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Speaker 1: From the Bloomberg Interactive Burgers Studios. This is Bloomberg day

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Speaker 1: Break for Monday, May eighth.

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Speaker 2: Coming up today, Janet Yellen warns of a constitutional crisis

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Speaker 2: over the debt ceiling.

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Speaker 1: Joe Biden trails Donald Trump in a new presidential poll.

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Speaker 2: Pac West extends gains after Friday's.

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Speaker 1: Record search, and Wall Street awaits two key readings on inflation.

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Speaker 3: Protests continue over last week's depth of a homeless New

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Speaker 3: York subway writer. Glass of vigil was held in Allen,

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Speaker 3: Texas for those killed in the latest mass shooting. I'm

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Speaker 3: Michael Barr.

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Speaker 4: More ahead, I'm John staph Shown sports lost US with

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Speaker 4: the Mets and Yankees. The Devil's won Game three. The

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Speaker 4: Knicks have their game board tonight.

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Speaker 5: That's all straight ahead on Bloomberg day Break, The business

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Speaker 5: news you need to starn your day in just one

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Speaker 5: fifteen minute podcast each morning on Apples, Spotify, the Bloomberg

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Speaker 5: Business app, and everywhere you get your podcasts.

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Speaker 2: Good morning, I'm Nathan Hager.

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Speaker 1: And I'm Karen Moscow. Here are the stories we're following today.

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Speaker 2: Treasury Secretary Janet Yellen says there are no good options

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Speaker 2: for solving the issue. Other than Congress lifting the cab.

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Speaker 2: Yellen says the White House invoking the fourteenth Amendment is

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Speaker 2: not a good option and could provoke a constitutional crisis.

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Speaker 6: All I want to say is that it's Congress's job

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Speaker 6: to do this. If they fail to do it, we

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Speaker 6: will have an economic and financial catastrophe that will be

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Speaker 6: of our own making. And there is no action that

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Speaker 6: President Biden in the US Treasury can take to prevent

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Speaker 6: that catastrophe.

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Speaker 2: Treasury Secretary Yellen made the comments on ABC's This Week.

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Speaker 2: You can catch the program every Sunday on Bloomberg Radio.

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Speaker 1: Well Nathan. While the president tries to reach a debt

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Speaker 1: ceiling deal, he's also struggling on another front. The president's

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Speaker 1: approval rating has now reached a career low. Amy Morris

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Speaker 1: has details from our Bloomberg ninety nine one news room

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Speaker 1: in Washington.

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Speaker 7: The ABC News Washington Post poll finds Biden's approval rating

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Speaker 7: at thirty six percent, six points lower than in February.

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Speaker 7: Some fifty six percent disapproved of Biden's performance. Sixty eight

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Speaker 7: percent say President Biden, who is eighty, is too old

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Speaker 7: to serve a second term. Biden is lagging behind Donald

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Speaker 7: Trump and early voter preferences for the twenty twenty four election.

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Speaker 7: The poll shows voters rated Trump's physical health and mental

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Speaker 7: acuity higher than Biden's, and they believe he did a

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Speaker 7: better job with the economy than Biden has done so far.

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Speaker 7: In Washington, I'm Mamy Morris Bloomberg Daybreak.

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Speaker 2: Thanks Amy Meantime, President Biden's unveiling plans today that could

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Speaker 2: affect travel around the country. He's looking to make things

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Speaker 2: easier for passengers who experience flight delays or cancelations. The

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Speaker 2: President will announce new rules that could require airlines to

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Speaker 2: provide meals, hotels, and additional compensation to travelers uncanceled or

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Speaker 2: severely delayed flights. The move comes ahead of an expected

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Speaker 2: spike in summer travel.

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Speaker 1: Well. Turning to the economy, now, Nathan, A few key

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Speaker 1: economic reports this week have an impact on FED policy.

