Speaker 1: Live from the Bloomberg Interacted Burger Studios. This is Bloomberg
Speaker 1: day Break for Thursday, February nine. Coming up today, Disney
Speaker 1: shares surge on earnings and planned job cuts, Credit Swee
Speaker 1: shares tumble, US investors pulled cash. We talked at the
Speaker 1: bank CEO. Feed officials come out in droves for more
Speaker 1: rate hikes, and the death toll from Turkey's massive earthquake
Speaker 1: surpasses sixteen thousand. I'm Amy Morris, the man accused of
Speaker 1: killing an off duty NYPD officer has a criminal record,
Speaker 1: and Connecticut's budget promises more tax cuts. I'm John Stashoer
Speaker 1: and sports and a blockbuster trade than nets delve Kevin
Speaker 1: Durant of Phoenix for three players and four draft picks.
Speaker 1: The Rangers beat Vancouver. That's all straight ahead on Bloomberg
Speaker 1: day Break, The business news you need disturn your day,
Speaker 1: and just one fifteen minute podcast each pointing on Apple, Spotify,
Speaker 1: The Bloomberg Business Appen everywhere you get your podcasts. Good morning,
Speaker 1: I'm Nathan Hagar and I'm kerin Moscow. Here are the
Speaker 1: stories we're following today. We begin this morning with earnings
Speaker 1: and job cuts at Disney. They have the stock up
Speaker 1: six and a quarter percent in early trading. Disney reported
Speaker 1: better than expected sales and profit, led by its theme
Speaker 1: parks division, and CEO Bob Iger is planning to cut
Speaker 1: seven thousand jobs as part of a dramatic restructuring. We
Speaker 1: are going to take a really hard look at the
Speaker 1: cost for everything that we make, both across television and film,
Speaker 1: because things in a very competitive world have just simply
Speaker 1: gotten more expensive. And that's something that is already underway here.
Speaker 1: Disney CEO Bob Iger is seeking five and a half
Speaker 1: billion dollars in cost savings. More than half of that's
Speaker 1: expected to come from the movie and TV budget. Well.
Speaker 1: On the flip side, Nathan Shares of credit suites are
Speaker 1: down more than five percent. This morning, the Swiss banks
Speaker 1: that it expects a substantial loss this year. Clients pulled
Speaker 1: direct one hundred ten billions with Frank's in the latest quarter,
Speaker 1: capping the bank's worst annual performance since the financial crisis.
Speaker 1: CEO al Rick Kerner spoke with us about the results.
Speaker 1: The results are unacceptable, obviously, and that's why we created
Speaker 1: the News to Edgy transformation program, which we as you know,
Speaker 1: communicated enter October to Credit a new Credit Swiss, much
Speaker 1: more focused, simpler build around client needs in the mid term,
Speaker 1: very profitable and the executing at Pace and Credit Swis
Speaker 1: CEO Rick Kerner says fixed income trading revenues were down
Speaker 1: eighty four percent year on year, while equities trading revenues
Speaker 1: from ninety six percent. Stay tuned for more of that
Speaker 1: interview coming up shortly on Bloomberg Daybreak. Well, Karen, We're
Speaker 1: hearing from another banking executive this morning, this time on
Speaker 1: the Fed. In an interview with Reuters, JP Morgan CEO
Speaker 1: Jamie Diamond said the Fed may need to lift its
Speaker 1: benchmark interest rate above five Diamond sent off inflation stops
Speaker 1: falling and gets stuck around three and a half percent,
Speaker 1: the Fed quote may have to go higher than five percent.
Speaker 1: Diamonds comments follow several calls from Fed officials for more
Speaker 1: interest rate hikes. Nathan Policymakers, speaking at separate events yesterday,
Speaker 1: delivered a similar message. And here's FED Governor Christopher Waller.
