WEBVTT - Bloomberg Daybreak: July 20, 2022 - Hour 2 (Radio) 0:00:03.080 --> 0:00:06.439 Live from the Bloomberg Interacted Brooker Studios. This is is Bloomberg 0:00:06.519 --> 0:00:11.400 Daybreak for Wednesday, July Chew coming up the shower. Stocks 0:00:11.400 --> 0:00:15.000 look to extend Wall Street's biggest rally in three weeks. 0:00:15.000 --> 0:00:18.239 Netflix shares gain after subscriber loss was not as bad 0:00:18.280 --> 0:00:21.880 as feared. Inflation in the UK surges to a forty 0:00:21.960 --> 0:00:25.280 year high, and President Biden plans to take executive action 0:00:25.360 --> 0:00:28.840 to tackle climate change. The Trying Steam bakes under the 0:00:28.840 --> 0:00:32.920 Summer Sizzle and Shark sightings closed Rockaway Beaches on John 0:00:32.960 --> 0:00:36.560 Tucker Bore Straight Ahead. I'm John stand and Sports making 0:00:36.680 --> 0:00:39.720 nine straight All Star Game victories of the American Lady Yankees. 0:00:39.760 --> 0:00:44.839 Dian Carlos Danton with the m v P. That's All 0:00:44.960 --> 0:00:48.680 Trained head on Bloomberg Daybreak on Bloomberg eleven three on 0:00:48.800 --> 0:00:53.199 New York, Bloomberg one, Washington, d C, Bloomberg one oh 0:00:53.240 --> 0:00:57.880 six one, Boston, Bloomberg nine sixties and Francisco Sirius x 0:00:57.880 --> 0:01:01.160 AM one nine team and around the world Bloomberg Radio 0:01:01.280 --> 0:01:08.000 dot Com and via the Bloomberg Business App. Good Morning, 0:01:08.000 --> 0:01:10.640 I'm Nathan Hager and I'm Karen Moscow and U West 0:01:10.680 --> 0:01:13.560 on Index Futures are higher this morning. We're coming up 0:01:13.600 --> 0:01:15.160 to six o one on Wall Street, and we check 0:01:15.200 --> 0:01:18.360 the markets every fifteen minutes throughout the trading day. On Bloomberg. 0:01:18.480 --> 0:01:21.240 Right now, SNP futures are up eight points to down 0:01:21.280 --> 0:01:24.839 futures up fifty, NASDACK futures up forty two. The decks 0:01:24.840 --> 0:01:27.400 in Germany's up a quarter percent. The ten year treasury 0:01:27.480 --> 0:01:30.120 up nine thirty seconds, held two point nine eight percent. 0:01:30.560 --> 0:01:32.840 The yield on the two year at three point one 0:01:32.959 --> 0:01:36.480 eight percent. NIMEX screwed oil is down one percent on 0:01:36.560 --> 0:01:39.080 a dollar nine at a hundred three dollars thirteen cents 0:01:39.080 --> 0:01:41.320 of barrel. Look at it Bitcoin this morning it's up 0:01:41.360 --> 0:01:44.520 one percent at twenty three thousand, five forty dollars. Nathan 0:01:44.640 --> 0:01:48.000 mccaren futures are adding to yesterday's gains on Wall Street. 0:01:48.000 --> 0:01:50.200 There were the biggest in three weeks. It was a 0:01:50.240 --> 0:01:53.280 broad based rally, all eleven industry groups in the SNP 0:01:53.400 --> 0:01:56.840 five hundred advanced. John Barenko is chief investment Officer of 0:01:56.880 --> 0:02:00.400 Fundamental Investments at all Spring Global Investments. I think we're 0:02:00.400 --> 0:02:02.880 in a transition period here, and then the market really 0:02:02.960 --> 0:02:07.000 is indeda evidence really, and I think evidence that inflation 0:02:07.080 --> 0:02:11.679 is speaking evidence that, um, you know, we're moving down 0:02:11.680 --> 0:02:14.680 a path of hopefully towards a you know, a soft landing. 0:02:14.880 --> 0:02:17.360 John Baranko at all Spring Global Investment says he is 0:02:17.360 --> 0:02:20.000 looking for companies with strong balance sheets they're able to 0:02:20.080 --> 0:02:24.560 weather tough economic conditions well. Nathan Earning's optimism is helping 0:02:24.639 --> 0:02:27.560 fuel this morning's gains. Netflix shares are up seven and 0:02:27.600 --> 0:02:30.320 a half percent in early trading, and for subscriber numbers 0:02:30.360 --> 0:02:33.239 came in better than estimates. To get the story from Bloombery, 0:02:33.240 --> 0:02:36.400 Sterley Pillett, the leader in paid streaming TV, says it 0:02:36.520 --> 0:02:40.040 lost nine hundred seventy thousand subscribers in the second quarter, 0:02:40.400 --> 0:02:43.639 less than half what Wall Street feared, thanks in large 0:02:43.680 --> 0:02:46.920 part to a new season of Stranger Things, the services 0:02:47.000 --> 0:02:51.520 most popular English language series. This quarter, Netflix expects