WEBVTT - Bloomberg Daybreak: October 20, 2022 - Hour 1 (Radio) 0:00:03.160 --> 0:00:06.439 Live from the Bloomberg Interactive Brokers Studios. This is is Bloomberg 0:00:06.519 --> 0:00:10.360 day Break for Thursday, October two. Coming up this hour, 0:00:10.600 --> 0:00:14.520 stocks drop by concerned strong inflation and hawkish monetary policy 0:00:14.560 --> 0:00:16.800 will further hit growth. We hear from two more FETE 0:00:16.800 --> 0:00:20.040 officials about the path of rate heights. Tesla shares fall 0:00:20.079 --> 0:00:23.079 at sales misestimates and they take it to London. Wheleass 0:00:23.120 --> 0:00:26.439 trust his government looks close to in floating. Justice Department 0:00:26.480 --> 0:00:29.880 prosecutors believe they have enough evidence to George Donald Trump. 0:00:29.920 --> 0:00:33.159 Plus doctors are concerned about children and R s V. 0:00:33.960 --> 0:00:36.960 Michael blah More ahead, I'm John Stashower and sports. The 0:00:37.040 --> 0:00:39.720 Yankees lost Game one of the Alcs and used to 0:00:39.840 --> 0:00:45.040 the Nixon Nets. Both lost their season opener. That's All's 0:00:45.040 --> 0:00:48.680 train ahead on Bloomberg day Break on Bloomberg eleven three, 0:00:48.680 --> 0:00:53.000 on New York Bloomberg nine one, Washington d C, Bloomberg 0:00:53.000 --> 0:00:56.720 one oh six one, Boston Bloomberg nine sixties and Francisco 0:00:57.160 --> 0:01:00.880 Syrius Exam one nineteen and around the world on Bloomberg 0:01:00.960 --> 0:01:07.960 Radio dot Com and via the Bloomberg Business App. Good morning, 0:01:07.959 --> 0:01:11.360 I'm Nathan Hagar, and I'm Karen Moscow futures are lower 0:01:11.440 --> 0:01:13.240 this morning. We're coming up to five oh one on 0:01:13.280 --> 0:01:15.440 Wall Street, and we check the markets every fifteen minutes 0:01:15.440 --> 0:01:18.119 throughout the trading day. On bloomberg S and P Future 0:01:18.160 --> 0:01:20.959 is down about nineteen points down. Future is down forty 0:01:20.959 --> 0:01:24.440 four NASDAC features down nineties seven. The decks in Germany's 0:01:24.480 --> 0:01:27.160 down eight tenths of upper sent ten year treasury down 0:01:27.200 --> 0:01:30.440 six thirty seconds, yield four point one five percent. They 0:01:30.480 --> 0:01:32.960 yield on a two year four point five nine percent 0:01:33.360 --> 0:01:35.399 nine next screw an oil up one point six percent 0:01:35.400 --> 0:01:38.080 of a dollar thirty six and eighty six cents of 0:01:38.120 --> 0:01:41.399 barrel comics call that will changed at sixteen thirty four 0:01:41.560 --> 0:01:45.280 twenty announced and the euro point nine two against the dollar. 0:01:45.440 --> 0:01:48.520 Nathan Karen. This morning's drop in futures comes after stocks 0:01:48.520 --> 0:01:51.560 snapped a two day winning streak on Wall Street. Treasury 0:01:51.600 --> 0:01:54.560 yields are trading your multi year highs. On Mountain concern, 0:01:54.600 --> 0:01:56.640 a hawk ish Fed will raise the odds of a 0:01:56.720 --> 0:02:00.200 hard landing market. Veteran Dennis Gartman says don't expect the 0:02:00.240 --> 0:02:03.120 Fed the change course anytime soon. So one. Once the 0:02:03.160 --> 0:02:06.639 Fed begins to change its policies, it moves rates farther 0:02:07.080 --> 0:02:10.079 and lasts longer than anybody ever wants to anticipate. When 0:02:10.120 --> 0:02:12.680 they when they ease monetary policy, they take rate slower 0:02:12.760 --> 0:02:15.720 than anybody believes for a longer period of time. When 0:02:15.760 --> 0:02:18.280 they tighten, they take rates higher for a longer period 0:02:18.320 --> 0:02:20.720 of time than anybody wants to anticipate. I think it's 0:02:20.720 --> 0:02:23.960 going to be at least until late in maybe four 0:02:24.040 --> 0:02:27.760 before the long awaited pivot occurs. Dennis Gartman, the former 0:02:27.800 --> 0:02:30.280 publisher of The Garment Letter, thinks stocks will remain in 0:02:30.280 --> 0:02:33.000 a bear market for some time. Well, Nathan, it will 0:02:33.040 --> 0:02:35.840 be another busy day for Feds speak with four different 0:02:35.880 --> 0:02:39.520 officials talking at separate events. Yesterday's Chicago Fed President Charles 0:02:39.520 --> 0:02:42.360 Evans said he's hopeful the current path for interest rates 0:02:42.520 --> 