WEBVTT - Bloomberg Daybreak: March 23, 2022 - Hour 2 (Radio) 0:00:02.480 --> 0:00:05.960 Live from the Bloomberg Interactive Brokers Studios. This is Bloomberg 0:00:06.040 --> 0:00:09.799 day Break for Wednesday, March two. Coming up this hour, 0:00:09.920 --> 0:00:12.959 President Biden heads to Europe to push for tougher sanctions 0:00:12.960 --> 0:00:16.560 on Russia. Supreme Court Nominique Kitangi Brown Jackson's on Capitol 0:00:16.640 --> 0:00:19.840 Hill for day three of confirmation hearings, and global bomb 0:00:19.840 --> 0:00:24.000 markets suffer on precedented losses since speaking last year. New 0:00:24.079 --> 0:00:27.600 York City may lift rules requiring face masks for children 0:00:27.680 --> 0:00:31.360 under five. Plus. A deadly tornado cuts a destructive path 0:00:31.440 --> 0:00:34.920 through New Orleans by Michael barn More. I'm John Stash, 0:00:34.920 --> 0:00:36.839 Aaron's boards, a loss for the next the win for 0:00:36.840 --> 0:00:39.240 the Alders, the Devils beat the Rangers, and the top 0:00:39.320 --> 0:00:44.560 women's tennis player in the world is retiring. That's all 0:00:44.600 --> 0:00:48.560 straight ahead on Bloomberg day Break on Bloomberg Elementary, on 0:00:48.680 --> 0:00:53.000 New York, Bloomberg one, Washington, d C, Bloomberg one, O 0:00:53.159 --> 0:00:57.600 six one, Boston, Bloomberg nine sixties, San Francisco, Sirius x 0:00:57.800 --> 0:01:01.200 M one nineteen, and around the world on Bloomberg Radio 0:01:01.280 --> 0:01:08.080 dot Com and via The Bloomberg Business at Good Morning. 0:01:08.080 --> 0:01:11.480 I'm John Tucker. I'm Nathan Hagar. Futures moving lower this morning. 0:01:11.480 --> 0:01:13.280 We're coming up to six o one on Wall Street, 0:01:13.280 --> 0:01:15.280 and we checked the markets every fifteen minutes during the 0:01:15.280 --> 0:01:17.840 trading day on Bloomberg. Right now, SMP futures are down 0:01:17.880 --> 0:01:21.360 almost fifteen points, Staff futures down ninety four, Nastack futures 0:01:21.360 --> 0:01:24.360 are lower by almost fifty nine points. The tenure treasury 0:01:24.400 --> 0:01:26.880 is up seven thirty seconds. The yield two point three 0:01:26.959 --> 0:01:29.680 five percent yield on the two year two point one 0:01:29.480 --> 0:01:32.279 one nime X screwed is up one and a half percent, 0:01:32.360 --> 0:01:35.000 or a dollar sixty five to a hundred ten dollars 0:01:35.560 --> 0:01:37.440 cents of barrel. John and Nathan will have more on 0:01:37.480 --> 0:01:39.520 the markets in a minute, but first, the latest on 0:01:39.560 --> 0:01:43.400 the war in Ukraine. Ukraine's President Filoadimrzlyinsky says about one 0:01:43.440 --> 0:01:46.479 hundred thousand people remain in the besieged city of Maripol, 0:01:46.880 --> 0:01:52.000 there without food, water, in medicine, and under constant bombardment. Meantime, 0:01:52.080 --> 0:01:55.200 President Biden heads to Europe to rally allies around tougher 0:01:55.360 --> 0:01:59.200 sanctions on Russia. That story from Bloomberg's at Baxter National 0:01:59.280 --> 0:02:02.000 Security Advice or Jake Sullivan says the Biden trip this 0:02:02.040 --> 0:02:04.880 week will firm the plans he will join our partners 0:02:04.880 --> 0:02:08.640 in imposing further sanctions on Russia and tightening the existing 0:02:08.720 --> 0:02:12.720 sanctions to crack down on evasion and to ensure robust enforcement. 0:02:12.880 --> 0:02:16.000 And reports are that the Biden administration is preparing sanctions 0:02:16.120 --> 0:02:19.800 on most members of Russia State Duma, the lower house 0:02:19.840 --> 0:02:23.160 of parliament, more than three hundred. They will be coordinated 0:02:23.200 --> 0:02:27.280 with the EU. In San Francisco, I'm at Baxter Bloomberg Daybreak. Alright, 0:02:27.320 --> 0:02:30.040 and thanks another major story where following takes us back 0:02:30.080 --> 0:02:32.120 to Capitol Hill, where it will be day three of 0:02:32.200 --> 0:02:35.400 Judge Kittanji Brown Jackson's Supreme Court hearings before the Senate 0:02:35.480 --> 0:02:39.840 Judiciary Committee. Yesterday mark Jackson's first chance to field questions 0:02:39.840 --> 0:02:43.880 from senators. Amy Morris has details from our Bloomberg newsroom 0:02:43.919 --> 0:02:48.200 in Washington. Republican Senator