to 0:02:51.560 --> 0:02:54.800 sign up one million subscribers. While that is well short 0:02:54.800 --> 0:02:58.320 of the one point eight three million analysts forecasts this period, 0:02:58.560 --> 0:03:01.720 it reverses the lost is of the first half. In 0:03:01.840 --> 0:03:04.880 New York, Charlie Pellet, Bloomberg Daybreak, Charlie, thank you, and 0:03:04.960 --> 0:03:07.840 earnings continue to roll in today. With seventeen companies on 0:03:07.880 --> 0:03:10.800 the SMP reporting, We get results from Tesla after the 0:03:10.800 --> 0:03:14.040 closing bell. Here with the preview is Bloomberg's Jeff Balinger 0:03:14.280 --> 0:03:18.440 Bloomberg Intelligence as Tesla's fundamentals relative to its peers are 0:03:18.480 --> 0:03:21.320 strong and the company's credit rating could be moved to 0:03:21.400 --> 0:03:24.800 investment grade, but lockdowns in China had an impact on 0:03:24.919 --> 0:03:29.359 vehicle production, and Tesla is heavily invested in bitcoin. Its 0:03:29.400 --> 0:03:32.480 bottom line may include a charge of nearly three quarters 0:03:32.520 --> 0:03:35.000 of a billion dollars related to the plunge in the 0:03:35.040 --> 0:03:39.680 price of the cryptocurrency. Jeff Wellinger, Bloomberg Daybreak, Right, Jeff, 0:03:39.720 --> 0:03:42.120 thank you well. Tesla has been a longtime favorite of 0:03:42.160 --> 0:03:44.839 investor Kathy Wood, and her funds have felt the pain 0:03:44.920 --> 0:03:47.920 as Tesla shares fell from the November peak. Now we're 0:03:47.960 --> 0:03:51.160 this morning Wood is closing down whatever exchange traded funds, 0:03:51.400 --> 0:03:53.960 and we get the latest live from Bloomberg's Rendita Young. 0:03:53.960 --> 0:03:57.040 Good morning Rindy to Good morning Karen. A regulatory filing 0:03:57.160 --> 0:04:00.400 shows Kathie Wood is shutting down her ARC Trands parents 0:04:00.440 --> 0:04:03.840 et F. The fund gained only twelve million dollars in 0:04:03.880 --> 0:04:06.240 assets since it launched at the end of last year. 0:04:06.680 --> 0:04:09.400 That's a fraction of the nine billion dollars in Woods 0:04:09.440 --> 0:04:13.800 flagship fund. It contains hold things like Teal, Dock and Spotify. 0:04:13.880 --> 0:04:16.919 It was aimed at investing in companies that received high 0:04:16.920 --> 0:04:22.680 scores on transparency. Transparency Global, which shaped the funds underlying portfolio, 0:04:23.000 --> 0:04:25.799 will stop calculating the index at the end of July. 0:04:26.520 --> 0:04:29.239 Live in New York, I'm reneed a young Bloomberg daybreak 0:04:29.279 --> 0:04:31.680 al right, Nita. Thanks. Bitcoin is trading at a one 0:04:31.720 --> 0:04:33.960 month high this morning right now at about twenty three thousand, 0:04:34.080 --> 0:04:36.960 five hundred, though that is a far cry from November's 0:04:37.000 --> 0:04:40.920 peak of nearly sixty nine thousand. Billionaire investor Mike Novigrats 0:04:40.920 --> 0:04:43.040 weighed in on the sell off at the Bloomberg Crypto 0:04:43.120 --> 0:04:45.960 Summit in New York. What I don't think people expected 0:04:46.200 --> 0:04:49.640 was the magnitude of losses that would show up in 0:04:50.240 --> 0:04:53.920 you know, professional institutions balance sheets, and that caused the 0:04:54.000 --> 0:04:57.600 daisy chain of effects. It turned into a full fledged 0:04:57.640 --> 0:05:00.760 credit crisis. Mike nelvi Grat says, right, gulators should do 0:05:00.800 --> 0:05:03.120 more to protect crypto investors, and he called for more 0:05:03.120 --> 0:05:06.599 transparency in the industry. Oh, we turned to the economy now, Nathan, 0:05:06.640 --> 0:05:10.400 expect higher interest rates for the foreseeable future. That, according 0:05:10.440 --> 0:05:12.839 to black Stone. We caught up with Joseph Zeidel, chief 0:05:12.880 --> 0:05:16.920 investment strategists and Blackstone's Private Wealth Solutions Group. I think 0:05:17.040 --> 0:05:19.440 that inflation is more deeply entrenched in the U s 0:05:19.480 --> 0:05:21.440 economy and it's going to require the FED to take 0:05:21.480 --> 0:05:26.320 interest rates up higher and the tightening cycle longer. So 0:05:26.440 --> 0:05:28.880 my own view is that Fed fund rates could exceed 0:05:29.000 --> 0:05:32.000 four percent. I think they could go above four hours 0:05:32.080 --> 0:05:35.520 and made can close black Stone Private Well, it's Joseph 0:05:35.600 --> 0:05:37.719 Zidel like expects the FED to high by seventy five 0:05:37.720 --> 0:05:40.720 basis points at next week's meeting like the US. Karen, 0:05:40.800 --> 0:05:43.680 inflation continues to be a major problem in Europe and 0:05:43.760 --> 0:05:46.799 fresh Day to show the UK still struggling to tain prices. 