WEBVTT - Bloomberg Daybreak: May 19, 2022 - Hour 2 (Radio) 0:00:02.600 --> 0:00:06.400 My from the Bloomberg Interactive Brooker Studios is Bloomberg Daybreak 0:00:06.440 --> 0:00:10.680 for Thursday May two, coming up this hour. Some off 0:00:10.680 --> 0:00:15.120 continues as US futures add to yesterday's losses. JP Morgan 0:00:15.200 --> 0:00:17.680 becomes the latest firm to cut its outlook for growth, 0:00:17.840 --> 0:00:20.960 Melvin Capital calls it quits, becoming the latest casualty of 0:00:21.000 --> 0:00:23.120 the sell off, and the White House takes another step 0:00:23.160 --> 0:00:26.560 to address the Baby formulas shortage. The suspected gunman in 0:00:26.600 --> 0:00:30.120 Buffalo supermarket shooting as a court appearance today, plus Supreme 0:00:30.120 --> 0:00:33.680 Court justices are getting twenty four hour protection by Michael Barne. 0:00:33.720 --> 0:00:37.040 More ahead, I'm John Stash, Aaron Swards. Game one to 0:00:37.080 --> 0:00:39.400 the Hurricanes, they tied the Rangers late and then one 0:00:39.440 --> 0:00:44.960 in overtime win to the Yankees and Mets. That's all 0:00:45.080 --> 0:00:48.760 trended ahead on Bloomberg Daybreak on Bloomberg eleven three on 0:00:48.880 --> 0:00:53.320 New York, Bloomberg one, Washington, d C, Bloomberg one oh 0:00:53.360 --> 0:00:58.120 six one, Boston, Bloomberg nine sixties and Francisco Sirius XM 0:00:58.160 --> 0:01:01.240 one nineteen and around the world. Old on Bloomberg Radio 0:01:01.360 --> 0:01:08.520 dot Com and via the Bloomberg Business app And good Morning, 0:01:08.520 --> 0:01:11.600 I'm Karen Moscow and I'm John Tucker. Bloomberg Day Rank 0:01:11.680 --> 0:01:13.800 being brought to you by B and B and Y 0:01:13.880 --> 0:01:18.120 Melon Pershing's Inside Conference back in person June fifteen through 0:01:18.160 --> 0:01:21.800 the seventh team in Grapevine, Texas. Must attend event for 0:01:21.840 --> 0:01:26.480 financial advisors. Register today at Insight dot B and Y 0:01:26.600 --> 0:01:30.479 Melon dot com. And futures this morning are lower. We're 0:01:30.480 --> 0:01:32.000 coming up to six o one on Wall Street. We 0:01:32.080 --> 0:01:34.400 checked the markets every fifteen minutes throughout the trading day. 0:01:34.480 --> 0:01:37.800 On Bloomberg, SNP future is down sixty two points down. 0:01:37.840 --> 0:01:40.400 Futures down four hundred fifty seven. At NAST day features 0:01:40.440 --> 0:01:43.560 down two hundred. Ten year Treasury up eighteen thirty seconds, 0:01:43.640 --> 0:01:45.840 Ye two point eight one percent. They yield on the 0:01:45.920 --> 0:01:48.520 two year two point six one percent. And I make 0:01:48.600 --> 0:01:51.520 screwed oil is down two point three percent, John, and 0:01:51.640 --> 0:01:54.840 futures are down this morning, Karen. After yesterday's big sell off, 0:01:55.040 --> 0:01:57.280 the S and P five hundred had its biggest single 0:01:57.360 --> 0:02:00.800 day drop in nearly two years. Laurens, you know it 0:02:00.920 --> 0:02:05.200 wealthwise as investors should proceed with caution. We are playing 0:02:05.200 --> 0:02:09.480 it more conservatively than more aggressively, both on the fixed 0:02:09.480 --> 0:02:12.760 income as well as on the equity, so dialing down 0:02:12.880 --> 0:02:16.960 areas that are high yield or areas like that. Wealthwise 0:02:17.000 --> 0:02:20.680 CEO Lauren Gilbert Stands say it's unclear when markets could stabilize. 0:02:20.919 --> 0:02:24.440 Bearings chief global strategist Christopher Smart believes that in spite 0:02:24.440 --> 0:02:28.280 of the uncertainty, there's still positive signs from the economy. 0:02:28.560 --> 0:02:31.760 We still see the US economy is fundamentally strong. The 0:02:31.880 --> 0:02:34.840 U S consumer is still very strong. Companies are ready 0:02:34.880 --> 0:02:38.240 to you know, have very good balance sheets. Uh, and 0:02:38.280 --> 0:02:40.799 we've just come through an earning session, an earning season 0:02:40.840 --> 0:02:43.760 that has been relatively good. I think it's important to 0:02:43.880 --> 0:02:46.359 understand that we're still a long way from a recession 0:02:46.360 --> 0:02:48.880 in the US. Christopher Smart of Bearings is it's a 0:02:48.880 --> 0:02:51.840 good time to focus on companies with strong business models 0:02:51.880 --> 