WEBVTT - Disney Surges and Credit Suisse Tumbles

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<v Speaker 1>Live from the Bloomberg Interacted Burger Studios. This is Bloomberg

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<v Speaker 1>day Break for Thursday, February nine. Coming up today, Disney

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<v Speaker 1>shares surge on earnings and planned job cuts, Credit Swee

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<v Speaker 1>shares tumble, US investors pulled cash. We talked at the

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<v Speaker 1>bank CEO. Feed officials come out in droves for more

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<v Speaker 1>rate hikes, and the death toll from Turkey's massive earthquake

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<v Speaker 1>surpasses sixteen thousand. I'm Amy Morris, the man accused of

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<v Speaker 1>killing an off duty NYPD officer has a criminal record,

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<v Speaker 1>and Connecticut's budget promises more tax cuts. I'm John Stashoer

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<v Speaker 1>and sports and a blockbuster trade than nets delve Kevin

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<v Speaker 1>Durant of Phoenix for three players and four draft picks.

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<v Speaker 1>The Rangers beat Vancouver. That's all straight ahead on Bloomberg

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<v Speaker 1>day Break, The business news you need disturn your day,

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<v Speaker 1>and just one fifteen minute podcast each pointing on Apple, Spotify,

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<v Speaker 1>The Bloomberg Business Appen everywhere you get your podcasts. Good morning,

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<v Speaker 1>I'm Nathan Hagar and I'm kerin Moscow. Here are the

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<v Speaker 1>stories we're following today. We begin this morning with earnings

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<v Speaker 1>and job cuts at Disney. They have the stock up

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<v Speaker 1>six and a quarter percent in early trading. Disney reported

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<v Speaker 1>better than expected sales and profit, led by its theme

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<v Speaker 1>parks division, and CEO Bob Iger is planning to cut

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<v Speaker 1>seven thousand jobs as part of a dramatic restructuring. We

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<v Speaker 1>are going to take a really hard look at the

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<v Speaker 1>cost for everything that we make, both across television and film,

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<v Speaker 1>because things in a very competitive world have just simply

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<v Speaker 1>gotten more expensive. And that's something that is already underway here.

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<v Speaker 1>Disney CEO Bob Iger is seeking five and a half

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<v Speaker 1>billion dollars in cost savings. More than half of that's

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<v Speaker 1>expected to come from the movie and TV budget. Well.

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<v Speaker 1>On the flip side, Nathan Shares of credit suites are

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<v Speaker 1>down more than five percent. This morning, the Swiss banks

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<v Speaker 1>that it expects a substantial loss this year. Clients pulled

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<v Speaker 1>direct one hundred ten billions with Frank's in the latest quarter,

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<v Speaker 1>capping the bank's worst annual performance since the financial crisis.

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<v Speaker 1>CEO al Rick Kerner spoke with us about the results.

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<v Speaker 1>The results are unacceptable, obviously, and that's why we created

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<v Speaker 1>the News to Edgy transformation program, which we as you know,

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<v Speaker 1>communicated enter October to Credit a new Credit Swiss, much

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<v Speaker 1>more focused, simpler build around client needs in the mid term,

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<v Speaker 1>very profitable and the executing at Pace and Credit Swis

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<v Speaker 1>CEO Rick Kerner says fixed income trading revenues were down

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<v Speaker 1>eighty four percent year on year, while equities trading revenues

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<v Speaker 1>from ninety six percent. Stay tuned for more of that

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<v Speaker 1>interview coming up shortly on Bloomberg Daybreak. Well, Karen, We're

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<v Speaker 1>hearing from another banking executive this morning, this time on

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<v Speaker 1>the Fed. In an interview with Reuters, JP Morgan CEO

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<v Speaker 1>Jamie Diamond said the Fed may need to lift its

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<v Speaker 1>benchmark interest rate above five Diamond sent off inflation stops

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<v Speaker 1>falling and gets stuck around three and a half percent,

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<v Speaker 1>the Fed quote may have to go higher than five percent.

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<v Speaker 1>Diamonds comments follow several calls from Fed officials for more

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<v Speaker 1>interest rate hikes. Nathan Policymakers, speaking at separate events yesterday,

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<v Speaker 1>delivered a similar message. And here's FED Governor Christopher Waller.