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Speaker 1: We get data on consumer prices this Wednesday, followed by

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Speaker 1: a reading on producer prices on Thursday. We get more

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Speaker 1: from Bloomberg Economics correspondent Michael McKee.

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Speaker 8: We get two CPI reports, two jobs reports before the

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Speaker 8: next FED meeting, and one PCE so we will have

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Speaker 8: the opportunity to see a couple months worth of inflation data.

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Speaker 8: It may or may not have a bearing on what

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Speaker 8: they do the next month, but if it does come down,

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Speaker 8: that will feed into this narrative that maybe.

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Speaker 2: We're going to get out of this not without.

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Speaker 8: A recession necessarily, but without having a real slowed down

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Speaker 8: or forcing the Fed to raise rates so much more.

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Speaker 1: And Bloomberg's Michael McKee says economists expect Wednesday CPI report

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Speaker 1: to show prices increased four tenths of a percent in April,

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Speaker 1: and that would bring the annual inflation rate to five percent.

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Speaker 2: So there's economic data and the debt ceiling careen, but

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Speaker 2: let's not also forget about earnings. Wall Street gets more

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Speaker 2: of those to digest. This week. We get a preview

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Speaker 2: from Bloomberg's Charlie Pellett.

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Speaker 9: There are ongoing concerns over turmoil in the financial sector,

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Speaker 9: of the debt ceiling, sticky inflation, and economic growth. Sarah

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Speaker 9: Mallick is chief investment officer at Neuven.

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Speaker 10: Revenue growth has been positive, but it basically significantly has

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Speaker 10: pricing power in it rather than volume growth. And if

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Speaker 10: in inflation is rolling over, so I think it's going

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Speaker 10: to be hard for companies to hold onto that pricing power.

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Speaker 10: That's another leg that will take earnings down and that

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Speaker 10: I think then at the S ANDP looks expensive.

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Speaker 9: Among some of the companies reporting this week, Apollo Global Management,

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Speaker 9: Devon Energy, Duke Energy, Occidental Petroleum, PayPal, and the Walt

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Speaker 9: Disney Company in New York, Charlie Palett Bloomberg Daybreak. All right, Charlie,

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Speaker 9: thanks well. Over the weekend, we got earnings from Berkshire.

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Speaker 9: Hathaway Warren.

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Speaker 1: Buffett's conglomerate reported in almost thirteen percent gain in operating

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Speaker 1: earnings to post results of more than eight billion dollars

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Speaker 1: in the first quarter. However, Buffett expects earnings at the

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Speaker 1: majority of Berkshire's operations to fall this year, he says

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Speaker 1: as a long predicted downturn will slow economic activity.

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Speaker 2: Seeing regional banks continue their bounce back this morning, Karen

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Speaker 2: Pack West, which surged eighty one percent on Friday, is

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Speaker 2: up another thirteen and a half percent this morning. The

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Speaker 2: bank slashed its quarterly dividend and said business remains sound.

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Speaker 2: Western Alliance is also gaining. It's up nearly five percent

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Speaker 2: after soaring forty nine percent on Friday.

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Speaker 1: Even so, Nathan, this year's banking turmoil is winging on

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Speaker 1: the sector. Overall regional bank shares and the S and

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Speaker 1: P five hundred are down forty percent on the year,

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Speaker 1: and the recent selloff threatens to push broader bank shares

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Speaker 1: below a technical threshold that could say no more pain ahead.

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Speaker 1: The S and P five hundred Financials indexes on the

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Speaker 1: verge of falling back below its two thousand and seven peak,

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Speaker 1: and we get more from Bloemberg Market's reporter Valerie Titel.

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Speaker 11: You think about what happened after thousand and two thousand

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Speaker 11: and eight, and that hit to the banking.

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Speaker 2: Sector took a decade to clawback.

