WEBVTT - Bloomberg Daybreak: August 15, 2022 - Hour 1 (Radio) 0:00:02.520 --> 0:00:06.320 By from the Bloomberg Interacted Burger's Studios is Bloomberg Daybreak 0:00:06.360 --> 0:00:10.360 for Monday, August fifteen two. Coming up the shower, China's 0:00:10.360 --> 0:00:14.520 Central Bank unexpectedly cuts the interest rates US China relations 0:00:14.520 --> 0:00:18.160 and focused as a congressional delegation visits Taiwan. The Fed 0:00:18.280 --> 0:00:21.840 releases minutes of its July policy meeting, and Walmart Home 0:00:21.920 --> 0:00:24.960 Depot and Target lead a busy week for retail earnings. 0:00:25.320 --> 0:00:28.520 New York Governor Hocol speaks from where author Salman Rushdie 0:00:28.560 --> 0:00:32.120 was attacked. Plus New York State is cracking down on speeders, 0:00:32.240 --> 0:00:36.080 especially this week. I'm Michael Vaughan. More ahead, I'm John Stage. 0:00:36.280 --> 0:00:38.600 In sports, the Mets stay hot, they shut out the Phillies, 0:00:38.640 --> 0:00:41.839 The Yankees slump continue to shut out loss in Boston. 0:00:44.440 --> 0:00:48.360 That's all Strading ahead on Bloomberg Daybreak on Bloomberg eleven, 0:00:48.400 --> 0:00:53.080 FREEO New York, Bloomberg one, Washington, d C, Bloomberg one 0:00:53.080 --> 0:00:57.600 oh six one, Boston, Bloomberg nine sixties and Francisco, Syria's 0:00:57.640 --> 0:01:00.840 Exam one nine team, and around the world on Bloomberg 0:01:00.880 --> 0:01:07.640 Radio dot Com and via The Bloomberg Business Apple and 0:01:07.760 --> 0:01:10.440 Good Morning, I'm John Tucker and I'm Karen Moscow and 0:01:10.520 --> 0:01:13.320 US Dock Index futures are lower this morning. We are 0:01:13.360 --> 0:01:15.319 coming up to five oh one on Wall Street, and 0:01:15.360 --> 0:01:18.120 we check the markets every fifteen minutes throughout the trading day. 0:01:18.200 --> 0:01:20.399 On Bloomberg, I guess in P future is down about 0:01:20.400 --> 0:01:23.200 twenty points down, futures down a hundred thirty three and 0:01:23.280 --> 0:01:26.640 NASDAG futures down sixty one. The decks in Germany as 0:01:26.680 --> 0:01:29.360 it will changed, and your treasury up one thirty second 0:01:29.480 --> 0:01:32.039 yell two point two percent and they yield on the 0:01:32.080 --> 0:01:35.400 two year three point to five percent. Cheleng and Caareda. 0:01:35.480 --> 0:01:38.320 We begin with a surprise out of Asia. China's Central 0:01:38.319 --> 0:01:41.680 Bank is unexpectedly cut it's key interest rate. That's this 0:01:41.800 --> 0:01:45.640 fresh data out of China shows its economic slowdown getting worse. 0:01:46.160 --> 0:01:48.960 Bloomberg Day Break Asia anchor Bryant Curtis has more from 0:01:49.040 --> 0:01:51.840 Hong Kong. The PBOC cut it's one year rate by 0:01:51.880 --> 0:01:55.240 ten basis points to two point seven five. None of 0:01:55.280 --> 0:01:58.320 the twenty economy is pulled by Bloomberg expected to change. 0:01:58.680 --> 0:02:01.440 The move comes as China's the economy weakened in July, 0:02:01.960 --> 0:02:05.640 COVID outbreaks and the property crisis taking a toll factory 0:02:05.680 --> 0:02:08.280 output up three point eight percent from a year ago, 0:02:08.600 --> 0:02:12.240 retail sales growing two point seven percent, while fixed asset 0:02:12.280 --> 0:02:15.480 investment grew five point seven percent in the first seven 0:02:15.520 --> 0:02:18.600 months of the year. All of those missing estimates and 0:02:18.720 --> 0:02:21.600 China's home prices dropped on eleventh month in a row 0:02:22.240 --> 0:02:25.120 in on Kong Brian Curtis Bloomberg Day Break A Right, Brian, 0:02:25.200 --> 0:02:28.360 thank you All. Stocks in Asia meantime finished mixed after 0:02:28.400 --> 0:02:30.959 that surprise rate cut from the PDOC. We get the 0:02:31.000 --> 0:02:34.600 recount from Bloomberg's Juliette, Sally and Singapore Good Morning, Juliette, 0:02:34.600 --> 0:02:36.640 Good Morning, John and Karen. Markets in Hong Kong and 0:02:36.720 --> 0:02:40.120 China's struggled for direction after the July activity data was released, 0:02:40.120 --> 0:02:43.359 While bonds rallied, the yield on China's tenure note, dropping 0:02:43.360 --> 0:02:45.800 as much as seven basis points, one of its steepest 0:02:45.880 --> 0:02:48.519 drops since the onset