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<v Speaker 1>We are seeing that effort begin to pay off, but

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<v Speaker 1>we have farther to go, and it might be a

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<v Speaker 1>long fight, with interest rates higher for longer than some

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<v Speaker 1>are currently expecting. But it will not hesitate to do

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<v Speaker 1>what is needed to get my job done. And those

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<v Speaker 1>comments from Christopher Waller were echoed by his colleague, Minneapolis

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<v Speaker 1>Fed President Neil cash Curry. There's not yet much evidence

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<v Speaker 1>in my judgment that the rate hikes that we've done

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<v Speaker 1>so far are having much effect on the labor market,

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<v Speaker 1>and we need to bring the labor market into balance.

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<v Speaker 1>So that tells me we need to do more. How

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<v Speaker 1>much more, I don't know for sure. Neil cash Curry

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<v Speaker 1>says the Fed will likely need to raise interest rates

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<v Speaker 1>to around five point four percent in order to get

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<v Speaker 1>inflation down to the feds two percent goal. Well, those

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<v Speaker 1>hawkish calls by the Fed lead to a sell off

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<v Speaker 1>in stocks yesterday about the SNP NAZDAC fell more than

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<v Speaker 1>one percent. Robert Stimpson, his chief investment officer at Oak associates, Well,

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<v Speaker 1>I think the market has gotten the message and that

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<v Speaker 1>two thousand and twenty three is going to be more

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<v Speaker 1>of the same, where the market gets optimistic that the

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<v Speaker 1>set is close to a pivot or done, only to

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<v Speaker 1>be reminded that no, it may not be. Robert Stimpson

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<v Speaker 1>at Oak Associate says the FETE is still concerned about

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<v Speaker 1>the strong job markets impact on prices. And now let's

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<v Speaker 1>head to the Middle East, Nathan, where the disaster from

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<v Speaker 1>last week's earthquakes is getting worse. The death toll has

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<v Speaker 1>now passed sixteen thousand across Turkey and Syria. Bloomberry symondemic

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<v Speaker 1>Can has the latest from Istanbul. Rescue fs are still underway,

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<v Speaker 1>but it's definitely a race against time to try and

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<v Speaker 1>save as many people as possible. Of course, this is

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<v Speaker 1>the fourth day of rescue efforts now. Both Turkish President

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<v Speaker 1>bridget Type as One and his US counterpart Joe Biden,

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<v Speaker 1>have caught this disaster the worst in a century. President

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<v Speaker 1>as One visited the disaster so in yesterday and he

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<v Speaker 1>promised to rebuild in a year in Bloombergy Simon Demican

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<v Speaker 1>reports that Turkeys stock exchange will be closed for five

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<v Speaker 1>trading days. The country's benchmark index erased twenty one billion

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<v Speaker 1>dollars in value after yesterday's trades were canceled. On the

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<v Speaker 1>geopolitical frontcar in US China relations continue to remain in

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<v Speaker 1>focus and President Biden is denying that ties between the

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<v Speaker 1>two countries are being strained after the balloon incident, Bloomberg

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<v Speaker 1>said Baxter has the story. Biden says he has not

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<v Speaker 1>spoken with China President She Jumping since the incident. On PBS,

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<v Speaker 1>when asked if the relations had taken a big hit,

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<v Speaker 1>he flatly answered, no, No, We're going to compete fully

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<v Speaker 1>with China, but we're not going to look if we're

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<v Speaker 1>not looking for conflict and uh and that's been the

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<v Speaker 1>case so far. Meanwhile, the administration is saying it is

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<v Speaker 1>collecting very valuable information on China's balloon intelligence gathering operation

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<v Speaker 1>and we'll share it with allies around the world. In

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<v Speaker 1>San Francisco, I'm at baxter Burg daybreak, all right, and

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<v Speaker 1>thank you. Meantime, China is blasting President Biden over his

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<v Speaker 1>critical comments about President She jan Ping, and the PBS

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<v Speaker 1>interview ed mentioned the President repeated comments made in his

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<v Speaker 1>State of the Union address that no world leader would

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<v Speaker 1>want to trade places with President She in Beijing this morning,

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<v Speaker 1>at Chinese Foreign Ministry spokeswoman said, quote, the US remarks

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<v Speaker 1>are highly irresponsible and violate basic diplomatic protocols. Future is