0:02:55.440 and balance sheets. The sell office extending overseas, John and 0:02:55.520 --> 0:02:58.760 europe equities are falling hard a day after Britain posted 0:02:58.840 --> 0:03:02.079 record inflation. On Burgh and Bloomberg's Max Ranty joins US 0:03:02.080 --> 0:03:05.480 live from Brussels with the latest next Good morning, Good morning, 0:03:05.560 --> 0:03:07.960 Karen and John ys to sell off gathering pace as 0:03:07.960 --> 0:03:10.640 we get through the European equities session this morning, the 0:03:10.639 --> 0:03:13.079 stock six hundred down two point two percent. Right now, 0:03:13.240 --> 0:03:15.880 it's in the UK that we see the worst losses, 0:03:15.919 --> 0:03:19.160 down two point six percent for the foot seat one hundred, 0:03:19.200 --> 0:03:21.240 but it is still the best performing of the major 0:03:21.280 --> 0:03:25.040 European indussees year to date, despite the challenges post from inflation, 0:03:25.040 --> 0:03:28.359 which hit a forty year high in those CPI figures yesterday. 0:03:28.560 --> 0:03:31.320 Live in Brussels, Max Ramsey bloom back daybreak thanks Max 0:03:31.400 --> 0:03:35.120 starts in Asia also all overnight and Bloombridge. Juliet Sally 0:03:35.240 --> 0:03:38.160 joins us with the latest from Singapore. Juliet, good morning, 0:03:38.200 --> 0:03:40.960 Good morning, Karen and John. The MSCI Asia Pacific Index 0:03:41.000 --> 0:03:43.560 halted a four day rally, posting its biggest one day 0:03:43.600 --> 0:03:46.680 decline in to day since early March. Ten Cent shares 0:03:46.720 --> 0:03:49.160 plunged in Hong Kong, dragging down the hang Sing Tech 0:03:49.240 --> 0:03:52.120 Index after it posted its slowest revenue growth in the 0:03:52.120 --> 0:03:55.240 first quarter since it's two thousand and four listing. Chinese 0:03:55.240 --> 0:03:57.720 shares also came under pressure on the mainland after stan 0:03:57.880 --> 0:04:01.119 Chart cut their twenty twenty two GDP forecast to four 0:04:01.160 --> 0:04:04.160 point one from five percent, but OSSI bones in the 0:04:04.160 --> 0:04:07.760 local currency rallied after Australia's unemployment level plunge to any 0:04:07.960 --> 0:04:11.000 fifty year low in April, delivering a potential boon to 0:04:11.160 --> 0:04:13.880 Prime Minister Scott Morrison's government as it into is the 0:04:13.920 --> 0:04:18.040 final days of campaigning for Saturday's election in Singapore. Juliette 0:04:18.080 --> 0:04:21.400 Sally Bloomberg Daybreak, Juliet thank you. Turning the Fed now 0:04:21.600 --> 0:04:23.880 is looking more and more likely the Fed will follow 0:04:23.960 --> 0:04:27.520 through on j Powell's recent hawkish comments to address inflation. 0:04:27.760 --> 0:04:30.719 Philadelphia Fed President Patrick Harker plans on a series of 0:04:30.800 --> 0:04:33.880 rate hikes at a measured pace going forward if there 0:04:33.920 --> 0:04:37.600 are no significant changes in the data in the coming weeks. 0:04:38.520 --> 0:04:41.919 I expect two additional fifty basis point rate hikes in 0:04:42.000 --> 0:04:45.120 June and July. And Philadelphia Fed President Patrick Harker made 0:04:45.120 --> 0:04:47.320 the comments at a virtual event hosted by the Mid 0:04:47.440 --> 0:04:50.720 Sized Bank Coalition of America. He anticipates the economy and 0:04:50.800 --> 0:04:54.920 whether a measured methodical tightening of monetary policy and JP 0:04:55.080 --> 0:04:58.960 Morgan warning of declining growth economists sound the Bank lowering 0:04:59.000 --> 0:05:02.200 their outlook of half up percent for the second half 0:05:02.240 --> 0:05:05.119 of this year, but now forecast growth of two point 0:05:05.160 --> 0:05:08.800 four percent. The bank science falling stock prices, hire mortgage 0:05:08.880 --> 0:05:12.560 rates on a strong dollar has reasons for the revision. John. 0:05:12.600 --> 0:05:15.640 It's been over a year since Melvin Capital Management suffered 0:05:15.680 --> 0:05:18.799 severe losses and the Memes stock frenzy, and now Gabe 0:05:18.800 --> 0:05:21.960 Plotkins firm is calling it quits. Bloomberg's We Need a 0:05:22.000 --> 0:05:23.680 Young is here alive with more We need a good 0:05:23.680 --> 0:05:26.679 morning and good morning Karen. Gabe Plotkin is shutting down 0:05:26.720 --> 0:05:30.359 his seven point eight billion dollar