WEBVTT - Bloomberg Daybreak: July 5, 2022 - Hour 2 (Radio) 0:00:02.600 --> 0:00:05.320 Live from the Bloomberg Interact Dave Brooker Studios. This is 0:00:05.480 --> 0:00:10.160 Bloomberg Daybreak for Tuesday July. Coming up this hour, Good 0:00:10.240 --> 0:00:13.640 Nation grapples with gun violence, get again about the holiday weekend. 0:00:13.960 --> 0:00:16.439 There are reports of tariff talks between the US and 0:00:16.560 --> 0:00:20.120 China's A Big Bank strategists warn of a continued growth 0:00:20.160 --> 0:00:22.639 slow down, and City Group says oil could be in 0:00:22.720 --> 0:00:25.160 for a major de fine in event of a recession. 0:00:26.079 --> 0:00:28.320 U n B A star Britney Griner pleads with the 0:00:28.360 --> 0:00:32.000 President Biden could get around of Russia. Plus fireworks lit 0:00:32.080 --> 0:00:35.120 up the sky in New York. I'm Michael Barr more ahead, 0:00:35.240 --> 0:00:37.559 and I'm Scott Zegenberg and the Mets when the Yankees 0:00:37.560 --> 0:00:40.080 were off. Plus enough they on Wimbledon. I'll have that 0:00:40.159 --> 0:00:45.600 more coming up in sports. That's all straight Ahead on 0:00:45.720 --> 0:00:48.960 Bloomberg day Break on Bloomberg eleven three on New York, 0:00:49.080 --> 0:00:53.640 Bloomberg one, Washington, d C, Bloomberg one oh six one, Boston, 0:00:53.760 --> 0:00:58.040 Bloomberg nine sixties and Francisco Syrius x M one nineteen 0:00:58.200 --> 0:01:01.120 and around the world on Bloomberg Radio dot com and 0:01:01.240 --> 0:01:08.679 via the Bloombird Business APT And Good Morning, I'm John Tucker. 0:01:09.120 --> 0:01:12.960 And I'm Karen Moscow us Kendeck's futures are lower this morning. 0:01:12.959 --> 0:01:14.840 We're coming up to six one on Wall Street. Let 0:01:14.840 --> 0:01:17.480 me check the markets every fifteen minutes throughout the trading day. 0:01:17.560 --> 0:01:20.200 On Bloomberg Guess and P Future is down nineteen points 0:01:20.200 --> 0:01:23.920 this morning. Now Future is down one and nasday futures 0:01:23.920 --> 0:01:27.240 down seventy five. Ten year treasury down four thirty seconds. 0:01:27.280 --> 0:01:29.360 You had two point eight nine percent yield on the 0:01:29.440 --> 0:01:32.679 two year two point eight nine percent, the euro one 0:01:32.720 --> 0:01:36.120 point two nine seven against the dollar, the N one 0:01:35.760 --> 0:01:38.960 thirty five point eight four, John, and we'll get to 0:01:39.160 --> 0:01:41.280 more of the markets in a moment. For first, Karen, 0:01:41.640 --> 0:01:44.080 we begin in the Highland Park, Illinois, where a gunman 0:01:44.240 --> 0:01:47.840 opened fire from a rooftop at an Independence Day parade yesterday, 0:01:48.360 --> 0:01:51.400 killing at least six people, wounding at least thirty others. 0:01:51.680 --> 0:01:55.280 Illinois Governor JB. Pritzker addressed the violence at a news conference. 0:01:55.760 --> 0:02:00.240 I'm furious. I'm furious that yet more innocent lives were 0:02:00.280 --> 0:02:03.920 taken by gun violence. I'm curious that their loved ones 0:02:03.960 --> 0:02:07.760 are forever broken by what took place today. I'm curious 0:02:07.880 --> 0:02:12.760 that children and their families have been traumatized Illinois Gavin J. V. 0:02:12.840 --> 0:02:16.720 Pritsker spoke to President Biden after the incident. The President 0:02:16.800 --> 0:02:19.240 also addressed the tragedy, saying more needs to be done 0:02:19.240 --> 0:02:22.000 to curb gun violence. We got a lot more work 0:02:22.040 --> 0:02:24.200 to do. We got to get this under control. A 0:02:24.360 --> 0:02:26.480 person of interest in the shooting was taken to the 0:02:26.520 --> 0:02:30.000 custody late yesterday after a lengthy man hunt and the 0:02:30.000 --> 0:02:32.840 community of Highland Park. There was also a gun violence 0:02:33.000 --> 0:02:36.600 in Pennsylvania last night to police officers shot in Philadelphia 0:02:36.919 --> 0:02:40.800 during festivities held near the city's Museum of Art. Philadelphia 0:02:40.840 --> 0:02:45.240 Police Commissioner Daniel out Law says the shooters motives were unclear. 0:02:45.639 --> 0:02:49.320 We don't know if this was ricochet from celebratory gunfire. 0:02:49.440 --> 0:02:52.080 We don't know if this was intentional. We don't know 0:02:52.120 --> 0:02:55.000 if this was someone taking a shot intentionally at these officers. 