of the pandemic. The off show 0:02:48.560 --> 0:02:51.919 Yuan fell along with the Kiwi and Ozzi dolas Japanese 0:02:52.040 --> 0:02:54.120 has theo rallied the neck to to five, close to 0:02:54.120 --> 0:02:57.440 erasing its losses for the year. Markets in South Korea 0:02:57.480 --> 0:03:01.600 and India were closed. In Singapore Julie Sally Bloomberg Daybreak, 0:03:01.720 --> 0:03:05.080 Thanks Julian. Relations between the US and China in focus 0:03:05.160 --> 0:03:08.880 once again this morning. The US congressional delegation landed in 0:03:09.000 --> 0:03:11.960 Taiwan over the weekend, and Bloomberg say Amy Morris has 0:03:11.960 --> 0:03:16.799 details from our newsroom in Washington. This delegation is led 0:03:16.840 --> 0:03:20.400 by Democratic Senator Ed Markey of Massachusetts and tests whether 0:03:20.480 --> 0:03:24.080 China will react more forcefully after how Speaker Nancy Pelosi 0:03:24.120 --> 0:03:27.119 went to Taiwan earlier this month. The delegation is set 0:03:27.160 --> 0:03:30.239 to meet with Taiwan's president and Minister of Foreign Affairs 0:03:30.400 --> 0:03:34.960 to discuss bilateral relations, security, trade, and investment. The delegation 0:03:35.000 --> 0:03:38.880 will reaffirm US support for Taiwan. Reuters sided China's embassy 0:03:39.120 --> 0:03:42.360 saying this latest visit shows the US quote does not 0:03:42.480 --> 0:03:45.720 want to see stability in the region. In Washington, I'm 0:03:45.720 --> 0:03:48.520 anymore as Bloomberg Daybreak, Amy, thank you. Well. Back here 0:03:48.560 --> 0:03:51.119 in the U S a senior Democrat says he has 0:03:51.200 --> 0:03:54.680 not seen any evidence that materials the FBI sees from 0:03:54.680 --> 0:03:58.960 Donald Trump's home were properly declassified. The former president has 0:03:58.960 --> 0:04:02.040 said the documents were declassified, and his supporters claim he 0:04:02.040 --> 0:04:05.680 has the power to declassify documents on his own. Adam Schiff, 0:04:05.720 --> 0:04:08.720 as Chair of the House Intelligence Committee, the former president 0:04:08.760 --> 0:04:12.160 has no declassification authority, and the idea that eighteen months 0:04:12.200 --> 0:04:15.400 after the fact, DONALDA. Trump Trump could simply announced, well, 0:04:15.480 --> 0:04:19.840 I'm you know, retroactively declassifying or whatever I took home 0:04:19.920 --> 0:04:23.880 had the effect of declassifying them is absurd. Adam Schiff 0:04:23.920 --> 0:04:26.480 made the comments on CDs his face the nation heard 0:04:26.560 --> 0:04:29.680 Sundays on Bloomberg Radio, and turning to the economy, now, 0:04:29.760 --> 0:04:32.559 the focus this week comes Wednesday. That's when the Federal 0:04:32.600 --> 0:04:37.200 Reserve issues minutes of its July policy meeting. Bloomberg's Vineydale 0:04:37.279 --> 0:04:40.120 Judai says more the minutes could indicate whether Fed Chair 0:04:40.240 --> 0:04:43.120 Jerome Pale intended to send a dovish signal what July's 0:04:43.160 --> 0:04:46.520 post meeting news conference. Bloombrig Economics is betting he didn't, 0:04:46.560 --> 0:04:49.840 and its full speed ahead on lifting interest rates, underpinned 0:04:49.880 --> 0:04:52.800 by ed roid sans among officials that the upside risk 0:04:52.880 --> 0:04:56.760 to inflation is material. Turning to this week's key economic data, 0:04:56.960 --> 0:05:00.480 US retail sales may show falling gasolene prices. Freed up 0:05:00.520 --> 0:05:03.839 cash for such things as Amazon Prime Day were rising 0:05:03.839 --> 0:05:07.479 mortgage traits put a dent, and housing starts any Jude Ice, 0:05:07.520 --> 0:05:10.080 Bloomberg day Break, All right, Denny, thank you all. Retail 0:05:10.120 --> 0:05:12.600 will also be in focus when it comes to earnings 0:05:12.600 --> 0:05:15.320 this week, and we get the story from Bloombergys Shirley Pillett. 