0:02:46.000 will be enough to bring down inflation. Wages are going up, 0:02:46.040 --> 0:02:48.560 and that's not that's not a bad thing, but if 0:02:48.600 --> 0:02:52.120 it gets caught up in costs price uh, you know, 0:02:52.240 --> 0:02:54.880 spiral that that would be bad. And so making sure 0:02:54.960 --> 0:02:58.480 that we've got monetary policy at a sufficiently restrictive stance 0:02:58.480 --> 0:03:01.400 so that we're not seen inflation. We're trying to get 0:03:01.400 --> 0:03:04.600 it down. Chicago Fed President Charles Evans and his colleagues 0:03:04.600 --> 0:03:07.640 have aggressively raised benchmark interest rates this year from nearly 0:03:07.800 --> 0:03:10.839 zero to just above three percent, and expect another big 0:03:10.919 --> 0:03:13.919 rate increase in next month's meeting. Karen we spoke about 0:03:13.919 --> 0:03:16.680 the move with Federal Reserve Bank of St. Louis President 0:03:16.800 --> 0:03:20.960 James Bullard. The November meeting has been more or less 0:03:20.960 --> 0:03:25.320 priced in the market at at the seventy five basis 0:03:25.360 --> 0:03:28.959 point number. Again, you know, I think you do want 0:03:28.960 --> 0:03:30.920 to wait till you actually get to the meeting, see 0:03:30.919 --> 0:03:34.240 what the situation is there. The December meeting is a 0:03:34.240 --> 0:03:38.120 little farther away. We will have more data at that point. St. 0:03:38.160 --> 0:03:40.600 Louis FED President James Bullard made the comments in an 0:03:40.600 --> 0:03:43.680 exclusive interview with Bloomberg's Kathleen Hayes here. More of the 0:03:43.720 --> 0:03:46.520 conversation coming up later in the program. Well, let's start 0:03:46.560 --> 0:03:49.120 to earnings now, Nathan. We get results from nearly two 0:03:49.160 --> 0:03:51.920 dozen companies in the S and P five D today. 0:03:52.000 --> 0:03:55.640 Disappointing numbers from Tesla after the bell has shares down 0:03:55.760 --> 0:03:59.160 six percent this morning. Sales fell short of estimates, and 0:03:59.200 --> 0:04:03.200 that's being blamed delivery and production bottlenecks. Still. CEO Elon 0:04:03.280 --> 0:04:06.600 Musk says demand for his company's cars remains strong. We're 0:04:06.600 --> 0:04:09.320 looking forward to a record breaking pupil, so it really 0:04:09.440 --> 0:04:11.320 you know, knock on wood, it looks like we'll have 0:04:11.360 --> 0:04:14.640 an epic end of her and Elon must says. Tesla 0:04:14.720 --> 0:04:18.000 could repurchase five to ten billion dollars of its shares, 0:04:18.240 --> 0:04:21.760 subject to board approval and review. The stock has lost 0:04:21.800 --> 0:04:24.080 more than a third of its value so far this year. 0:04:24.440 --> 0:04:27.279 It is a different story at IBM this morning, Karen, 0:04:27.320 --> 0:04:31.320 the company reported better than expected sales and affirmed its 0:04:31.360 --> 0:04:34.680 cash flow forecast. And let's say that's as signed. Demand 0:04:34.680 --> 0:04:38.440 for software mainframe computers and hybrid cloud services remains study 0:04:38.839 --> 0:04:41.720 well in Asia. Overnight, Nathan stocks fell but came off 0:04:41.720 --> 0:04:45.000 their lowest levels. That's after Bloomberg News reported China is 0:04:45.120 --> 0:04:48.960 considering relaxing quarantine rules. Let's get the recap from Bloomberg's 0:04:49.000 --> 0:04:52.359 Juliette Sally in Singapore. Good morning, Juliette, Good morning Nathan 0:04:52.360 --> 0:04:54.480 and Karen the off show. You one gained from record 0:04:54.520 --> 0:04:57.120 lows against the greenback on the news, Well, China cs 0:04:57.120 --> 0:05:00.680 I three hundred erased earlier losses. Chinese Xox in Hong 0:05:00.760 --> 0:05:03.479 Kong also paired earlier steep losses. On news. China is 0:05:03.480 --> 0:05:07.080 holding emergency talks with chip firms after US curbs. The 0:05:07.080 --> 0:05:10.839 Ossi dollar declined as hiring down under almost stalled in September, 0:05:10.880 --> 0:05:14.200 and Japan's benchmark bond yield climbed above the Central Banks 0:05:14.200 --> 0:05:18.440 policy ceiling, prompting monetary authorities to announce an unscheduled bond 0:05:18.520 --> 0:05:22.080 purchase to rain it back in In Singapore, juliet Sally 0:05:22.200 --> 0:05:25.320 Bloomberg Daybreak, Juliette