WEBVTT - Bloomberg Daybreak: December 16, 2022 - Hour 1 (Radio) 0:00:01.840 --> 0:00:05.240 Markets, headlines and breaking news twenty four hours a day 0:00:05.360 --> 0:00:09.480 at Bloomberg dot Com, at Bloomberg Business Outland, at Bloomberg Picktape. 0:00:09.680 --> 0:00:18.800 This is a Bloomberg Business Flash. But I'm Karen Moscow. 0:00:18.840 --> 0:00:21.360 You must not indise future is lower this morning along 0:00:21.400 --> 0:00:24.040 with European shares and the concerned. The resolve at central 0:00:24.040 --> 0:00:26.599 banks and continue their fine against inflation will tip the 0:00:26.640 --> 0:00:29.600 economy into recession. And we check the markets all day 0:00:29.600 --> 0:00:33.160 long here on Bloomberg SMP futures down more than one percent, 0:00:33.200 --> 0:00:35.720 down fifty four points, Dow and NASDACK future is also 0:00:35.800 --> 0:00:37.959 down more than one percent, with Dow futures down four 0:00:38.000 --> 0:00:41.159 hundred twelve points and nastack futures down a hundred twenty one. 0:00:41.400 --> 0:00:43.760 Can your treasury down twelve thirty seconds? He on three 0:00:43.800 --> 0:00:45.960 point four nine percent and they yield on the two 0:00:46.040 --> 0:00:48.800 year at four point to five percent, And that's a 0:00:48.840 --> 0:00:52.280 Bloomberg Business flash. Nathan all right, Karen, thanks for coming 0:00:52.320 --> 0:00:54.880 up to five fifty six on Wall Street's side for 0:00:54.880 --> 0:00:57.920 our daily Bloomberg lob Brief exploring legal issues in the news, 0:00:57.920 --> 0:01:00.280 and today we focus on a New York aw that 0:01:00.320 --> 0:01:04.640 temporarily lifts the statute of limitations on civil sexual abuse 0:01:04.680 --> 0:01:07.600 and harassment claims, and it is expected to lead to 0:01:07.640 --> 0:01:10.560 a flood of lawsuits. Hundreds of alleged victims of sought 0:01:10.640 --> 0:01:13.720 legal advice in recent days, and companies are calling outside 0:01:13.720 --> 0:01:17.720 attorneys to prepare for potential claims. That's according to interviews 0:01:17.720 --> 0:01:20.640 with lawyers from across the country. Lawsuits have already been 0:01:20.680 --> 0:01:24.600 filed against former president Donald Trump, comedian Bill Cosby, and 0:01:24.840 --> 0:01:28.600 billionaire Leon Black over allegations they assaulted women decades ago, 0:01:29.080 --> 0:01:32.759 which their lawyers deny. For more, Bloomberg's June Grosso speaks 0:01:32.760 --> 0:01:37.040 with legal reporter Eric Larson kind of plaintiff sua company 0:01:37.160 --> 0:01:39.920 to hold them accountable for alleged abuse even if the 0:01:39.959 --> 0:01:44.160 alleged abuser is deceased. Yes, in fact, that has already happened. 0:01:44.160 --> 0:01:48.360 In the case of Atlantic Records, part of Warner Music Group. 0:01:48.600 --> 0:01:53.200 Warner Music is being dued because the Atlantic Record founder 0:01:53.600 --> 0:01:58.160 allegedly decades ago, more than forty years ago, sexually abused women. 0:01:58.400 --> 0:02:01.360 So now the company, you know, saying that they're looking 0:02:01.400 --> 0:02:04.400 into these allegations, interviewing people who may have been around 0:02:04.440 --> 0:02:07.120 back then, saying that many of the individuals who would 0:02:07.120 --> 0:02:10.359 have been witnessing our deceased or in their eighties or nineties. 0:02:10.480 --> 0:02:13.760 So clearly this case there's a good illustration of how 0:02:13.800 --> 0:02:17.240 difficult it might be for some of these defendants to 0:02:17.760 --> 0:02:21.280 defend themselves. Notably the suit against Bill Cosby. You know, 0:02:21.400 --> 0:02:25.200 it also named NBC Universal Media as a defendant because 0:02:25.240 --> 0:02:27.880 it aired the Cosby Show in a different World, you know, 0:02:27.960 --> 0:02:32.080 to Echather the cousby starting. So NBC Universal is accused 0:02:32.160 --> 0:02:35.160 of especially turning a blind eye to cause these conducts 0:02:35.200 --> 0:02:37.840 for years. A similar claim made against one of the 0:02:38.000 --> 0:02:41.320 music groups. Of course, both companies are expected to fit 0:02:41.400 --> 0:02:44.480 those very strongly in court, and a lot of these 0:02:44.520 --> 0:02:48.639 claims are expected to be settled before a lawsuit is 