0:05:15.600 --> 0:05:19.040 Walmart and Target let a list of retailers issuing profit 0:05:19.080 --> 0:05:24.200 warnings last month. This week they report, along with Home Depot, Lows, Cole's, Macy's, 0:05:24.279 --> 0:05:27.600 and t j X. Laur Calvacina is out of US 0:05:27.640 --> 0:05:30.960 equity strategy at RBC Capital Markets. We would tell you 0:05:30.960 --> 0:05:32.960 we're not entirely out of the woods from a market 0:05:33.000 --> 0:05:36.000 perspective in terms of earnings right now, just because if 0:05:36.000 --> 0:05:39.360 there really is a big macro slow downcoming economically, UM 0:05:39.440 --> 0:05:41.320 numbers do still need to come down. But I think 0:05:41.360 --> 0:05:45.000 for the moment, investors are and you're just excited about 0:05:45.160 --> 0:05:48.160 the resilience that we're seeing. Also reporting this week, Agile 0:05:48.240 --> 0:05:53.400 and Technologies, Analog Devices, Applied Materials, Cisco Systems, and Deer 0:05:54.040 --> 0:05:57.239 in New York. Charlie Pellet, Bloomberg day Break, Thanks Charlie. 0:05:57.320 --> 0:06:00.560 We had earnings overseas out this weekend. South a Ramco 0:06:00.720 --> 0:06:05.160 posted the biggest quarterly profit of any listed company anywhere. 0:06:05.760 --> 0:06:08.800 Net income at the Saudi Oil Giant rose to forty 0:06:08.839 --> 0:06:12.680 eight point four billion dollars in the second quarters from 0:06:12.760 --> 0:06:15.719 twenty five and a half billion a year earlier. Well 0:06:15.760 --> 0:06:18.560 searging oil prices give a boost to energy companies. John 0:06:18.600 --> 0:06:22.120 Both oil and gas have come down since their June highs, 0:06:22.120 --> 0:06:25.720 and US Energy Secretary Jennifer Granholm says they may fall 0:06:25.800 --> 0:06:29.200 even further. Bloomberg said Baxter has the details. The caveat, 0:06:29.320 --> 0:06:32.080 as always is the instability of the globe. But grand 0:06:32.120 --> 0:06:34.719 Holmes says, given the four dollars, depending on the region 0:06:34.760 --> 0:06:37.600 we're seeing now, it should go down even further. We'll 0:06:37.640 --> 0:06:41.480 probably drop to about three dollars and seventy eight cents. 0:06:41.520 --> 0:06:44.000 So we hope that that's true, but again it can 0:06:44.040 --> 0:06:47.920 be impacted by what's happening globally. Grandholme on CNN says 0:06:47.960 --> 0:06:51.040 the President is monitoring very closely and we'll do everything 0:06:51.040 --> 0:06:54.480 within his power to help. In San Francisco, I'm at Baxter, 0:06:54.520 --> 0:06:57.640 Bloomberg Gabriak, thanks said some news on finances out of 0:06:57.720 --> 0:07:01.040 Russia now. Major Wall Street banks include JPMorgan chas In 0:07:01.120 --> 0:07:05.120 City Group are reportedly offering to facilitate trades in Russian 0:07:05.160 --> 0:07:09.039 corporate debt and government bonds. Writer's reports. The move took 0:07:09.040 --> 0:07:11.280 place in recent days after guidelines for the U. S. 0:07:11.320 --> 0:07:15.080 Treasury that allowed US holders to wind down their positions 0:07:15.680 --> 0:07:19.040 ahead of the market opened. Al futures down one five points. 0:07:23.360 --> 0:07:26.520 You're listening to Bloomberg daybreak time now all for check 0:07:26.640 --> 0:07:28.720 on news and New York and around the world. And 0:07:28.840 --> 0:07:31.320 for that we say good morning to Bloomberg's Michael Barr. 0:07:31.640 --> 0:07:34.160 Thank you very much, Sarah and Rainy and government official 0:07:34.280 --> 0:07:37.520 denied today that Tehran was involved in the assault on 0:07:37.560 --> 0:07:41.560 author Salmon Rushtia. The comments from around Foreign Ministry come 0:07:41.640 --> 0:07:45.120 after Friday's attack on Rushti in Western New York. New 0:07:45.160 --> 0:07:47.600 York Governor Kathy Oco spoke at the side where Rustie 0:07:47.640 --> 0:07:51.080 survived last week's NiFe attack. New York State will always 0:07:51.200 --> 0:07:55.960 stand up to protect freedom of expression, freedom of speech, 0:07:56.560 --> 0:08:01.840 and we condemned the cowardly attack on Salomon. Governor Hokel 0:08:01.920 --> 0:08:05.720 at the Chautauqua Institution promised freedom will always eclipse hatred 0:08:05.760 --> 0:08:10.239 and oppression. Rushdie suffered a damaged liver and severed nerves 0:08:10.240 --> 0:08:12.760 in an arm and and I, however, He is off 0:08:12.800 --> 0:08:14.680 a ventilator and is said to be on the road 0:08:14.720 --> 0:08:18.200 to recover. It is assailant, twenty four year old Hattie 0:08:18.280 --> 0:08:22.680 Matar of New Jersey has pleaded not guilty. More details 0:08:22.720 --> 0:08:26.040 have been disclosed and yesterday's shooting in Jerusalem's Old City. 0:08:26.440 --> 0:08:29.760 Authorities in Israel say a Palestinian gunmen opened fire at 0:08:29.760 --> 0:08:32.960 a bus, wounding several passengers, among them a New York 0:08:33.000 --> 0:08:36.760 family visiting the country. Three were from Brooklyn, where Senate 0:08:36.800 --> 0:08:40.560 Majority Leader Chuck Schumer represents. During a briefing, Schumers shared 0:08:40.600 --> 0:08:43.920 details he learned about one of the victims. He was 0:08:44.040 --> 0:08:49.000 very brave. He bent down over his family to protect them. 0:08:49.040 --> 0:08:52.320 He was shot in the neck, but and they had 0:08:52.400 --> 0:08:55.400 him on a respirator, but it looks like he will 0:08:55.600 --> 0:08:59.439 His condition is improving. Senator Schumer says this incident in 0:08:59.520 --> 0:09:03.360 Jerusalem follows a tense week between Israel and the Palestinians. 0:09:03.840 --> 0:09:06.920 Don't speed in New York State, especially this week, a 0:09:07.040 --> 0:09:11.120 weeklong crackdown to start it, and according to Governor Kathy Hokel, 0:09:11.600 --> 0:09:15.680 there are countless risks and tragic consequences to speeding, and 0:09:15.679 --> 0:09:17.800 I want all New Yorkers to be mindful of the 0:09:17.880 --> 0:09:21.680 speed limits in your area. During last year's crackdown, police 0:09:21.679 --> 0:09:25.640 gave out twenty three thousand speeding tickets. Russian President Vladimir 0:09:25.640 --> 0:09:29.160 Putin offered to expand relations with North Korea, reaching out 0:09:29.200 --> 0:09:32.080 to his neighbor as the Krumlin scours the globe for 0:09:32.120 --> 0:09:35.560 weapons for its war in Ukraine. Amy winning film and 0:09:35.679 --> 0:09:39.160 television actor and Haitians died of injuries from a fiery crash. 0:09:39.600 --> 0:09:42.920 Spokeswoman says Haiti was peacefully taken off life support and 0:09:43.040 --> 0:09:46.160 hash was fifty three Global News twenty four hours a 0:09:46.280 --> 0:09:49.240 day on air and on Bloomberg Quick Take, powered by 0:09:49.240 --> 0:09:52.199 more than hundred journalists and analysts more than a hundred 0:09:52.240 --> 0:09:55.719 twenty countries. Michael barn this is Bloomberg, John, Michael, thank you, 0:09:58.640 --> 0:10:01.160 and it brings us to Town of Wall Street. Timed 0:10:01.160 --> 0:10:04.320 after the Floberg Sports update and good morning John stown 0:10:04.360 --> 0:10:06.560 S all right, Good morning John. Shutout win for the Mets, 0:10:06.559 --> 0:10:09.880 shutout loss for the Yankees. Mets of now one seventeen 0:10:09.880 --> 0:10:12.280 of their last twenty games. The Yankees have lost nine 0:10:12.280 --> 0:10:14.480 of eleven At Fenway, they had just two hits, struck 0:10:14.520 --> 0:10:17.480 out eleven times Feld the Red Sox three upping the 0:10:17.520 --> 0:10:19.840 Socks win a series, was in the division for the 0:10:19.840 --> 0:10:22.960 first time all year. Michael Waka, who had been Outstince 0:10:23.040 --> 0:10:25.920 June with injured shoulder, was dominant. Jamison Tyone took the 0:10:26.000 --> 0:10:29.719 lost ending a two and seven Yankee road trip to 0:10:29.920 --> 0:10:31.920 jarn Judge. It's baseball. You know you're gonna go through 0:10:31.920 --> 0:10:36.079 shutters like this. Um everything every team does, so it's 0:10:36.120 --> 0:10:39.360 just about us. I'm staying consistent, you know. I don't 0:10:39.600 --> 0:10:41.560 sit on our woes here on our head. You know, 0:10:41.760 --> 0:10:43.800 we're not happy about it. But still a lot of 0:10:43.840 --> 0:10:45.160 work to be done. Still a lot of things I 0:10:45.200 --> 0:10:47.079 need to improve on and keep working on. Come home 0:10:47.120 --> 0:10:49.439 for a nine game homestand three with Tampa Bay, four 0:10:49.480 --> 0:10:51.559 with Toronto, and then two of the Mets, who now 0:10:51.600 --> 0:10:54.160 hit the road for the next ten games, four in Atlanta, 0:10:54.640 --> 0:10:57.040 four in Philadelphia. The Mets just threw back to back 0:10:57.080 --> 0:10:59.720 shutouts at the Phillies. Chris Bassett got his tent win 0:11:00.080 --> 0:11:02.480 bourning to the bullpen Mets one six and nothing. They 0:11:02.480 --> 0:11:05.520 are seventy five and forty. It's first time the Mets 0:11:05.520 --> 0:11:09.280 have been thirty five games over five hundred eight. Jets 0:11:09.320 --> 0:11:11.720 quarterback Zack Wilson headed to l a for a knee 0:11:11.720 --> 0:11:14.680 procedure tomorrow that will determine how long he'll be out. 0:11:14.679 --> 0:11:16.960 Suffered a bone bruise and a torn meniscus in the 0:11:16.960 --> 0:11:20.840 preseason opener. Will's Alatorus nearly won the US Open, nearly 0:11:20.840 --> 0:11:23.840 won the PG Championship, loss in the playoff in Memphis. 