0:02:55.280 --> 0:02:58.600 Police Commissioner danielle out Along, saying the officers have been 0:02:58.639 --> 0:03:02.040 treated and released. I'm not turning to Washington. John the 0:03:02.040 --> 0:03:05.280 Biden administration could roll back some tariffs imposed by former 0:03:05.320 --> 0:03:08.800 President Shrump. Senior US and Chinese officials discussed the matter 0:03:08.880 --> 0:03:10.960 last night and what the White House calls candid and 0:03:11.080 --> 0:03:15.440 substitutive discussions. There are expectations that the administration could remove 0:03:15.600 --> 0:03:18.880 levies to help these price increases on consumers became more 0:03:18.880 --> 0:03:22.200 In this story from Bloomberg's Bruce Einhorn, people familiar to 0:03:22.200 --> 0:03:25.200 say that the White House has actually asked companies to 0:03:25.320 --> 0:03:28.680 make a commitment that if the US agrees to ease 0:03:28.720 --> 0:03:31.640 some of these tariffs, that companies will then pass those 0:03:31.680 --> 0:03:36.520 savings through two consumers. But people familiar say that executives 0:03:36.560 --> 0:03:38.120 of these companies said, well, no, we're not going to 0:03:38.200 --> 0:03:41.160 make that kind of commitment, and Bloomberg spruces. Einhorn reports 0:03:41.160 --> 0:03:43.480 there are currently US tariffs on hundreds of billions of 0:03:43.520 --> 0:03:46.440 dollars in Chinese goods. However, senior members of the Biden 0:03:46.440 --> 0:03:50.160 administration appear divided about the need to lift levies. Well, 0:03:50.200 --> 0:03:54.720 initially futures were acted positively to these potentially lifting tariffs, 0:03:54.720 --> 0:03:57.600 they've since erased those games still that it was good 0:03:57.600 --> 0:04:01.320 for said about According to dpak Mara, who's investments at 0:04:01.400 --> 0:04:05.480 Commercial Bank of Dubai, it's the recognition that the government 0:04:05.640 --> 0:04:08.080 is very conscious that they need to act on the 0:04:08.280 --> 0:04:12.840 supply side of the inflation issue. Because the FED has 0:04:12.920 --> 0:04:15.880 been slamming the brakes on the demand side, whereas the 0:04:15.960 --> 0:04:18.760 real issue is the supply. So I think trying to 0:04:18.960 --> 0:04:22.840 fix that issue is giving the markets a bit of 0:04:22.960 --> 0:04:26.760 an ease and comfort that you know, we are finally 0:04:26.800 --> 0:04:30.040 addressing the problem. Where where it is Commercial Bank of 0:04:30.120 --> 0:04:32.960 device depect mirrors is he expects the FED to keep 0:04:33.040 --> 0:04:36.520 hiking rates and slam the brakes on demand. Turning to 0:04:36.560 --> 0:04:39.360 the economic outlook, John one Goldman SAX strategist, said the 0:04:39.400 --> 0:04:43.240 base case expectation is not for a US recession to 0:04:43.400 --> 0:04:46.239 great gil As, a macro strategist for Global fixed income 0:04:46.279 --> 0:04:49.240 at Goldman Saccess, said management. She says, we may get 0:04:49.279 --> 0:04:53.080 a recession, but opportunity for investment will depend on its magnitude. 0:04:53.640 --> 0:04:56.880 We do expect continued monkey tightening. You may well see 0:04:56.920 --> 0:05:00.680 a technical recession, but what really matteres you're thinking about 0:05:00.680 --> 0:05:04.200 the investment landscape and opportunities and fixing conceptus is the 0:05:04.440 --> 0:05:09.680 magnitude And instead of the characteristics of that recession gone 0:05:09.720 --> 0:05:13.000 macro strategist, your pretty Gil expects growth to level off 0:05:13.080 --> 0:05:16.520 as rates head higher. Another major bank painting a grim 0:05:16.640 --> 0:05:19.640 picture for the economy, and Bloomberg's reneily Young joins us 0:05:19.720 --> 0:05:22.600 Live with that story really the good morning, Good Morning John. 0:05:22.720 --> 0:05:25.719 With the recent drop in bond yields, investors are betting 0:05:25.800 --> 0:05:28.640 the Fed may turn less hawkish if inflation peaks in 0:05:28.720 --> 0:05:31.880 the second half of the year, but Morgan Stanley says 0:05:31.960 --> 0:05:34.680 any drop in interest rates should be interpreted as more 0:05:34.720 --> 0:05:37.960 of a growth concern rather than the Fed giving relief. 