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Speaker 11: And now we're teetering about to fall below those two

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Speaker 11: thousand and seven highs. And you have to think of

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Speaker 11: that with the backdrop that it looks like monetary policy

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Speaker 11: is going to say restrictive for longer. Given Friday to

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Speaker 11: Day's hot payroll report, it doesn't look like the labor

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Speaker 11: market in the US is starting to turn, and the

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Speaker 11: Fed is not going to pivot into cuts until they

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Speaker 11: start to see some real weakness there.

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Speaker 1: In Bloomberg's Valery Titels, as we'll get an update on

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Speaker 1: how banks are adapting to the turmoil on the fence

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Speaker 1: quarterly lending Standards survey, and that's due out later today.

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Speaker 2: Time out to take a look at some of the

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Speaker 2: other stories making news in New York and around the world.

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Speaker 2: For that, we're joined by Bloomberg's Michael Vahr.

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Speaker 3: Good morning, Michael, Good morning, Nathan. New York protesters are

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Speaker 3: demanding justice in the choke old death of thirty year

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Speaker 3: old Jordan Neely in the subway. The corner has ruled

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Speaker 3: the death of homicide. The Manhattan District Attorney's office is

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Speaker 3: investigating the case, which could go before a grand jury

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Speaker 3: this week. The twenty four year old man Daniel Penny,

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Speaker 3: who allegedly caused Neely's death, says he was defending himself

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Speaker 3: after Neely aggressively threatened him and others on board the train. Meanwhile,

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Speaker 3: some demonstrators supporting Neely jumped on the tracks, preventing the

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Speaker 3: f train from arriving.

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Speaker 12: It is devastating and it was absolutely preventable and the

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Speaker 12: city and the state have failed us again.

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Speaker 3: Police arrested thirteen people over the weekend. The city of Allen, Texas,

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Speaker 3: held a vigiled yesterday and for the eight people killed

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Speaker 3: and seven injured during a weekend mass shooting in a

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Speaker 3: shopping mall. Governor Abbott and Lieutenant Governor Patrick were among

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Speaker 3: the crowd at Cottonwood Creek Church, which hosted the vigil.

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Speaker 3: Alan Mayor ken Folk also spoke at the vigil.

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Speaker 12: We will not let the actions of one individual impact

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Speaker 12: our resolve. We will band together as a community and

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Speaker 12: will emerge even stronger. But in this time of sorrow,

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Speaker 12: please continue to pray for the victims and the families

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Speaker 12: of the victims.

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Speaker 3: The gunman was killed. President Biden ordered flags flown and

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Speaker 3: half staff, denouncing the violence as senseless. In Brownsville, Texas, yesterday,

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Speaker 3: an suv plowed into people gathered near a migrant shelter,

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Speaker 3: killing eight. The shelter's director said that the facility surveillance

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Speaker 3: video showed an suv running a light and crashing into

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Speaker 3: people's sitting at the bus stop. Victor Maldonado runs the

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Speaker 3: Ozamanam Center, a shelter serving people in need of emergency

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Speaker 3: housing assistant.

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Speaker 5: It's is tragic. I mean, we've never had a situation

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Speaker 5: like this happening, you know, here at the shelter or

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Speaker 5: in the city.

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Speaker 3: Maldonado says. Some of the victims were migrants. Closing arguments

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Speaker 3: began today in the New York civil assault and defamation

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Speaker 3: trial against former President Donald Trump. He decided not to

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Speaker 3: testify in his own defense. Author e Jen Carroll claims

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Speaker 3: Trump sexually assaulted her in a Bergdorf Goodman dressing room

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Speaker 3: in the nineteen nineties. Jury deliberations are expected tomorrow. Global

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Speaker 3: News twenty four hours a day, powered by more than

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Speaker 3: twenty seven hundred journalist nanailists in over one hundred and

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Speaker 3: twenty countries. I'm Michael Barr, and this is Bloomberg, Nathan.

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Speaker 3: Thank you, Michael.

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Speaker 2: Time now for our Bloomberg Sports Update. Good morning, John Stanshout.