hedge fund. Melvin Capital 0:05:30.360 --> 0:05:33.279 Management was the most prominent victim of the Meme stock 0:05:33.360 --> 0:05:38.080 frenzy of January one, losing billions. Now. The fund posted 0:05:38.120 --> 0:05:41.719 a fifty five percent loss that month alone, and since then, 0:05:41.760 --> 0:05:44.200 Plotkin has been trying to claw his way back with 0:05:44.320 --> 0:05:47.719 funding from some of Wall Street's biggest players. Although the 0:05:47.720 --> 0:05:51.240 fund showed some promise last year, a plan to reimpose 0:05:51.320 --> 0:05:56.160 fees frustrated backers and failed. Now Melvin Capitals outlining plans 0:05:56.200 --> 0:06:00.799 to eliminate fees and return investor cash. I've in New York. 0:06:00.839 --> 0:06:03.880 I'm gonned a young Bloomberg daybreak thanks for Rena. Turning 0:06:03.920 --> 0:06:06.840 to the nation's capital, the White House remains laser focused 0:06:07.040 --> 0:06:10.200 on easing the baby formula shortage, taking new measures in 0:06:10.279 --> 0:06:13.880 tanda with Congress to address the crisis. Bloomberg's Amy Morris, 0:06:13.920 --> 0:06:17.120 as the latest from our ninety one newsroom in Washington. 0:06:17.440 --> 0:06:21.320 President Biden invoked emergency powers under the Defense Production Act 0:06:21.440 --> 0:06:25.000 to try to boost production of baby formula while ordering 0:06:25.040 --> 0:06:29.040 the use of government planes for imports called Operation Fly. 0:06:29.240 --> 0:06:32.000 Formula has to be able to speed up the import 0:06:32.000 --> 0:06:35.680 of infant formula and start getting more formula in stories 0:06:35.720 --> 0:06:38.279 as soon as possible. Meanwhile, the House path the twenty 0:06:38.279 --> 0:06:41.080 eight million dollar emergency funding bill for the FDA to 0:06:41.120 --> 0:06:44.800 address the baby formula shortage. Republicans oppose the measure, and 0:06:44.880 --> 0:06:48.280 its future in the Senate is uncertain. In Washington, I'm 0:06:48.279 --> 0:06:51.120 maybe Morris Bloomberg daybreak, all right, Amy, thank you, and 0:06:51.200 --> 0:06:54.599 President Biden meets today with Finland's president and Sweden's Prime 0:06:54.640 --> 0:06:57.920 minister to discust the nations bids to join NATO. Turkey's 0:06:57.920 --> 0:07:00.560 president has blocked the Alliance from starting the process for 0:07:00.680 --> 0:07:03.880 both countries. He cites Finland and Sweden's approach to Kurdish 0:07:03.960 --> 0:07:07.640 groups that he considers terrorists. Futures this morning lower SMP 0:07:07.800 --> 0:07:10.160 futures down fifty five points and Down futures down four 0:07:10.200 --> 0:07:13.559 hundred twelve, NASTAG futures down a hundred seventies seven straight, 0:07:13.560 --> 0:07:16.840 A hand your latest local headlines, plus a check of sports, 0:07:17.280 --> 0:07:24.480 and this is Bloomberg. He has six so settled on 0:07:24.520 --> 0:07:26.640 wolfs for it. Let's bring in Michael Varne now to 0:07:26.720 --> 0:07:28.640 find out what else is going on in New York 0:07:28.720 --> 0:07:32.360 and around the world. Thank you very much. The white 0:07:32.560 --> 0:07:35.760 eighteen year old gunmen accused of killing ten black people 0:07:35.800 --> 0:07:39.480 at a Buffalo supermarket is scheduled to appear in court today, 0:07:39.840 --> 0:07:43.679 authorities say. Shortly before the attack last Saturday, Peyton Gendrin 0:07:43.960 --> 0:07:48.000 posted hundreds of pages of writings to online discussion groups 0:07:48.160 --> 0:07:51.040 where he detailed his plans for the assault and his 0:07:51.200 --> 0:07:54.920 racist motivation. It prompted New York Governor Kathy Hockle to 0:07:55.000 --> 0:07:58.600 sign an executive order to create a domestic terrorism unit 0:07:58.840 --> 0:08:02.560 to address the rise the home grown extremism. Hocal says, 0:08:02.600 --> 0:08:05.560 among other things, it will alert authorities to anyone who 0:08:05.560 --> 0:08:10.480 could become violent, requiring the state police to file an 0:08:10.480 --> 0:08:14.119 extreme risk order of protection under New York's Red Flag 0:08:14.200 --> 0:08:17.000 Law when they believe that an individual is a threat 0:08:17.040 --> 0:08:23.000 to himself, herself or others. Previously current law, it's an 0:08:23.040 --> 0:08:27.160 option to do so. According