0:05:38.480 --> 0:05:42.320 Strategists there say if macro economic data do not confirm 0:05:42.360 --> 0:05:45.760 a recession, than equity markets could rally further. But if 0:05:45.839 --> 0:05:48.120 growth were to pull back, they say the S and 0:05:48.160 --> 0:05:51.960 P five may sink to three thousand points. That's about 0:05:53.000 --> 0:05:56.280 below its latest clothes Live in New York. I'm real 0:05:56.360 --> 0:05:58.520 need a young Bloomberg daybreak. I need to thank you. 0:05:58.640 --> 0:06:01.040 Looking at oil now, city Girl was warning that crude 0:06:01.080 --> 0:06:03.400 could collapse to sixty five dollars a barrel by the 0:06:03.520 --> 0:06:05.599 end of this year and slumped to forty five dollars 0:06:05.680 --> 0:06:07.960 by the end of next year. That's if we get 0:06:08.080 --> 0:06:11.120 hit by a demand crippling recession. The outlook is based 0:06:11.160 --> 0:06:13.680 on the absence of any intervention by OPEQ and checking 0:06:13.760 --> 0:06:16.400 prices now, nine X screwed oil of a quarter percent 0:06:16.720 --> 0:06:19.120 at a hundred eight dollars seventy cents of barrel. Brent 0:06:19.360 --> 0:06:22.160 is down one percent at a hundred twelve dollars thirty 0:06:22.200 --> 0:06:28.360 five cents. Overseas, European equities have turned lower andrew some 0:06:28.560 --> 0:06:32.520 initial optimism. The earl this morning, weakening to the lowest 0:06:32.600 --> 0:06:36.120 level against the dollars since two thousand three. Meantime, at Asia, 0:06:36.200 --> 0:06:40.440 stocks climbed overnight and John futures are lower. SNP future 0:06:40.520 --> 0:06:43.120 is down about seventeen points a Dow futures down one 0:06:43.560 --> 0:06:47.000 twenty seven and NASTAC futures down sixty four. The decks 0:06:47.040 --> 0:06:50.200 in Germany is down one percent. Ten year treasury down 0:06:50.279 --> 0:06:53.200 five thirty seconds, the yield two point nine zero percent 0:06:53.600 --> 0:06:55.560 and the yield on the two year two point eight 0:06:55.800 --> 0:06:58.960 nine percent. Comes Gold is higher, up about a tenth 0:06:59.000 --> 0:07:02.320 of a percent, and one thousand, eight hundred three dollars 0:07:03.040 --> 0:07:06.920 announced the euro one point two nine six against the dollar, 0:07:07.000 --> 0:07:09.800 and checking bitcoin, it is down a tenth of a 0:07:09.960 --> 0:07:13.920 percent at nineteen thousand seven twenty dollars. Straight ahead, your 0:07:13.960 --> 0:07:17.640 latest local headlines plus a check of sports, and this 0:07:18.280 --> 0:07:25.360 is Bloomberg. Thanks Karen six wall Street, and that's time 0:07:25.400 --> 0:07:27.160 to bring in Michael Barr and I find out what 0:07:27.280 --> 0:07:30.480 else is going on a New York and around the world. Yeah, 0:07:30.560 --> 0:07:32.960 thank you very much. Siria was a fireworks show that 0:07:33.080 --> 0:07:39.560 did not disappoint. About three million people watched the Macy's 0:07:39.600 --> 0:07:42.360 fireworks show over the East River in New York City 0:07:42.480 --> 0:07:45.120 last night. The inn my p D said deployment was 0:07:45.320 --> 0:07:49.280 robust at the show that went off peacefully. W NBA 0:07:49.400 --> 0:07:52.880 player Brittney Grinder wrote to President Joe Biden, pleading with 0:07:53.000 --> 0:07:57.280 him to Bringer and other Americans detained in Russia back home. 0:07:57.800 --> 0:08:00.880 According to the Associated Press, Grinder told Biden in the 0:08:01.000 --> 0:08:04.480 letter that she is terrified might be here forever. A 0:08:04.560 --> 0:08:07.280 representative for Grinder delivered the letter to the White House. 0:08:07.920 --> 0:08:11.520 After more than four months of ferocious fighting, Russia claimed 0:08:11.560 --> 0:08:15.320 full control over one of the two provinces in Ukraine's 0:08:15.360 --> 0:08:19.920 eastern industrial heartland. However, there are signs Russia is sustaining 0:08:19.960 --> 0:08:24.240 heavy losses. Another step closer to joining NATO, Finland and 0:08:24.440 --> 0:08:27.840 Sweden foreign ministers are in Brussels today for the signing 0:08:27.880 --> 0:08:32.559 of ratification protocols. NATO Secretary General Yen Stoltenberg opened the 0:08:32.600 --> 0:08:37.240 meeting in Brussels Diday. We will formally sign the propicals 0:08:37.320 --> 0:08:43.000 of accession. This marks the start of the gratification courses NATOS. 