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<v Speaker 1>higher this morning. Straight ahead, we have your latest headlines,

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<v Speaker 1>plus a check of sports, and this is Bloomberg. Forty

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<v Speaker 1>one degrees in Central Park It's going to turn cloudy

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<v Speaker 1>today with showers likely this afternoon, going up to near

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<v Speaker 1>fifty degrees. As those showers move out, tonight will dip

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<v Speaker 1>down into the upper forties, and temperatures will rise through

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<v Speaker 1>the overnight hours. So I'm now to look at some

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<v Speaker 1>of the other stories making news in New York and

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<v Speaker 1>around the world with Bloomberg's Amy Morris. Good morning, Amy,

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<v Speaker 1>Good morning, Nathan. Southwest Airlines is canceled two thirds of

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<v Speaker 1>its flights in the wake up severe winter weather and

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<v Speaker 1>internal systems issues, and it's not expected to get caught

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<v Speaker 1>up until this weekend at the earliest. Co and analyst

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<v Speaker 1>Helene Becker tells Bloomberg TV that Southwest under invested in

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<v Speaker 1>I T and now that's come back to haunt them.

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<v Speaker 1>They're doing what should be automated by hand. Um, when

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<v Speaker 1>you have six thousand flights today and and you probably shouldn't,

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<v Speaker 1>you should probably have two thirds of that. Um, it's

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<v Speaker 1>nothing I don't have enough people. It's that they don't

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<v Speaker 1>know where their people are. She says, more than eight

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<v Speaker 1>percent of flight cancelations earlier this week. We're just by

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<v Speaker 1>Southwest Airlines. Connecticut Governor Ned Lamont has unveiled a more

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<v Speaker 1>than fifty billion dollar by any Ill budget that would

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<v Speaker 1>cut income taxes to four and a half percent, down

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<v Speaker 1>from five percent for families making up to one hundred

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<v Speaker 1>thousand dollars per year. He projects it will save about

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<v Speaker 1>four hundred forty million dollars each year. The budget also

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<v Speaker 1>increases spending by three and a half percent this fiscal

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<v Speaker 1>year and then by another one point eight percent next year.

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<v Speaker 1>A councilman from New Jersey was shot to death yesterday.

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<v Speaker 1>That's the second set shooting in a week. Russell Heller

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<v Speaker 1>was a councilman from Milford and was killed outside the

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<v Speaker 1>PSC in g Somerset Division headquarters in Franklin. Police say

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<v Speaker 1>the suspect and that shooting was a former employee, Garry Curtis,

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<v Speaker 1>who was found later dead from a self inflicted gunshot wound.

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<v Speaker 1>This just one week after Sayerville councilwoman unict One Far

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<v Speaker 1>was fatally shot in a vehicle near her home. In

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<v Speaker 1>New York. Police say the alleged NYPD cup killer has

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<v Speaker 1>had previous run ins with law enforcement. Mayor Eric Adams

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<v Speaker 1>tells MSNBC he's not surprised the suspect, thirty eight year

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<v Speaker 1>old Randy Jones has a criminal record to evolve into

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<v Speaker 1>a recidivism that you're seen in not only New York

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<v Speaker 1>but our country is impact in how we keep our

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<v Speaker 1>city safe. Jones was arrested once in New York City

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<v Speaker 1>for strangulation and two other times in Virginia. Now he's

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<v Speaker 1>charged with murder and attempted robbery in the fatal shooting

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<v Speaker 1>of twenty six year old add Fayez. Grand Central Madison

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<v Speaker 1>will officially kick off its full l I Double R

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<v Speaker 1>service schedule at the end of this month's or is

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<v Speaker 1>Tell w NBC TV. Full service will begin on Monday,

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<v Speaker 1>February Global News powered by more than twenty seven hundred

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<v Speaker 1>journalists and analysts and over one twenty countries. I'm Amy

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<v Speaker 1>Morris and this is Bloomberg Nathan. Thanks Amy, time for

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<v Speaker 1>the Bloomberg Sports Update, brought to you by Trice stayed

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<v Speaker 1>out a major departure in Brooklyn, John Stan Shouer, Yeah, Nathan,

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<v Speaker 1>last one out the door, turned out the lights. You

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<v Speaker 1>know they say you need multiple All stars to win

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<v Speaker 1>an NBA championship. Well, a year ago, the Nets had

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<v Speaker 1>put together three of the best players in the NBA,

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<v Speaker 1>but James Harden Kyrie aving Kevin Durant only played sixteen

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<v Speaker 1>games together. All three had expressed desires previously their careers

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<v Speaker 1>to get traded. All three would express that same desire

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<v Speaker 1>to the Nets a year ago, Hard and ship to Philadelphia.

