WEBVTT - The Fed Could Head Higher and Musk's Twitter Following

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<v Speaker 1>This is Bloomberg Daybreak here for this Wednesday, the fifteenth

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<v Speaker 1>of February in London. Coming up today, Pivot pushed back,

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<v Speaker 1>Traders abounded ray card bets as US inflation remains stubbornly high.

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<v Speaker 1>The stage of Omaha doubles down on Apple. Bloomberg analyzes

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<v Speaker 1>what Buffett has had by all that glitters isn't Goldman

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<v Speaker 1>David Solomon says the bank expects to rein in hiring soon,

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<v Speaker 1>A considers back dating pay Both scenario plans are returned

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<v Speaker 1>to Brazil and a two billion dollar lottery win. Those

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<v Speaker 1>are the stories we're looking at in today's papers. And

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<v Speaker 1>I'm Leanne Geron's plus in search of more followers. Reports

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<v Speaker 1>emerge that Elon Musk tweet the algorithm to boost his tweets.

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<v Speaker 1>That's all straight ahead on Bloomberg Daybreak Europe. The business

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<v Speaker 1>news you need to start your day in just one

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<v Speaker 1>fifteen minute podcast on Apple, Spotify, the Bloomberg Business app,

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<v Speaker 1>and everywhere you get your podcasts. Good morning, I'm Stephen

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<v Speaker 1>Carroll and I'm Caroline Hick. Here all the stories that

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<v Speaker 1>we're following today. Traders are abandoning bets of the Federal

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<v Speaker 1>Reserve is about to cut rates, with a two year

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<v Speaker 1>treasury yield rising above four and a half percent. The

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<v Speaker 1>market rethink comes after data showed consumer prices rising six

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<v Speaker 1>point four percent in January compared to a year earlier.

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<v Speaker 1>Speaking exclusively to Bloomberg, Richmond FED President Thomas Barkin says

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<v Speaker 1>the central bank will hike higher if needed. We may

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<v Speaker 1>or may not choose to take rates up further if

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<v Speaker 1>inflation continues to persist, but we'll have to see what happens.

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<v Speaker 1>If inflation settles, maybe we don't go quite as far.

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<v Speaker 1>But of inflation persists and levels well above our our target,

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<v Speaker 1>may we'll have to do more. Barkin's view was echoed

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<v Speaker 1>elsewhere by Dallas FED President Laurry Logan, who said rate

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<v Speaker 1>rises may be needed for a longer period than previously anticipated.

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<v Speaker 1>Now moving on, Once considered uninvestable, Chinese stocks have become

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<v Speaker 1>a must have for edge funds again. The latest filings

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<v Speaker 1>show that they loaded up on the shares last quarter

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<v Speaker 1>as Beijing abandoned its COVID zero policy. Even Michael Burry,

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<v Speaker 1>the money manager made famous by the Big Short, is

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<v Speaker 1>going along. Meanwhile, Berkshire Hathaway has provided an update on

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<v Speaker 1>what it's holding, and it's been bulking up its position

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<v Speaker 1>in Apple. The story from Bloombergs Charlie Palace. In addition,

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<v Speaker 1>Berkshire expanded its stakes in Paramount Global and Louisiana Pacific Corp.

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<v Speaker 1>In the last three months of two according to a

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<v Speaker 1>regulatory filing. At the same time, Berkshire trimmed as some

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<v Speaker 1>of its financial holdings, including its stakes in US BANKORPS,

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<v Speaker 1>Bank of New York, Melon and Ally Financial. The remainder

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<v Speaker 1>of the company's portfolio was largely unchanged in New York.

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<v Speaker 1>Charlie Pellett Bloomberg Daybreak Europe Now, Bloomberg has learned that

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<v Speaker 1>the European Union is seeking to force banks to report

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<v Speaker 1>information on frozen Russian Central Bank assets as part of

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<v Speaker 1>its tenth package of sanctions targeting Moscow. Commission is also

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<v Speaker 1>proposing extensive trade restrictions on goods used by Russia's military,

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<v Speaker 1>including technology, heavy vehicles, and electronics. After a record slew

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<v Speaker 1>of job cuts, Goldman CEO David Solomon says the bank

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<v Speaker 1>plans to have stricter hiring policies going forward. He told

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<v Speaker 1>her Credit Swiss conference cutting costs was a key focus

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<v Speaker 1>for him. We are in a position to lower the

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<v Speaker 1>head count of the firm. We've taken some action. Um,

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<v Speaker 1>we have a much tighter hiring plan in three and

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<v Speaker 1>then attrition rolls through and so that also helps and