0:08:43.040 --> 0:08:47.120 Jen Stoltenberg called today historic for Finland, Sweden and NATO. 0:08:47.520 --> 0:08:51.280 The federal judges ruled in favor of three major US 0:08:51.360 --> 0:08:54.200 drug distributors in a two and a half billion dollar 0:08:54.360 --> 0:08:58.319 lawsuit which had accused them of causing an opioid crisis 0:08:58.360 --> 0:09:00.959 in the West Virginia County. The suit said, and the 0:09:01.080 --> 0:09:05.440 cussing maryor Source, Bergen and Cardinal Health distributed eighty one 0:09:05.520 --> 0:09:08.960 million pills over eight years in Cabell County, ravaged by 0:09:09.040 --> 0:09:12.800 opioid addiction. Attorney Rusty Webb represents the county and the 0:09:12.840 --> 0:09:16.520 city of Huntington's Naturally, we're extremely disappointed for the city 0:09:16.559 --> 0:09:22.240 of Huntington, who's had to undergo so much devastation. Attorney 0:09:22.320 --> 0:09:25.160 Rusty Webb says Huntington and Cabell County had asked for 0:09:25.240 --> 0:09:28.400 two point six million dollars were so called abatement. That 0:09:28.600 --> 0:09:32.520 money would have provided for drug education, prevention, treatment, and 0:09:32.640 --> 0:09:36.079 law enforcement for the next fifteen years. Global News twenty 0:09:36.120 --> 0:09:39.040 four hours a day on air and on Bloomberg Quicktake, 0:09:39.400 --> 0:09:42.360 powered by more than twenty seven hundred journalists and analysts. 0:09:42.440 --> 0:09:44.920 More than a hundred twenty countries. Michael Barr and this 0:09:45.160 --> 0:09:51.880 is Bloomberg, John Michael, thank you, as how six ten 0:09:52.000 --> 0:09:54.840 on Wall Street any time to the Bloomberg Sports Update. 0:09:54.960 --> 0:09:59.079 Here's Scott Seidenberg. Thanks John. Taiwan Walker struck out nine 0:09:59.280 --> 0:10:01.480 in a six sinnings as the Mets beat the Reds 0:10:01.559 --> 0:10:05.920 yesterday seven four. Brandon Nimo and Francisco Lindor both homeward 0:10:05.960 --> 0:10:08.679 off Red starter Hunter Green, who has now allowed a 0:10:08.840 --> 0:10:12.160 major league leading twenty two home runs this season. The 0:10:12.240 --> 0:10:15.360 Mets are the first n L team to fifty wins. 0:10:15.559 --> 0:10:18.719 Brandon Nimo on the team's first half success, been a 0:10:18.760 --> 0:10:21.040 good first half. I don't think anybody would complain about it. 0:10:21.640 --> 0:10:23.240 But we also know that we have places that we 0:10:23.960 --> 0:10:26.920 can get better and that, you know, opportunities that, um, 0:10:27.000 --> 0:10:29.120 we haven't taken a mantage of, so to know that 0:10:29.200 --> 0:10:32.520 there's more in the tank, especially with Jake and Max 0:10:32.600 --> 0:10:35.040 coming back, and Max Scherzer comes off the i L 0:10:35.160 --> 0:10:38.040 to make the start tonight his first since leaving the 0:10:38.120 --> 0:10:42.080 game back on May eighteen. The Yankees were off yesterday. Tonight, 0:10:42.200 --> 0:10:45.959 Jamison Tyone faces his former team, the Pirates Tennis That 0:10:46.040 --> 0:10:48.920 Wimbledon rap on the Doll and Nick Curios advanced to 0:10:48.960 --> 0:10:52.760 the men's quarter finals and a fourth of July tradition, 0:10:52.880 --> 0:10:56.520 as Joey Chestnut wins his fifteenth Nathan's Hot Dog Eating 0:10:56.559 --> 0:11:01.480 Contest despite being interrupted by a protester way through. Chestnut 0:11:01.559 --> 0:11:05.199 down sixty three dugs to win his fifteenth title in 0:11:05.240 --> 0:11:09.720 the last sixteen years. I'm Scott Zadinger with Bloomberg Sports. 