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<v Speaker 1>He's playing for his fourth different team, just this past Sunday,

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<v Speaker 1>Irving Delta Dallas, that's his fourth team. And last night

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<v Speaker 1>then that's traded Kevin Durant to Phoenix, So the Sons

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<v Speaker 1>will become the fourth team that k D has aid for.

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<v Speaker 1>T J. Warren also goes to the Sun's. In return,

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<v Speaker 1>the Nets get three decent players mckel Bridges, Cam Johnson,

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<v Speaker 1>Jay Crowder. They get four first round draft picks. A

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<v Speaker 1>year ago the next traded a first round pick in

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<v Speaker 1>Atlanta for Cam Reddish. He hadn't played a single minute

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<v Speaker 1>for the Knicks in the last two months. Reddish Delta

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<v Speaker 1>Portland with the first round pick. The Knicks get Josh

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<v Speaker 1>Hart from the Blazer's NBA trade deadline coming this afternoon.

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<v Speaker 1>At the Garden, Rangers won their third in a row,

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<v Speaker 1>beat Vancouver four to three. Seaton Halls three game winning

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<v Speaker 1>Street came to an end a home lost to Creighton

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<v Speaker 1>Fordham one again beat you Mass The Rams are now

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<v Speaker 1>nineteen and five and Yukon women lost at Marquette and

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<v Speaker 1>they've now lost two games in a row for the

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<v Speaker 1>first time in thirty years. NFL honors go out to

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<v Speaker 1>night Patrick Mahomes getting ready for the Super Bowl. He's

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<v Speaker 1>expected to win m v P. Two Jets could win

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<v Speaker 1>Rookie of the Year awards, Garry Wilson on the offense

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<v Speaker 1>and Sauce Gardener for defense, a little over a month

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<v Speaker 1>after he nearly died on the field in Buffalo. Tomorrow,

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<v Speaker 1>Hamlin was a Super Bowl Week of Phoenix, picking up

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<v Speaker 1>the NFL Community Service Award. John Stashower Bloomberg Sport Live

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<v Speaker 1>from coast to coast, from New York to San Francisco,

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<v Speaker 1>Boston to Washington, d C. Nationwide on Sirius, example of

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<v Speaker 1>Bloomberg Business app and Bloomberg dot Com. This is Bloomberg Daybreak.

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<v Speaker 1>Good morning. I'm Nathan Hacker. Credit Suite still expects to

0:11:20.920 --> 0:11:25.600
<v Speaker 1>return to profit in that's despite warning of a significant

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<v Speaker 1>loss this year and reporting a fifth straight quarterly decline.

0:11:30.000 --> 0:11:33.280
<v Speaker 1>Credit Swite saw a record hundred twenty billion dollars in

0:11:33.320 --> 0:11:36.520
<v Speaker 1>outflows in the latest quarter, and it's making significant cuts

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<v Speaker 1>to its bonus pool. The CEO of Credit swiz al

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<v Speaker 1>Rick Kerner, spoke about all that and more with Bloomberg's

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<v Speaker 1>Francine Lakwa. Let's listen in we have results. You your

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<v Speaker 1>first got feeling about them. The results are unacceptable, obviously,

0:11:50.960 --> 0:11:55.560
<v Speaker 1>and that's why we created the News to Edgy transformation program,

0:11:55.640 --> 0:11:59.360
<v Speaker 1>which we as you know, communicated er October. To Credit

0:11:59.400 --> 0:12:03.480
<v Speaker 1>New Credits is much more focused, simpler, built around client

0:12:03.600 --> 0:12:08.240
<v Speaker 1>needs in the midterm, very profitable, and we are executing

0:12:08.280 --> 0:12:11.160
<v Speaker 1>at pace. And let we also say we are confirming

0:12:11.160 --> 0:12:13.280
<v Speaker 1>all our targets we gave by the end of October.