Speaker 1: We are seeing that effort begin to pay off, but
Speaker 1: we have farther to go, and it might be a
Speaker 1: long fight, with interest rates higher for longer than some
Speaker 1: are currently expecting. But it will not hesitate to do
Speaker 1: what is needed to get my job done. And those
Speaker 1: comments from Christopher Waller were echoed by his colleague, Minneapolis
Speaker 1: Fed President Neil cash Curry. There's not yet much evidence
Speaker 1: in my judgment that the rate hikes that we've done
Speaker 1: so far are having much effect on the labor market,
Speaker 1: and we need to bring the labor market into balance.
Speaker 1: So that tells me we need to do more. How
Speaker 1: much more, I don't know for sure. Neil cash Curry
Speaker 1: says the Fed will likely need to raise interest rates
Speaker 1: to around five point four percent in order to get
Speaker 1: inflation down to the feds two percent goal. Well, those
Speaker 1: hawkish calls by the Fed lead to a sell off
Speaker 1: in stocks yesterday about the SNP NAZDAC fell more than
Speaker 1: one percent. Robert Stimpson, his chief investment officer at Oak associates, Well,
Speaker 1: I think the market has gotten the message and that
Speaker 1: two thousand and twenty three is going to be more
Speaker 1: of the same, where the market gets optimistic that the
Speaker 1: set is close to a pivot or done, only to
Speaker 1: be reminded that no, it may not be. Robert Stimpson
Speaker 1: at Oak Associate says the FETE is still concerned about
Speaker 1: the strong job markets impact on prices. And now let's
Speaker 1: head to the Middle East, Nathan, where the disaster from
Speaker 1: last week's earthquakes is getting worse. The death toll has
Speaker 1: now passed sixteen thousand across Turkey and Syria. Bloomberry symondemic
Speaker 1: Can has the latest from Istanbul. Rescue fs are still underway,
Speaker 1: but it's definitely a race against time to try and
Speaker 1: save as many people as possible. Of course, this is
Speaker 1: the fourth day of rescue efforts now. Both Turkish President
Speaker 1: bridget Type as One and his US counterpart Joe Biden,
Speaker 1: have caught this disaster the worst in a century. President
Speaker 1: as One visited the disaster so in yesterday and he
Speaker 1: promised to rebuild in a year in Bloombergy Simon Demican
Speaker 1: reports that Turkeys stock exchange will be closed for five
Speaker 1: trading days. The country's benchmark index erased twenty one billion
Speaker 1: dollars in value after yesterday's trades were canceled. On the
Speaker 1: geopolitical frontcar in US China relations continue to remain in
Speaker 1: focus and President Biden is denying that ties between the
Speaker 1: two countries are being strained after the balloon incident, Bloomberg
Speaker 1: said Baxter has the story. Biden says he has not
Speaker 1: spoken with China President She Jumping since the incident. On PBS,
Speaker 1: when asked if the relations had taken a big hit,
Speaker 1: he flatly answered, no, No, We're going to compete fully
Speaker 1: with China, but we're not going to look if we're
Speaker 1: not looking for conflict and uh and that's been the
Speaker 1: case so far. Meanwhile, the administration is saying it is
Speaker 1: collecting very valuable information on China's balloon intelligence gathering operation
Speaker 1: and we'll share it with allies around the world. In
Speaker 1: San Francisco, I'm at baxter Burg daybreak, all right, and
Speaker 1: thank you. Meantime, China is blasting President Biden over his
Speaker 1: critical comments about President She jan Ping, and the PBS
Speaker 1: interview ed mentioned the President repeated comments made in his
Speaker 1: State of the Union address that no world leader would
Speaker 1: want to trade places with President She in Beijing this morning,
Speaker 1: at Chinese Foreign Ministry spokeswoman said, quote, the US remarks
Speaker 1: are highly irresponsible and violate basic diplomatic protocols. Future is
Speaker 1: higher this morning. Straight ahead, we have your latest headlines,
Speaker 1: plus a check of sports, and this is Bloomberg. Forty
Speaker 1: one degrees in Central Park It's going to turn cloudy
Speaker 1: today with showers likely this afternoon, going up to near
Speaker 1: fifty degrees. As those showers move out, tonight will dip
Speaker 1: down into the upper forties, and temperatures will rise through
Speaker 1: the overnight hours. So I'm now to look at some
Speaker 1: of the other stories making news in New York and
Speaker 1: around the world with Bloomberg's Amy Morris. Good morning, Amy,
Speaker 1: Good morning, Nathan. Southwest Airlines is canceled two thirds of
Speaker 1: its flights in the wake up severe winter weather and
Speaker 1: internal systems issues, and it's not expected to get caught
Speaker 1: up until this weekend at the earliest. Co and analyst
Speaker 1: Helene Becker tells Bloomberg TV that Southwest under invested in
Speaker 1: I T and now that's come back to haunt them.