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Speaker 4: Good morning, Avan mess and Yankees combined to win two

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Speaker 4: two one hundred regular season games last season. Things not

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Speaker 4: going so well this year, and both they're looking at

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Speaker 4: already large deficits in their divisions. Mets look City Field

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Speaker 4: lost to Colorado thirteen to six. Rockies hit two home

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Speaker 4: runs of the seven run fifteen. The Mets have now

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Speaker 4: lost five to the last six, eleven of the last fourteen,

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Speaker 4: and Atlanta keeps winning.

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Speaker 2: The Braziers seven games ahead.

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Speaker 3: Looked as if the Yankees were.

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Speaker 4: Gonna win the series at Tampa Bay got six to

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Speaker 4: nothing with Garrett Cole on the mount. In seven starts,

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Speaker 4: Cole had not allowed more than two runs.

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Speaker 9: He allowed six.

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Speaker 2: Raise took the lead.

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Speaker 4: Yanks tied at the Raise one eight to seven.

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Speaker 3: In ten.

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Speaker 4: It is there now twenty eight and seven. They are

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Speaker 4: ten games ahead of the Yankees, who are expecting to

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Speaker 4: get Aaron Judge back tomorrow via Blue who passed away

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Speaker 4: at seventy three. As a twenty one year old. Pitching

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Speaker 4: for Oakland, Golo won the Cy Young and MDP Awards.

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Speaker 4: Familiar script for the Devils, who lost games one and

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Speaker 4: two to the Rangers by combining ten to two, but

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Speaker 4: then won the series. They lost the first two to

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Speaker 4: Carolina by a combined eleven to two, but they won

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Speaker 4: Game three in Newark eight to four. Jack Hughes two

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Speaker 4: goals to assist brother Luke added two assist seattlebey Dallas

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Speaker 4: seven to two, surprising Florida one again three two and

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Speaker 4: overtime over Toronto. Sixers beat the Celtics in overtime. That

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Speaker 4: series tied to two. So are the Nuggets and Sons

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Speaker 4: Phoenix one game for an incident in that game when

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Speaker 4: Denver Starr Nikoliochers took the ball from a fan made

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Speaker 4: contact with him, and that fan was Matt as Bia,

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Speaker 4: who owns the Sons. Jocus contended it was Ishbia who

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Speaker 4: first made contact with him. Next to their two losses

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Speaker 4: to the heat of shot, only fifteen of seventy four

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Speaker 4: on three point ers. Game four is tonight in Miami.

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Speaker 4: John stash Hellen.

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Speaker 2: Bloomberg Sports.

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Speaker 5: Live from coast to coast, from New York to San Francisco,

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Speaker 5: Boston to Washington, d C. Nationwide on SiriusXM, the Bloomberg

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Speaker 5: Business app in Bloomberg dot com. This is Bloomberg Day Break.

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Speaker 5: Good morning, I'm Nathan Hager.

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Speaker 2: We are kicking off a new trading week that could

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Speaker 2: be dominated by concerns over the debt impasse in Washington,

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Speaker 2: the health of regional banks as well. That says the

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Speaker 2: Federal Reserve appears on course to keep interest rates elevated

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Speaker 2: after another strong monthly jobs report. Well, this week's inflation

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Speaker 2: data changed the calculus for this central bank. Let's bring

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Speaker 2: in Dennis Gartman to get this trading week started, chairman

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Speaker 2: of the University of Akron Endowment Investment Committee, and of course,

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Speaker 2: the former publisher of the Gartman Letter, Dennis, good morning.

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Speaker 2: What's the biggest market risk for you right now?

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Speaker 13: I think the biggest risk is the fact that people,

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Speaker 13: including yourself, called the employment number on Friday a strong number.

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Speaker 13: Let's be honest, it really wasn't that strong.

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Speaker 1: There.