Thanks in Europe this morning, It's all 0:05:25.360 --> 0:05:28.560 about politics. UK Prime Minister Liz Trust's government could be 0:05:28.600 --> 0:05:30.720 on the brink of collapse. Let's go to Learning and 0:05:30.839 --> 0:05:33.159 the LAist Life with Bloomberg's U and Parts. Good Morning, 0:05:33.839 --> 0:05:36.359 Good morning, Nathan and Karen. It has been a chaotic 0:05:36.520 --> 0:05:39.200 twenty four hours at Westminster. One of the most senior 0:05:39.240 --> 0:05:42.240 members of the British government has been fired. As she went, 0:05:42.360 --> 0:05:45.000 she criticized the Prime Minister and accused list Trust of 0:05:45.120 --> 0:05:49.120 breaking key pledges. Later, dramatic scenes in Parliament with the 0:05:49.200 --> 0:05:52.480 ports of lawmakers man handled into voting with the governments. 0:05:52.920 --> 0:05:55.080 Just weeks after she took over. Many members of our 0:05:55.120 --> 0:05:58.479 own Conservative Party are openly saying they want Liz Trust 0:05:58.600 --> 0:06:02.159 to go. Who would replace is another question in London, 0:06:02.560 --> 0:06:05.040 Paul Daybreak, all right, you and thank you. Now to 0:06:05.120 --> 0:06:08.560 the latest in the war in Ukraine. President Vladimir'szlenski is 0:06:08.600 --> 0:06:11.640 now urging people to use as little electricity as possible. 0:06:11.880 --> 0:06:14.440 He says Russia has destroyed much of the country's power 0:06:14.560 --> 0:06:18.920 infrastructure with Iranian made explosive drones. Ukraine is assembling its 0:06:18.960 --> 0:06:21.720 own army of drones to monitor the front lies. It's 0:06:21.800 --> 0:06:24.480 enlisted actor Mark Hamill to help bring it together through 0:06:24.600 --> 0:06:28.239 Ukraine's United twenty four fundraising arm The Star Wars actor 0:06:28.320 --> 0:06:31.400 tells Bloomberg President Zelenski asked him to join the effort 0:06:32.000 --> 0:06:37.919 very simply. Ukraine needs drones, and you know they define 0:06:38.040 --> 0:06:42.360 war outcomes. They are They protect their land, their people there, 0:06:42.839 --> 0:06:45.880 They monitor the border, their their eyes in the sky. 0:06:46.440 --> 0:06:49.480 Mark Hamill's spoke of our Washington correspondent Joe Matthew on 0:06:49.560 --> 0:06:52.720 Bloomberg Sound on Catch the Show weekdays at five pm 0:06:52.760 --> 0:06:56.160 Eastern on Bloomberg Radio, and I said, futures right now 0:06:56.200 --> 0:06:59.760 are down seventeen points now, futures down twenty four, nastac 0:06:59.800 --> 0:07:02.760 few tchers are lower by ninety two points ten. Your 0:07:02.800 --> 0:07:05.520 treasuries down five thirty seconds, the old four point one 0:07:05.640 --> 0:07:07.600 five percent, you old on the two year four point 0:07:07.680 --> 0:07:10.680 five eight and NIMEX screwed right now is up one 0:07:10.760 --> 0:07:14.640 point six percent at eighty six dollars of barrel. Straight ahead, 0:07:14.680 --> 0:07:17.560 your latest local headlines, and a check of sports. This 0:07:18.400 --> 0:07:25.000 is Bloomberg five oh seven on Wall Street. Were forty 0:07:25.040 --> 0:07:27.800 five degrees in Central Park on an overturned vehicle on 0:07:27.840 --> 0:07:30.840 the westbound l I E. It's by Utopia Parkway. Details 0:07:30.880 --> 0:07:33.360 coming up in traffic. First, Michael Bars here with what 0:07:33.440 --> 0:07:35.440 else is going on in New York and around the world. 0:07:35.520 --> 0:07:38.360 Good morning Michael, Good morning Nathan. A group of Justice 0:07:38.400 --> 0:07:42.160 Department prosecutors believe there is sufficient evidence to charge Donald 0:07:42.200 --> 0:07:46.040 Trump with obstruction of justice. Bloomberg. Sources say they are 0:07:46.120 --> 0:07:49.400 building other cases as well. Sources say they believe all 0:07:49.520 --> 0:07:52.080 charges should be complete by the end of the year. 0:07:52.640 --> 0:07:55.680 Former President Trump has finished his deposition in the case 0:07:55.840 --> 0:07:58.840 brought by a woman who claims he's sexually assaulted her 0:07:59.000 --> 0:08:01.800 and then to fame their online saying she was a liar. 0:08:02.400 --> 0:08:06.000 Trump has claimed the entire defamation lawsuits should be dismissed 0:08:06.240 --> 0:08:09.200 because he was president and was immune to charges. In 0:08:09.360 --> 0:08:12.200 New York Trump once again said E. Gene Carroll was 0:08:12.320 --> 0:08:16.200 lying and quote not his type. Former Vice President Mike 0:08:16.280 --> 0:08:19.160 Penn said he would not necessarily vote for Donald Trump 0:08:19.240 --> 0:08:23.480 if he runs for president in Pennce has been visiting 0:08:23.560 --> 0:08:27.120 early voting states, fueling speculation he might run for president. 