Marsha Blackburn pressed Jackson on abortion 0:02:48.240 --> 0:02:50.840 and whether she would respect the Supreme Court's ruling in 0:02:50.880 --> 0:02:54.480 the event that the Court effectively guts Roe v. Wade. Senator, 0:02:54.560 --> 0:02:58.560 whatever the Supreme Court decides in Dobbs will be the 0:02:58.600 --> 0:03:02.040 president of the Supreme Court art and I commit to 0:03:02.080 --> 0:03:05.400 treating it as I would any other President. Republican Senator 0:03:05.480 --> 0:03:08.320 Tom Cotton pressed to Jackson on policing and the role 0:03:08.400 --> 0:03:11.240 of law enforcement. I asked a simple eider or question, 0:03:11.560 --> 0:03:15.519 does United States need more or fewer police? Senator? The 0:03:15.600 --> 0:03:20.480 determination about whether there should be more or fewer police 0:03:20.560 --> 0:03:25.720 is a policy decision by another branch of government. It 0:03:25.880 --> 0:03:29.280 is not something that judges have control over. More questioning 0:03:29.280 --> 0:03:32.359 by senators is set for today in Washington. I'm any 0:03:32.400 --> 0:03:35.440 more as Bloomberg Daybreak, Thanks Savy, we turned from Washington 0:03:35.520 --> 0:03:38.320 to China down the latest details on the deadly plane 0:03:38.320 --> 0:03:41.320 crash this week. The China Eastern jet to crash Monday 0:03:41.320 --> 0:03:44.440 was traveling close to the speed of sound just moments 0:03:44.480 --> 0:03:48.120 before plunged into a hillside. Let's get more from Bloomberg's Asia, 0:03:48.160 --> 0:03:52.360 corresponded Stephen Angle. When the airplane is traveling at that speed, 0:03:52.480 --> 0:03:58.960 crashing into the ground, it obliterates everything, including potentially the 0:03:59.000 --> 0:04:01.920 flight and voice day, the recorders, the so called black boxes, 0:04:01.960 --> 0:04:05.000 which are actually of course orange, and those have been 0:04:05.040 --> 0:04:07.800 found and that will be critical, of course to determine 0:04:07.920 --> 0:04:11.200 what exactly caused this mystery crash and Bloomberg Steven Angle 0:04:11.240 --> 0:04:15.040 reports that a black box was found just today after all, 0:04:15.120 --> 0:04:18.440 one two people on board died in the crash. Back 0:04:18.440 --> 0:04:20.920 here in the US, John for markets, it's all about 0:04:20.960 --> 0:04:24.200 the FED. Central Bank officials are joining j Powell's hawk 0:04:24.279 --> 0:04:27.640 ish call on interest rates. Cleveland FED President Loretta Mester 0:04:27.760 --> 0:04:30.760 says more than a quarter point hike maybe needed. I 0:04:30.760 --> 0:04:33.560 don't think fifty days this point should be off the table. 0:04:33.920 --> 0:04:36.280 You know, my fungery paths is a little steeper than 0:04:36.320 --> 0:04:40.440 the median path. So if you do the math, you know, um, 0:04:40.480 --> 0:04:43.839 I think what we're gonna probably need to move some 0:04:43.839 --> 0:04:46.080 some of those meetings fifty. But we're gonna go into 0:04:46.080 --> 0:04:48.479 every meeting looking at what the data is telling us 0:04:48.520 --> 0:04:51.400 about the outlet before we determine. We don't predetermine before 0:04:51.440 --> 0:04:54.440 we go there. Loretta Master joined St. Louis FED President 0:04:54.520 --> 0:04:58.040 Jim Bullard and calling for quicker tightening. Bullard tells Bloomberg, 0:04:58.080 --> 0:05:00.080 faster is better when it comes to right, Hi, So 0:05:00.160 --> 0:05:02.080 what you have to do is move the policy rate 0:05:02.200 --> 0:05:06.840 up discreetly a fair amount, not to be too disruptive, 0:05:06.880 --> 0:05:09.640 but I think fifty basis point moves will definitely be 0:05:09.720 --> 0:05:12.240 in the mix, and then get to a level that 0:05:12.320 --> 0:05:14.520 we can be neutral, and then from there we can 0:05:14.560 --> 0:05:18.279 decide if we want to be restrictive and put further 0:05:18.360 --> 0:05:21.240 downward pressure on In flash of Jim Bullard's reiterating his 0:05:21.320 --> 0:05:24.479 call for interest rates to rise above three percent this year, 0:05:24.560 --> 0:05:26.600 Stay tuned for more from the Fed today when we'll 0:05:26.600 --> 0:05:30.159 speak live with San Francisco President Mary Daily. That's coming 0:05:30.279 --> 0:05:32.479 up at eleven thirty a