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<v Speaker 1>creates more cost leverage. I think we're very targeted and

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<v Speaker 1>focused and we'll be in a good place. Speaking at

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<v Speaker 1>the same conference as Solomon JP, Morgan's chief financial officer,

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<v Speaker 1>Jeremy Barnum also struck a pessimistic tone. He warned the

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<v Speaker 1>lender's first quarter trading revenue for this year made a

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<v Speaker 1>kline compared to the eight point eight billion dollars it

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<v Speaker 1>pulled in at the start of two. And finally, Elon

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<v Speaker 1>Musk has reportedly had Twitter's engineers all to the social

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<v Speaker 1>media's algorithm so that his own tweets get more views.

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<v Speaker 1>According to Platformer, the billionaire owner for the social media

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<v Speaker 1>firm was unhappy with the number of views that his

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<v Speaker 1>Super Bowl tweet got. The change would be at odd

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<v Speaker 1>with musque previous comments on preferential treatment before taking the

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<v Speaker 1>company private. He said that he wanted to make the

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<v Speaker 1>site an even playing field without bias. Okay, those are

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<v Speaker 1>top stories this morning. Well, well, well, people doing doing

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<v Speaker 1>making ways to make their their social media more popular

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<v Speaker 1>and not just a regular social media strategy, really, is it? No?

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<v Speaker 1>I mean, look it's a little bit strange, isn't it.

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<v Speaker 1>But yes, it's one report on elon mask and the

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<v Speaker 1>super Bowl tweets over the weekend, and look, I've been

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<v Speaker 1>more focused on what's happening here in the UK Waitrose

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<v Speaker 1>custing prices to compete that the high sweet competition, champagne

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<v Speaker 1>corps being puffed everywhere as a result. Look, I mean

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<v Speaker 1>it's a bit more mundane than that, isn't it. Waits

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<v Speaker 1>is facing so much competition on the high street other

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<v Speaker 1>firms of slashing costs and it goes of course to

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<v Speaker 1>the inflation number that is the all important data. After

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<v Speaker 1>the U s CPI figure yesterday we get the UK

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<v Speaker 1>inflation data at seven am, three d own brand products

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<v Speaker 1>from Waitrose are going to see prices cut. Food price

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<v Speaker 1>inflation is just staggering sixteen point seven and looks interesting

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<v Speaker 1>because we've had other supermarkets have done this already. You know,

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<v Speaker 1>many of the other big players, test Go a Little

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<v Speaker 1>Algae have their price match guaranteed to ensure their charge

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<v Speaker 1>and the same price as Waitrose until now hasn't gotten

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<v Speaker 1>in on that. But they've obviously decided that even the

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<v Speaker 1>hallowed Waitrose consumer is also worried about prices going up,

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<v Speaker 1>so it is interesting to see them taking this action

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<v Speaker 1>as well. Yeah. Plus also on the kind of paying

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<v Speaker 1>for things side of issues, Yeah, slightly to but should

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<v Speaker 1>have brought an electric vehicle. I'm certainly kicking myself when

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<v Speaker 1>I look at the data that we've been reporting on

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<v Speaker 1>this morning. It's Tom Tom data, but apparently London second

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<v Speaker 1>only to Hong Kong in terms of how expensive it

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<v Speaker 1>is to drive a petrol vehicle more than two thousand,

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<v Speaker 1>five hundred quick last year. It makes you think, certainly,

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<v Speaker 1>walk a bit more. Stephen up next Sooner considers backdating pay.

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<v Speaker 1>Barsonaro plans a return to Brazil and a two billion

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<v Speaker 1>dollar lottery win. Now the paper review on Blue Birddaybreak Europe.

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<v Speaker 1>The news you need to know from today's papers. I

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<v Speaker 1>thought we've got a lottery win in today's newspapers will

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<v Speaker 1>get to that well. I suppose it's a fun story.

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<v Speaker 1>A bit later on Blue Bakeley and Karen's is here

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<v Speaker 1>with details. Let's start with the meet the serious staff

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<v Speaker 1>for the report in the ft. The headline we she

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<v Speaker 1>soon like explores public sector paid deal that back dates

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<v Speaker 1>wage offer. Yes, indeed, Caroline, good morning to you. So

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<v Speaker 1>the Prime Minister and the Chancellor, according to the FT,

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<v Speaker 1>are exploring this pay offer, and this is really to

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<v Speaker 1>try to end the way for public sector strikes that

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<v Speaker 1>we have seen here for months. According to the paper,

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<v Speaker 1>to try to sweeten this pill, Richie Soon, I can

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<v Speaker 1>Jerry me Hunt are considering giving workers a lum sum

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<v Speaker 1>of money by back dating next year's pay rise, which

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<v Speaker 1>takes effect from April probably to the start of January three.