0:08:27.600 --> 0:08:31.360 At an appearance at Georgetown University, a student aspens if 0:08:31.400 --> 0:08:33.439 you would vote for his former running mate in the 0:08:33.480 --> 0:08:37.840 next presidential election. If Donald Trump is the Republican nominee 0:08:37.920 --> 0:08:46.880 for president in twent trench fool, will you vote for him? Well, 0:08:46.960 --> 0:08:50.199 there might be somebody else I'd prefer more. The former 0:08:50.280 --> 0:08:53.839 Vice president predicted Republican wins in the midterm elections, but 0:08:54.040 --> 0:08:57.520 took veiled jabs at candidates who run on opposition to 0:08:57.640 --> 0:09:02.200 Democrats without offering policy alternate Hospitals and at least twenty 0:09:02.320 --> 0:09:05.120 six states and the District of Columbia say they are 0:09:05.160 --> 0:09:09.640 struggling with a surge and pediatric respiratory illnesses like RSV, 0:09:09.960 --> 0:09:13.360 flu and the common cold. The early wave of infections 0:09:13.480 --> 0:09:17.000 is raising alarm bells for children's healthcare teams as flu 0:09:17.120 --> 0:09:21.520 season approaches. Connecticut Children's Hospital physician in chief Dr Juan 0:09:21.600 --> 0:09:25.000 Salazar says two years of pandemic measures may have left 0:09:25.120 --> 0:09:30.120 kids immune systems unprepared for the unusual respiratory viruses, which 0:09:30.160 --> 0:09:36.120 has dramatically altered the normal epidemiology of this virus RSC specifically, 0:09:36.640 --> 0:09:40.079 and the other viruses rhinovirus, adnovirus and the introvirus which 0:09:40.120 --> 0:09:43.440 have been We're more severe than they normally are. Dr 0:09:43.520 --> 0:09:46.440 Salazar says the timing is off generally. This is something 0:09:46.520 --> 0:09:49.520 seen in late winter early spring. Global News twenty four 0:09:49.559 --> 0:09:52.040 hours a day on air and on Bloomberg Quick Take, 0:09:52.080 --> 0:09:54.600 powered by more than twenty seven hundred journalists analysts more 0:09:54.600 --> 0:09:57.480 than a hundred twenty countries. Michael bar this is Bloomberg, Nathan, 0:09:57.600 --> 0:10:04.520 Thank you, Michael. Coming up to five Tan on Wall Street. 0:10:04.520 --> 0:10:06.240 Time for the Bloomberg Sports Updade, brought to you by 0:10:06.280 --> 0:10:09.079 Try State Outie. Here's John stan Shower, Thanks Nathan. The 0:10:09.120 --> 0:10:12.000 Alcs underway and Houston. Good start for the Yankee second 0:10:12.040 --> 0:10:15.880 any whole run for Harrison. Beata continues to provide surprising power. 0:10:16.000 --> 0:10:19.040 His fourth homer of the postseason. Astros tied it up 0:10:19.080 --> 0:10:21.440 in Game one was one one sixth inning OH two 0:10:21.920 --> 0:10:24.480 and Gary L. Frank sits left. Stanton is going back 0:10:24.600 --> 0:10:28.600 at the wall looking up Sailetta and the Lantrys. Crofter 0:10:28.760 --> 0:10:32.120 boxing for Uli Guriel and the Astros lead at two 0:10:32.160 --> 0:10:35.839 to one. They'll pitch to McCormick. It's ash Rives a 0:10:35.880 --> 0:10:38.600 pretty heat to right center, just going back at the wall, 0:10:38.760 --> 0:10:44.160 looking up, kiss a goodbye chas McCormick coast Tea and 0:10:44.320 --> 0:10:47.360 the Astros go up three to one. K B m 0:10:47.480 --> 0:10:49.920 E both home runs hit off Clark Schmidt and in 0:10:50.120 --> 0:10:53.280 later Jeremy Paenia homer off Rankie Mantas. The Astros one 0:10:53.360 --> 0:10:56.319 for to two, remained unbeaten in the postseason. Thirty nine 0:10:56.360 --> 0:10:58.760 year old Justin Burlander gave up that Beder home run 0:10:58.800 --> 0:11:02.000 and only two other hits. He struck out eleven in two. Tonight, 0:11:02.080 --> 0:11:04.440 Luis Sevreno on the mound for the Yankster San Diego. 