m. Wall Street time on 0:05:32.520 --> 0:05:36.080 Bloomberg Radio and Television. Nathan, the prospect of higher rates 0:05:36.120 --> 0:05:38.640 taking a toll on the bomb market. That Bloomberg Global 0:05:38.680 --> 0:05:42.120 Aggregate Index that's a benchmark for government and corporate debt 0:05:42.160 --> 0:05:45.520 total returns has fallen eleven percent from its high in 0:05:45.640 --> 0:05:48.479 January of last year. That's the biggest decline from a 0:05:48.520 --> 0:05:52.400 peak in data. Stretching back to it equates to a 0:05:52.480 --> 0:05:55.520 drop in the index market value of about two point 0:05:55.600 --> 0:05:58.839 six trillion dollars. When it comes to stocks, John, now 0:05:58.960 --> 0:06:01.719 is not the time to I that's according to Muhammad 0:06:01.760 --> 0:06:05.440 al Arian, the Bloomberg opinion columnist and chief Economic advisor Alliance. 0:06:05.640 --> 0:06:09.080 He says investors should pair their holdings. If I'm investing 0:06:09.120 --> 0:06:13.320 over the next twelve month horizon, I would reduce equities 0:06:13.360 --> 0:06:15.560 at this point. I would take some money off the 0:06:15.600 --> 0:06:17.719 table I think the market is giving you a wonderful 0:06:17.720 --> 0:06:21.680 opportunity to come out. Muhammadal Arian says equity markets have 0:06:21.800 --> 0:06:24.520 yet to factor in what's to come for the economy. 0:06:24.560 --> 0:06:27.520 And speaking of the economy, we have French data on wages. 0:06:27.640 --> 0:06:30.360 This morning, there's a new study that shows many Americans 0:06:30.400 --> 0:06:33.960 are still seeing pay below fifteen dollars an hour, and 0:06:34.040 --> 0:06:36.960 Bloomberg's Really the Young joins us live with details, Really 0:06:37.000 --> 0:06:39.720 the good morning, Good morning John. A report from Oxfam 0:06:39.800 --> 0:06:42.640 America finds one in three U S workers is still 0:06:42.680 --> 0:06:45.880 making less than fifteen dollars an hour, and the share 0:06:45.920 --> 0:06:48.520 of women and people of color earning that amount is 0:06:48.600 --> 0:06:52.480 even greater. The report helps quantify how many Americans could 0:06:52.520 --> 0:06:55.520 be impacted by the Raise the Wage Act, which would 0:06:55.520 --> 0:06:59.680 set a fifteen federal minimum wage. The legislation is still 0:06:59.680 --> 0:07:04.200 pinned in Congress. Of men earned less than fifteen dollars 0:07:04.240 --> 0:07:08.479 an hour, the figure is fort for women and for 0:07:08.600 --> 0:07:11.760 working women of color. Live in New York. I'm really 0:07:11.760 --> 0:07:14.040 need a Young Bloomberg day break. Allright, we need to 0:07:14.040 --> 0:07:17.679 thanks very much. Dal Futures right now down, SMP futures 0:07:17.680 --> 0:07:24.160 down fourteen, Mrs Bloomberg, And that brings us to six 0:07:24.160 --> 0:07:26.120 oh seven on wal Street. Let's bring in Michael barn 0:07:26.160 --> 0:07:27.840 now to find out what else is going on in 0:07:27.880 --> 0:07:31.360 New York and around the world. Yeahn thank you very much, sir. 0:07:31.440 --> 0:07:33.960 New York City Mayor Eric Adams just preparing to lift 0:07:34.080 --> 0:07:37.600 requirements that children under the age of five where face 0:07:37.680 --> 0:07:43.160 masks in school. We'll announcing that if the numbers continue 0:07:43.440 --> 0:07:47.880 to show a low level of risk. Let me see 0:07:47.920 --> 0:07:53.080 that again. If the numbers continue to show a low 0:07:53.200 --> 0:07:57.600 level of risk, mask would be optional for two to 0:07:57.720 --> 0:08:02.640 four years old students is schools and in daycare. Adam 0:08:02.720 --> 0:08:05.720 says it will start April fourth, if case rates and 0:08:05.760 --> 0:08:08.600 the risk of the virus spreading remained low. Adams two 0:08:08.600 --> 0:08:12.320 weeks ago lifted several pandemic related rules, including that students 0:08:12.360 --> 0:08:15.640 five and older ware masks in school. A new federal 0:08:15.720 --> 0:08:19.640 lawsuit accuses the NYPD of taking and storing d n 0:08:19.680 --> 0:08:23.360 A as part of an illegal and unregulated database. The 0:08:23.440 --> 0:08:26.680 lawsuit accuses the department of turning tens of thousands of 0:08:26.680 --> 0:08:31.000 people into quote permanent criminal suspects. It