0:11:10.240 --> 0:11:13.400 John all right, thanks Scott, and ahead of the cash 0:11:13.480 --> 0:11:15.880 open on Wall Street, futures in the red right now 0:11:16.000 --> 0:11:19.319 down futures down one nine points, that's the decline of 0:11:19.360 --> 0:11:22.520 four tens of a percent. SMP even in futures down 0:11:22.640 --> 0:11:25.360 fourteen that's down four tens of a percent. But as 0:11:25.440 --> 0:11:28.640 the futures right now are fifty six points lower, that 0:11:28.920 --> 0:11:32.679 is down half a percent. Right now, the Wall Street 0:11:32.760 --> 0:11:38.000 fear gage volatility and that's still well below thirty slightly 0:11:38.080 --> 0:11:40.719 elevated though this morning. And as we look at the 0:11:40.800 --> 0:11:44.040 four in exchange this morning, the yuro ever closer to 0:11:44.160 --> 0:11:46.800 parody with the dollar one oh two nineties six right 0:11:46.840 --> 0:11:49.959 now that is down one point two percent against the 0:11:50.240 --> 0:11:53.400 green back, and the dollar d X Y index dollar 0:11:53.440 --> 0:11:58.160 continues its strengthening path right now close to one percent 0:11:59.120 --> 0:12:07.480 you're listening to Bloomberg day Break, and just ahead on 0:12:07.559 --> 0:12:12.120 Bloomberg Daybreak, US markets reopen after capping eleven declines in 0:12:12.200 --> 0:12:15.160 the past thirteen weeks. We'll be joined by Jeffrey U, 0:12:15.400 --> 0:12:18.800 senior market strategist at B and Y Melon. He'll weigh 0:12:18.880 --> 0:12:24.520 in on the markets, markets, headlines, and breaking news twenty 0:12:24.559 --> 0:12:27.400 four hours a day at Bloomberg dot Com, the Bloomberg 0:12:27.440 --> 0:12:31.480 Business Out and at Bloomberg Victape, She's a Bloomberg Business 0:12:31.559 --> 0:12:40.360 Lash and I'm Karen Moscow. US dot index, futures and 0:12:40.400 --> 0:12:43.480 European equities are falling as concerned over the possibility of 0:12:43.520 --> 0:12:47.040 our recession. Always optimism over at US China talks aimed 0:12:47.040 --> 0:12:49.880 at teriff reductions, the heroes at a twenty year low. 0:12:49.920 --> 0:12:52.520 We checked the markets every fifteen minutes throughout the trading day. 0:12:52.679 --> 0:12:56.160 On Bloomberg, SNP future is down seventeen points this morning, 0:12:56.240 --> 0:12:58.720 Down futures down a hundred twenty eight, and NASTAG futures 0:12:58.760 --> 0:13:01.840 down sixty seven. The decks in Germany's down nine tens 0:13:01.880 --> 0:13:04.760 of percent, the ten year treasury down six thirty seconds, 0:13:05.040 --> 0:13:07.240 Hill two point nine zero percent. They yield him a 0:13:07.320 --> 0:13:10.240 two year two point eight nine percent, nine X screwed 0:13:10.320 --> 0:13:12.600 oil it's it'll change in a hundred eight dollars forty 0:13:12.679 --> 0:13:14.920 nine cents of barrel break is moving lower down one 0:13:14.920 --> 0:13:17.480 point two percent and a hundred twelve dollars eighteen cents. 0:13:17.920 --> 0:13:20.400 Comic school This it'll change and one thousand, eight hundred 0:13:20.440 --> 0:13:23.000 two dollars announced. The euro one point oh three oh 0:13:23.080 --> 0:13:25.280 one against the dollar, British found one point two zero 0:13:25.440 --> 0:13:27.960 three four and the end one thirty five point nine five. 0:13:28.280 --> 0:13:30.360 Look at a bitcoin, it's down about a quarter percent 0:13:30.480 --> 0:13:34.240 at nineteen thousand, seven hundred dollars. That's a bloomberg business floush. 0:13:34.280 --> 0:13:36.400 Now here's Michael Barr with more on what's going on 0:13:36.520 --> 0:13:39.439 around the world. Muchael, thank you very much, Karen. Police 0:13:39.480 --> 0:13:42.480 say a gunman on a rooftop opened fire on an 0:13:42.559 --> 0:13:46.320 Independence Day parade in suburban Chicago, killing at least six people, 0:13:46.760 --> 0:13:50.040 wounding at least thirty, and sending hundreds of marchers, parents 0:13:50.120 --> 0:13:54.439 with strollers and children on bicycles fleeing in terror. Police 0:13:54.480 --> 0:13:56.600 and Highland Parks say a person of interest, twenty two 0:13:56.679 --> 0:14:00.199 year old Robert Bobby Cremo, is now in cust in 0:14:00.240 --> 0:14:03.480 connection to the shooting in Philadelphia two police officers were 0:14:03.520 --> 0:14:06.440 shot and Moon did during Fourth of July festivities held 0:14:06.559 --> 0:14:09.680 near the city's Museum of Art. So far, new arrests 0:14:09.760 --> 0:14:12.720 have been made. Baseball, the Met's one, the Red Sox, 0:14:12.800 --> 0:14:16.120 Orioles and A's also won. The Nationals lost along with 0:14:16.200 --> 0:14:18.800 the giants. Global News twenty four hours a day on 0:14:18.920 --> 0:14:22.400 air and on Bloomberg Quick Take, powered by more than 0:14:23.200 --> 0:14:25.960 hundred journalists and analyists more than a hundred twenty countries. 