0:11:23.880 --> 0:11:26.200 His first career victory came in a playoff, and in 0:11:26.240 --> 0:11:29.520 the start of the FedEx Cup playoffs, NBA announcedince Christmas 0:11:29.600 --> 0:11:31.760 Day schedule. The next who did not make the playoffs 0:11:31.840 --> 0:11:34.640 last year will play on Christmas. The whole Philadelphia, the 0:11:34.760 --> 0:11:37.440 Nets who might trade Kevin Durant did not make the 0:11:37.520 --> 0:11:41.680 Christophers Days l John Stash Allard, Bloomberg's Sports John all Right, John, 0:11:41.720 --> 0:11:44.679 thanks very much. At ahead of the market open this 0:11:44.720 --> 0:11:47.520 Monday morning, we have down futures right now down one 0:11:47.920 --> 0:11:49.679 twenty seven points, so that set a climb of four 0:11:49.720 --> 0:11:52.640 tenths of a percent. The s would be many futures 0:11:52.679 --> 0:11:55.800 down twenty points, down half a percent. Mazzack futures right 0:11:55.840 --> 0:11:59.280 now sixty one point slower, that ease down half a percent. 0:12:00.040 --> 0:12:02.319 End at London the footsie, you have two tents of 0:12:02.400 --> 0:12:07.679 a percent. This is Bloomberg, just the head was it 0:12:07.840 --> 0:12:10.680 a bear market rally. We'll get you set up for 0:12:10.720 --> 0:12:13.760 the training day head with economist Dennis Gartment, Chair of 0:12:13.800 --> 0:12:22.240 the University of acron in down the Fund. This is Daybreak, Markets, 0:12:22.320 --> 0:12:25.400 headlines and breaking news twenty four hours a day at 0:12:25.440 --> 0:12:29.400 Bloomberg dot Com, the Bloomberg Business Outland at Bloomberg Quick Tape. 0:12:29.559 --> 0:12:38.800 She's a Bloomberg Business lash and I'm Karen Moscow and 0:12:38.920 --> 0:12:42.280 US knock Index futures are slipping this morning and commodities 0:12:42.320 --> 0:12:45.320 from oil to iron ore are falling. Is disappointing data 0:12:45.400 --> 0:12:48.520 from China further clousy outlook for the global economy. We 0:12:48.679 --> 0:12:51.160 check the markets every fifteen minutes throughout the trading day 0:12:51.240 --> 0:12:54.319 on Bloomberg guess in P futures down nineteen points now 0:12:54.440 --> 0:12:57.200 futures down a hundred twenty nine and nasday features down 0:12:57.200 --> 0:13:00.440 sixty two. The decks in Germany as little change ten. 0:13:00.480 --> 0:13:03.559 Your treasury up to thirty seconds l two point two percent. 0:13:03.880 --> 0:13:06.480 They yield on the two year three point to five percent. 0:13:06.920 --> 0:13:09.959 NIMEX screwed oil is down three percent, down two dollars 0:13:10.040 --> 0:13:12.320 seventy eight cents at eighty nine dollars twenty eight cents 0:13:12.360 --> 0:13:14.760 a barrel comex school down nine tenths per cent or 0:13:14.840 --> 0:13:18.840 sixteen dollars seventy cents is seventy eighty announce the euro 0:13:19.000 --> 0:13:21.240 one point oh two oh three against the dollar British 0:13:21.240 --> 0:13:23.640 found one point two zero six two and the end 0:13:23.679 --> 0:13:26.360 one thirty three point three one. And looking at bitcoin 0:13:26.440 --> 0:13:29.080 this morning down one at a quarter percent at twenty 0:13:29.120 --> 0:13:32.800 four thousand, sixteen dollars as a Bloomberg business flash. Now 0:13:32.800 --> 0:13:35.439 here's Michael Barrow with Moore on what's going on around 0:13:35.440 --> 0:13:37.920 the world. Michael, good morning, Good morning, Karen. A U 0:13:38.000 --> 0:13:41.440 S congressional delegation led by Senator Ed Markeen landed and 0:13:41.520 --> 0:13:45.199 Taiwan Sunday for a two day visit with Taiwan's president 0:13:45.280 --> 0:13:49.400 sighing win angering China. They are expected to discuss BI 0:13:49.480 --> 0:13:54.440 lateral relations, regional security, trade and investment, climate change, and 0:13:54.559 --> 0:13:58.280 other issues. The FBI is facing an unprecedented number of 0:13:58.320 --> 0:14:03.000 threats after searching for President trump'smer Lago estate and seizing 0:14:03.080 --> 0:14:06.560 boxes of White House documents that included some classified material. 