happens when someone 0:08:31.040 --> 0:08:34.320 is arrested or brought in for questioning, and each drinks 0:08:34.360 --> 0:08:38.040 or smokes while on the premises. The NYPD admits it 0:08:38.080 --> 0:08:40.720 collects DNA in this way, but says it is within 0:08:40.760 --> 0:08:44.520 the law. A large, destructive tornado struck the east side 0:08:44.520 --> 0:08:48.160 of New Orleans last night. St. Bernard Parish President Guy 0:08:48.200 --> 0:08:52.720 McGinnis says the damage is widespread. I was lifted off 0:08:52.720 --> 0:08:55.440 this foundation and put it to the street right around 0:08:55.440 --> 0:08:58.720 a carner for him. Parish President Guy McGinnis says at 0:08:58.800 --> 0:09:01.360 least one person was killed old The twister was part 0:09:01.400 --> 0:09:04.240 of an outbreak of severe thunderstorms across the Deep South 0:09:04.600 --> 0:09:07.520 and followed the siege of tornadoes in Texas. On Monday, 0:09:07.760 --> 0:09:10.640 Hillary Clinton tested positive for COVID nineteen and had some 0:09:10.720 --> 0:09:15.000 mild cold symptoms. According to a tweet, the former Secretary 0:09:15.000 --> 0:09:18.640 of State and former presidential candidate says she is feeling fine, 0:09:19.320 --> 0:09:22.559 and White House Press Secretary Jen Saki tested positive for 0:09:22.640 --> 0:09:24.959 COVID nineteen and will no longer travel with the President 0:09:25.040 --> 0:09:28.640 Joe Biden to Europe. Zaki says she is experiencing only 0:09:28.760 --> 0:09:32.679 mild symptoms and will isolate for five days. Biden tested negative. 0:09:33.000 --> 0:09:35.520 Global News twenty four hours a day on air and 0:09:35.720 --> 0:09:38.720 on Bloomberg quick Take, powered by more than twenty seven 0:09:38.840 --> 0:09:41.480 under journalist and analysts more than a hundred twenty countries. 0:09:41.640 --> 0:09:44.240 I'm Michael Barr. This is Bloomberg, John, Michael, thank you 0:09:48.559 --> 0:09:50.520 at It's six o nine on Wall Street. Time for 0:09:50.559 --> 0:09:53.480 the Bloomberg Sports Update. Here's John Stesshower. All right, John. 0:09:53.520 --> 0:09:55.960 The Knicks last season finished fourth in the East. This 0:09:56.120 --> 0:09:59.000 year they are twelfth, and any faint hopes of sneaking 0:09:59.000 --> 0:10:00.680 in the playoffs may avenge. With the home loss to 0:10:00.720 --> 0:10:04.280 Atlanta one seventeen one eleven left the Knicks six games out, 0:10:04.320 --> 0:10:06.360 only ten to play. Trey Young lead the Hops. He 0:10:06.440 --> 0:10:09.360 scored forty five points. R J. Barrett had thirty for 0:10:09.360 --> 0:10:12.040 the Knicks and Newark nightmare second period for the Rangers. 0:10:12.400 --> 0:10:15.400 Devils wanted five nothing, scoring all five and a thirteen 0:10:15.440 --> 0:10:17.599 minutes span. They won the game seven to four. The 0:10:17.679 --> 0:10:20.520 Islanders won three nothings over Ottawa. Ash Party is the 0:10:20.559 --> 0:10:22.840 best women's tennis player in the world, ranked number one. 0:10:23.160 --> 0:10:25.640 She just won Wimbledon and then the Native Asse captured 0:10:25.640 --> 0:10:29.120 the Australian Open. But she's retiring at age twenty five. 0:10:29.240 --> 0:10:32.079 She's the anti Tom Brady. Party says she no longer 0:10:32.160 --> 0:10:35.840 has the physical drive or the emotional wants she's getting married. 0:10:35.880 --> 0:10:38.080 She says, she's said to enjoy the next phase of 0:10:38.080 --> 0:10:40.360 her life. Baseball's open to day two weeks from tomorrow. 0:10:40.440 --> 0:10:42.439 Yankees alost the Red Sox right now. The question is 0:10:42.440 --> 0:10:45.600 whether unvaccinated Yankees will be allowed to play or will 0:10:45.679 --> 0:10:48.640 it be a Kyrie Irving situation, not allowed to play 0:10:48.720 --> 0:10:52.600 home games uder the city's private employer mandate in person 0:10:52.679 --> 0:10:55.440 Worth Mayor Adams said yesterday they may peel it back slowly, 0:10:55.559 --> 0:10:58.960 but that most businesses like the mandate. Here, Yankee manator 0:10:59.040 --> 0:11:01.240 Aaron Boone think there's a lot up in the air 0:11:01.240 --> 0:11:03.800 and a lot left to play out and and we'll 0:11:03.800 --> 0:11:06.240 just see. But no, we haven't had a big group 0:11:06.240 --> 0:11:11.440 