0:02:48.680 --> 0:02:52.600 even filed, to avoid the publicity associated with it. So 0:02:52.720 --> 0:02:56.960 plaintiff lawyers best chance is before they even filed the suit, 0:02:57.639 --> 0:02:59.440 That's right. That's why a few of the lawyers, I 0:02:59.480 --> 0:03:01.760 suppose to you said that what we end up seeing 0:03:01.760 --> 0:03:04.360 in court, actual lawsuits that are filed are really just 0:03:04.400 --> 0:03:06.360 going to be the tip of the iceberg, and that 0:03:06.480 --> 0:03:08.480 a lot of these claims are are going to be 0:03:08.520 --> 0:03:12.440 resolved before anything becomes public, and that as these plane 0:03:12.480 --> 0:03:14.959 emplawyers know, you know, some of these claims may be 0:03:15.120 --> 0:03:18.320 so serious that a company will simply want to settle 0:03:18.360 --> 0:03:21.040 them just to keep them from becoming public. That they 0:03:21.040 --> 0:03:24.480 can use that as part of their settlement strategy. So 0:03:24.840 --> 0:03:27.720 I'm not sure if that increases the amount of money 0:03:27.760 --> 0:03:30.080 that they get paid or whatnot. I'm sure that every 0:03:30.080 --> 0:03:32.280 settlement is going to be handled a little bit differently, 0:03:32.360 --> 0:03:36.240 but clearly the reputational damage is potentially significant for some 0:03:36.320 --> 0:03:39.320 of these employers. If you can imagine as Bloomberg Legal 0:03:39.320 --> 0:03:41.840 reporter Eric Larson speaking with our June Grosso on this 0:03:41.920 --> 0:03:44.760 new New York law that temporarily lifts the statue of 0:03:44.800 --> 0:03:48.640 limitations on civil sexual abuse claims. You can catch more 0:03:48.680 --> 0:03:51.280 of that interview, plus analysis of the latest legal news, 0:03:51.480 --> 0:03:54.600 by subscribing to the Bloomberg Law Podcast or downloading the 0:03:54.640 --> 0:03:59.200 show at Bloomberg dot com slash podcast. Attorneys can find 0:03:59.200 --> 0:04:03.240 exceptional legal research and business development tools at Bloomberg Law 0:04:03.320 --> 0:04:06.440 dot com and on the Bloomberg terminal b law Go. 0:04:07.480 --> 0:04:10.240 Looking ahead to the market open looks like more losses 0:04:10.320 --> 0:04:13.800 for Friday, SMP futures down fifty one points, Stown futures 0:04:13.800 --> 0:04:17.080 down three in Nastack futures are lower by a hundred 0:04:17.080 --> 0:04:19.719 thirteen points the ten. Your treasury is down thirteen thirty 0:04:19.760 --> 0:04:21.960 seconds deal three point four nine percent, yield on the 0:04:21.960 --> 0:04:24.520 two year four point to five percent, and I'm ex 0:04:24.520 --> 0:04:26.480 Scrooge down two and a half percent now down a 0:04:26.520 --> 0:04:30.320 buck one barrel comex Scold up two tenths per center, 0:04:30.520 --> 0:04:34.919 three dollars higher at seventy nine eighty per ounce. Euro 0:04:35.040 --> 0:04:37.279 one point zero six to five against the dollar. The 0:04:37.440 --> 0:04:40.000 end one thirty seven point one two. We'll get a 0:04:40.080 --> 0:04:42.679 check of the business headlines, all the news you need 0:04:42.960 --> 0:04:46.720 to start your day. Our two of Bloomberg day Break 0:04:46.839 --> 0:04:54.760 starts right now. Markets, headlines and breaking news twenty four 0:04:54.800 --> 0:04:57.840 hours a day at Bloomberg dot Com, bloo Bloomberg Business 0:04:57.839 --> 0:05:01.040 apt and at Bloomberg Quick Take three. He's a Bloomberg 0:05:01.120 --> 0:05:10.080 Business Flash and I'm Karen Moscow US not Index futures 0:05:10.120 --> 0:05:12.680 are lower this morning, along with European shares and the 0:05:12.760 --> 0:05:15.440 concerned the resolve of central banks to continue their fight 0:05:15.480 --> 0:05:18.800 against inflation will tip the economy into recession. You check 0:05:18.839 --> 0:05:20.840 the markets all day long year at Bloomberg S and P. 0:05:21.040 --> 0:05:23.160 Future is down forty eight points or one at a 0:05:23.200 --> 0:05:26.240 quarter percent down. Futures down three hundred sixty seven points 0:05:26.279 --> 0:05:28.720 or one point one percent, and NAZDAC futures down a 0:05:28.800 --> 0:05:31.440 hundred twelve points or one percent. The decks in Germany's 0:05:31.440 --> 0:05:34.080 down about eight tents of a percent. Ten year treasury 0:05:34.120 --> 0:05:36.720 down thirteen thirty seconds, heel three point four nine percent, 0:05:36.760 --> 0:05:39.120 the yield on the two year four point to five percent. 