0:11:04.520 --> 0:11:07.560 The Phillies, having won the NLCS opener to nothing, led 0:11:07.600 --> 0:11:09.600 for nothing, but the Padres came back to within eight 0:11:09.679 --> 0:11:12.240 to five. Five on fifth and he wants Soto had 0:11:12.240 --> 0:11:14.960 a big hit and so did Padres. Capture Austin Nola. 0:11:15.360 --> 0:11:17.880 He was facing his brother. Nicks and Nets both lost 0:11:17.920 --> 0:11:20.679 their openers in different fashion. Tight game in Memphis after 0:11:20.720 --> 0:11:23.720 the Knicks rallied from nineteen down, but the Grizzlies pulled 0:11:23.760 --> 0:11:26.920 it out in overtime one fifteen, one twelve. John Brant 0:11:27.000 --> 0:11:29.240 thirty four points. Julius Randall led the Knicks with twenty 0:11:29.320 --> 0:11:31.800 four rough opener for r. J. Barry shot three of 0:11:31.880 --> 0:11:35.360 eighteen in Brooklyn. All Pelicans their stars. Zion Williamson back 0:11:35.400 --> 0:11:38.120 after missing last season. He scored twenty five. New Orleans 0:11:38.200 --> 0:11:40.680 won one thirty to one oh eight. Kevin Durant led 0:11:40.720 --> 0:11:42.679 the Nets with thirty two. Kyrie you Irving shot six 0:11:42.800 --> 0:11:47.200 of nineteen. John Stasward Bloomberg Sports, Nathan John thank USMP 0:11:47.360 --> 0:11:50.640 futures down sixteen points, now Dal futures down eighteen nez 0:11:50.720 --> 0:11:54.040 Deck futures lower by eighty eight points. Tesla shares down 0:11:54.160 --> 0:11:56.120 five and a half percent in the pre market on 0:11:56.240 --> 0:11:59.480 disappointing third quarter sales. We'll talk about the numbers next. 0:11:59.520 --> 0:12:03.920 Ford Ives, senior equity research analyst at Wedbush Securities. This 0:12:04.320 --> 0:12:09.319 is Bloomberg. The Bloomberg Sports Report was brought to you 0:12:09.440 --> 0:12:11.400 by Audie. Don't let someone else drive off in the 0:12:11.440 --> 0:12:14.240 Audi model. You've always wanted. Visit your local Tri state 0:12:14.280 --> 0:12:16.520 Audie dealer to get behind the wheel of yours today, 0:12:16.679 --> 0:12:22.640 or visit autie Offers dot com for more information, markets, 0:12:22.760 --> 0:12:25.800 headlines and breaking news twenty four hours a day at 0:12:25.840 --> 0:12:29.760 Bloomberg dot com The Bloomberg Business Outland at Bloomberg Quicktake. 0:12:30.040 --> 0:12:39.080 This is a Bloomberg Business large and I'm Karen Moscow. 0:12:39.240 --> 0:12:43.040 European stocks and US stock index futures are falling amid 0:12:43.200 --> 0:12:46.640 rising von yields, with investors concerned that strong inflation and 0:12:46.720 --> 0:12:50.400 Hakish monetary policy will further slow the global economy. We 0:12:50.559 --> 0:12:52.880 checked the markets every fifteen minutes throughout the trading day 0:12:53.200 --> 0:12:56.360 on Bloomberg s and p Future is down about fifteen points. 0:12:56.400 --> 0:12:59.920 Staff futures down twelve nasdack futures down on the decks 0:13:00.000 --> 0:13:02.959 in Germany's down six tenths of uppercent. Ten year treasury 0:13:03.040 --> 0:13:05.920 down two thirty seconds, held four point one four percent 0:13:06.320 --> 0:13:08.840 yield on the two year four point five eight percent. 0:13:09.240 --> 0:13:11.480 Nimex screwed oil up one point six percent of a 0:13:11.520 --> 0:13:15.000 dollar thirty six at eighty six cents of arrol comics 0:13:15.040 --> 0:13:17.160 gold up two tens per cent or three dollars seventy 0:13:17.240 --> 0:13:20.200 cents at sixteen thirty seven ninety an ounce. The euro 0:13:20.400 --> 0:13:23.120 point nine seven eight four against the dollar, British pound 0:13:23.200 --> 0:13:25.760 one point one eight zero and the N one forty 0:13:25.840 --> 0:13:28.880 nine point age six, and bitcoin is down a third 0:13:28.920 --> 0:13:32.319 of u percent at nineteen thousand, one hundred dollars. That's 0:13:32.320 --> 0:13:34.920 a Bloomberg business flash. Now here's Michael Barr with more 0:13:35.000 --> 0:13:37.160 on what's going on around the world. Michael, good morning, 0:13:37.240 --> 0:13:40.720 Good morning, Karen. Russia has declared its intention to increase 0:13:40.760 --> 0:13:45.040 its targeting of Ukraine's power, water, and other vital infrastructure 0:13:45.280 --> 0:13:47.960 in its latest phase of the nearly eight month old war. 0:13:48.559 --> 0:13:52.360 Ukrainian President of Voladimir Zelenski says that Moscow's forces have 0:13:52.559 --> 0:13:56.839 destroyed thirty percent of the country's power stations since October tenth. 