discussion on these kind of things. Where again, um, I 0:11:11.480 --> 0:11:13.680 feel like Grandy's on top of that and handling that, 0:11:13.800 --> 0:11:16.680 and we'll see where it goes. And when it comes 0:11:16.679 --> 0:11:18.320 to time and that we have to address it, we 0:11:18.320 --> 0:11:21.199 will reference Yankee President Randy Levin, who used to work 0:11:21.240 --> 0:11:23.840 at city Hall, not knowing how many or which Yankees 0:11:23.840 --> 0:11:27.480 are unbacked, not to fash our Bloomberg Sports John all right, John, 0:11:27.520 --> 0:11:29.319 thanks a lot ahead of the cash shop on Wall 0:11:29.360 --> 0:11:32.560 Street this morning. Futures right now in the red. The down. 0:11:32.600 --> 0:11:35.160 Futures down ninety five points. That's a decline of three 0:11:35.160 --> 0:11:39.360 tents of eight percent. Smp E many futures sixteen points slower. 0:11:39.480 --> 0:11:42.360 That's down three tents. And when I say futures right now, 0:11:42.520 --> 0:11:46.160 down sixty two points, down four tenths of a percent. 0:11:46.640 --> 0:11:48.880 As we also have to focus on the bond market 0:11:48.960 --> 0:11:52.679 this morning, as far as treasuries are concerned, the tenure 0:11:52.760 --> 0:11:55.560 getting a bit of a bid this morning. Tenure yield 0:11:56.120 --> 0:11:59.680 is at two thirty six, that is down two basis points. 0:12:00.000 --> 0:12:04.160 The two year yield is at two point. This is 0:12:04.160 --> 0:12:08.280 Bloomberg Daybreak, brought to you by the Jewish Community Fund 0:12:08.520 --> 0:12:10.680 j c F. S Donnor Advised Fund is the smart 0:12:10.760 --> 0:12:14.200 choice to manage your philanthropy, especially in times of crisis. 0:12:14.400 --> 0:12:17.480 Make your giving impactful. Visit j c F n Y 0:12:18.000 --> 0:12:25.120 dot org, markets headlines and breaking news twenty four hours 0:12:25.120 --> 0:12:28.120 a day at Bloomberg dot com, the Bloomberg Business Act 0:12:28.200 --> 0:12:37.400 and at Bloomberg Quick Tape. He's a Bloomberg Business Lash. 0:12:37.760 --> 0:12:41.360 I'm Nathan Hagar. Stocks are drifting lower along with US 0:12:41.480 --> 0:12:46.520 futures as global bond markets stabilized from an unprecedented route. 0:12:46.520 --> 0:12:49.120 We check the markets every fifteen minutes during the training 0:12:49.160 --> 0:12:52.320 day on Bloomberg SMP futures right now are down fourteen 0:12:52.320 --> 0:12:55.280 points down, futures down eighty eight, nastack futures lower by 0:12:55.320 --> 0:12:58.480 sixty three points. Both Germany's decks and the CAC in 0:12:58.520 --> 0:13:01.040 Paris are down by two tenths of one percent. The 0:13:01.120 --> 0:13:03.600 tenure treasury is up four thirty seconds. The yield two 0:13:03.600 --> 0:13:06.199 point three six percent yield on the two year two 0:13:06.240 --> 0:13:10.080 point one two percent. Nimex crewed up one percent of 0:13:10.120 --> 0:13:12.600 two dollars four cents at a hundred eleven dollars thirty 0:13:12.600 --> 0:13:15.240 one cents a barrel. Comex gold is up six tenths 0:13:15.280 --> 0:13:18.840 percent or ten dollar seventy cents at nine forty announced. 0:13:19.120 --> 0:13:22.040 The Euro one point one zero zero two against the dollar, 0:13:22.080 --> 0:13:24.719 British pound one point three two two five. The n 0:13:24.920 --> 0:13:28.959 is at zero free and that is a Bloomberg business flash. 0:13:29.120 --> 0:13:31.120 Now here's Michael Barr with more on what's going on 0:13:31.120 --> 0:13:34.199 around the world. Michael Anathan, thank you very much. One 0:13:34.240 --> 0:13:36.840 of two black boxes has been located in the crash 0:13:36.920 --> 0:13:39.440 of a China Eastern plain with a hundred thirty two 0:13:39.440 --> 0:13:43.520 people on board. However, the Civil Aviation Authority of China 0:13:43.880 --> 0:13:46.280 says the recorder is so damaged that they are not 0:13:46.400 --> 0:13:49.120 able to tell whether it is the flight data recorder 0:13:49.400 --> 0:13:52.840 or the cockpit voice recorder. President Joe Biden's trip to 0:13:52.880 --> 0:13:55.959 Europe comes at a critical moment for the war in Ukraine, 0:13:56.000 --> 0:13:59.960 which could become a bloody stalemate as Russia pummel cities 0:14:00.040 --> 0:14:03.280 with air strikes and artillery. Biden departs today on a 0:14:03.320 --> 0:14:05.760 four day trip. You'll head the Brussels in later Poland. 