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<v Speaker 1>Now we did hear ripples and a few rumors months

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<v Speaker 1>back about this back dated pay but now after weeks

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<v Speaker 1>of deadlock, it's really important to clarify that no final

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<v Speaker 1>decisions have actually been made as of yet. However, the

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<v Speaker 1>newspaper highlights that these talks do reflect fears currently brewing

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<v Speaker 1>in Downing Street that the waves of strikes could run

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<v Speaker 1>on for months and months. And remember we're not that

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<v Speaker 1>far from an election, and public sector pay awards for

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<v Speaker 1>two and twenty three were around five percent and inflation

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<v Speaker 1>actually stood at ten point five pc back in December,

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<v Speaker 1>so way above those public sector pay awards, and there's

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<v Speaker 1>going to be more news on the inflation front. Today

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<v Speaker 1>we get the UK headline CPI growth and that's scene

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<v Speaker 1>is slowing to ten point three percent in January from

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<v Speaker 1>that figure in December, and that's due to weaker fuel prices,

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<v Speaker 1>even though it is expensive in London to drive, like

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<v Speaker 1>you just mentioned. I just think tenuous link. Yes, no,

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<v Speaker 1>it is. I also just think it's isn't it's clever

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<v Speaker 1>that this is how potentially the government would get around

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<v Speaker 1>the idea that the Prime Minister has said that he

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<v Speaker 1>doesn't want to reopen the pay negotiations for pay this year. Well,

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<v Speaker 1>if it's about next year's pay, that is just backdated.

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<v Speaker 1>It's a little bit of wiggle room in the language,

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<v Speaker 1>isn't there. Yeah, I'm took me a minute to get

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<v Speaker 1>my head around that idea. But I think I've gotten

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<v Speaker 1>a know, so love somebody back dating next year's pay

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<v Speaker 1>your eyes to the storage of this year. That is

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<v Speaker 1>kind of essentially an advance on next year's pay rise. Right,

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<v Speaker 1>I think I've gotten it now. Right, let's turn to

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<v Speaker 1>the World Street Journal next. We've all got it now, Stephen,

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<v Speaker 1>thank you. Yes, I'm always the last. Turn to the

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<v Speaker 1>World Street Journal next, Baltonaro says he will return to

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<v Speaker 1>Brazil and march to lead opposition. Yes, indeed, so the

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<v Speaker 1>former Brazilian president Shayea Bolsonaro is planning his return to Brazil,

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<v Speaker 1>and he said that's actually going to be next month,

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<v Speaker 1>and he's planning to lead the political opposition to President

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<v Speaker 1>Lula de Silva and defend himself against his accusations that

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<v Speaker 1>he incited attacks by protesters on government buildings when he

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<v Speaker 1>was voted out of offers. Now, this is his first

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<v Speaker 1>interview since leaving the top job with the Wall Street Journal,

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<v Speaker 1>and according to the paper, Bolsonaro was surrounded by bodyguards

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<v Speaker 1>as he gave this interview in the US and said

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<v Speaker 1>the right wing movement is not dead and we live

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<v Speaker 1>on Balsonaro has never conceded that he actually lost that election,

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<v Speaker 1>last year's election, and now was actually staying with friends

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<v Speaker 1>in Florida. Well, it seems that he's plotting. Has come

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<v Speaker 1>back to Brazil, and Bolsonaro says he is eager to

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<v Speaker 1>get home, but acknowledge those illegal risks he faced after

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<v Speaker 1>he was accused by prosecutors of inciting rights in January

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<v Speaker 1>with social media posts that did warn of a voter

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<v Speaker 1>fraud echoes there to what may have happened in the

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<v Speaker 1>US Caroline, but it does appear that Bolsonaro is plotting

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<v Speaker 1>a return despite Lula da Silva being in power. He

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<v Speaker 1>won by a slim majority, but still a majority. He

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<v Speaker 1>won exactly so in terms. Yeah, Also, they did have

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<v Speaker 1>a nice photograph. Actually, I thought that they actually had

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<v Speaker 1>a picture Barsonara looking relatively relaxed, I thought in the

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<v Speaker 1>water Journal. And we've seen him go to KFC in

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<v Speaker 1>all different restaurants while he has been staying in the States.