to Governor hocol Let, Buffalo 0:08:27.240 --> 0:08:30.280 be the city where people said enough is enough. Meanwhile, 0:08:30.320 --> 0:08:32.839 the U. S House passed legislation last night that would 0:08:33.000 --> 0:08:36.920 bolster federal resources to prevent domestic terrorism in response to 0:08:36.960 --> 0:08:40.480 the Buffalo shooting. Coronavirus variants are spreading in the US 0:08:40.559 --> 0:08:44.800 and worldwide. At the Lighthouse COVID Response Team briefing, CDC 0:08:45.040 --> 0:08:49.680 Director Dr Rochelle Wilenski, urging new precautions in areas where 0:08:49.679 --> 0:08:53.720 community levels are high, everyone should be using prevention measures 0:08:53.720 --> 0:08:56.800 and wearing a mask in public indoor setting. Dr Wilensky 0:08:56.880 --> 0:08:58.960 says there is an uptick in COVID deaths about two 0:08:59.360 --> 0:09:03.120 seventy day. New York Mayor Eric Adams said he has 0:09:03.200 --> 0:09:06.480 no plans to reinstate a mask mandate in public schools, 0:09:06.760 --> 0:09:09.839 even after health officials this week raised the city's COVID 0:09:09.880 --> 0:09:13.360 alert level too high. During a news conference, Adam says, 0:09:13.400 --> 0:09:16.600 we are not allowing COVID to out smartest, and so 0:09:16.880 --> 0:09:21.400 I'm just really impressed with how we are operating as 0:09:21.400 --> 0:09:26.000 a city. Various are going to continue to come. Mayor 0:09:26.040 --> 0:09:29.199 Adams went on to say we're staying prepared and not panicking. 0:09:29.480 --> 0:09:32.360 The federal government is warning law enforcement agencies around the 0:09:32.440 --> 0:09:36.400 nation of the increased potential for extremist violence after the 0:09:36.480 --> 0:09:39.760 leak of a draft Supreme Court opinion striking down the 0:09:39.760 --> 0:09:43.520 constitutional right to abortion, The U. S. Marshals Service has 0:09:43.559 --> 0:09:47.360 the Supreme Court justices under twenty four hour security. Global 0:09:47.400 --> 0:09:49.720 News twenty four hours a day on air and on 0:09:49.800 --> 0:09:53.079 Bloomberg Quick Take, powered by more than twenty seven hundred 0:09:53.120 --> 0:09:56.120 journalists and analysts more than a hundred twenty countries. Michael 0:09:56.160 --> 0:10:03.760 barn This is Bloomberg, John, Michael, thank you, Hey. It's 0:10:03.800 --> 0:10:05.640 now six till on Wall Street. That's time for the 0:10:05.640 --> 0:10:09.360 Bloomberg Sports Update. He's John Stehower. Thanks John. The Rangers 0:10:09.400 --> 0:10:12.000 know all about losing a series opener in overtime. It 0:10:12.000 --> 0:10:14.559 happened against Pittsburgh that was triple overtime at the Garden. 0:10:14.559 --> 0:10:16.640 This one was in a Raleigh and it ended just 0:10:16.760 --> 0:10:20.240 three minutes in. She gets at the Smith's luck to 0:10:20.320 --> 0:10:35.079 get through as the c MC of the call. Rangers 0:10:35.080 --> 0:10:36.760 for most of the night had a one nothing leading 0:10:36.800 --> 0:10:39.520 a Philippino goal, where they didn't score again and Carolina 0:10:39.640 --> 0:10:42.040 dominated the third period. They had a breakaway shot go 0:10:42.200 --> 0:10:45.040 up the crossbar and another shot caramed off the post 0:10:45.080 --> 0:10:47.520 and then with under threw to go Sebaston Ajo Scord 0:10:47.960 --> 0:10:50.480 the time goal. Cole's game winner actually went in off 0:10:50.520 --> 0:10:53.839 the stick a Ranger defenseman Ryan Lingren wild Star to 0:10:53.920 --> 0:10:57.240 the Battle of Alberta. Calgary led five to one. Edmonton 0:10:57.320 --> 0:11:00.360 tied the game at six, then the Flames won nine 0:11:00.440 --> 0:11:03.240 to six. NBA West Finals Game one, Golden State throughout 0:11:03.320 --> 0:11:06.360 Dallas by twenty five. Yankees won again in Baltimore, three 0:11:06.440 --> 0:11:08.079 runs in the first an. They didn't score again, but 0:11:08.120 --> 0:11:10.360 they won three two is. Garrett Cole went seven inings, 0:11:10.400 --> 0:11:13.439 and Clay Homes the last two Homes has now thrown 0:11:13.440 --> 0:11:16.560 almost twenty consecutive scoreless innings. The Yanks go for the 0:11:16.559 --> 0:11:19.520 four game suite this afternoon at City Field. Mets pulled 0:11:19.520 --> 0:11:22.400 away after four runs in the fifth inning, five more 0:11:22.400 --> 0:11:24.840 in the eighth, including a Petlnzo three run homer. Max 0:11:24.840 --> 0:11:27.760 Scherzer got the winners. The Mets meet the Cardinals eleven 0:11:27.760 --> 0:11:30.640 to four, but Scherzer took himself out in the sixth 0:11:30.640 --> 0:11:33.079 inning discomfort and his left side headed for an m 0:11:33.160 --> 0:11:36.840 r I, but Scherzer said he doubts that it's anything serious. 