0:05:47.000 --> 0:05:49.440 Let's go to London get the latest with Bloomberg's un ponds. 0:05:49.480 --> 0:05:51.680 Good morning You and good morning Nathan and Karen. A 0:05:51.760 --> 0:05:55.960 fresh forty year high for UK inflation. Consumer prices rose 0:05:56.040 --> 0:05:58.560 nine point four percent in the eighth of June, driven 0:05:58.600 --> 0:06:02.040 by searching prices from to fuel. The pain only sets 0:06:02.040 --> 0:06:05.839 get worse, with inflation forecast to top eleven percent in October, 0:06:06.000 --> 0:06:09.359 when another gas and electricity price hike is due. The 0:06:09.400 --> 0:06:12.920 banking and has already increased rates five times since December, 0:06:13.080 --> 0:06:14.880 and today's day so well had to calls for a 0:06:15.000 --> 0:06:18.120 jumbo hike at the bank's next meeting in London. I'm 0:06:18.120 --> 0:06:19.919 you and pots in back day break, all right you 0:06:19.960 --> 0:06:21.919 and thank you all back here in the US, President 0:06:21.960 --> 0:06:25.400 Biden plans to take executive action to tackle climate change. 0:06:25.640 --> 0:06:29.080 With his clean energy agenda stalled on Capitol Hill, the 0:06:29.120 --> 0:06:31.760 President will outline his steps later today at a shuttered 0:06:31.800 --> 0:06:35.560 coal fire plant in Somerset, Massachusetts. He is not expected 0:06:35.600 --> 0:06:39.200 to declare a climate emergency, but Bloomberg Politics contributor mc 0:06:39.279 --> 0:06:42.000 davis says he doesn't have to. There are many things 0:06:42.000 --> 0:06:45.520 he can do around pollution from cars, and and and 0:06:45.520 --> 0:06:49.440 and and put a little pressure on Joe Mansion by 0:06:49.520 --> 0:06:51.560 you know, talking about doing some things around coal and 0:06:51.560 --> 0:06:55.480 gas fire power plant regulation. So I think he could 0:06:55.560 --> 0:06:58.320 bring him along to the negotiating table if he wants 0:06:58.320 --> 0:07:00.320 to put some heat on Mansion. And bloom you got 0:07:00.360 --> 0:07:03.160 Sloomberg Politics, A contributor. Big Davis will have more on 0:07:03.240 --> 0:07:06.240 the president's announcement in just a few minutes. Bloomberg's and 0:07:06.320 --> 0:07:08.720 Must Do is at the event, and she'll join us 0:07:08.760 --> 0:07:11.920 live again in just a few moments, futures are higher. 0:07:11.960 --> 0:07:15.000 This morning, straight ahead, your latest local headlines, plus a 0:07:15.080 --> 0:07:23.640 check of sports. And this is Bloomberg. All right, Karen, 0:07:23.680 --> 0:07:26.000 thank you. Six seven on Wall Street, seventy eight degrees 0:07:26.000 --> 0:07:28.800 in Central Park. Still dealing with an accident investigation eastbound 0:07:28.840 --> 0:07:31.560 Bruckner at the Sheridan. More coming up in traffic. First, 0:07:31.640 --> 0:07:34.440 John Tucker with what else is going on in sweltering 0:07:34.440 --> 0:07:36.280 New York and around the world? John, And as a 0:07:36.360 --> 0:07:39.240 heat wave griff the city, Nathan, everyone's been ordered out 0:07:39.280 --> 0:07:42.360 of the water on Rockaway Beaches. Sharks were seen prowling 0:07:42.400 --> 0:07:45.320 the area. The police department has been doing flyovers to 0:07:45.360 --> 0:07:48.240 look for any threats. Parts Officials say they'll reopen the 0:07:48.240 --> 0:07:51.400 beach when it's safe to do so. Trump indorsed candidate 0:07:51.520 --> 0:07:55.080 won the closely watch Republican primary for governor in Maryland. 0:07:55.360 --> 0:07:58.600 The story from Bloomberg sat me Morris Dan Cox won 0:07:58.640 --> 0:08:01.440 the Republican primary in the race to replace Governor Larry 0:08:01.480 --> 0:08:04.080 Hogan of Maryland, a race that became a proxy clash 0:08:04.280 --> 0:08:09.520 between former President Trump and Hogan, a potential GOP presidential candidate. 