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<v Speaker 1>Just put that out there. Interesting. The headline in the

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<v Speaker 1>Times two billion dollar lottery win Edwin Castro is shocked

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<v Speaker 1>and ecstatic. Why did you want to highlight this newspaper story? Well,

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<v Speaker 1>I want to highlight those because I think this is

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<v Speaker 1>a very smart man. And the reason it's not just

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<v Speaker 1>because he's won the lottery, but he actually has told

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<v Speaker 1>officials that he wants to remain in private and has

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<v Speaker 1>declined to release his age, occupation and also his address.

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<v Speaker 1>But his name has now come into the forefront after

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<v Speaker 1>he did win the biggest amount on the lottery ever,

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<v Speaker 1>I mean, what are you going to do with two

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<v Speaker 1>point zero four billion dollars. Yes, do you. Oh well,

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<v Speaker 1>I'm sure, but he actually scooped that lottery win after

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<v Speaker 1>buying a ticket at a convenience store in l A.

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<v Speaker 1>So what a lucky guy. Now, Castro's win means that

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<v Speaker 1>three of the ten largest tickets in US history have

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<v Speaker 1>all been sold in California. That's just a tip. Yes,

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<v Speaker 1>I've got my playing ticket booked hours ago, but that's

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<v Speaker 1>just a tip bit for anyone who wants to buy

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<v Speaker 1>a winning ticket go to California. But I think this

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<v Speaker 1>is interesting because I think to not actually release your age, occupation,

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<v Speaker 1>and address is probably quite sensible. And I do agree

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<v Speaker 1>as a sense of lottery that they don't don't stay

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<v Speaker 1>sensible for very long. Yes, and tee. But the odds

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<v Speaker 1>I mean of winning. I'm sorry, I'm still into the mathsphatism. Yeah,

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<v Speaker 1>you're more likely to be hit by a meteor, rights, etcetera,

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<v Speaker 1>etcetera than than win. But yeah, really good. Thank you

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<v Speaker 1>so much again for the roundup of newspapers this morning.

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<v Speaker 1>Let's get back to some of the Central Bank action.

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<v Speaker 1>Several FED officials stressing on Tuesday that interest rates may

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<v Speaker 1>need to move to a higher level after US consumer

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<v Speaker 1>prices rose by half a percent in January. That was

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<v Speaker 1>the most in three months. We've got Bloomberg's Mark Cranfield

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<v Speaker 1>from our Markets Life team with us for more market Mark.

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<v Speaker 1>Great to have you with us. Traders forced to rethink

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<v Speaker 1>the Fed path after this inflation data. Yeah, it's been

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<v Speaker 1>a very steady stream of hawkish Federal reserveial racist jobs

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<v Speaker 1>data earlier in the month. But probably the most significant

0:12:43.760 --> 0:12:47.800
<v Speaker 1>thing that's that's happened is that traders are finally taken

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<v Speaker 1>out the potential rate cuts for later in this year.

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<v Speaker 1>For some time we were still pricing but the lower

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<v Speaker 1>rates before the end of that's finally now being taken

0:12:58.840 --> 0:13:01.760
<v Speaker 1>out of the market and seeing that yields arise everywhere,

0:13:01.840 --> 0:13:04.240
<v Speaker 1>and people now are starting to price for the fact

0:13:04.280 --> 0:13:07.400
<v Speaker 1>that the Fed could continue raising rates even through to

0:13:07.520 --> 0:13:10.360
<v Speaker 1>June this year, which is a slight change from what

0:13:10.440 --> 0:13:12.520
<v Speaker 1>we've been seeing in recent weeks. So it's it's all

0:13:12.559 --> 0:13:15.319
<v Speaker 1>starting to come home there and in the rates market

0:13:15.360 --> 0:13:17.760
<v Speaker 1>and obviously other asset platists or we need to start

0:13:17.800 --> 0:13:21.640
<v Speaker 1>paying attention to that because there was some people thinking

0:13:21.720 --> 0:13:24.040
<v Speaker 1>that the Feds will go too far and it was

0:13:24.080 --> 0:13:26.600
<v Speaker 1>going to have to reverse course quickly. But that really

0:13:26.640 --> 0:13:28.160
<v Speaker 1>doesn't look as that it's going to be the case,

0:13:28.280 --> 0:13:31.679
<v Speaker 1>and particularly equity market probably hasn't really noticed that just yet.