0:14:06.160 --> 0:14:08.880 In the NBA, the Knicks and Warriors lost. In the NHL, 0:14:08.960 --> 0:14:11.959 the Devils beat the Rangers seven four, The Islanders won, 0:14:12.000 --> 0:14:15.120 the Capitals lost. Global news twenty four hours a day 0:14:15.200 --> 0:14:18.439 on air and on Bloomberg Quicktake, powered by more than 0:14:18.480 --> 0:14:21.080 twenty seven hundred journalists and analysts more than a hundred 0:14:21.080 --> 0:14:24.280 twenty countries. I'm Michael Barn. This is Bloomberg Jump Michael, 0:14:24.280 --> 0:14:26.880 thank you, coming up on six twenty All Street, relying 0:14:26.880 --> 0:14:30.360 for the Bloomberg Interact of Broker Studios. This is Bloomberg 0:14:30.440 --> 0:14:35.360 Daybreak A global bond markets have suffered unprecedented losses and 0:14:35.560 --> 0:14:38.920 money as a result has been flowing to stocks. For 0:14:39.040 --> 0:14:41.800 closer look at the markets this morning, get just set 0:14:41.880 --> 0:14:44.440 up for the trading day. Head were joined by Tracy mcmillion, 0:14:44.800 --> 0:14:49.640 head of Global ASCID Allocations Strategy, Wells Fargo Investment Institute. 0:14:49.720 --> 0:14:53.960 She's joining us from Winston Salem, North Carolina this morning. 0:14:55.120 --> 0:14:57.200 Nice for being nice to have you with us this morning. 0:14:57.200 --> 0:15:03.280 Are stocks the correct alternative to bonds? So? Uh, you know, 0:15:03.920 --> 0:15:07.480 this week what we have seen is an investors moving 0:15:07.600 --> 0:15:11.280 into stocks and out of the bond market UM, putting 0:15:11.280 --> 0:15:14.760 that money into equities where you know, companies still have 0:15:14.920 --> 0:15:19.600 the ability to raise prices to offset inflation. UM. And 0:15:19.920 --> 0:15:23.600 the issue appears to be UM one for another day, 0:15:23.680 --> 0:15:27.880 that higher rates will inevitably slow growth, you know, perhaps 0:15:27.920 --> 0:15:30.640 to the point of recession. UM. We are in a 0:15:30.720 --> 0:15:35.480 highly charged, highly levered economy where interest rate increases. That 0:15:35.600 --> 0:15:38.720 though this far as ist s fast, will probably have 0:15:39.040 --> 0:15:42.840 a disruptive effect on equity markets at some point. But 0:15:43.040 --> 0:15:47.040 for today, investors are looking at equities versus six income 0:15:47.160 --> 0:15:50.920 equities versus cash and saying I will stick with the 0:15:50.960 --> 0:15:54.400 inflation hedge of equities for now. I mean, it sounds 0:15:54.400 --> 0:15:55.960 like you have to be a lot more selective in 0:15:56.080 --> 0:15:59.080 terms of looking at the margins and who has the 0:15:59.120 --> 0:16:04.480 pricing powers this point you do. And you know, investors 0:16:04.480 --> 0:16:07.320 are also looking at earning season that starts in a 0:16:07.320 --> 0:16:12.800 couple of weeks here, and surprisingly earnings really haven't on 0:16:13.520 --> 0:16:17.040 the forecast for earnings really haven't seen big revisions here. 0:16:17.080 --> 0:16:20.880 So we think that that's probably a result of um, 0:16:21.160 --> 0:16:24.280 you know, COVID starting to wane here in the US. 0:16:24.600 --> 0:16:28.720 UM at the same time that's being balanced by uh, 0:16:28.960 --> 0:16:33.320 you know, worsening consumer's sentiment. But that's the two of 0:16:33.360 --> 0:16:36.760 them are kind of keeping earnings estimates pretty stable. So 0:16:36.960 --> 0:16:42.440 we think investors will be listening to companies quarterly reports 0:16:42.520 --> 0:16:45.160 to see what their forecasts are for the future and 0:16:45.200 --> 0:16:49.000 how much pricing power they have, how much margin pressures 0:16:49.040 --> 0:16:52.040 they're facing here. Uh, so they will start to be 0:16:52.120 --> 0:16:55.360 more selective. You know, it's just the back to fix 0:16:55.480 --> 0:16:57.760 income just for for a moment, and I do want 0:16:57.760 --> 0:16:59.840 to focus just on equities. But when you consider the 0:17:00.120 --> 0:17:06.440 ration risk, can the treasures be a safe haven? They 0:17:06.480 --> 0:17:10.800 can be, uh, and they are when periods of significant 0:17:10.800 --> 0:17:14.280 market