0:14:07.120 --> 0:14:10.080 In baseball, the Red Sox beat the Yankees three nothing. 0:14:10.360 --> 0:14:13.439 The match shut out the Phillies six zip. The Nationals 0:14:13.559 --> 0:14:18.040 and Orioles lost the A's lost to the Astros six three. 0:14:18.440 --> 0:14:21.720 The Giants won global news twenty four hours a day 0:14:21.760 --> 0:14:24.800 on air and on Bloomberg Quicktake, powered by more than 0:14:24.840 --> 0:14:28.080 twenty journalists and analysts more than a hundred twenty countries. 0:14:28.200 --> 0:14:30.880 I'm Michael Barr, and this is Bloomberg, John, Michael, Thank you, 0:14:30.960 --> 0:14:33.560 five twenty on Wall Street. We're lying for the Bloomberg 0:14:33.600 --> 0:14:37.560 Interactive Broker Studios. This is Bloomberg Daybreak with the contracts 0:14:37.600 --> 0:14:41.200 on the SMP five hundred NASDAC futures right now learn 0:14:41.320 --> 0:14:45.520 lower suggesting last week's stocks rally. Make cool. Let's get 0:14:45.560 --> 0:14:47.440 you set up for the training day ahead. Now we're 0:14:47.520 --> 0:14:50.760 joined by economist Dennis Garban, chairman of the University of 0:14:50.800 --> 0:14:54.480 acron En Dowmond Fund, former publisher of the garment letter 0:14:54.960 --> 0:14:58.680 Happy Monday. Dennis, we learned this morning of the surprise 0:14:58.800 --> 0:15:01.720 rate cut in the world se and largest economy. Does 0:15:01.760 --> 0:15:04.680 that indicate things are worse than thought in China? And 0:15:04.800 --> 0:15:07.400 maybe more importantly for those listening, does it result in 0:15:07.880 --> 0:15:11.840 significant spillover? It's a markets elsewhere, Well, it's spilling over 0:15:11.880 --> 0:15:13.920 as we as we speak, no question about it. And 0:15:13.920 --> 0:15:16.760 the numbers were up for month on month and in 0:15:16.920 --> 0:15:20.800 quarter on quarter but well below expectations, and the the 0:15:20.800 --> 0:15:24.680 the Central Bank of China surprise everybody by cutting the 0:15:24.760 --> 0:15:27.640 seven day and one year over the funds rates by 0:15:27.680 --> 0:15:30.760 ten basis points, which indicate that the economy is doing 0:15:31.360 --> 0:15:35.880 a good deal less surprisingly well than people had anticipated. 0:15:35.960 --> 0:15:39.280 So you've got the central bank having to move already, 0:15:39.560 --> 0:15:41.680 it's taken the rim and be down with it. It's 0:15:41.720 --> 0:15:44.320 taken stock prices down with it, and you've had a 0:15:44.440 --> 0:15:47.560 huge rally rather surprising than need to be quite honest, 0:15:47.560 --> 0:15:49.840 that we've had a stronger rally in the United States 0:15:49.880 --> 0:15:52.320 stock market as we've had or in the global stock 0:15:52.320 --> 0:15:55.840 markets generally. As the chairman of the University of Akron's endowment, 0:15:55.880 --> 0:15:58.440 I had us move about twelve of our our portfolio 0:15:58.480 --> 0:16:00.480 out at the end of the year, and we've got 0:16:00.480 --> 0:16:02.720 a quarterly meeting coming this week, and I'm actually gonna 0:16:02.720 --> 0:16:06.880 think about moving the committee or recommending to the committee 0:16:06.880 --> 0:16:08.480 that we cut another two or three percent out of 0:16:08.480 --> 0:16:11.600 our portfolio on this rally. So I think that we've 0:16:11.600 --> 0:16:13.960 probably I think this has been a bull market or 0:16:13.960 --> 0:16:16.760 a bear market rally, nothing more than that. Uh, And 0:16:16.800 --> 0:16:18.400 I think that we're probably going to test the loads 0:16:18.440 --> 0:16:21.160 that we made back in June or July before the 0:16:21.560 --> 0:16:24.760 before the year is over. So I'm I'm embarrassed on 0:16:24.800 --> 0:16:26.800 this rally that we've had in in equity here in 0:16:26.840 --> 0:16:29.960 the United States. What about the foundations? Are there shallow 0:16:30.000 --> 0:16:35.160 foundations for that that rally? Well, clearly, the the the 0:16:35.240 --> 0:16:39.360 seed has been expansionary thus far, and one of the 0:16:40.280 --> 0:16:43.960 one