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<v Speaker 1>So when do you think results will be acceptable? When

0:12:15.920 --> 0:12:18.640
<v Speaker 1>will they be at a level that you're comfortable with. Look,

0:12:18.679 --> 0:12:21.080
<v Speaker 1>we said this is a three year, three year transformation.

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<v Speaker 1>We gave targets on on return, on times aroacuity. As

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<v Speaker 1>you know, we reconfirmed them. So it will take some time,

0:12:29.720 --> 0:12:33.280
<v Speaker 1>certainly a very transformative year, and then we get better

0:12:33.280 --> 0:12:38.560
<v Speaker 1>and better. What's your outlook for asset flows? So we

0:12:38.600 --> 0:12:42.079
<v Speaker 1>have seen what has happened in October. Let me say

0:12:42.120 --> 0:12:45.600
<v Speaker 1>that you know the outflows we have seen basically are

0:12:45.679 --> 0:12:51.160
<v Speaker 1>more than eighty five stemming from October and November, and

0:12:51.200 --> 0:12:53.360
<v Speaker 1>if you click only in October is more than six.

0:12:54.720 --> 0:12:57.520
<v Speaker 1>So what we did immediately after we could communicate the

0:12:57.640 --> 0:13:01.320
<v Speaker 1>end of October, we put in place and at least

0:13:01.320 --> 0:13:06.280
<v Speaker 1>what the colleagues tell me, an unprecedented client outreach program.

0:13:06.320 --> 0:13:08.640
<v Speaker 1>So we talked in the meantime to more than ten

0:13:08.720 --> 0:13:13.040
<v Speaker 1>thousand wealth management clients individual as we talk, and more

0:13:13.040 --> 0:13:16.280
<v Speaker 1>than fifty thousand clients in Switzerland. And I think that

0:13:16.400 --> 0:13:19.640
<v Speaker 1>has created very good momentum. So if I look into January,

0:13:20.440 --> 0:13:25.840
<v Speaker 1>the group overall isn't that positive on deposits, wealth's management

0:13:25.880 --> 0:13:30.080
<v Speaker 1>globally as well. Let's menationedent Asia Peck as well. Let's

0:13:30.080 --> 0:13:33.239
<v Speaker 1>mentioned PEC being positive on that new assets and Switzerland

0:13:33.280 --> 0:13:37.560
<v Speaker 1>as well. So I think the situation has changed completely.

0:13:37.800 --> 0:13:41.559
<v Speaker 1>When will Christmas be reliably profit again? Look, that is

0:13:41.600 --> 0:13:46.040
<v Speaker 1>a far reaching, far reaching question. We said very clearly

0:13:46.080 --> 0:13:48.840
<v Speaker 1>we will make a loss in twenty twenty three and

0:13:48.920 --> 0:13:51.720
<v Speaker 1>from there on um we will get better and better.

0:13:52.360 --> 0:13:53.960
<v Speaker 1>Talk to me a little bit about compensation. I mean

0:13:53.960 --> 0:13:57.640
<v Speaker 1>there's certainly created waves. There was talk about you delaying

0:13:57.720 --> 0:14:00.640
<v Speaker 1>compensation or doing in the three transits. What is the

0:14:00.679 --> 0:14:03.599
<v Speaker 1>reasoning behind that? No, we we are don't doing it

0:14:03.600 --> 0:14:07.480
<v Speaker 1>in two responsors. So we have we haven't hadn't pick

0:14:07.920 --> 0:14:11.880
<v Speaker 1>you know, sort of say compensation day like today before yesterday.

0:14:12.080 --> 0:14:14.880
<v Speaker 1>And there are very small parts of the firm, particular

0:14:15.200 --> 0:14:18.120
<v Speaker 1>seniors in CSFB that was delighted of it. But you

0:14:18.120 --> 0:14:20.520
<v Speaker 1>know we are we're doing that over the next couple

0:14:20.520 --> 0:14:22.920
<v Speaker 1>of days. But overall it was done globally more less

0:14:22.920 --> 0:14:25.440
<v Speaker 1>at the same day. So what's your strategy on compensation

0:14:25.640 --> 0:14:29.560
<v Speaker 1>and bonuses? Look at this vergy in quotation market is