0:14:26.400 --> 0:14:29.120 Michael Barr and this is Bloomberg, Jo, Michael, thank you 0:14:29.240 --> 0:14:31.600 very much, six ninths you know well Street. We are 0:14:31.720 --> 0:14:36.000 live in the Bloomberg Interactive Brokers studios. This is Bloomberg Daybreak. 0:14:36.480 --> 0:14:40.480 The US markets reopening today this Tuesday morning, after capping 0:14:40.720 --> 0:14:43.800 eleventh of clients in the past thirteen weeks. Let's try 0:14:43.880 --> 0:14:45.520 to get you set up at the trading day ahead 0:14:45.520 --> 0:14:48.680 with Jeffrey u, a senior market strategist at B and 0:14:49.080 --> 0:14:54.440 Y Melod Jeff, have recession fears replaced the inflation fears 0:14:54.800 --> 0:14:59.080 at this at this stage of the economy, um it 0:14:59.200 --> 0:15:02.560 toutainly feels boining. So and the wakers a lot of 0:15:02.640 --> 0:15:06.640 survey data and hard data as well, and globally I 0:15:06.720 --> 0:15:09.280 think that really is taking over. Yes, we do have 0:15:09.400 --> 0:15:12.760 some pockets of optimism, such as China trying to reopen 0:15:13.160 --> 0:15:15.880 and the tariffs and news, but I don't think they're 0:15:15.880 --> 0:15:18.600 getting the benefits to doubt by markets right now with 0:15:18.840 --> 0:15:22.360 respect of the tariffs and Chinese good's possibly being rolled back. 0:15:22.800 --> 0:15:27.880 Could that practically ease inflation pressures? I think it'll take 0:15:27.960 --> 0:15:30.560 time for it to transmit, and a bearing in mind 0:15:30.680 --> 0:15:33.040 in terms of the policy response, it's not about inflation 0:15:33.120 --> 0:15:37.560 pressures that say, it's about inflation expectations, so tariffs and 0:15:38.520 --> 0:15:43.160 of people. It will take time for any tariff relief 0:15:43.520 --> 0:15:49.479 to um to be translating into cheaper prices the local supermarket, 0:15:49.760 --> 0:15:52.240 I think, whereas if people see their gas fights every 0:15:52.240 --> 0:15:55.080 single day, so I think that's where tariffs will help 0:15:55.160 --> 0:15:57.960 over the medium term. I think that people need short 0:15:58.040 --> 0:16:01.560 term expectations management on inflation and otherwise they step back 0:16:01.600 --> 0:16:03.200 on their spending, and I don't think we're going to 0:16:03.240 --> 0:16:06.040 see that at the time being with a concern about 0:16:06.240 --> 0:16:09.520 possible recession ahead. Does this alter the course a hand 0:16:09.600 --> 0:16:13.520 for the Federal Reserve? No, we don't believe so, because 0:16:13.760 --> 0:16:18.360 there's a difference between expecting a recession in and of 0:16:18.440 --> 0:16:21.760 itself versus a recession and starting to drag down prices. 0:16:21.840 --> 0:16:24.440 That we still believe that a lot of the supply issues, 0:16:24.520 --> 0:16:27.120 the labor be a good if those are the structural 0:16:27.160 --> 0:16:30.320 things in driving inflation. There's no guarantee right now that 0:16:30.920 --> 0:16:33.560 slower growth or even a recession can bring down inflation. 0:16:33.880 --> 0:16:36.160 And with that in mind, it's still imperative. And if 0:16:36.160 --> 0:16:38.640 they be said to keep its current course, and and 0:16:38.680 --> 0:16:40.680 if anything, you don't think the markets are appreciating how 0:16:40.760 --> 0:16:42.520 high they can still go. Well, is it a supply 0:16:42.720 --> 0:16:46.080 or demanded issue with respect to inflation. It's sort of 0:16:46.080 --> 0:16:47.840 supply issue, and we see the bulk of it as 0:16:48.040 --> 0:16:52.920 a supply issue that cannot be um adjusted easily. And 0:16:53.080 --> 0:16:55.800 even if we do have demand come off, and we 0:16:55.840 --> 0:16:57.600 need to look at the distribution of demand, you know, 0:16:57.640 --> 0:16:59.840 where is the mond coming up? Will demand come off 0:16:59.880 --> 0:17:03.680 the areas you know which are impacting a supply? So? 0:17:04.240 --> 0:17:06.640 Can can the state afford to take that chance? Basically 0:17:06.680 --> 0:17:08.640 at this point and we just don't think it's fair yet. 0:17:08.640 --> 0:17:10.560 If you look at from the pricing components in within 0:17:10.640 --> 0:17:13.080 the I SMS, for example, there's still very very firm 0:17:14.280 --> 0:17:18.120 with respect to the Wall Street sphere gage. The VIX 0:17:18.520 --> 0:17:23.760 still right now below thirty eight oh seven, just slightly elevated. 