of the concerns has been, excuse me, one of 0:16:43.960 --> 0:16:46.000 the concerns has been that the FED will be cutting 0:16:46.040 --> 0:16:49.360 its assets from nine trillion, nine point two trillion dollars 0:16:49.360 --> 0:16:55.800 to something billion dollars less each month. Just get a 0:16:55.840 --> 0:16:57.480 get a glass of water. I'm just gonna do the 0:16:57.520 --> 0:17:00.640 futures real quick. Uh, while you could drink of water, 0:17:00.680 --> 0:17:04.080 their down futures right now down the S and P 0:17:04.200 --> 0:17:07.480 emnity futures twenty two points slower than as their futures 0:17:07.480 --> 0:17:11.640 sixty six points slower. So again, if you just want 0:17:11.680 --> 0:17:13.560 to pick up on the thoughts that they do, you 0:17:13.640 --> 0:17:18.200 have there. The problem has been that the set has 0:17:18.200 --> 0:17:21.560 been expansionary with its asset base for a long period 0:17:21.560 --> 0:17:23.639 of time and has promised that it would be cutting 0:17:24.480 --> 0:17:27.000 dollars out of its asset base over the course of 0:17:27.040 --> 0:17:29.639 the next several years. Actually, what they've been doing is 0:17:29.640 --> 0:17:32.600 cutting demonstrably less than that. So there's been more fuel 0:17:32.640 --> 0:17:36.000 to the fire that that I had anticipated, less uh 0:17:36.560 --> 0:17:39.760 less qute than we had then then had been let 0:17:40.000 --> 0:17:42.120 we have been led to believe, and that has been 0:17:42.119 --> 0:17:43.920 the fuel for the fire. Now and now with the 0:17:44.240 --> 0:17:48.600 said having no choice but to become less expansionary, become contractionary, 0:17:48.720 --> 0:17:51.240 that's going to be deltarious to share prices. And I 0:17:51.280 --> 0:17:53.480 think that this has been a bear market rally, nothing 0:17:53.480 --> 0:17:55.600 more than that. Watch what the volume has been like. 0:17:56.080 --> 0:17:59.280 Volume has tended to be down on up dates and 0:17:59.440 --> 0:18:02.399 up on days. That tends to be bearish in from 0:18:02.440 --> 0:18:06.719 a technical circumstance. So I'm gonna be becoming less involved 0:18:06.760 --> 0:18:09.400 in stocks over the course the next several months, believing 0:18:09.440 --> 0:18:13.040 that this has been really nothing more than a good, strong, volatile, 0:18:13.440 --> 0:18:16.639 and surprising, let's be blunt bull market or bear market 0:18:16.720 --> 0:18:19.040 rally and nothing more than that. Okay, where you gonna 0:18:19.040 --> 0:18:22.239 go then to cash? Cash is probably the great thing 0:18:22.240 --> 0:18:24.560 to be in right now. Two year to me, two 0:18:24.640 --> 0:18:27.600 year notes is the equivalent to cash. Yeah. The other 0:18:27.600 --> 0:18:29.199 thing to be concerned about is the fact that the 0:18:29.240 --> 0:18:33.800 over the that the Uh, the inversion in the bond 0:18:33.840 --> 0:18:36.679 market has been we're back over forty two basis points. 0:18:36.920 --> 0:18:38.560 I think they're going to take the inversion two is 0:18:38.600 --> 0:18:40.880 to tends to a basis points before this is done. 0:18:41.359 --> 0:18:45.760 As the FED becomes as the FED embraces QT rather 0:18:45.800 --> 0:18:48.000 than QUE and if they have no choice but to 0:18:48.040 --> 0:18:51.320 do so so, inflationary pressures remain. The set has to 0:18:51.480 --> 0:18:54.000 remain contractionary over the course in the next several years, 0:18:54.440 --> 0:18:57.439 the the yield curve is gonna become inverted. In stock prices, 0:18:57.440 --> 0:19:00.440 I think are gonna have had a nice, good, strong rally, 0:19:00.520 --> 0:19:01.840 but I think that's the end of it. So go 0:19:01.920 --> 0:19:04.879 to cash two your notes to the above three percent 0:19:05.359 --> 0:19:07.560 is a great place to be right now, no question 0:19:07.560 --> 0:19:09.600 about that. When will it be safe to dip your 0:19:09.600 --> 0:19:12.560 tone the water again? Got thirty seconds when we test 0:19:12.600 --> 0:19:14.479 the lows that we're made in June and July, and 0:19:14.520 --> 0:19:16.240 I think that that's going to be before the year end. 0:19:16.920 --> 0:19:20.240 Dennis always a pleasure to appreciated. Ecnnabis downis Gartment, Chairman 0:19:20.280 --> 0:19:23.320 of the University