0:08:09.880 --> 0:08:13.360 Trump had endorsed Cox, while Hogan, who can't seek re election, 0:08:13.400 --> 0:08:16.400 because of term limits. Backed Kelly Schultz, who served in 0:08:16.440 --> 0:08:20.000 Hogan's administration, Cox will face the winner of the crowded 0:08:20.000 --> 0:08:23.880 Democratic primary. Cox organized bus loads of Trump supporters to 0:08:23.960 --> 0:08:27.120 attend the Stop the Steel rally before the assault on 0:08:27.160 --> 0:08:31.960 the US capital in Washington. I'm anymore as Bloomberg Daybreak. 0:08:32.040 --> 0:08:35.920 In Maryland's Democratic primary, former nonprofit leader westmore lad the 0:08:35.920 --> 0:08:38.000 field with thirty six percent of the vote. He was 0:08:38.040 --> 0:08:41.320 followed by former Labor Secretary Tom Perez and State Controller 0:08:41.360 --> 0:08:45.080 Peter Frenshaw, who garnered twenty seven nine of the vote. 0:08:45.320 --> 0:08:48.880 Former Secretary State Henry Kissinger has some words of advice 0:08:48.920 --> 0:08:53.000 for President Biden regarding China. That story from Ed Baxter. Kissinger, 0:08:53.040 --> 0:08:55.720 of course, was Richard Nixon State Department. Later, during the 0:08:55.760 --> 0:09:00.000 time of Ping Pong diplomacy with China, Kissinger tells Bloomberg's 0:09:00.040 --> 0:09:03.040 editor in chief John Michael Thwaite at the Intelligence Squared event, 0:09:03.480 --> 0:09:06.719 it is important to prevent some of China's actions, that 0:09:07.559 --> 0:09:12.240 it's a permanent detendment, that it's not something that can 0:09:12.320 --> 0:09:21.679 be achieve uh endless confrontations. Kissinger says, today's world needs flexibility. 0:09:21.920 --> 0:09:25.160 In San Francisco, I'm at Baxter Bloomberg Daybreak and former 0:09:25.280 --> 0:09:27.839 New York City Mayor Bill Deblancia says he's dropping out 0:09:27.840 --> 0:09:30.600 of the crowded Democratic primary race for an open seat 0:09:30.800 --> 0:09:34.480 in the state's redrawn tenth congressional district. De Blasia says 0:09:34.679 --> 0:09:37.960 it's clear people are looking for another option, pulls that 0:09:37.960 --> 0:09:41.200 showed him trailing several other candidates and A thirty one 0:09:41.280 --> 0:09:43.880 year old crew member on Law and Order Organized Crime 0:09:44.000 --> 0:09:47.040 was fatally shot in Brooklyn this week while working on 0:09:47.120 --> 0:09:50.120 the production of the TV show Johnny Pizzaro was found 0:09:50.160 --> 0:09:53.920 unconscious and unresponsive with multiple gunshot wounds to the head 0:09:53.960 --> 0:09:57.800 and neck on North Henry Street in Greenpoint. Global News 0:09:57.800 --> 0:09:59.839 twenty four hours a day on Aeron on Bloomberg Quick 0:09:59.880 --> 0:10:02.120 to Power by more than twenty seven hundred journalists and 0:10:02.120 --> 0:10:05.680 analysts and more than one countries. I'm John Tucker. This 0:10:05.720 --> 0:10:13.320 is Bloomberg, all right, John, thank you, coming up to 0:10:13.360 --> 0:10:15.360 six ten on Wall Street and John Sashower has a 0:10:15.360 --> 0:10:17.839 Bloomberg Sports update. Thanks Nathan. There was a long period 0:10:17.840 --> 0:10:20.160 where the National League dominated the Baseball All Star Game 0:10:20.200 --> 0:10:23.080 one twenty of twenty one back the nineteen sixties and seventies, 0:10:23.080 --> 0:10:25.319 but lately the American League is at its way. Last 0:10:25.360 --> 0:10:27.360 night in Los Angeles, the n L jumped in front 0:10:27.360 --> 0:10:29.520 two runs in the first inning, but then failed to 0:10:29.520 --> 0:10:32.280 score again. And the Yale did damage in the fourth 0:10:33.240 --> 0:10:36.880 swing and high fly ball trill, forget it way back 0:10:36.920 --> 0:10:40.080 out to left center field and that is tall. Oh 0:10:40.160 --> 0:10:44.520 my goodness, he crushed it, John Carlos Stanton deep into 0:10:44.559 --> 0:10:47.760 the pavilion and left center field, and the American League 0:10:47.760 --> 0:10:50.920 with one swing is tied it up. It's too two. 0:10:51.440 --> 0:10:53.760 As Stanton goes keen, he has had to call the 0:10:53.800 --> 0:10:56.560 Stanton homer travel four hundred and fifty seven ft, longer 0:10:56.600 --> 0:10:58.719 than any homer hit at Dodger Stadium this season. Next 0:10:58.760 --> 0:11:01.400 batter was the Twins Iron Buxton. He had a solo 0:11:01.480 --> 0:11:03.079 shot and that was it for the scoring. The A 