0:13:57.240 --> 0:14:00.240 At least one person is dead after a sixty hard 0:14:00.360 --> 0:14:04.679 crash in thick fall on Interstate five in Lynn County, Oregon. 0:14:05.200 --> 0:14:07.880 Big rigs and cars were n't able to see stop 0:14:07.960 --> 0:14:11.120 traffic in front of them. In baseball, the Yankees lost 0:14:11.200 --> 0:14:14.400 Game one of the a LCS against the Astros four two. 0:14:14.840 --> 0:14:17.679 In the NLCS, the Padres even the series at a 0:14:17.760 --> 0:14:21.440 game of piece after beating the Phillies eight five. Global 0:14:21.520 --> 0:14:23.920 News twenty four hours a day on air and on 0:14:24.040 --> 0:14:27.760 Bloomberg Quick Take powered by more than seven hundred journalists 0:14:27.760 --> 0:14:30.720 and analysts more than a hundred twenty countries. Michael Barr 0:14:30.800 --> 0:14:33.600 and this is Bloomberg an Thanks Michael. It's five nineteen 0:14:33.640 --> 0:14:36.320 on Wall Street Life from the Bloomberg Interactor Broker Studios. 0:14:36.400 --> 0:14:39.120 This is Bloomberg Daybreak, and we continue to watch shares 0:14:39.200 --> 0:14:42.240 of Tesla this morning, dropping about five and a half 0:14:42.280 --> 0:14:45.800 percent in the pre market. Elon Musk's electric carmaker came 0:14:45.840 --> 0:14:49.440 in with sales at came in short of Wall Street estimates. 0:14:49.520 --> 0:14:51.880 Let's get more on the earnings now. Dan Ives joins 0:14:51.960 --> 0:14:55.920 us senior analyst at web Bush Securities. Dan, it's great 0:14:55.960 --> 0:14:57.680 to speak with you, and I know you've been bullish 0:14:57.800 --> 0:15:00.280 on this company and the e V sector more oddly 0:15:00.360 --> 0:15:05.120 for a long time. Here does this quarter shake your confidence? Yeah? Look, 0:15:05.200 --> 0:15:07.680 it's been a Cinderella story for Tests of the last 0:15:08.120 --> 0:15:11.640 three years and they're hitting a rough patch. And I 0:15:11.720 --> 0:15:14.840 think that's what you saw last night in terms of earnings. Now, 0:15:14.880 --> 0:15:17.400 I believe it's more of logestics and demand driven. But 0:15:17.560 --> 0:15:20.640 for Musk, it's a moment of truth to get Testa 0:15:20.760 --> 0:15:23.120 through this rough patch, and that's the street is going 0:15:23.160 --> 0:15:25.840 to be digesting now, what's must need to do to 0:15:25.880 --> 0:15:27.720 get through the rough patch. I mean he's been talking 0:15:27.760 --> 0:15:32.680 about issues with supply chain bottlenecks, delivery difficulties for for 0:15:32.880 --> 0:15:37.920 quite some time here, not even just before this earnings period. Yeah, 0:15:37.960 --> 0:15:40.720 and well, Tessa has seen what other automakers are around 0:15:40.760 --> 0:15:43.720 the world in terms of logestics issues, some battery prob 0:15:43.800 --> 0:15:47.160 from a component perspective. But but the issue here is 0:15:47.280 --> 0:15:49.480 the Bears are going to say this is demand driven 0:15:49.560 --> 0:15:53.040 and that's an excuse, and and that's now this is 0:15:53.080 --> 0:15:55.240 going to be a critical three to six months to 0:15:55.360 --> 0:15:58.240 Tessa to show they could get their sea legs back 0:15:58.320 --> 0:16:01.440 and start to hit that fifty saying growth target, which 0:16:01.480 --> 0:16:03.160 looks like they're going to come unto that in Q 0:16:03.400 --> 0:16:05.600 four and for the year. And that's why you're going 0:16:05.640 --> 0:16:09.040 to see the negative knee jerk reaction today. How much 0:16:09.120 --> 0:16:12.800 of a headwind is China? He called out China specifically, 0:16:12.920 --> 0:16:15.960 saying they're in a recession of sorts in the property sector. 