Speaker 1: They're doing what should be automated by hand. Um, when
Speaker 1: you have six thousand flights today and and you probably shouldn't,
Speaker 1: you should probably have two thirds of that. Um, it's
Speaker 1: nothing I don't have enough people. It's that they don't
Speaker 1: know where their people are. She says, more than eight
Speaker 1: percent of flight cancelations earlier this week. We're just by
Speaker 1: Southwest Airlines. Connecticut Governor Ned Lamont has unveiled a more
Speaker 1: than fifty billion dollar by any Ill budget that would
Speaker 1: cut income taxes to four and a half percent, down
Speaker 1: from five percent for families making up to one hundred
Speaker 1: thousand dollars per year. He projects it will save about
Speaker 1: four hundred forty million dollars each year. The budget also
Speaker 1: increases spending by three and a half percent this fiscal
Speaker 1: year and then by another one point eight percent next year.
Speaker 1: A councilman from New Jersey was shot to death yesterday.
Speaker 1: That's the second set shooting in a week. Russell Heller
Speaker 1: was a councilman from Milford and was killed outside the
Speaker 1: PSC in g Somerset Division headquarters in Franklin. Police say
Speaker 1: the suspect and that shooting was a former employee, Garry Curtis,
Speaker 1: who was found later dead from a self inflicted gunshot wound.
Speaker 1: This just one week after Sayerville councilwoman unict One Far
Speaker 1: was fatally shot in a vehicle near her home. In
Speaker 1: New York. Police say the alleged NYPD cup killer has
Speaker 1: had previous run ins with law enforcement. Mayor Eric Adams
Speaker 1: tells MSNBC he's not surprised the suspect, thirty eight year
Speaker 1: old Randy Jones has a criminal record to evolve into
Speaker 1: a recidivism that you're seen in not only New York
Speaker 1: but our country is impact in how we keep our
Speaker 1: city safe. Jones was arrested once in New York City
Speaker 1: for strangulation and two other times in Virginia. Now he's
Speaker 1: charged with murder and attempted robbery in the fatal shooting
Speaker 1: of twenty six year old add Fayez. Grand Central Madison
Speaker 1: will officially kick off its full l I Double R
Speaker 1: service schedule at the end of this month's or is
Speaker 1: Tell w NBC TV. Full service will begin on Monday,
Speaker 1: February Global News powered by more than twenty seven hundred
Speaker 1: journalists and analysts and over one twenty countries. I'm Amy
Speaker 1: Morris and this is Bloomberg Nathan. Thanks Amy, time for
Speaker 1: the Bloomberg Sports Update, brought to you by Trice stayed
Speaker 1: out a major departure in Brooklyn, John Stan Shouer, Yeah, Nathan,
Speaker 1: last one out the door, turned out the lights. You
Speaker 1: know they say you need multiple All stars to win
Speaker 1: an NBA championship. Well, a year ago, the Nets had
Speaker 1: put together three of the best players in the NBA,
Speaker 1: but James Harden Kyrie aving Kevin Durant only played sixteen
Speaker 1: games together. All three had expressed desires previously their careers
Speaker 1: to get traded. All three would express that same desire
Speaker 1: to the Nets a year ago, Hard and ship to Philadelphia.