0:05:39.560 --> 0:05:41.960 Nine X screwed oil is down two points seven percent, 0:05:42.000 --> 0:05:44.240 down two dollars six cents at seventy four dollars five 0:05:44.279 --> 0:05:46.800 cents of barrel comics called up two tens percent or 0:05:46.800 --> 0:05:49.559 three dollars thirty cents at seventeen ninety one ten an ounce. 0:05:49.960 --> 0:05:52.400 The euro one point oh six to four against the dollar, 0:05:52.480 --> 0:05:54.880 British found one point to one six five and the 0:05:54.960 --> 0:05:57.719 ends one thirty seven point oh six. And bitcoin is 0:05:57.720 --> 0:06:01.040 down to in a quarter percent at seventy thousand dollars. 0:06:01.240 --> 0:06:03.760 And that's a bloomberg business flash. Now here's Amy Morris 0:06:03.760 --> 0:06:06.520 with Moore on what's going on around the world. Amy, 0:06:06.839 --> 0:06:10.000 thank you, Karen. Ukrainian authorities say Russia has launched a 0:06:10.080 --> 0:06:13.800 major missile attack on energy of facilities and infrastructure are 0:06:13.920 --> 0:06:17.480 Ukrainian Air Force spokesman says Russia today fired more than 0:06:17.640 --> 0:06:21.400 sixty missiles. A huge aquarium in the center of Berlin 0:06:21.600 --> 0:06:24.599 has burst, spilling more than two hundred sixty four thousand 0:06:24.640 --> 0:06:27.720 gallons of water and debris, causing a wave of destruction 0:06:27.960 --> 0:06:30.960 at the sea life tourist attraction. They're looking into the cause, 0:06:30.960 --> 0:06:34.200 but for now they're blaming freezing temperatures. In sports, the Caps, 0:06:34.200 --> 0:06:36.840 Bruins and Devils lose. The Rangers win. The World Cup 0:06:36.839 --> 0:06:40.479 final between Argentina and France. Is Sunday Global News twenty 0:06:40.480 --> 0:06:42.560 four hours a day on errand on Bloomberg Quick Take, 0:06:42.600 --> 0:06:45.719 powered by more than twenty hundred journalists and analysts in 0:06:45.720 --> 0:06:48.440 more than one hundred twenty countries. I'm Amy Morris. This 0:06:48.600 --> 0:06:51.960 is Bloomberg. Nathan all right, Amy, Thanks, it's two now 0:06:52.000 --> 0:06:55.200 on Wall Street. This is Bloomberg Daybreak. I'm Nathan Hagar. 0:06:55.600 --> 0:06:58.359 That's Karen Moscow. And we've got some other stories making 0:06:58.400 --> 0:07:01.400 news this morning. So let's get right to the Beijing's 0:07:01.560 --> 0:07:05.360 rapidly spreading COVID outbreak has turned the Chinese capital into 0:07:05.400 --> 0:07:09.920 a virtual ghost town. We've seen stores close, restaurants turn empty, 0:07:09.960 --> 0:07:13.080 residents staying home either because they have COVID or afraid 0:07:13.080 --> 0:07:16.600 they'll catch it. While officials have abandoned efforts to track 0:07:16.680 --> 0:07:21.320 case numbers. Anecdotal evidence suggest entire families and offices in 0:07:21.360 --> 0:07:24.000 Beijing have become infected in the span of just days. 0:07:24.720 --> 0:07:27.240 Safe to say, it could prove a difficult issue, to 0:07:27.240 --> 0:07:31.800 say the very least for China's less developed healthcare system. 0:07:31.920 --> 0:07:35.200 Real issues, they're Karen, Oh, indeed, all right, Nathan, While 0:07:35.240 --> 0:07:37.560 we turn to the markets now and Bank of America, 0:07:37.640 --> 0:07:41.200 which is saying that global equity funds saw big inflows 0:07:41.240 --> 0:07:43.560 ahead of this week's f O, m C and ECB 0:07:43.800 --> 0:07:47.000 rate hikes, then hawkish comments triggered a sharp sell off 0:07:47.000 --> 0:07:50.800 in equities. Strategist led by Michael Hartnett say a policy 0:07:50.920 --> 0:07:54.600 mistake by central banks could result in a hard economic 0:07:54.720 --> 0:07:58.520 landing next year. Well. Meantime, the largest U. S steelmaker 0:07:58.960 --> 0:08:02.400 is warning its shareholder as the recession concerns could affect demand. 0:08:02.520 --> 0:08:06.440 New Core says it's steel mills business will report considerably 0:08:06.760 --> 0:08:09.720 lower earnings in the fourth quarter due to lower shipments, 0:08:09.760 --> 0:08:14.640 and it also notes average selling prices are down well, Nathan. 