0:16:16.080 --> 0:16:21.120 But there's still an ongoing risk, isn't there that potentiality 0:16:21.440 --> 0:16:25.760 for shutdowns from COVID could affect the Shanghai factory. Yeah, 0:16:25.800 --> 0:16:28.560 it's a great classic China it's the hearts and lungs 0:16:28.600 --> 0:16:31.920 of the Tesla story. That's that's key, the both thesis, 0:16:32.520 --> 0:16:35.320 and that's where they're hitting some of the issues wigistics 0:16:35.320 --> 0:16:38.080 and even around the edges on demand. So it's a 0:16:38.440 --> 0:16:40.520 it's really an arms hury He's going on in China 0:16:40.600 --> 0:16:44.320 with domestic players as well as Tesla, and that's why 0:16:44.920 --> 0:16:47.680 this is all happening as Musk is juggling all these 0:16:47.720 --> 0:16:51.400 different balls, with Twitter of course front and center, and 0:16:51.520 --> 0:16:53.920 I think you're starting to see a little bloom come 0:16:54.000 --> 0:16:56.800 off the rows in terms of the way the Street 0:16:57.080 --> 0:17:00.120 used Musk and the Tesla story, I would now just 0:17:00.240 --> 0:17:03.360 a critical juncture. Yeah, jugglings balls is a good way 0:17:03.360 --> 0:17:05.200 to put it. I did want to ask you about 0:17:05.320 --> 0:17:08.840 the Twitter saga, whether that may have been more of 0:17:08.920 --> 0:17:12.640 a distraction than even Musk might have let on, even 0:17:12.720 --> 0:17:17.600 with all the tweeting he was doing during that buyout drama. Well, 0:17:17.640 --> 0:17:19.520 I think that's part of the problem. You don't want 0:17:19.560 --> 0:17:23.680 to see Musk focus shifting, and the last thing you 0:17:23.760 --> 0:17:26.920 want to see is the Twitter situations that him just 0:17:27.040 --> 0:17:30.560 actually focused on Tesla and then the bigger elephant in 0:17:30.600 --> 0:17:33.920 the room continues to be Muscle more Tesla stock to 0:17:34.080 --> 0:17:37.879 potentially fund the Twitter deal with some financing looking like 0:17:38.040 --> 0:17:42.000 could fall apart. That is the perfect storm combined with 0:17:42.080 --> 0:17:45.080 what we saw with the soft delivery number. What about 0:17:45.160 --> 0:17:49.120 other products cyber truck, for example, it's been so long 0:17:49.400 --> 0:17:52.719 since it was introduced and we still haven't seen actual 0:17:52.920 --> 0:17:56.399 cyber trucks in the show rooms. Is that a problem? 0:17:57.280 --> 0:17:59.320 It is a it's a boy that crowed wolf problem, 0:17:59.560 --> 0:18:02.840 and especially at the time you need that to hit 0:18:02.920 --> 0:18:07.159 in two thousand twenty three with GM rivan Ford and 0:18:07.280 --> 0:18:10.440 others coming up and going ap to ev pickup trucks. 0:18:10.760 --> 0:18:14.959 And that's why Musk No ultimately talks cheap need to execute, 0:18:15.080 --> 0:18:17.680 and I think you're starting to see patients were thin 0:18:18.200 --> 0:18:22.119 on some of the musk antics. Fiber truck needs to 0:18:22.200 --> 0:18:25.240 hit over the next year, otherwise they're gonna lose share. 0:18:25.680 --> 0:18:27.479 You got about a minute left here, Dan, We got 0:18:27.520 --> 0:18:30.000 a lot of tech earnings to get to next week 0:18:30.119 --> 0:18:34.119 with Apple, Amazon, Microsoft, a few others reporting. What are 0:18:34.160 --> 0:18:37.600 you looking at. I think it's most important tech earnings 0:18:37.960 --> 0:18:41.440 season potentially in the last two years because of what's 0:18:41.480 --> 0:18:45.160 happened overall demand store. In terms of the macro tech 0:18:45.280 --> 0:18:50.240 needs to prove that the resilience is their enterprise spend. Microsoft, 0:18:50.320 --> 0:18:52.960 that's gonna be keen in terms of cloud as well 0:18:53.040 --> 0:18:55.840 as with Amazon. And then probably the most important name 0:18:55.960 --> 0:18:59.800 for earning season across the board, not just tech, is Apple. 0:19:00.400 --> 0:19:04.000 What's the consumer spending on? Is the iPhone fourteen product 0:19:04.080 --> 0:19:06.840 cycle happening? Look, I think Bart's worse in the bite 0:19:06.880 --> 0:19:09.000 in terms of attack. I view it next weeks more 0:19:09.040 --> 0:19:13.000 as a positive catalyst rather than something to fear. In 0:19:13.160 --> 0:19:16.359 just ten seconds, are you sticking with the outperform on Tesla? 0:19:17.320 --> 0:19:20.919 Sticking with outperform remains one of the most disruptive technology 0:19:21.000 --> 0:19:25.080 companies out there, but it wasn't rainbows and roses, and 0:19:25.200 --> 0:19:26.960 I think that's what you can see the stock down. 0:19:27.320 --> 0:19:30.000 I think they get through the rough patch, and right 0:19:30.040 --> 0:19:33.000 now the stock is down nearly six percent in the 0:19:33.080 --> 0:19:36.120 pre market. Dan, i'ves web Bush security is always great 0:19:36.200 --> 0:19:38.000 to talk with you. Thanks for joining us this morning 0:19:38.359 --> 0:19:41.080 on Bloomberg day Break. Looking ahead to the market open, 0:19:41.600 --> 0:19:45.160 uh NAZAC futures are leading the declines. Tesla's pretty heavy there. 