volatility. And you know, the yield curve right now 0:17:14.760 --> 0:17:20.200 is flashing a yellow warning sign because you know, yields 0:17:20.240 --> 0:17:22.879 had moved up so much on the front end. But 0:17:23.440 --> 0:17:28.159 we think that's giving investors an opportunity to invest in 0:17:28.200 --> 0:17:33.000 those shorter term and immediate term bonds and generate more income, 0:17:33.080 --> 0:17:36.399 a lot more income than they were generating just a 0:17:36.440 --> 0:17:39.960 couple of months ago. And that does provide a hedge 0:17:40.040 --> 0:17:43.000 in an equity portfolio. But I gotta wonder if the 0:17:43.280 --> 0:17:47.560 if for the average investor, that portfolio is pretty much 0:17:47.640 --> 0:17:52.680 dead and buried at this point. M Yeah, it's a 0:17:52.760 --> 0:17:56.480 tough here for a sixty forty portfolio because both equities 0:17:56.520 --> 0:18:00.159 and fixed income, you know, have had negative returns so 0:18:00.240 --> 0:18:05.000 far this year, So a sixty forty is experiencing negative returns. 0:18:05.080 --> 0:18:09.600 And that's why we think investors need to diversify beyond 0:18:09.880 --> 0:18:15.400 just equities and fixed income and invest in things like commodities, 0:18:15.440 --> 0:18:18.639 which have had a pretty good year, UM invest in 0:18:18.800 --> 0:18:24.200 hedge funds that are market neutrals, that have strategies that 0:18:24.240 --> 0:18:27.240 can benefit in both up markets and down markets. So 0:18:27.320 --> 0:18:32.000 there's some diversification that probably should be happening here beyond 0:18:32.080 --> 0:18:36.240 its traditional sixty forty. You touched on this briefly before, 0:18:36.320 --> 0:18:38.480 but maybe a little deeper diver in the minute we 0:18:38.520 --> 0:18:42.000 have left Canda. The global economy weather of a sustained 0:18:42.040 --> 0:18:47.960 period of higher finance and costs. Yeah, so, UM, we 0:18:47.960 --> 0:18:52.760 we think so. To some extent, UM investors have been 0:18:53.000 --> 0:18:56.560 calling for the Fed to get toplan inflation UM to 0:18:56.760 --> 0:19:01.240 prevent UH an even more problematic outcome in the future. 0:19:01.800 --> 0:19:04.760 So you know, a hawk is hawk is bed right 0:19:04.800 --> 0:19:10.760 now is counterintuitively being seen as the market's friend. UM. 0:19:10.960 --> 0:19:15.080 And you know, in the presence of so much uncertainty, UM, 0:19:15.280 --> 0:19:19.359 markets are really lasting onto these short lived themes UM, 0:19:19.440 --> 0:19:23.760 and that's causing significant price movements. We think that you know, 0:19:23.880 --> 0:19:27.000 for the new year term, we probably are going to 0:19:27.040 --> 0:19:30.040 be able to avoid a recession, but we're growing a 0:19:30.040 --> 0:19:34.280 little bit more concerned about three. Tracy, your pleasure, Thanks 0:19:34.320 --> 0:19:36.520 for being with us this morning. Tracy McMillian, head of 0:19:36.600 --> 0:19:43.119 Global Lasset Allocations Strategy, Wells Fargo Investment Institute and ahead 0:19:43.119 --> 0:19:46.080 of the cash Olten on Wolf Street. The down futures 0:19:46.160 --> 0:19:48.879 right now one points lower, that's down three tents pent 0:19:49.480 --> 0:19:52.720 SMP even in futures seventeen points lower than ant futures 0:19:53.000 --> 0:19:58.200 found seventies seven. Tracy mentioned the yield curve flattening the 0:19:58.240 --> 0:20:01.800 difference between twos and tents right out twenty two basis points. 0:20:02.440 --> 0:20:07.359 You're listening to Bloomberg day Break. Daybreak being drunk to 0:20:07.440 --> 0:20:11.000 by ancient accountants that advisers challenging times called for proactive 0:20:11.000 --> 0:20:14.440 advisors who helped minimize taxes, increased cash flow, and great 0:20:14.480 --> 0:20:17.879 opportunities for the future of your business. Visit Ancient dot 0:20:17.880 --> 0:20:25.879 Com broadcasting live from the Bloomberg Interacted Broker's studio in 0:20:25.960 --> 0:20:28.960 New York, Bloomberg E Living Freedom to Washington, d C. 0:20:29.160 --> 0:20:33.879 Bloomberg to Boston, Bloomberg one oh six one to San Francisco, 0:20:33.960 --> 0:20:37.400 Bloomberg nine sixteen to the country Sirius XM Chado one 0:20:37.480 --> 0:20:40.400 nine team, and around the globe, the Bloomberg Business app 0:20:40.520 --> 0:20:49.399 and Bloomberg Radio dot Com. This is Bloomberg Daybreak, be 0:20:49.560 --> 0:20:52.080 at six thirty on Wall Street. Good morning, I'm John Tucker. 