0:11:03.240 --> 0:11:05.319 l one three to two and is now one nine 0:11:05.400 --> 0:11:07.280 All Star Games in a row twenty one of the 0:11:07.400 --> 0:11:10.040 last twenty five. Stanton, in l a native, was the 0:11:10.200 --> 0:11:12.599 m v P third Yankee to win Derek Jeter in 0:11:12.640 --> 0:11:15.720 two thousand, Marianna Rivera in two thousand and thirteen. Aaron 0:11:15.800 --> 0:11:18.320 Judge struck out twice, Jose Trevino got a base hit, 0:11:18.360 --> 0:11:21.000 and Estra Cortez pitched the sixth and in Clay Holmes 0:11:21.040 --> 0:11:22.760 got two houts in the eight for the Mets. Jeff 0:11:22.840 --> 0:11:25.120 McNeill over one also got hit by a pitch. Pete 0:11:25.120 --> 0:11:28.520 Alonzo was up once and drew a walk. Miles Bridges 0:11:28.679 --> 0:11:31.280 was the Charlotte Hornets leading score this past season. He's 0:11:31.320 --> 0:11:34.200 currently a free agent. He's now facing three felon accounts 0:11:34.240 --> 0:11:37.600 of domestic violence, excused of assaulting his girlfriend. Waiting word 0:11:37.640 --> 0:11:40.760 on how long the suspension Cleveland quarterback to Shaun Watson 0:11:40.800 --> 0:11:43.200 will get. There's now report it's expected to be eight 0:11:43.320 --> 0:11:46.640 games for sexual misconduct. There was earlier reporting it would 0:11:46.640 --> 0:11:50.360 be the entire season. John stash Award, Blueberg Sports, Nathan 0:11:50.600 --> 0:11:52.480 John Thanks s, S and P. Future is now up 0:11:52.520 --> 0:11:55.480 five points. Stouth Future is up thirty, NaSTA Future is 0:11:55.559 --> 0:11:58.560 up thirty two points. Send your Treasury's up nine thirty seconds. 0:11:58.640 --> 0:12:01.599 The yield two point nine eight percent. You're listening to 0:12:01.720 --> 0:12:09.680 Bloomberg Daybreak Bloomberg eleven three oh weather heat advisory noon 0:12:09.800 --> 0:12:12.680 today till eight Tomorrow night with highs in the load 0:12:12.720 --> 0:12:16.000 of mid nineties all the way into Friday. Right now 0:12:16.160 --> 0:12:24.000 seventy eight in Central Park markets, headlines and breaking new 0:12:24.040 --> 0:12:26.720 ones twenty four hours a day at Bloomberg dot Com, 0:12:26.840 --> 0:12:30.400 The Bloomberg Business at and at Bloomberg Quick Take, She's 0:12:30.440 --> 0:12:39.400 a Bloomberg Business Flash and I'm Karen Moscow. Stocks are 0:12:39.440 --> 0:12:42.360 inching higher amid speculation that the worst of this year's 0:12:42.400 --> 0:12:45.240 equity route made. The over US stock Index futures are 0:12:45.320 --> 0:12:48.120 higher as Netflix surges in early trading on a smaller 0:12:48.160 --> 0:12:51.360 than expected subscriber loss. We check the markets every fifteen 0:12:51.400 --> 0:12:53.760 minutes throughout the trading day. On Bloomberg Guess and p 0:12:53.960 --> 0:12:56.079 Future is up six points this morning. Down Future is 0:12:56.120 --> 0:12:59.080 up thirty seven. Nasday Future is also up thirty seven. 0:12:59.160 --> 0:13:00.840 The decks in German he is up at thirty five 0:13:00.880 --> 0:13:03.600 percent ten. Your treasury of nine thirty seconds held two 0:13:03.600 --> 0:13:05.480 point nine eight percent. The yield on the two year 0:13:05.559 --> 0:13:08.480 three point one eight percent. NIMEX Screwed Oil is down 0:13:08.559 --> 0:13:10.440 one and a half percent out of dollar fifty two 0:13:10.480 --> 0:13:13.080 and a hundred two dollars seventy cents. A barrel comic 0:13:13.120 --> 0:13:16.320 school that will change the seventy eight announced zero one 0:13:16.760 --> 0:13:19.160 two three seven against the dollar, British found one point 0:13:19.200 --> 0:13:21.640 two zero one four and the end one thirty eight 0:13:21.720 --> 0:13:24.640 point to four and Bitcoin this morning of one point 0:13:24.720 --> 0:13:27.840 four percent at twenty three thousand and six twenty five dollars. 0:13:28.120 --> 0:13:30.839 As a Bloomberg Business Flash. Now here's John Tucker with 0:13:30.960 --> 0:13:33.720 more on what's going on around the world. John and Karen. 