0:17:24.160 --> 0:17:26.719 We're told that it needs to go somewhere around forty 0:17:26.840 --> 0:17:32.080 before we see capitulation in equity markets. Your view, I'm 0:17:32.080 --> 0:17:33.960 not sure I agree with that. You know, you don't 0:17:34.040 --> 0:17:39.639 really have to have capitulation in a in a meltdown manner, right, 0:17:39.720 --> 0:17:42.000 so you can have a sudden capitulation or you can 0:17:42.080 --> 0:17:44.919 have slow attrition based capitulations. I think those two are 0:17:44.920 --> 0:17:47.480 separate issues. If there's just going to be steady reduction 0:17:47.760 --> 0:17:50.800 whereby the flow of let's say, in a freshly available 0:17:50.840 --> 0:17:52.760 in less and cash fanball that just goes into bonds 0:17:52.960 --> 0:17:55.240 and rather than into equity, you just don't have the 0:17:55.280 --> 0:17:58.400 Pikes momentum to a support the levels in the SMP 0:17:58.600 --> 0:18:01.920 which are necessary. So um, that can happen, you know, 0:18:02.119 --> 0:18:05.720 without a sudden unwinding of existing of them, of the 0:18:05.800 --> 0:18:08.760 existing positions. And also in a beerying in mind, there's 0:18:09.040 --> 0:18:11.320 not a whole lot of leverage in the system you 0:18:11.400 --> 0:18:13.520 need that collapse and for a rise in the victor 0:18:13.720 --> 0:18:17.879 as well, um and the overall centers. You know, and 0:18:17.960 --> 0:18:20.600 there is a lot of liquidity available yes, said is 0:18:20.640 --> 0:18:23.000 going to start to passively allow its balance you to 0:18:23.080 --> 0:18:25.359 come up. There will be a liquidity withdrawal, but it's 0:18:25.400 --> 0:18:28.000 not actively happening in a way which could polatility higher 0:18:28.160 --> 0:18:30.680 if they can switch to foreign exchange. Just briefly to 0:18:30.840 --> 0:18:35.879 what extent is fex a litmus test for economies around 0:18:35.880 --> 0:18:39.119 the world. Um So it's interesting to say that is 0:18:39.119 --> 0:18:41.119 a a litmus test me there for economies or for 0:18:41.200 --> 0:18:43.280 central banks and how they deal with economies, because you 0:18:43.359 --> 0:18:45.080 look at any way the euro is behaving right now. 0:18:45.280 --> 0:18:47.359 I don't think that be on the Eurozone economy has changed. 0:18:47.760 --> 0:18:50.040 But unlike what I just said about the FED, whereby 0:18:50.320 --> 0:18:52.720 high U S inflation irrespective of growth, and FED will 0:18:52.760 --> 0:18:55.080 react to that, we're not so sure about the or 0:18:55.119 --> 0:18:57.080 the market's not so sure about the ECB right now. 0:18:57.280 --> 0:19:00.720 Will the ECB they start to step back from higher 0:19:00.760 --> 0:19:04.000 interest rates? And because what about the growth trajectory in Europe? 0:19:04.080 --> 0:19:06.560 So that's far less confident. So that the ECB will 0:19:06.640 --> 0:19:08.520 do when it says it might do versus what the 0:19:08.600 --> 0:19:10.359 said will do. The v dot plots and I think 0:19:10.400 --> 0:19:12.480 now that's what's pressing euro dollar right now. Do you 0:19:12.560 --> 0:19:18.280 get the sense in thirty seconds that emerging markets are unraveling. No, 0:19:18.560 --> 0:19:20.399 and on the contrary, we are starting to see in 0:19:20.400 --> 0:19:24.600 a gentle purchases of emerging market equity, so China and 0:19:25.040 --> 0:19:27.560 Hong Kong, you know, these areas and finding some games 0:19:27.920 --> 0:19:32.719 underlying iphon custody interests are showing up in the Philippines unit, 0:19:32.760 --> 0:19:35.240 for example. So now there are pockets where And let's 0:19:35.280 --> 0:19:37.680 bear in mind being equity for bonds and markets weren't 0:19:37.680 --> 0:19:40.080 really the heavily invest in emerging markets anyway the last 0:19:40.080 --> 0:19:41.840 few years or so, so it's still probably a good 0:19:41.920 --> 0:19:44.040 environment that we need to wait and see. Oh it 0:19:44.119 --> 0:19:47.040 is a pleasure. Jeffrey You, senior market strategist at B 0:19:47.200 --> 0:19:49.920 and Y, melon with us this morning and ahead of 0:19:49.960 --> 0:19:52.320 the can showp on on Wall Street