0:14:29.600 --> 0:14:32.280
<v Speaker 1>pretty simple. That needs to be in line with the

0:14:32.360 --> 0:14:36.360
<v Speaker 1>results more or less um and and I think that's

0:14:36.400 --> 0:14:38.800
<v Speaker 1>the current thinking and and the future thinking. And I

0:14:38.800 --> 0:14:41.200
<v Speaker 1>think there is also something which is very important, you know,

0:14:41.280 --> 0:14:44.760
<v Speaker 1>if you think about new credits with that provides us

0:14:44.800 --> 0:14:47.960
<v Speaker 1>with the opportunity to create an also new culture. And

0:14:47.960 --> 0:14:49.800
<v Speaker 1>that is all what we are defining now. And I

0:14:49.840 --> 0:14:52.120
<v Speaker 1>think the new culture when it comes to compensation in

0:14:52.160 --> 0:14:54.920
<v Speaker 1>principle going forward will be you know, you make profit,

0:14:54.960 --> 0:14:59.960
<v Speaker 1>you paper honest, if you don't, you pay the very

0:15:00.040 --> 0:15:02.840
<v Speaker 1>little or nothing. So that's that's the culture around bonus

0:15:02.920 --> 0:15:06.880
<v Speaker 1>going forward. Are you reallocating bonuses actually at the bank?

0:15:07.120 --> 0:15:09.360
<v Speaker 1>Like how you think about it? What do you mean

0:15:09.400 --> 0:15:11.920
<v Speaker 1>by reallocating in terms of the units. So is it

0:15:12.520 --> 0:15:15.240
<v Speaker 1>seems pretty I guess intuitive that if you make a

0:15:15.280 --> 0:15:17.120
<v Speaker 1>profit or if you would do good, you have bonuses.

0:15:17.840 --> 0:15:20.880
<v Speaker 1>Are you taking some away from certain people to give

0:15:20.880 --> 0:15:22.560
<v Speaker 1>it to others? Like? How has that changed in the

0:15:22.640 --> 0:15:25.400
<v Speaker 1>last twelve months looked not in principle or not. But

0:15:25.520 --> 0:15:27.840
<v Speaker 1>the only thing which we are doing, obviously is as

0:15:27.880 --> 0:15:32.000
<v Speaker 1>you have seen we we we cut the bonus pool significantly,

0:15:32.000 --> 0:15:33.800
<v Speaker 1>which you would expect, I guess in a year like

0:15:33.920 --> 0:15:37.160
<v Speaker 1>last year. But then we make sure and that's maybe

0:15:37.200 --> 0:15:39.880
<v Speaker 1>the the only overlay as we are creating and make

0:15:39.920 --> 0:15:42.120
<v Speaker 1>sure you know that we can really keep the franchise.

0:15:42.600 --> 0:15:44.400
<v Speaker 1>And in this sense it might be that you know,

0:15:44.400 --> 0:15:46.680
<v Speaker 1>a little bit goes more left than right and so on,

0:15:46.800 --> 0:15:49.840
<v Speaker 1>but in principle it goes on the on the underlying results.

0:15:50.000 --> 0:15:52.600
<v Speaker 1>Are you worried about people leaving the firm? Look, we

0:15:52.680 --> 0:15:54.960
<v Speaker 1>have a tough bonus on the sands we are, we

0:15:55.040 --> 0:15:59.840
<v Speaker 1>are in competition with all our friendly peers. But on

0:16:00.040 --> 0:16:02.120
<v Speaker 1>the other hand, I think I believe very strong in

0:16:02.160 --> 0:16:04.840
<v Speaker 1>that one is, you know, new credits bees, but also

0:16:04.880 --> 0:16:09.720
<v Speaker 1>see SFP for important colleagues. On that side creates really

0:16:09.920 --> 0:16:12.480
<v Speaker 1>something which they can believe in. This is something new,

0:16:12.680 --> 0:16:15.720
<v Speaker 1>This is a very very good story, will be very

0:16:15.760 --> 0:16:19.160
<v Speaker 1>profitable on both sides, and there's something people believe it.

0:16:20.640 --> 0:16:23.720
<v Speaker 1>This is Bloomberg Daybreak Today, your morning brief on the

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0:16:27.440 --> 0:16:30.200
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