Speaker 1: He's playing for his fourth different team, just this past Sunday,
Speaker 1: Irving Delta Dallas, that's his fourth team. And last night
Speaker 1: then that's traded Kevin Durant to Phoenix, So the Sons
Speaker 1: will become the fourth team that k D has aid for.
Speaker 1: T J. Warren also goes to the Sun's. In return,
Speaker 1: the Nets get three decent players mckel Bridges, Cam Johnson,
Speaker 1: Jay Crowder. They get four first round draft picks. A
Speaker 1: year ago the next traded a first round pick in
Speaker 1: Atlanta for Cam Reddish. He hadn't played a single minute
Speaker 1: for the Knicks in the last two months. Reddish Delta
Speaker 1: Portland with the first round pick. The Knicks get Josh
Speaker 1: Hart from the Blazer's NBA trade deadline coming this afternoon.
Speaker 1: At the Garden, Rangers won their third in a row,
Speaker 1: beat Vancouver four to three. Seaton Halls three game winning
Speaker 1: Street came to an end a home lost to Creighton
Speaker 1: Fordham one again beat you Mass The Rams are now
Speaker 1: nineteen and five and Yukon women lost at Marquette and
Speaker 1: they've now lost two games in a row for the
Speaker 1: first time in thirty years. NFL honors go out to
Speaker 1: night Patrick Mahomes getting ready for the Super Bowl. He's
Speaker 1: expected to win m v P. Two Jets could win
Speaker 1: Rookie of the Year awards, Garry Wilson on the offense
Speaker 1: and Sauce Gardener for defense, a little over a month
Speaker 1: after he nearly died on the field in Buffalo. Tomorrow,
Speaker 1: Hamlin was a Super Bowl Week of Phoenix, picking up
Speaker 1: the NFL Community Service Award. John Stashower Bloomberg Sport Live
Speaker 1: from coast to coast, from New York to San Francisco,
Speaker 1: Boston to Washington, d C. Nationwide on Sirius, example of
Speaker 1: Bloomberg Business app and Bloomberg dot Com. This is Bloomberg Daybreak.
Speaker 1: Good morning. I'm Nathan Hacker. Credit Suite still expects to
Speaker 1: return to profit in that's despite warning of a significant
Speaker 1: loss this year and reporting a fifth straight quarterly decline.
Speaker 1: Credit Swite saw a record hundred twenty billion dollars in
Speaker 1: outflows in the latest quarter, and it's making significant cuts
Speaker 1: to its bonus pool. The CEO of Credit swiz al
Speaker 1: Rick Kerner, spoke about all that and more with Bloomberg's
Speaker 1: Francine Lakwa. Let's listen in we have results. You your
Speaker 1: first got feeling about them. The results are unacceptable, obviously,
Speaker 1: and that's why we created the News to Edgy transformation program,
Speaker 1: which we as you know, communicated er October. To Credit
Speaker 1: New Credits is much more focused, simpler, built around client
Speaker 1: needs in the midterm, very profitable, and we are executing
Speaker 1: at pace. And let we also say we are confirming
Speaker 1: all our targets we gave by the end of October.
Speaker 1: So when do you think results will be acceptable? When
Speaker 1: will they be at a level that you're comfortable with. Look,
Speaker 1: we said this is a three year, three year transformation.
Speaker 1: We gave targets on on return, on times aroacuity. As
Speaker 1: you know, we reconfirmed them. So it will take some time,
Speaker 1: certainly a very transformative year, and then we get better
Speaker 1: and better. What's your outlook for asset flows? So we
Speaker 1: have seen what has happened in October. Let me say
Speaker 1: that you know the outflows we have seen basically are
Speaker 1: more than eighty five stemming from October and November, and
Speaker 1: if you click only in October is more than six.
Speaker 1: So what we did immediately after we could communicate the
Speaker 1: end of October, we put in place and at least
Speaker 1: what the colleagues tell me, an unprecedented client outreach program.