0:11:36.840 --> 0:11:40.040 P g H Championship begins this morning in Tulsa Tiger 0:11:40.080 --> 0:11:43.560 Woods as an early tea time. John stash Award Bloomberg Sports. 0:11:43.600 --> 0:11:46.160 John all right, John, thanks a lot. After yesterday's four 0:11:46.240 --> 0:11:49.560 percent sell off for the SMP five hundred SMP futures 0:11:49.559 --> 0:11:53.319 this morning, the point lower right now down fifty four points, 0:11:53.559 --> 0:11:57.720 the DALLA futures four hundred eleven points, Flower Canada Asta 0:11:57.920 --> 0:12:01.200 futures are down right now one at seventy five points. 0:12:01.520 --> 0:12:08.040 You're listening the Bloomberg day Break and just to have 0:12:08.240 --> 0:12:12.240 lessons from Wednesday's sell off, our own Joe Wisenthal stops 0:12:12.280 --> 0:12:16.480 by to look at the bullwhip effect. We'll explain. This 0:12:16.600 --> 0:12:24.720 is Bloomberg day Break, Markets, headlines and breaking news twenty 0:12:24.720 --> 0:12:27.599 four hours a day at Bloomberg dot com, the Bloomberg 0:12:27.600 --> 0:12:30.559 Business Out, and at Bloomberg Quick Tape. This is a 0:12:30.600 --> 0:12:39.880 Bloomberg Business flash and I'm kring Moscow. The global stocks 0:12:39.880 --> 0:12:43.520 are out deepening, European shares tumbling, and US Stock Index 0:12:43.640 --> 0:12:46.600 Future is signaling more losses ahead. After yesterday's sell off 0:12:46.640 --> 0:12:49.160 that ere raised one and a half trillion dollars of 0:12:49.200 --> 0:12:51.679 market value from US equities. We checked the markets every 0:12:51.679 --> 0:12:54.199 fifteen minutes throughout the trading day. On Bloomberg guess and 0:12:54.240 --> 0:12:57.360 P futures down five points this morning, Down futures down 0:12:57.400 --> 0:13:01.000 four and NASDAG futures down a hundred seven six. The 0:13:01.080 --> 0:13:03.200 decks in Germany is down more than two percent. The 0:13:03.240 --> 0:13:05.760 ten year treasury up eighteen thirty seconds, held two point 0:13:05.760 --> 0:13:08.200 eight one percent yield on the two year two point 0:13:08.240 --> 0:13:11.200 six one percent. No max Screwde oil is down one 0:13:11.200 --> 0:13:13.079 point six percent out a dollar seventy one and a a 0:13:13.240 --> 0:13:16.080 hundred seven dollars eighty eight cents of barrel COMEXS Gold 0:13:16.120 --> 0:13:18.360 up six tenths percent or eleven dollars twenty cents at 0:13:18.360 --> 0:13:21.320 eighteen thirty three sixty an ounce. The euro one point 0:13:21.360 --> 0:13:23.640 oh five oh two against the dollar British bound one 0:13:23.640 --> 0:13:26.200 point two four oh nine again is at one twenty 0:13:26.200 --> 0:13:29.280 seven point six eight, and Bitcoin this morning is down 0:13:29.679 --> 0:13:33.520 half percent at twenty nine thousand dollars. And shall me 0:13:33.760 --> 0:13:36.600 posting his first quarterly revenue decline on record this after 0:13:36.640 --> 0:13:40.760 beijing strict COVID containment policies crippled smartphone sales. We are 0:13:40.760 --> 0:13:44.559 watching for some earnings today from companies including coals. That's 0:13:44.559 --> 0:13:47.240 a Bloomberg business flash. Now here's Michael Barr with more 0:13:47.280 --> 0:13:49.720 on what's going on around the world. Michael, thank you 0:13:49.840 --> 0:13:53.560 very much, Jarren. The CDC's Independent Advisory Committee meets today 0:13:53.640 --> 0:13:57.720 to discuss whether to authorize Fiser's COVID nineteen booster shot 0:13:57.800 --> 0:14:01.520 children ages five to eleven. It's happening as the nation's 0:14:01.559 --> 0:14:05.839 COVID resurgence reaches its highest point since mid February. The 0:14:05.920 --> 0:14:09.200 suspected eighteen year old gunman in the deadly Buffalo supermarket 0:14:09.200 --> 0:14:13.280 shooting has a court appearance today. Authorities continue to investigate 0:14:13.320 --> 0:14:17.560 the