0:13:33.760 --> 0:13:37.120 President Biden said to announce executive action today to confront 0:13:37.200 --> 0:13:41.560 climate change. Russian President Ladmir Putin's signaling Europe will start 0:13:41.600 --> 0:13:45.200 getting gas again through a key pipeline. Dan Cox wins 0:13:45.240 --> 0:13:48.480 the Republican primer in the race to replace Governor Larry 0:13:48.559 --> 0:13:51.520 Hogan to Maryland, a race that became a proxy clash 0:13:51.600 --> 0:13:55.640 between former President Trump and Hogan. Westmore led the Democratic 0:13:55.720 --> 0:13:58.199 field and the Yankees t and Como stamp name the 0:13:58.320 --> 0:14:01.480 All Star Game, m v P as the American League, 0:14:01.480 --> 0:14:04.079 Beach the National League. Global News twenty four hours a 0:14:04.200 --> 0:14:06.880 day on IRAN, on Bloomberg, Quicksache, We're Powerline. We're the 0:14:07.000 --> 0:14:10.319 twenty seven hood journalists and analysts more than one hundred 0:14:10.360 --> 0:14:14.160 twenty countries. I'm John Soccer. This is Bloomberg. Nathan all right, John, 0:14:14.200 --> 0:14:16.440 thank you. It's six nineteen on Wall Street Live from 0:14:16.480 --> 0:14:19.600 the Bloomberg Interactive Broker Studios. This is a Bloomberg Daybreak, 0:14:19.640 --> 0:14:22.280 and we continue to watch Netflix shares this morning. They're 0:14:22.360 --> 0:14:25.160 up more than seven percent in the pre market after 0:14:25.240 --> 0:14:28.160 the streaming giant second quarter earnings and a subscriber loss 0:14:28.240 --> 0:14:30.680 that came in not as bad as many Wall Street 0:14:30.680 --> 0:14:33.880 analysts were expecting. Let's bringing one of the best of them. KEITHA. 0:14:33.920 --> 0:14:36.600 Wronganathan is with us this morning, Senior media analyst at 0:14:36.640 --> 0:14:40.800 Bloomberg Intelligence. KEITHA. Good morning. So Netflix shed nine hundred 0:14:40.880 --> 0:14:44.000 seventy thousand subscribers in this last quarter and that's a 0:14:44.040 --> 0:14:48.200 good thing. Good morning, Nathan. Yeah, thank you for having me. 0:14:48.400 --> 0:14:51.960 And yeah, it looks like in this environment less bad 0:14:52.200 --> 0:14:54.760 definitely seems to be good. But I think it's still 0:14:54.800 --> 0:14:58.040 a little bit premature for for a victory lap. So yes, uh, 0:14:58.320 --> 0:15:01.640 you know, um I. One one key positive that came 0:15:01.680 --> 0:15:03.960 out of last night's report was that it looks like 0:15:04.120 --> 0:15:09.440 the subscriber base is stabilizing. Uh, you know, we're we're 0:15:09.520 --> 0:15:12.640 done with the worst most likely in terms of subscriber losses. 0:15:12.720 --> 0:15:15.400 But then if you look at the third quarter guide 0:15:15.400 --> 0:15:19.640 doesn't it doesn't look particularly inspiring. But at the same time, 0:15:20.080 --> 0:15:23.160 management seems to have a better handle on what they're 0:15:23.200 --> 0:15:26.000 going to do to read in the great subscriber growth. Yeah, 0:15:26.080 --> 0:15:28.240 as you allude to, Netflix is saying it's going to 0:15:28.320 --> 0:15:31.120 sign up about a million customers in this current quarter. 0:15:31.240 --> 0:15:33.920 That was lower than many analysts were expecting. What was 0:15:33.960 --> 0:15:35.800 at one point eight million or something like that the 0:15:35.880 --> 0:15:38.560 average analyst estimate there. How is it going to do it? 0:15:38.720 --> 0:15:42.280 What does Netflix need to do to cement a turnaround 0:15:42.320 --> 0:15:45.040 after the first quarter that really put a shutter in investors. 0:15:46.000 --> 0:15:48.840 So they really have so many different initiatives whichtball. We 0:15:48.960 --> 0:15:51.360 have to remember that the full streaming game has has 0:15:51.440 --> 0:15:54.800 kind of changed completely. We're we're done with those days 0:15:54.880 --> 0:15:57.720 of heavy growth when you know, services were able to 0:15:57.840 --> 0:16:00.800 easily at and and fifteen million subscriber spread quarters. So 0:16:00.880 --> 0:16:02.440 now we're in a different world where in a little 0:16:02.440 --> 0:16:06.160 bit of an uncharted territory, Netflix does have an advantage. 