0:08:14.720 --> 0:08:18.560 Amazon is making more moves in the premium video space. 0:08:18.640 --> 0:08:22.600 It's partnering with Games Workshop Group to develop film and 0:08:22.640 --> 0:08:28.200 television productions, with initial work focusing on the Warhammer forty 0:08:28.320 --> 0:08:32.240 universe Warhammer for e K, as it's known by fans. 0:08:32.600 --> 0:08:37.000 It's a franchise that already includes popular tabletop games, over 0:08:37.120 --> 0:08:41.600 three hundred novels, and has licenses content for several successful 0:08:41.760 --> 0:08:44.920 video games. Warhammer forty K Navan. Yeah, I guess I'm 0:08:44.960 --> 0:08:47.480 gonna have to catch up with see if my kids 0:08:47.559 --> 0:08:50.760 know anything about that. I am lost when it comes 0:08:50.800 --> 0:08:53.000 to video games. All right, let's get right back to 0:08:53.080 --> 0:08:56.480 this market check in now with Tracy mcmillion, head of 0:08:56.480 --> 0:09:01.360 Global Asset Allocations Strategy of Wells Fargo. This is no game, Tracy, 0:09:01.400 --> 0:09:05.319 as we watch this sell off continue on the back 0:09:05.440 --> 0:09:09.959 of really hawkish rhetoric from central banks, what is this 0:09:10.160 --> 0:09:16.880 market getting set for? Yeah, so definitely markets are keying 0:09:16.960 --> 0:09:20.600 off the said latest policy decision, and you know, add 0:09:20.679 --> 0:09:25.640 to that the the CBS hawkish comments yesterday, and you know, 0:09:25.800 --> 0:09:31.679 markets are are really starting to, um, I guess recognize 0:09:31.720 --> 0:09:35.640 the reality of a recession, a recession probably here in 0:09:35.640 --> 0:09:38.600 the US and a global recession and what that means. 0:09:38.800 --> 0:09:42.520 And you know the unemployment, the earnings contraction that comes 0:09:42.600 --> 0:09:46.240 with that. So you know what what markets are now 0:09:46.440 --> 0:09:51.200 looking at is that reality, and they don't typically bottom 0:09:51.760 --> 0:09:55.880 until the central banks are are finished tightening, so you know, 0:09:55.920 --> 0:10:00.679 we won't necessarily see a recovery as long as we're 0:10:00.679 --> 0:10:05.920 we're um, we have restrictive monetary policy, so you know, UM, 0:10:05.960 --> 0:10:10.320 we think that markets are probably in for more choppiness, UM, 0:10:10.480 --> 0:10:15.600 for a difficult ride as we move into three more 0:10:15.679 --> 0:10:19.040 chopping us or a downward trajectory. You say that the 0:10:19.080 --> 0:10:23.120 market doesn't hit bottom until after a recession. What kind 0:10:23.120 --> 0:10:26.959 of bottom can we be looking for here? Yeah, so, um, 0:10:27.760 --> 0:10:33.439 today we have a price target at the end of 0:10:34.360 --> 0:10:37.880 three of forty four hundred on the SMP five hundred, 0:10:38.080 --> 0:10:41.040 and so you know, from where we are today, that's 0:10:41.080 --> 0:10:45.160 about fourteen percent higher. But we think that markets could 0:10:45.200 --> 0:10:49.640 go down to the mid to lower three thousands, and 0:10:49.720 --> 0:10:52.960 that's where we think that the risk reward tradeoff is 0:10:53.000 --> 0:10:56.280 going to be much more attractive. At thirty five hundred, 0:10:56.360 --> 0:11:00.520 for example, to our rand target, that's about any five 0:11:00.520 --> 0:11:04.720 percent upside, So we'd be looking for those opportunities around 0:11:04.800 --> 0:11:07.280 the mid three thousands. If we get down to the 0:11:07.320 --> 0:11:11.880 lower three thousands, that's probably another good opportunity to put 0:11:11.920 --> 0:11:16.560 cash to work. And we're just shy of on the 0:11:16.720 --> 0:11:19.880 SMP five hundred right now, for those keeping score, where 0:11:19.920 --> 0:11:24.120 do you see those potentials, those pockets for opportunity heading 0:11:24.160 --> 0:11:28.000 into the new year, Tracy, Yes, And heading into the 0:11:28.000 --> 0:11:30.600 new year, we're going to continue to be defensive, So 0:11:30.800 --> 0:11:34.600 that means US sets that are international assets, and we 0:11:34.720 --> 0:11:39.760 like large tap companies over mid tap companies UH and 0:11:39.880 --> 0:11:44.040 small cap companies. And we also like UM the sectors 0:11:44.160 --> 0:11:49.760 that have higher quality earnings. So