Speaker 1: So we talked in the meantime to more than ten
Speaker 1: thousand wealth management clients individual as we talk, and more
Speaker 1: than fifty thousand clients in Switzerland. And I think that
Speaker 1: has created very good momentum. So if I look into January,
Speaker 1: the group overall isn't that positive on deposits, wealth's management
Speaker 1: globally as well. Let's menationedent Asia Peck as well. Let's
Speaker 1: mentioned PEC being positive on that new assets and Switzerland
Speaker 1: as well. So I think the situation has changed completely.
Speaker 1: When will Christmas be reliably profit again? Look, that is
Speaker 1: a far reaching, far reaching question. We said very clearly
Speaker 1: we will make a loss in twenty twenty three and
Speaker 1: from there on um we will get better and better.
Speaker 1: Talk to me a little bit about compensation. I mean
Speaker 1: there's certainly created waves. There was talk about you delaying
Speaker 1: compensation or doing in the three transits. What is the
Speaker 1: reasoning behind that? No, we we are don't doing it
Speaker 1: in two responsors. So we have we haven't hadn't pick
Speaker 1: you know, sort of say compensation day like today before yesterday.
Speaker 1: And there are very small parts of the firm, particular
Speaker 1: seniors in CSFB that was delighted of it. But you
Speaker 1: know we are we're doing that over the next couple
Speaker 1: of days. But overall it was done globally more less
Speaker 1: at the same day. So what's your strategy on compensation
Speaker 1: and bonuses? Look at this vergy in quotation market is
Speaker 1: pretty simple. That needs to be in line with the
Speaker 1: results more or less um and and I think that's
Speaker 1: the current thinking and and the future thinking. And I
Speaker 1: think there is also something which is very important, you know,
Speaker 1: if you think about new credits with that provides us
Speaker 1: with the opportunity to create an also new culture. And
Speaker 1: that is all what we are defining now. And I
Speaker 1: think the new culture when it comes to compensation in
Speaker 1: principle going forward will be you know, you make profit,
Speaker 1: you paper honest, if you don't, you pay the very
Speaker 1: little or nothing. So that's that's the culture around bonus
Speaker 1: going forward. Are you reallocating bonuses actually at the bank?
Speaker 1: Like how you think about it? What do you mean
Speaker 1: by reallocating in terms of the units. So is it
Speaker 1: seems pretty I guess intuitive that if you make a
Speaker 1: profit or if you would do good, you have bonuses.
Speaker 1: Are you taking some away from certain people to give
Speaker 1: it to others? Like? How has that changed in the
Speaker 1: last twelve months looked not in principle or not. But
Speaker 1: the only thing which we are doing, obviously is as
Speaker 1: you have seen we we we cut the bonus pool significantly,
Speaker 1: which you would expect, I guess in a year like
Speaker 1: last year. But then we make sure and that's maybe
Speaker 1: the the only overlay as we are creating and make
Speaker 1: sure you know that we can really keep the franchise.
Speaker 1: And in this sense it might be that you know,
Speaker 1: a little bit goes more left than right and so on,
Speaker 1: but in principle it goes on the on the underlying results.
Speaker 1: Are you worried about people leaving the firm? Look, we
Speaker 1: have a tough bonus on the sands we are, we
Speaker 1: are in competition with all our friendly peers. But on
Speaker 1: the other hand, I think I believe very strong in
Speaker 1: that one is, you know, new credits bees, but also
Speaker 1: see SFP for important colleagues. On that side creates really
Speaker 1: something which they can believe in. This is something new,
Speaker 1: This is a very very good story, will be very
Speaker 1: profitable on both sides, and there's something people believe it.
Speaker 1: This is Bloomberg Daybreak Today, your morning brief on the
Speaker 1: stories making news from Wall Street to Washington and beyond.
Speaker 1: Look for us on your podcast feed at six am
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Speaker 1: get your podcasts. You can also listen live each morning
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Speaker 1: and on Bloomberg dot Com. I'm Nathan Hager and I'm
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Speaker 1: news you need to start your day right here on
Speaker 1: Bloomberg Daybreak