0:16:06.200 --> 0:16:08.560 It is the dominant streaming platform. They still do have 0:16:08.640 --> 0:16:13.480 two million subscribers, they have huge levels of engagement. Um 0:16:13.640 --> 0:16:16.040 So that is something that they're really looking to capitalize 0:16:16.120 --> 0:16:19.800 on going forward. Um So in three they're going to 0:16:19.840 --> 0:16:23.440 be introducing an advertising tier which they're hoping will um 0:16:23.560 --> 0:16:26.560 you know, not only open up their addressable market significantly, 0:16:26.640 --> 0:16:30.280 but will also then reignite both subscriber growth as well 0:16:30.360 --> 0:16:33.200 as um you know, revenue, But in terms of near 0:16:33.400 --> 0:16:36.200 term and how they're going to um you know, get 0:16:36.400 --> 0:16:39.320 more subscribers onto the service, there's just you know a 0:16:39.400 --> 0:16:43.080 combination of different strategies. So they're obviously going to uh 0:16:43.520 --> 0:16:45.200 I think the biggest thing for them right now. This 0:16:45.320 --> 0:16:47.680 is something that Read Hastings spoke to yesterday as well. 0:16:48.320 --> 0:16:52.600 Stranger Things was by far the biggest driver for this 0:16:52.960 --> 0:16:55.720 uh you know, UM subscriber beat, if you want to 0:16:55.800 --> 0:16:58.520 call it, for the second quarter. So content, content, content, 0:16:58.600 --> 0:17:01.280 content is king. It is absolut netally the biggest differentiator, 0:17:01.680 --> 0:17:03.680 and they do have a content slate that's kind of 0:17:03.880 --> 0:17:06.880 ramping up. The only problem for them is that they're 0:17:07.359 --> 0:17:10.200 their competition is getting much much tougher, so you have 0:17:10.320 --> 0:17:13.800 a lot of great content coming from rival services as well. Yeah, 0:17:13.800 --> 0:17:15.440 I wanted to ask you about that because I know 0:17:15.520 --> 0:17:18.520 you've been bullish in the past about Netflix's content and 0:17:18.600 --> 0:17:21.760 its ability to compete on that score with some of 0:17:21.800 --> 0:17:25.239 the other players like Prime Video, Hulu, Disney Plus, now 0:17:25.600 --> 0:17:29.600 Apple Plus. Does it still have a content advantage compared 0:17:29.640 --> 0:17:32.920 to some of those other players. Absolutely, I do think 0:17:32.960 --> 0:17:36.119 that they have you know, a first mood mover advantage. 0:17:36.200 --> 0:17:39.520 They do have this great ability to drive the social conversation. 0:17:39.680 --> 0:17:42.280 We've seen that time and again with with you know, 0:17:42.400 --> 0:17:45.199 these big, big hits, whether it's an Ozark, whether it's 0:17:45.240 --> 0:17:48.639 a Stranger Things, whether it's a Peaky Blinders. But you know, 0:17:49.040 --> 0:17:51.280 a competition is ramping up. So you know, you brought 0:17:51.359 --> 0:17:54.560 up Apple TV. Plus, they have their flagship show ted Lasso, 0:17:54.640 --> 0:17:56.840 which is coming back. You have a huge movie state 0:17:56.920 --> 0:18:00.200 coming there. You have HBO Max where you have you know, 0:18:00.280 --> 0:18:02.320 the Game of Throne sequel with the House of the Dragon. 0:18:02.880 --> 0:18:05.800 You have Prime, Amazon Prime, that's kind of really doubling down. 0:18:05.840 --> 0:18:08.440 Whether it's you know, they're going after Thursday night football, 0:18:08.600 --> 0:18:11.680 they're prepared to launching They're prepared to launch a lot 0:18:11.760 --> 0:18:14.720 of The Rings, which is supposedly one of the most 0:18:14.800 --> 0:18:18.560 expensive expensive shows in the history of television. So yes, um, 0:18:18.800 --> 0:18:21.879 you know, Netflix definitely has an advantage. But but one 0:18:21.920 --> 0:18:24.600 of the things that they did bring up, um during 0:18:24.880 --> 0:18:28.840 their earnings called was that they're holding content spending flat. 0:18:29.000 --> 0:18:31.360 It's going to be about seventeen billion dollars and that's 0:18:31.359 --> 0:18:34.280 a huge amount of money. But I'm not sure that's 0:18:34.320 --> 0:18:36.399 going to be enough to cut it, especially when you 0:18:36.520 --> 0:18:40.520 have rivals also willing uh to to to write huge, 0:18:40.640 --> 0:18:44.520 huge checks for content. Only about thirty seconds left here, GEETHA. 0:18:44.600 --> 0:18:47.040 But the big question going into this earnings was whether 0:18:47.280 --> 0:18:51.040 people continue to see Netflix as an expense worth spending 0:18:51.119 --> 0:18:54.560 on in this economy. Did Netflix answer that question in 0:18:54.640 --> 0:18:58.359 the earnings? They did so, you know, yes, they do 0:18:58.560 --> 0:19:03.520 allude to inflationary pressures and impending recession and people kind 0:19:03.560 --> 0:19:05.600 of holding back a little bit. We saw some elevated 0:19:05.640 --> 0:19:08.320 shown levels because of the recent price increases that they 0:19:09.000 --> 0:19:12.280 h implemented across the board in so many different regions. 