of Acrony and Downmud Fund, former publisher 0:19:23.359 --> 0:19:26.320 of the Gartment Letter. As we speak right now, again, 0:19:26.359 --> 0:19:31.480 the futures are lower. This morning, Dennis mentioned the two tans. 0:19:31.600 --> 0:19:35.560 The inversion there down forty three basis points. You have 0:19:35.600 --> 0:19:38.120 the two is at three. The tenure yield right now, 0:19:38.119 --> 0:19:42.280 the benchmark at two eighty two and again down futures 0:19:42.359 --> 0:19:45.280 one hundred fifty three points lower. That's down half a percent, 0:19:45.400 --> 0:19:49.200 empty surprise rate cut from the People's Bank of China 0:19:49.400 --> 0:19:51.760 and S and P futures right now twenty two points lower, 0:19:52.080 --> 0:19:54.800 that's down a half a percent, and the nassetic futures 0:19:55.040 --> 0:19:59.399 down sixty seven points. That is down half percent. Just 0:19:59.520 --> 0:20:02.680 to had our top headlines. You're listening to Bloomberg Daybreak 0:20:06.720 --> 0:20:09.840 and the Bloomberg Weather from Rob Caroline partly Sunday today, 0:20:09.880 --> 0:20:16.040 the high temperature five mostly cloudy tonight, seventy tomorrow mostly 0:20:16.080 --> 0:20:23.640 Sunday hies again in the mid eighties, broadcasting live from 0:20:23.640 --> 0:20:27.760 the Bloomberg Interactive Broker's studio in New York, Bloomberg Elving 0:20:27.840 --> 0:20:32.440 Freed to Washington, d C. Bloomberg to Boston, Bloomberg one 0:20:32.440 --> 0:20:35.639 O six one to San Francisco, Bloomberg Name sixty to 0:20:35.680 --> 0:20:38.800 the country, Sirius xm ch A one nine and around 0:20:38.800 --> 0:20:42.760 the globe. The Bloomberg Business at and Bloomberg Radio dot Com. 0:20:42.760 --> 0:20:51.280 This is Bloomberg Daybreak is five thirty on Wall Street. 0:20:51.320 --> 0:20:54.000 Good morning, I'm John Tucker and I'm Karen Moscow. We 0:20:54.040 --> 0:20:56.399 are just about four hours away from the open of 0:20:56.520 --> 0:20:58.199 US trading. Let's get you have to day in the 0:20:58.200 --> 0:20:59.959 news you need to know at this hour, We've been 0:21:00.040 --> 0:21:03.560 in with a surprise out of Asia, China's Central Bank 0:21:03.640 --> 0:21:07.200 unexpectedly cut its key interest rate ten basis points after 0:21:07.280 --> 0:21:12.440 data show July retail sales, investment, and industrial output missing estimates. 0:21:12.560 --> 0:21:15.399 Bloomberg's end of Current says it all signals trouble for 0:21:15.480 --> 0:21:18.080 the Chinese economy. All of his thought it was weak. 0:21:18.440 --> 0:21:21.360 But the reasons especially concerning is because July was meant 0:21:21.359 --> 0:21:23.040 to be the good month. July was meant to be 0:21:23.080 --> 0:21:24.959 the think, the month when things pick up a bit 0:21:24.960 --> 0:21:27.600 of momentum again. The third quarter was supposed to be be 0:21:27.640 --> 0:21:29.639 better than the second quarter and all the rest of it. 0:21:29.760 --> 0:21:32.440 But of course it's now underscores just how much pressure 0:21:32.480 --> 0:21:35.879 China's economy is actually under. Bloomberg's end a Current says 0:21:35.960 --> 0:21:39.119 the rate cut shows how concerned Chinese officials are about 0:21:39.160 --> 0:21:42.120 the deepening economic slowdown. And back here in the US. 0:21:42.160 --> 0:21:44.600 We get a couple of key data points about the 0:21:44.640 --> 0:21:48.680 economy this week, July's FED minutes and retail sales. They're 0:21:48.680 --> 0:21:51.400 going to be released on Wednesday. John China and US 0:21:51.480 --> 0:21:54.639 relations are in focus once again this morning, as another U. 0:21:54.720 --> 0:21:58.520 S congressional delegation has landed in Taiwan. It's led by 0:21:58.600 --> 0:22:02.520 Democratic Senator At Arkey of Massachusetts. The delegation is said 0:22:02.520 --> 0:22:05.360 to me what Taiwan's president and Minister of Foreign Affairs 0:22:05.400 --> 0:22:09.200 and will reaffirm US support for Taiwan. Becky in Washington, 0:22:09.200 --> 0:22:12.040 the senior Democrats says he hasn't seen any evidence that 0:22:12.119 --> 0:22:14.359 materials the n B I C S from Donald Trump's 0:22:14.359 --> 0:22:18.240 home were properly declassified. Last week, the former presidents of 0:22:18.280 --> 0:22:21.920