0:13:32.880 --> 0:13:35.240
<v Speaker 1>The rethink on inflation has been applied to many other

0:13:35.320 --> 0:13:38.479
<v Speaker 1>global central banks though too. You know this is recalibrating

0:13:38.840 --> 0:13:42.960
<v Speaker 1>for the fairs. Yeah, I mean, it's what happens there

0:13:43.200 --> 0:13:45.640
<v Speaker 1>tends to spread to other places. So it's obviously the

0:13:45.679 --> 0:13:48.640
<v Speaker 1>Europeans will be looking at it pretty closely, probably the

0:13:48.640 --> 0:13:51.880
<v Speaker 1>Bank of England as well. It doesn't usually stop in

0:13:52.240 --> 0:13:54.280
<v Speaker 1>one place like that, and obviously when you look at

0:13:54.640 --> 0:13:57.160
<v Speaker 1>the CPI data there were revisions higher as well. So

0:13:57.280 --> 0:14:00.360
<v Speaker 1>though um, we're under a six percent how door now

0:14:00.559 --> 0:14:02.800
<v Speaker 1>for for CPR, which is a slight improvement, they're still

0:14:02.840 --> 0:14:05.599
<v Speaker 1>way too high and they put up some of the

0:14:05.880 --> 0:14:10.000
<v Speaker 1>previous months. So there's no way as the inflation battle finished.

0:14:10.040 --> 0:14:13.320
<v Speaker 1>As far as the feeders concerned. Europeans are saying similar

0:14:13.360 --> 0:14:16.839
<v Speaker 1>things as well. Um, looks as though the seculation story,

0:14:16.920 --> 0:14:20.400
<v Speaker 1>which we thought was the story, actually the three story,

0:14:20.480 --> 0:14:21.720
<v Speaker 1>and it looks like he's going to go on for

0:14:21.800 --> 0:14:24.760
<v Speaker 1>some time. We've also been hearing mark from the governor

0:14:24.760 --> 0:14:27.920
<v Speaker 1>of Australia Center Bank, Philip I was speaking to lawmakers

0:14:28.000 --> 0:14:33.200
<v Speaker 1>in Canberra and much in his testimony for markets UM,

0:14:33.360 --> 0:14:36.320
<v Speaker 1>he was indicating that he thinks a soft lending it's

0:14:36.360 --> 0:14:40.560
<v Speaker 1>still possible for Australia, and the rates market took it

0:14:40.640 --> 0:14:43.760
<v Speaker 1>pretty well. There was a rebound in the Australian bondom

0:14:43.760 --> 0:14:46.600
<v Speaker 1>market on the back of that UM so as though

0:14:46.640 --> 0:14:48.840
<v Speaker 1>they were thinking that he wouldn't have to go too

0:14:48.920 --> 0:14:51.440
<v Speaker 1>much further on interest rate hikes. He said the job

0:14:51.560 --> 0:14:54.840
<v Speaker 1>wasn't finished, but they seemed to be indicating that there

0:14:54.920 --> 0:14:57.360
<v Speaker 1>might not be too much more, maybe one, possibly too

0:14:58.000 --> 0:15:00.600
<v Speaker 1>two more rate hikes in australa radio. But he does

0:15:00.600 --> 0:15:02.840
<v Speaker 1>seem to have a bit of a communication issue because

0:15:02.920 --> 0:15:05.960
<v Speaker 1>it was only last week that the RBA stunded very

0:15:06.080 --> 0:15:09.680
<v Speaker 1>hawkish and since there he sees you backtracking a little

0:15:09.720 --> 0:15:11.560
<v Speaker 1>bit on some of the things he said. And it's

0:15:11.680 --> 0:15:13.880
<v Speaker 1>been a little bit of the case over the past

0:15:13.920 --> 0:15:16.080
<v Speaker 1>few months that the the r BA say one thing

0:15:16.120 --> 0:15:18.600
<v Speaker 1>and then a few days later there's a different story

0:15:18.680 --> 0:15:20.800
<v Speaker 1>going around and bond traders are having a very difficult

0:15:20.840 --> 0:15:24.920
<v Speaker 1>time trying to figure out exactly what the RBA means.

0:15:24.960 --> 0:15:26.880
<v Speaker 1>And you can see there's a lot of flip flopping

0:15:27.480 --> 0:15:30.560
<v Speaker 1>in that market. So not an easy time to be

0:15:30.640 --> 0:15:34.000
<v Speaker 1>a bond trader in Australia. This is Bloomberg Daybreak Europe,

0:15:34.040 --> 0:15:36.800
<v Speaker 1>your morning brief on the stories making news from London

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<v Speaker 1>played Bloomberg thirty. I'm Caroline Hetke and I'm Stephen Caroll.

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<v Speaker 1>Join us again tomorrow morning for all the news you

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<v Speaker 1>M