down futures one 0:19:52.800 --> 0:19:56.560 twenty nine points lower, the dollar d X y up 0:19:56.560 --> 0:20:00.560 about one percent. Right now, you're listening to of Bloomberg 0:20:00.640 --> 0:20:11.000 day Break, and just ahead we'll have top stories and 0:20:11.320 --> 0:20:14.680 focus on the Marcus after eleven declients of the US 0:20:15.000 --> 0:20:18.840 in the past thirteen weeks. You're listening the Bloomberg day Break, 0:20:21.960 --> 0:20:26.440 broadcasting live from the Bloomberg Interactive Broker Studio in New York. 0:20:26.600 --> 0:20:31.199 Bloomberg Living Freedom to Washington, d C, Bloomberg one to Boston, 0:20:31.359 --> 0:20:34.600 Bloomberg one oh six, one to San Francisco, Bloomberg No. 0:20:34.840 --> 0:20:37.640 Sixty to the Country, Sirius XM to the one nine 0:20:38.040 --> 0:20:41.200 and around the globe the Bloomberg Business App and Bloomberg 0:20:41.280 --> 0:20:50.560 Radio dot Com. This is Bloomberg Daybreak. It's six thirty 0:20:50.600 --> 0:20:52.959 on Wall Street. Good morning. I'm John Tucker and I'm 0:20:53.040 --> 0:20:56.200 Karen Moscow. We are just about three hours away from 0:20:56.280 --> 0:20:58.320 the Open of US Training. It's time of the five 0:20:58.400 --> 0:20:59.960 Things that you need to know to start your day, 0:21:00.119 --> 0:21:03.920 brought to you by Interactive Brokers. Interactive Broker symbol ib 0:21:04.000 --> 0:21:06.920 k R Global Trader App. Deposit in your local currency 0:21:06.960 --> 0:21:09.840 and trade stocks in the US, Europe and Asia. Start 0:21:09.880 --> 0:21:12.399 your free trial at ib k R dot com slash 0:21:12.440 --> 0:21:16.240 Global Trader. First, we go to Highland Park, Illinois, where 0:21:16.280 --> 0:21:19.359 a gunman opened fire on a rooftop at an Independence 0:21:19.440 --> 0:21:23.280 Day parade yesterday, killing at least six people and wounding 0:21:23.320 --> 0:21:26.920 at least thirty others. Illinois Governor JB. Prisker addressed the 0:21:27.000 --> 0:21:29.520 violence in a news conference. A little while ago, I 0:21:29.640 --> 0:21:33.440 spoke with President Biden, who pledged all support the White 0:21:33.480 --> 0:21:38.320 House can provide. The President agrees with me, this madness 0:21:38.840 --> 0:21:42.800 must stop. Illinois Governor JB. Prisker, a person of interest 0:21:42.880 --> 0:21:45.840 in the shooting, was taken into custody lady yesterday. Now 0:21:45.920 --> 0:21:49.119 turning to Washington, there's worth the Biden administration could roll 0:21:49.160 --> 0:21:52.760 backs of terrorists imposed by former President Trump. Senior US 0:21:52.800 --> 0:21:55.600 and Chinese officials discussed the matter last night in what 0:21:55.720 --> 0:21:59.680 the White House calls candid and substantive discussions. The rex 0:21:59.800 --> 0:22:02.600 with stations the White House that removing levies could ease 0:22:02.720 --> 0:22:06.680 inflation pressures on consumers. Well, John, looking at the economy, 0:22:06.800 --> 0:22:10.280 we may get a recession, but opportunity for investment could 0:22:10.320 --> 0:22:13.400 still be positive, depending on the magnitude of the slowdown. 0:22:13.680 --> 0:22:16.560 That's according to Goldman Sax, macro strategist for Global Fixed 0:22:16.600 --> 0:22:19.800 Income g Preate Gil. Either way, she says, the labor 0:22:19.880 --> 0:22:22.440 market will feel a pinch. We'd say that the so 0:22:22.560 --> 0:22:25.240 much sinsatainty. We're going to have to monitor the data closely. 0:22:25.640 --> 0:22:28.119 The expectations of this shoe is for the unemployment rate 0:22:28.200 --> 0:22:30.600 to I mean stable, but both the pace of job 0:22:30.680 --> 0:22:34.840 games to motivate. Goldman Sax macro strategistical Preate Yille expects 0:22:34.880 --> 0:22:37.800 your growth to level off as rates had higher. Meantime, 0:22:37.840 --> 0:22:41.360 another bank is painting a grim picture for the economy, 0:22:41.720 --> 0:22:44.160 and Bloomberg's reading the Young joins us Lie with more 0:22:44.400 --> 0:22:46.399 we need a good morning, Good morning John. With the 0:22:46.520 --> 0:22:49.720 recent drop in bond yields, investors are betting the FIT 0:22:49.840 --> 0:22:52.720 may turn less hawkish if inflation peaks in the second 0:22:52.800 --> 0:22:55.960