possibility of a hate crime or terrorism charges against 0:14:17.600 --> 0:14:20.920 Peyton Gendrin. In the NHL playoffs, the Rangers lost to 0:14:20.960 --> 0:14:23.280 the Hurricanes to one in overtime in Game one of 0:14:23.320 --> 0:14:26.880 their series. In the NBA playoffs, the Warriors won Game 0:14:26.920 --> 0:14:31.120 one of their Western Conference Finals over the Mavericks. In baseball, 0:14:31.200 --> 0:14:34.000 the Yankees beat the Orioles three to the Mets, Red 0:14:34.000 --> 0:14:37.040 Sox and Nationals won the Giants, and A's lost. Global 0:14:37.080 --> 0:14:39.440 news twenty four hours a day on air and on 0:14:39.480 --> 0:14:42.880 Bloomberg quick Take, powered by more than twenty seven hundred 0:14:42.960 --> 0:14:45.440 journalists and analysts more than a hundred twenty countries. I'm 0:14:45.480 --> 0:14:48.480 like Labar, this is Bloomberg. Michael Thank you. Six twenty 0:14:48.560 --> 0:14:51.200 on Wall Street. We are live from the Bloomberg Interactive 0:14:51.200 --> 0:14:54.960 Broker Studios. This is Bloomberg Daybreak. The big story of 0:14:55.000 --> 0:14:58.440 this week seems to be the absolute implosion of some 0:14:58.680 --> 0:15:03.720 huge retail name sames like Walmart, Target, Costco. Join. I 0:15:03.720 --> 0:15:06.840 guess now, Joe Wisenhal, Bloomberg News Managing editor and host 0:15:06.880 --> 0:15:09.720 of the Odd Lots podcast, who just happened to write 0:15:09.720 --> 0:15:14.160 a story with that exact headline, Joe, there's a shift 0:15:14.280 --> 0:15:17.920 taking place? What is it? Yeah? I mean, look, you 0:15:18.000 --> 0:15:21.320 know what people have expected for a long time is 0:15:21.360 --> 0:15:24.920 that at some point there would be this big shift 0:15:25.040 --> 0:15:28.440 away from the type of sort of durable goods household 0:15:28.520 --> 0:15:31.800 goods consumption that we saw for the pandemic, because we 0:15:31.840 --> 0:15:35.200 know there was this big durable goods boom, but nobody 0:15:35.440 --> 0:15:37.680 really knew when. And if you think about it, you know, 0:15:37.760 --> 0:15:41.400 like remember what the story was last fall. Would there 0:15:41.440 --> 0:15:45.560 be empty shelves on the on the stores for Christmas? 0:15:45.560 --> 0:15:47.640 And so what you have is this effect where it's 0:15:47.640 --> 0:15:51.800 like everybody wanted to load up, everybody wanted to have inventories, 0:15:51.920 --> 0:15:54.880 everybody wanted to make sure that there was no um, 0:15:54.920 --> 0:15:57.360 you know, empty shelves. And what we're seeing now is 0:15:57.400 --> 0:16:00.880 that the consumption shift has happened in a big way 0:16:01.040 --> 0:16:03.880 really in the last two months, this sort of normalization 0:16:03.920 --> 0:16:07.520 of consumption. And now we see these huge piles of 0:16:07.720 --> 0:16:11.360 unsold inventories places like Target and Walmart, and that's a 0:16:11.440 --> 0:16:14.960 pretty sort of like to costly. It's a costly shift 0:16:15.040 --> 0:16:18.040 for them. What am I spending my money on? Now? 0:16:18.160 --> 0:16:21.400 What if I shifted to? You know what? Target said 0:16:21.480 --> 0:16:25.800 yesterday that they're seeing a huge surge in luggage sales. 0:16:25.880 --> 0:16:28.880 So one category that is doing extremely well for Target 0:16:28.920 --> 0:16:31.360 is luggage. But it's pretty obvious like what that means. 0:16:31.480 --> 0:16:34.240 It's like the things that we put off for two 0:16:34.360 --> 0:16:36.560 years are coming back in a big way, and one 0:16:36.560 --> 0:16:39.080 of them is travel in BacT I know myself, you know, 0:16:39.160 --> 0:16:41.040 I'm not even typically a big traveler. I think I've 0:16:41.040 --> 0:16:44.080 been on like twelve flights in the last month and 0:16:44.080 --> 0:16:46.400 a half, which is like a record for me. It's 0:16:46.440 --> 0:16:49.760 like different work things, some vacations, some other traveling. And 0:16:49.840 --> 0:16:52.960 so this big shift is happening from the type of 0:16:53.000 --> 0:16:55.600 things that a lot of people simply did not do 0:16:55.800 --> 0:16:59.160 for essentially two straight years. Okay, so we've we're going 0:16:59.200 --> 0:17:04.040 from buying stuff to services. Services the biggest part of 0:17:04.040 --> 0:17:07.720 the economy. Um