0:19:45.240 --> 0:19:48.360 Nasdack Future is down right now. Down Future is down. 0:19:49.320 --> 0:19:53.480 SMP futures are lower by seventeen points and the tenure 0:19:53.560 --> 0:19:56.760 treasuries down four thirty seconds for yield of four point 0:19:56.880 --> 0:20:08.480 one five per cent. You're listening to Bloomberg Daybreak Bloomberg 0:20:08.520 --> 0:20:12.040 eleventh three oh weather sunny, breezy, upper fifties today, low sixties, 0:20:12.080 --> 0:20:15.080 sunny Tomorrow, will be in the upper sixties by Saturday. 0:20:15.440 --> 0:20:19.640 Showers develop on Sunday. Right now forty five in Central Park, 0:20:22.240 --> 0:20:26.760 Broadcasting live from the Bloomberg Interactive Broker Studio in New York. 0:20:26.880 --> 0:20:30.800 Bloomberg Living Freedom to Washington, d C, Bloomberg N one 0:20:30.960 --> 0:20:34.160 to Boston, Bloomberg one O six one to San Francisco, 0:20:34.240 --> 0:20:37.440 Bloomberg N sixteen to the country, Sirius XM to the 0:20:37.560 --> 0:20:40.439 one nine team, and around the globe, the Bloomberg Business 0:20:40.840 --> 0:20:50.280 and Bloomberg Radio dot Com. This is Bloomberg Daybreak and 0:20:50.400 --> 0:20:53.440 it's thirty on Wall Street. Good morning, I'm parin Moscow. 0:20:53.640 --> 0:20:56.000 I'm Nathan Hecker. Bloomberg Daybreak is brought to you by 0:20:56.160 --> 0:20:59.360 se I. Built on advanced technologies in fifty years of innovation, 0:20:59.520 --> 0:21:04.680 SEI offers asset managers a comprehensive and flexible operations outsourcing platform. 0:21:05.040 --> 0:21:08.399 Go to se i c dot com, slash Managers and 0:21:08.520 --> 0:21:10.880 we are just about four hours away from the open 0:21:10.920 --> 0:21:12.680 of US training. Let's get you have to day to 0:21:12.720 --> 0:21:14.680 the news you need to know. At this shower, US 0:21:14.760 --> 0:21:17.879 futures are lower, adding to yesterday's losses when stocks is 0:21:17.920 --> 0:21:20.600 snapping a two gay when stocks snapped rather a two 0:21:20.640 --> 0:21:24.040 day winning streak. Concerns continue to swirl about hawkish FED 0:21:24.119 --> 0:21:27.160 policy and how it will impact growth. Silver Crest Head 0:21:27.200 --> 0:21:30.680 of Investment Policy Robert Teeter says timing will be everything. 0:21:31.160 --> 0:21:33.399 The timeline question I think is in focus here and 0:21:33.440 --> 0:21:35.479 it's a matter of do we get inflation under control? 0:21:35.560 --> 0:21:37.560 Do we get the Fed pausing before you start to 0:21:37.600 --> 0:21:39.639 see some of that pass through, whether it's lagged effects 0:21:39.720 --> 0:21:41.920 or otherwise, onto the consumer and onto earnings. And so 0:21:42.080 --> 0:21:44.000 that's really the race that's in place right now is 0:21:44.280 --> 0:21:46.880 which happens first, the break in inflation or a break 0:21:46.920 --> 0:21:50.520 in the economy. Robert Teeter with Silver Crest Downset Management 0:21:50.560 --> 0:21:53.520 says if consumer spending days strong, it will help the 0:21:53.600 --> 0:21:56.440 Fed bring down inflation. Now, today will be another busy 0:21:56.480 --> 0:21:59.520 one for Fed speakers, Karen. Four different officials appear at 0:21:59.560 --> 0:22:03.080 separative today Yesterday are Kathleen Hayes sat down with St. 0:22:03.160 --> 0:22:06.159 Louis FED President James Bullard, who indicated there's still no 0:22:06.359 --> 0:22:08.840 clear timeline for a FED pivot. We started off at 0:22:08.880 --> 0:22:11.520 a very low level. That's why we've moved so fast, 0:22:12.119 --> 0:22:15.879 so far, so quickly. But at some point we'll get 0:22:15.960 --> 0:22:19.200 to a level that the Committee judges will be sufficient 0:22:19.280 --> 0:22:21.760 to put meaningful downloard pressure on inflation. Then we'll be 0:22:21.800 --> 0:22:24.080 able to adjust from there, and we'll bring you more 0:22:24.080 --> 0:22:26.919 of our conversation with St. Louis FED President James Bullard 0:22:27.000 --> 0:22:29.359 later in the program. Meantime, the FED gets another key 0:22:29.480 --> 0:22:32.000