0:20:52.119 --> 0:20:54.119 I'm Nathan Hager. We're about three hours away from the 0:20:54.160 --> 0:20:56.040 open of US trading. Time for the five things you 0:20:56.080 --> 0:20:57.600 need to know to start your day. Brought to you 0:20:57.640 --> 0:21:00.560 by I v k R Investment Advisors switched to Interactive 0:21:00.600 --> 0:21:03.960 brokers for lowest cost global trading and turn key custody solutions, 0:21:03.960 --> 0:21:06.760 no ticket charges, no conflicts of your interests at ibk 0:21:06.960 --> 0:21:10.560 R dot com slash r I A first President Biden 0:21:10.600 --> 0:21:13.840 heads to Europe today to radley allies around tougher sanctions 0:21:13.840 --> 0:21:16.119 on Russia for its invasion of Ukraine. We get the 0:21:16.160 --> 0:21:19.199 latest from Bloomberg senior reporter Mark Champion. What they are 0:21:19.280 --> 0:21:22.360 trying to do is to get ahead of what they 0:21:22.359 --> 0:21:26.000 know will be a continuing issue with Russia over Ukraine. 0:21:26.359 --> 0:21:28.720 So try and get ahead on issues like how do 0:21:28.800 --> 0:21:31.880 we make sure that the sanctions take real effect, how 0:21:31.880 --> 0:21:34.159 do we resolve our differences of that have to do 0:21:34.280 --> 0:21:38.280 with energy, particular oil. Bloomberg's Mark Champions says President Biden 0:21:38.320 --> 0:21:40.840 will join back to back summits, first with NATO members 0:21:40.840 --> 0:21:43.480 in Brussels, then the Group of Seven and European Union. 0:21:43.680 --> 0:21:46.800 It's day three of Judge Katangi Brown jackson Supreme Court 0:21:46.840 --> 0:21:50.480 hearing before the Senate Judiciary Committee. Yesterday marked their first 0:21:50.560 --> 0:21:53.520 chance to field questions from Congress and defend her record. 0:21:54.000 --> 0:21:58.880 My record demonstrates that I am not proceeding from any 0:21:58.960 --> 0:22:03.160 sort of preconceived notion about how a case comes out. 0:22:03.440 --> 0:22:07.760 Jackson face questions from Republicans about her religion, critical rice theory, 0:22:07.840 --> 0:22:12.520 child pornography, and abortion. I'm not ruling consistent with any 0:22:12.560 --> 0:22:18.280 sort of ideology. I'm doing what impartial and fair judges do, 0:22:18.760 --> 0:22:22.760 which is to decide in every case based only on 0:22:22.840 --> 0:22:26.120 the facts and the law. Jackson returns to Capitol Hill 0:22:26.160 --> 0:22:29.119 for more questioning Today. Turning the markets now, John Global 0:22:29.160 --> 0:22:32.439 bonds remained under heavy pressure. The Bloomberg Global Aggregate Index, 0:22:32.440 --> 0:22:35.080 a benchmark for government and corporate dead total returns, has 0:22:35.080 --> 0:22:38.160 fallen eleven percent from high in January last year. That's 0:22:38.200 --> 0:22:40.480 the biggest decline from a peak in data, stretching back 0:22:40.480 --> 0:22:43.520 to the bomb market and focus. Tune in today for 0:22:43.640 --> 0:22:45.720 more from the Fed. We're gonna speak live this morning 0:22:45.880 --> 0:22:49.159 with San Francisco President Mary Daily. Catch that at eleven 0:22:49.240 --> 0:22:51.959 thirty am Wall Street Time, and looking at the economy now, 0:22:51.960 --> 0:22:54.479 a new study shows many Americans are still seeing wages 0:22:54.520 --> 0:22:57.600 below fifteen dollars an hour. Bloomberg's Jornita Young joins us 0:22:57.600 --> 0:23:00.520 live with that Ranita Nathan. A report from OXFA America 0:23:00.560 --> 0:23:02.880 finds one in three U S workers is still making 0:23:02.960 --> 0:23:05.359 less than fifteen dollars an hour, and the share of 0:23:05.400 --> 0:23:08.639 women and people of color earning that amount is even greater. 0:23:08.960 --> 0:23:11.600 The report helps quantify the impact from the Raise the 0:23:11.640 --> 0:23:14.600 Wage Act, which would set a fifteen in our federal 0:23:14.640 --> 0:23:18.760 minimum wage. The legislation is still pending in Congress. Live 0:23:18.760 --> 0:23:21.760 in New York. I'm Ranita Young Bloomberg Daybreak. All right, Ranita, 0:23:21.800 --> 0:23:23.199