that gets a boost. Maybe the prices 0:17:07.760 --> 0:17:12.600 coming down on the stuff, Joe, the problem solved, Well, 0:17:13.640 --> 0:17:16.680 you look, it is the big hope, right. I don't 0:17:16.680 --> 0:17:19.240 know if the problem is solved, but the hope would 0:17:19.240 --> 0:17:23.680 be at least that when we have normalized consumption, where 0:17:23.760 --> 0:17:27.320 we when we're our lifestyle but our purchasing petits are 0:17:27.440 --> 0:17:31.119 roughly what they were in twenty nineteen, that mixtures returned, 0:17:31.680 --> 0:17:35.600 that then supply chains and offices and all that can 0:17:35.680 --> 0:17:38.280 more or less work is intended, and that that's that 0:17:38.480 --> 0:17:41.639 the FED would love that, investors would love it. We 0:17:41.680 --> 0:17:44.040 don't know if that will happen, especially on the price side, 0:17:44.080 --> 0:17:48.119 because look, we know that rents are picking up. That's 0:17:48.200 --> 0:17:51.320 not something that you know, it is like looks like 0:17:51.359 --> 0:17:54.480 it's going to go away imminently. We know that services 0:17:54.520 --> 0:17:57.919 prices are saying firming inflation. So I think the jury 0:17:58.040 --> 0:18:00.760 is still out on whether the sort of inflation will 0:18:00.800 --> 0:18:03.920 normalize just when our consumption normalizes, but I think that 0:18:03.960 --> 0:18:05.560 will be part of it. And look, we know like 0:18:05.640 --> 0:18:08.560 there is an element of the current inflation that sort 0:18:08.560 --> 0:18:11.399 of related to the pandemic, and so the big question 0:18:11.480 --> 0:18:17.800 is how much we'll probably find out soon what's sort 0:18:17.800 --> 0:18:21.480 of like real underlying inflation looks like, and that will 0:18:21.480 --> 0:18:23.439 tell us how much more work the FED has to 0:18:23.480 --> 0:18:28.280 do to get back to target. What's the bull whip effect? Yeah, 0:18:28.320 --> 0:18:32.119 I mean, it's this phenomenon that supply chain professionals have 0:18:32.359 --> 0:18:35.359 talked about for a long time, long before the pandemic. 0:18:35.400 --> 0:18:40.480 But it basically is this phenomenon in which it becomes 0:18:40.480 --> 0:18:45.800 extremely hard in a shock to accurately gauge um uh 0:18:46.000 --> 0:18:49.040 proper level of inventory and buying, and people don't have 0:18:49.160 --> 0:18:52.000 much visibility into what the end consumer is going to 0:18:52.040 --> 0:18:56.479 look like. So companies change their whole patterns. You see, okay, 0:18:56.520 --> 0:19:01.399 we're getting a big pickup in demand for are toast 0:19:01.520 --> 0:19:05.159 offens or new refrigerators or the you know, furniture, and 0:19:05.200 --> 0:19:09.119 so then everybody starts cranking up uh you know, production 0:19:09.160 --> 0:19:11.680 of furniture and orders of furniture, and then people over 0:19:11.880 --> 0:19:14.480 order because again, remember we had these shortages, and so 0:19:14.600 --> 0:19:16.800 if you're facing shortages, when you do, you're like, well, 0:19:16.800 --> 0:19:18.640 I'm going to order even more just to make sure 0:19:18.640 --> 0:19:21.119 I don't run out. But then it sort of whips 0:19:21.119 --> 0:19:23.960 in the other direction, and then you have these really 0:19:24.080 --> 0:19:28.560 magnified errors in both directions where you go from shortages 0:19:28.960 --> 0:19:33.400 to gluts very fast because of the compensation in either direction. 0:19:33.640 --> 0:19:36.680 It sounds like they're parallels. Also to FED Policy, Joel 0:19:36.760 --> 0:19:39.680 thanks a lot, appreciate it. Joey isn't thought, the Bloomberg 0:19:39.720 --> 0:19:43.920 News Managing editor, also the host of the Odd Lots podcast. 0:19:44.560 --> 0:19:48.119 And I had the cash of about Wall Street futures 0:19:48.400 --> 0:19:51.600 after yesday four percent sell off for the SMP five hundred. 