0:19:12.600 --> 0:19:14.000 But at this end of the day, it is a 0:19:14.080 --> 0:19:17.000 compelling value proposition and that and they're hoping that as 0:19:17.040 --> 0:19:20.600 they kind of introduced more features, as they introduce better content, 0:19:21.200 --> 0:19:24.960 people will still hold on to their Netflix subscription even 0:19:26.000 --> 0:19:29.159 with you know, an economic downturn. Great to speak with 0:19:29.240 --> 0:19:31.080 you this morning, KEITHA. Thanks for this Keith of Wrong 0:19:31.160 --> 0:19:35.080 and Nathan senior media analysts at Bloomberg Intelligence. And again, 0:19:35.400 --> 0:19:38.159 Netflix shares on the rise this morning, up more than 0:19:38.280 --> 0:19:42.440 seven percent, following that second quarter subscriber loss that came 0:19:42.480 --> 0:19:46.679 in not as bad as analysts were expecting. SMP futures 0:19:46.760 --> 0:19:49.119 right now up seven points down futures of forty three 0:19:49.200 --> 0:19:53.320 NASTACT futures higher by thirty nine points just ahead. Stocks 0:19:53.400 --> 0:19:55.880 come off their biggest rally in three weeks, and as 0:19:56.000 --> 0:19:59.119 we continue to watch Netflix shares, will bring you the 0:19:59.359 --> 0:20:02.280 five things need to know to start your day. Coming 0:20:02.359 --> 0:20:08.520 up on Bloomberg day Break, Bloomberg eleven three oh weather. 0:20:08.600 --> 0:20:11.160 The heat advisory kicks in noon, doesn't go away till 0:20:11.200 --> 0:20:13.879 eight tomorrow night, but the heat will stay with us 0:20:13.960 --> 0:20:17.320 into Friday. Highs in the low nineties for the rest 0:20:17.400 --> 0:20:22.840 of this week. Right now seventy eight degrees broadcasting live 0:20:23.040 --> 0:20:26.920 from the Bloomberg Interacted Broker Studio in New York, Bloomberg 0:20:27.000 --> 0:20:31.040 and Looking Free to Washington, d C, Bloomberg to Boston, 0:20:31.160 --> 0:20:34.399 Bloomberg one O six one to San Francisco, Bloomberg N 0:20:34.640 --> 0:20:37.879 six to the country, Sirius XM chto one nineteen and 0:20:38.000 --> 0:20:41.320 around the globe the Bloomberg Business APT and Bloomberg Radio 0:20:41.480 --> 0:20:51.160 dot Com. This is Bloomberg Daybreak six thirty on Wall Street. 0:20:51.160 --> 0:20:54.159 Good morning, I'm Nathan Hagar and I'm Karen Moscow. We 0:20:54.280 --> 0:20:56.440 are just about three hours away from the open of 0:20:56.560 --> 0:20:58.480 US trading time for the five things you need to 0:20:58.560 --> 0:21:01.760 notice start your day. Brought to you by Interactive Brokers. 0:21:01.880 --> 0:21:05.080 Interactive Brokers Global Linelist helps you find new global investment 0:21:05.119 --> 0:21:09.560 opportunities to diversify your portfolio and discover undervalued companies that 0:21:09.680 --> 0:21:13.200 may have greater growth potential. Try ibk our Global Analysts 0:21:13.200 --> 0:21:16.800 today at ibk R dot com. Slash g a up first. 0:21:16.960 --> 0:21:19.760 US futures are adding to yesterday's gains on Wall Street, 0:21:19.840 --> 0:21:23.359 which were the biggest in three weeks. Still, Sherry Paul's 0:21:23.359 --> 0:21:26.960 senior portfolio manager with Morgan Stanley Private Wealth, says, the 0:21:27.040 --> 0:21:30.560 markets remain uncertain. Clients I think are feeling very data 0:21:30.640 --> 0:21:34.080 overwhelmed and the greatest threat to portfolio returns as in decision. 0:21:34.320 --> 0:21:36.359 So right now where we're advising clients is to go 0:21:36.560 --> 0:21:38.440 right down the middle of this market. You want to 0:21:38.600 --> 0:21:41.920 plan for inflation being structural and own sectors of the 0:21:42.119 --> 0:21:45.399 market that actually benefit from the reflationary stories. So that 0:21:45.440 --> 0:21:48.480 would put you in financials and energy stocks. Sherry Paul 0:21:48.520 --> 0:21:51.800 with Morgan Stanley Private Wealth says investors sugar remain active 0:21:51.960 --> 0:21:55.400 despite volatility. We get more earnings today. Karen with seventeen 0:21:55.480 --> 0:21:59.560 companies in the SPI reporting, Tesla headlines the list investors 0:21:59.600 --> 0:22:01.479