that's for US UM, UH, 0:11:49.880 --> 0:11:55.199 information technology, energy, we like healthcare. We'd stay away from 0:11:55.240 --> 0:11:59.839 consumer discretionary and reads that are more economically sensitive and 0:12:00.280 --> 0:12:04.520 within fixed income UM. We like the short term part 0:12:04.559 --> 0:12:07.760 of the curve because of those higher rates and the 0:12:07.800 --> 0:12:11.960 optionality that it provides UM, and we like long term 0:12:12.040 --> 0:12:14.800 because we are seeing these rates that are higher than 0:12:14.840 --> 0:12:19.120 they've been over the course of the last decade. Are 0:12:19.160 --> 0:12:22.840 you looking for further earnings revision? Setting into this conversation, 0:12:22.960 --> 0:12:27.320 we just noted the new core is UH predicting considerably 0:12:27.360 --> 0:12:30.520 lower earnings, and we've had this sort of parade of 0:12:30.880 --> 0:12:35.680 companies forecasting further downward revisions for earnings. Is that something 0:12:35.720 --> 0:12:40.120 that's part of the theme for you in Yeah, I 0:12:40.240 --> 0:12:44.439 definitely is we're looking for earnings estimates to come down 0:12:45.160 --> 0:12:48.679 quite a bit from from where they are today. UM 0:12:48.679 --> 0:12:53.640 Our earnings estimate on the SMP five hundred is two 0:12:53.640 --> 0:12:59.720 oh five, and so that is significantly below the two 0:13:00.040 --> 0:13:04.440 it's keen that is the top line estimate for analysts, 0:13:04.440 --> 0:13:08.680 and significantly below the bottoms up estimates which are still 0:13:08.720 --> 0:13:14.920 around two. So in our last minute here, Tracy, what's 0:13:15.160 --> 0:13:19.480 the possibility that we could see a Santa rally at 0:13:19.520 --> 0:13:21.160 the end of this year? Is is that just out 0:13:21.160 --> 0:13:25.480 the window at this point? Well, I guess anything's possible, 0:13:25.600 --> 0:13:28.920 especially with very thin trading here at the end of 0:13:28.960 --> 0:13:34.080 the year. UM. Any directionality can push markets UM significantly 0:13:34.200 --> 0:13:38.800 higher or significantly lower UM. But I'd say that, you know, 0:13:38.880 --> 0:13:41.880 given the news that we've gotten over the past couple 0:13:41.920 --> 0:13:45.000 of days, we just really have gotten nothing to support 0:13:45.040 --> 0:13:50.239 a bulk case, so UM a Santa rally is probably 0:13:50.360 --> 0:13:55.720 unlikely this year. All right, Thanks as always Tracy McMillian. 0:13:55.880 --> 0:13:59.319 See how things go. And we do have the possibility 0:13:59.360 --> 0:14:02.720 for yet more of vlatility, especially today as a lot 0:14:02.760 --> 0:14:07.120 of these options contracts come doing Triple Witch and Tracy McMillian, 0:14:07.200 --> 0:14:10.839 head of Global Asset Allocations Strategy, at Wells Fargo with 0:14:10.920 --> 0:14:15.240 us this morning as we watch the selling continue around 0:14:15.320 --> 0:14:18.880 the world. SMP futures right now are down fifty three point, 0:14:18.880 --> 0:14:21.960 STAFF futures down four or five, NASTAC futures are lower 0:14:22.000 --> 0:14:24.360 by a hundred twenty five points. The decks in Germany 0:14:24.400 --> 0:14:26.640 down just about one percent. The CACK in Paris is 0:14:26.640 --> 0:14:29.080 lower by one and a quarter percent. So it's a 0:14:29.160 --> 0:14:32.680 sell off across the board. In risk assets, tenure treasuries 0:14:32.680 --> 0:14:35.680 down thirteen thirty seconds, the old three point four nine 0:14:35.680 --> 0:14:38.120 percent yield on the two year right now four point 0:14:38.160 --> 0:14:40.600 to five percent, and nime X screwed as lower as well, 0:14:40.640 --> 0:14:43.760 down two point six percent, trading at seventy four dollars 0:14:44.120 --> 0:14:47.280 sixteen cents of barrel. Much more to come. Stay with us. 0:14:47.360 --> 0:14:54.200 You're listening to Bloomberg Daybreak, Markets, headlines and breaking news 0:14:54.280 --> 0:14:56.920 twenty four hours a day at Bloomberg dot Com, the 0:14:56.960 --> 0:15:00.480 Bloomberg Business At and a Bloomberg Quick Take. She's a 0:15:00.520 --> 0:15:09.760 Bloomberg Business Flash. Hey, good morning. I'm Karen Moscow, and 0:15:09.840 --> 0:15:12.120 futures are falling this morning. We check the markets all 0:15:12.160 --> 0:15:15.680 day long here on Bloomberg Radio with SMP futures UH 0:15:15.800 --> 0:15:18.360 down one point three percent on fifty one points this morning. 