0:19:52.040 --> 0:19:55.479 We have futures lower this morning. SMP futures down fifty 0:19:55.480 --> 0:19:58.320 two down future is four hundred two points lower than 0:19:58.359 --> 0:20:01.960 AMSDACK futures down one utter day and seventy points. You're 0:20:02.000 --> 0:20:07.920 listening to Bloomberg Day Prey and the Bloomberg Weather from 0:20:08.040 --> 0:20:12.159 meteorologist Rob Carolin. They have some real heavy rain this 0:20:12.320 --> 0:20:15.480 morning for rain will end this morning becoming party site 0:20:15.480 --> 0:20:22.920 the Heights Aptude today seventy to seventy five degrees broadcasting 0:20:22.960 --> 0:20:26.680 live from the Bloomberg Interactive Broker Studio in New York. 0:20:26.800 --> 0:20:31.480 Bloomberg E Living Freedom to Washington, d C. Bloomberg to Boston, 0:20:31.560 --> 0:20:35.359 Bloomberg one six one to San Francisco, Bloomberg nine sixty 0:20:35.520 --> 0:20:38.320 to the country, Sirius XM Chad A one nineteen and 0:20:38.400 --> 0:20:41.760 around the globe, the Bloomberg Business apt and Bloomberg Radio 0:20:41.880 --> 0:20:51.600 dot com. This is Bloomberg Daybreak. He's six thirty on 0:20:51.680 --> 0:20:54.280 blow Street. Good morning, I'm John Tucker and I'm Karen 0:20:54.320 --> 0:20:57.000 Moscow or just about three hours away from the open 0:20:57.000 --> 0:20:59.040 of US trading time for the five things you need 0:20:59.080 --> 0:21:02.200 to notice start your brought to you by Interactive Brokers. 0:21:02.400 --> 0:21:05.440 Interactive Brokers charges margin loan rates from one point three 0:21:05.520 --> 0:21:08.560 three to two point three three percent, rates subject to change. 0:21:08.640 --> 0:21:12.439 Learn more at ibk R dot com. Slash compare up first. 0:21:12.600 --> 0:21:15.200 US future is falling again as stocks come off their 0:21:15.240 --> 0:21:18.280 worst day in nearly two years. Weak retail earnings are 0:21:18.280 --> 0:21:21.200 stoking concerns about the consumer sector, and Mark Cudmore is 0:21:21.240 --> 0:21:24.359 a macro strategist for Bloomberg News. The weakness for the 0:21:24.400 --> 0:21:27.439 consumer sector was related in my point of view, and 0:21:27.440 --> 0:21:29.280 it makes sense that it's finally come. We kind of 0:21:29.280 --> 0:21:31.720 seem to be denying reality there. The bit that I'm 0:21:31.760 --> 0:21:35.399 really confused about is how fragile is the consumer overall? 0:21:35.480 --> 0:21:37.680 Because our session is definitely coming by the way, there's 0:21:37.680 --> 0:21:39.520 no chance of avoiding a hard landings we're just talking 0:21:39.520 --> 0:21:42.520 about when it comes. Bloomberg macro strategist Mark cud Morris 0:21:42.600 --> 0:21:46.040 as the most optimistic view has the US entering recession 0:21:46.160 --> 0:21:49.040 next year. So where do investors put their money? There's 0:21:49.080 --> 0:21:51.399 no good answer. According to David Dits, he's seen your 0:21:51.440 --> 0:21:56.320 portfolio strategist at Pepak Private Wealth. The alternatives like bitcoin 0:21:56.400 --> 0:21:59.520 have crash show there's only cash. But you know, with 0:22:00.359 --> 0:22:02.840 close to eight percent cash doesn't look very good for 0:22:02.880 --> 0:22:05.040 the long haul either. So it's a real hand reading 0:22:05.119 --> 0:22:08.200 time for investors. The facts Davids was against on Bloomberg 0:22:08.200 --> 0:22:10.800 Business Week heard Weekday Afternoons from two to five and 0:22:10.840 --> 0:22:15.920 Bloomberg Radio five hundred four percent yesterday. This morning, SMP 0:22:16.080 --> 0:22:19.280 futures are down one point four percent. Well, the latest 0:22:19.320 --> 0:22:23.320 casualty of the sell off John Melvin Capital, Gabe Plotkin's 0:22:23.400 --> 0:22:26.000 hedge fund as calling it quests and bloombergerny to Young 0:22:26.080 --> 0:22:28.240 joins us live at the very latest. Good morning, Nina, 0:22:28.359 --> 0:22:31.320 Good morning Karen. Gabe Plotkin is shutting down his seven 0:22:31.480 --> 0:22:35.439 point eight billion dollar hedge fund. Melvin Capital Management was 0:22:35.480 --> 0:22:39.960 the most prominent victim of last year's memestock frenzy, losing billions. 0:22:40.320 --> 0:22:43.879 The fund posted of fifty five percent lost that month alone, 0:22:44.280 --> 0:22:46.760 and since then, Plotkin has been trying to claw his 0:22:46.800 --> 0:22:50.160 way back with funding from some of Wall Street's biggest players. 0:22:50.520 --> 0:22:53.280 Now the fund showed some promise last year, but a 0:22:53.280 --> 0:22:58.000 plan to reimpose fees frustrated backers and failed. Now Melvin 0:22:58.040 --> 0:23:01.520 Capital is outlining plans to elimit eight fees and return 0:23:01.600 --> 0:23:04.800