0:15:18.360 --> 0:15:20.680 Down futures down one point two percent or three hundred 0:15:20.720 --> 0:15:23.400 eighty seven points, and NASDAG futures are falling one point 0:15:23.440 --> 0:15:26.600 one percent or hundred twenty seven points. Tenure treasury down 0:15:26.640 --> 0:15:29.160 twelve thirty seconds. He on three point four nine percent. 0:15:29.240 --> 0:15:31.720 They yield on the two year four point to five percent. 0:15:32.160 --> 0:15:34.520 Nine X. Screwed oil is down two points seven percent 0:15:34.600 --> 0:15:37.480 or two dollars two cents at seventy four dollars nine 0:15:37.520 --> 0:15:40.200 cents of barrel. And that's a Bloomberg business flash. Now 0:15:40.240 --> 0:15:42.800 here's Amy Morris with Moore on what's going on around 0:15:42.800 --> 0:15:45.640 the world. Any good morning, Thank you, Karen, good morning. 0:15:45.640 --> 0:15:48.600 The White House is encouraging Americans to get their updated 0:15:48.640 --> 0:15:51.560 COVID nineteen backs seem to prevent the spread of the 0:15:51.640 --> 0:15:55.200 virus over the winter. White House COVID nineteen Response Coordinator 0:15:55.280 --> 0:15:59.280 doctor As she Jas says COVID cases and hospitalizations are 0:15:59.320 --> 0:16:02.800 on the rye across the country. Confidential data of about 0:16:02.840 --> 0:16:06.440 a hundred twelve thousand taxpayers inadvertently published by the I 0:16:06.560 --> 0:16:10.280 r S over the summer was mistakenly published again in 0:16:10.360 --> 0:16:14.680 late November, including names and contact information and sports the Caps, 0:16:14.720 --> 0:16:17.760 Bruins and Devils lose. The Rangers win. The World Cup 0:16:17.760 --> 0:16:21.360 final between Argentina and Frances Set for Sunday. Global News 0:16:21.400 --> 0:16:23.920 twenty four hours a day on errand on Bloomberg Quick Take, 0:16:24.000 --> 0:16:27.080 powered by more than twenty seven hundred journalists and analysts 0:16:27.080 --> 0:16:30.320 in more than one hundred twenty countries. I maybe Morris. 0:16:30.320 --> 0:16:33.160 This is Bloomberg, Nathan, Thanks Amy. It's five twenty three 0:16:33.160 --> 0:16:35.320 on Wall Street. Good morning. I'm Nathan Hagar. This is 0:16:35.440 --> 0:16:38.640 Bloomberg Daybreak on the morning. We're talking markets. It has 0:16:38.640 --> 0:16:42.000 been quite the week for the SMP five, sharp gains 0:16:42.040 --> 0:16:45.760 and losses tied to inflation data and the FED decision. Now, 0:16:45.840 --> 0:16:48.560 let's look at the path ahead with Bridgewater Associates co 0:16:48.720 --> 0:16:52.280 Chief investment officer Greg Jensen. He says to expect the 0:16:52.400 --> 0:16:55.560 downturn in the US and that it will last longer 0:16:55.920 --> 0:16:59.600 than previous recessions. Greg Jensen's worried the Fed maybe over 0:16:59.720 --> 0:17:02.320 tie name's he already had to say in a conversation 0:17:02.440 --> 0:17:07.679 with Bloomberg's Guy Johnson and Alex Steele. If China reopens successfully, 0:17:07.720 --> 0:17:10.080 how much of accounts weights is that to the down 0:17:10.160 --> 0:17:14.359 draft you're talking about in Weston markets. Well, in some 0:17:14.400 --> 0:17:16.520 ways it's helpful into certain countries, it will certainly be 0:17:16.560 --> 0:17:20.920 helpful UM and and we do think while the timing 0:17:20.920 --> 0:17:24.200 on that's unknown, it'll it'll be beneficial. Although it's worth 0:17:24.240 --> 0:17:27.080 noting that China did not do the type of balance 0:17:27.119 --> 0:17:32.160 sheet actions that US European policymakers did in the sense 0:17:32.200 --> 0:17:36.360 that UM Chinese small and medium businesses are coming out 0:17:36.400 --> 0:17:38.399 of this with much worse balance sheets than they had 0:17:38.520 --> 0:17:41.399 shut down these businesses. You've allowed them not to default 0:17:41.440 --> 0:17:43.600 on their debt, but you haven't forgiven the debt that's 0:17:43.600 --> 0:17:46.960 been piled up just to live while these business have 0:17:47.000 --> 0:17:49.080 been shut down. So you come out with much bigger 0:17:49.119 --> 0:17:52.120 overhanging China. But the other point I make is as 0:17:52.200 --> 0:17:54.800 China opens, this is not a great thing for the 0:17:54.840 --> 0:17:56.880 U For the U S and Europe. China has been 0:17:57.200 --> 0:17:59.320 a blessing in a sense to the U S and 0:17:59.320 --> 0:18:02.600 European and me because it's been such a disinflationary force 0:18:02.720 --> 0:18:06.040 into a global inflation. China opening and the effect that's 0:18:06.040 --> 0:18:08.720 gonna have on commodity prices and competing for a raw 0:18:08.760 --> 0:18:12.160 materials in the world while the US and Europe are 0:18:12.320 --> 0:18:16.160 entering recession will probably make the central banking dilemma worse 0:18:16.359 --> 0:18:19.439 and potentially draw down, particularly the countries that don't benefit 0:18:19.440 --> 0:18:23.280 as much from Chinese growth, um draw down those economies 0:18:23.280 --> 0:18:26.680 while China picks up. So this is not a great 0:18:26.720 --> 0:18:30.560 thing for the European and US economies, particularly the countries 0:18:30.840 --> 0:18:32.960 that don't have a tremendous amount of exports to China 0:18:33.160 --> 0:18:37.960 and and have monetary policy that is you know, has 0:18:38.080 --> 0:18:40.920 very significant inflation problems to begin with. You're seriously bumming 0:18:40.960 --> 0:18:42.159 me out. I want to go into my bed with 0:18:42.240 --> 0:18:44.280 suit cans and gold bars. So tell me what I'm 0:18:44.280 --> 0:18:45.919 supposed to go hide out in this? Why sit in 0:18:45.960 --> 0:18:49.200 cash for the next few years? Well, I think, first off, 0:18:49.680 --> 0:18:54.040 cash at you know, at these levels are is is competitive. 0:18:54.160 --> 0:18:56.080 You know that's gonna be one of the dilemmas, right, 0:18:56.119 --> 0:18:58.679 So this year you saw it as the interest rate 0:18:58.680 --> 0:19:01.720 has changed a lot, that the change had a big effect. 0:19:02.200 --> 0:19:04.359 Now the bigger deal is going to be the level difference. Right, 0:19:04.400 --> 0:19:08.840 The yield on cash is competitive with the yield and 0:19:08.840 --> 0:19:11.919 equity markets, with obviously the yielded bond markets. So I 0:19:11.920 --> 0:19:14.320 do think you're gonna see more people draw into cash, 0:19:14.440 --> 0:19:17.000 and it's not terrible at at those levels, it's a 0:19:17.240 --> 0:19:20.960 it's a pretty reasonable choice. Secondly, um, I do think 0:19:20.960 --> 0:19:23.280 we're at a turning point where the growth story is 0:19:23.280 --> 0:19:25.199 going to be the bigger deal. So while we do 0:19:25.240 --> 0:19:27.520 think inflation for a variety of reasons will lag and 0:19:27.560 --> 0:19:29.439 be staker and more of a problem than While the 0:19:29.480 --> 0:19:33.119 recent inflation reports are no big surprise, you're gonna get 0:19:33.680 --> 0:19:37.960 probably a mix of inflation reports going forward, and and 0:19:38.000 --> 0:19:39.560 so where do you hide. I mean, we do think 0:19:39.560 --> 0:19:42.800 inflation next bonds are attractive long term inflation has not 0:19:42.880 --> 0:19:45.720 been priced into markets, and if the economy we gets 0:19:45.760 --> 0:19:47.960 a lot, real yields will need to fall. So we 0:19:48.000 --> 0:19:51.119 think that's an area that's that's reasonable. And some of 0:19:51.160 --> 0:19:54.320 the emerging markets that haven't had the inflation problem, particularly 0:19:54.359 --> 0:19:57.720 that can benefit from the tail wind from China's they reopen. 0:19:58.160 --> 0:20:00.680 Those are the types of things where they're decent opportunities. 0:20:00.840 --> 0:20:03.399 But overall, it's not great out there, and cash is 0:20:03.400 --> 0:20:06.320 not a terrible seeing assets don't always go up. Even 0:20:06.320 --> 0:20:08.480 though we've had that, um, you know, we've had that 0:20:08.520 --> 0:20:12.200 feeling over the last decade. That's Bridgewater Associates co Chief 0:20:12.200 --> 0:20:16.000 investment Officer Greg Jensen speaking with Bloomberg's Guy Johnson and 0:20:16.080 --> 0:20:18.119 Alex Steel. You can catch more of that interview on 0:20:18.119 --> 0:20:21.960 Bloomberg dot com and on the Bloomberg Terminal. Assets are 0:20:21.960 --> 0:20:24.960 moving lower this morning. We have SMP futures down to 0:20:25.040 --> 0:20:27.440 fifty one points are one in the third percent down. 0:20:27.480 --> 0:20:29.880 Futures are lower by three undred ninety five points. That's 0:20:29.880 --> 0:20:32.679 a decline of one point two percent. NASTAC futures are 0:20:32.720 --> 0:20:35.520 lower by one point one percent or a hundred twenty 0:20:35.560 --> 0:20:38.600 five points. The tenure treasury is down thirteen thirty seconds, 0:20:38.640 --> 0:20:41.320 yield three point four nine percent. We've got this morning's 0:20:41.359 --> 0:20:44.040 top stories, local headlines, and a fuller check of markets 0:20:44.080 --> 0:20:50.920 straight ahead. First, let's get you your Bloomberg weekend weather forecast. Ramy, 0:20:51.000 --> 0:20:53.560 breezy day across the Tri State area will have temperatures 0:20:53.560 --> 0:20:56.280 between forty five and fifty the safternoon. The rain ends 0:20:56.280 --> 0:20:58.600 as a few showers during the evening. It'll start the 0:20:58.600 --> 0:21:00.960 clear overnight lows near thirty live in town, twenties for 0:21:01.040 --> 0:21:05.160 the suburbs. Sunshine and breezy Tomorrow, highest ranging from forty five. 0:21:05.480 --> 0:21:07.920 It will be mostly sunny colder Sunday, with a high 0:21:07.920 --> 0:21:10.919 of thirty five to your forty. I'm Rob Carolyn with 0:21:10.960 --> 0:21:17.879 your three day forecast on Bloomberg eleven three oh broadcasting 0:21:17.920 --> 0:21:21.640 live from the Bloomberg Interactive Broker Studio in New York. 0:21:21.760 --> 0:21:25.720 Bloomberg E Living Free to Washington, d C, Bloomberg one 0:21:25.840 --> 0:21:29.080 to Boston, Bloomberg one O six one to San Francisco, 0:21:29.119 --> 0:21:32.600 Bloomberg No. Six to the country, Sirius XM Cho one 0:21:32.640 --> 0:21:35.600 nine team, and around the globe, the Bloomberg Business app 0:21:35.720 --> 0:21:45.720 and Bloomberg Radio dot Com. This is Bloomberg Daybreak and 0:21:45.760 --> 0:21:48.119 it is coming up to five thirty on Wall Street. 0:21:48.160 --> 0:21:51.359 Good morning. I'm Karen Moscow, I'm Nathan Hagar. Bloomberg day 0:21:51.359 --> 0:21:53.520 Break is brought to you by se I. Imagine your 0:21:53.520 --> 0:21:57.440 asset management firms operational infrastructure as a competitive advantage. Let 0:21:57.560 --> 0:21:59.880 se I show you how at se I C dot 0:22:00.119 --> 0:22:02.800 M slash I M S. And we are nearly four 0:22:02.840 --> 0:22:05.200 hours away from the open of US trading. Let's get 0:22:05.200 --> 0:22:06.560 you up to date on the news you need to know. 0:22:06.600 --> 0:22:09.600 At this hour. US futures are lower as concerns and 0:22:09.680 --> 0:22:13.520 linger over Central Bank tightening. Only home builders, healthcare, and 0:22:13.560 --> 0:22:17.159 oil and gas companies posted gains in yesterday's session, and 0:22:17.200 --> 0:22:20.480 the energy sector could be poised for more outsized returns 0:22:20.560 --> 0:22:22.600 in the coming year. And as of you from Goldman 0:22:22.640 --> 0:22:28.800 Sacks headed a commodity research Jeff Curry returns, you know, 0:22:29.000 --> 0:22:33.320 so far we're headed towards somewhere around twenty three returns 0:22:33.359 --> 0:22:38.000 and in two. So this is a continuation of the 0:22:38.080 --> 0:22:41.440 strong returns that we've been seen over the last several years. 0:22:41.680 --> 0:22:44.399 Jeff Curry with Goldman Sacks believes commodities could be the 0:22:44.400 --> 0:22:47.680 best performing asset class next year. Well, global stocks, Karen, 0:22:47.720 --> 0:22:49.760 are headed for a weekly slide as the FED, the 0:22:49.760 --> 0:22:52.399 Bank of England, and the European Central Bank all dash 0:22:52.440 --> 0:22:55.800 hopes for more devilish policy. Megan Green, Global Chief economistic 0:22:55.800 --> 0:22:59.919 Crowle Institute says, despite the hawkish tone, inflation could prove sticky. 0:23:00.440 --> 0:23:02.600 I think the Fed is really considered that it will 0:23:02.600 --> 0:23:04.879 be stickier than the market seemed to be pricing in 0:23:04.920 --> 0:23:07.800 and I think that's reasonable. The big question is why 0:23:07.840 --> 0:23:10.240 the Fed didn't think that three months ago with their 0:23:10.240 --> 0:23:15.280 previous economic projections, And the Fed doesn't really clarify that. 0:23:15.640 --> 0:23:18.320