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Speaker 13: Revisions were one hundred and forty thousand down for the

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Speaker 13: previous month, and actually almost all in fact, all of

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Speaker 13: the increase was predicated upon the birth death adjustment number,

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Speaker 13: which was plus three hundred and eighty thousand. It's the

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Speaker 13: largest number of the year. We'll probably start to see

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Speaker 13: some lesser numbers on the birth death adjustment. So I

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Speaker 13: think that the non farm payrolls number was actually almost

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Speaker 13: clearly almost negative if you take out the birth the

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Speaker 13: birth death adjustment phenomenon. So let's be honest, it was

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Speaker 13: not that strong a number. And I was quite surprised

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Speaker 13: by the response by the stock market, with the Dow

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Speaker 13: gaining what five hundred points during the course of the day.

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Speaker 13: That caught me rather off guard. I'm I'm somewhat bearish

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Speaker 13: of stocks, marginally, so in my own account, I'm short

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Speaker 13: about seven percent. I've got a large cash position, a

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Speaker 13: large position in a two year note, and a somewhat

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Speaker 13: larger position in gold. So I'm short a little bit

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Speaker 13: of stocks, long a little bit of gold that basically

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Speaker 13: predicated upon the uncertainty regarding the economy. My biggest position

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Speaker 13: is in the two year note, and I'm comfortable sitting

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Speaker 13: right there essentially on the sidelines.

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Speaker 2: All Right, So you have been pretty bearish on this

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Speaker 2: market for quite some time. Are you raising your forecast

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Speaker 2: for a recession coming out of the data that we've seen.

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Speaker 13: I think that when the data is actually revised, I

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Speaker 13: think given the fact that we've revised downward the non

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Speaker 13: farm payrolls number by one hundred and forty, which is

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Speaker 13: a big number, I think we may well be already

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Speaker 13: in recession. It depends on which industry you're in. If

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Speaker 13: you're in the if you're in the commercial real estate,

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Speaker 13: there's no question you're in recession. If you're in retail business,

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Speaker 13: you're probably worried about being the in recession, and if

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Speaker 13: you're in some if you're in travel, you're you're wondering,

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Speaker 13: how can it be any better than what we've got?

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Speaker 13: So it depends upon which industry you're in. But I

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Speaker 13: think on balance, when we when the NBER sits down

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Speaker 13: in several months and looks back and says the recession

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Speaker 13: began probably in the first quarter of this year. Tom

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Speaker 13: will tell right now.

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Speaker 2: You've also said that you believe that the Fed is

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Speaker 2: going to keep interest rates higher for quite a bit

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Speaker 2: longer than the market is expecting. If we are starting

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Speaker 2: to get the data showing the possibility of a recession

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Speaker 2: sooner than expected, could that cause the Fed to bring

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Speaker 2: rates down sooner than expected?

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Speaker 13: The Fed will be slow in responding. To be quite honest,

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Speaker 13: the Fed is always slow. They're always laid to the adjustment,

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Speaker 13: either to tighten or to ease. I've maintained that the

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Speaker 13: Fed will be holding interest rates higher for a longer

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Speaker 13: period of time, listening to what mister Powell has said

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Speaker 13: and basically reverberating or or reiterating what he is always

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Speaker 13: what he has commented upon. I think the odds of

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Speaker 13: the SAD pivoting and reducing interest rates by the end

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Speaker 13: of the year are negligible, borderline zero. I think it'll

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Speaker 13: be early in twenty twenty four before the Fed considers

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Speaker 13: the possibility of lowering the overnight FED funds. Right, so

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Speaker 13: it's a long ways into the future.

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Speaker 2: And I also heard you say that you're comfortable staying

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Speaker 2: in two year treasuries. Where do you see treasury yields

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Speaker 2: going in this environment?

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Speaker 13: Probably not much direction either way. We haven't gone far

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Speaker 13: either way in the course of the past several months,

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Speaker 13: and I think we're going to sit essentially where we

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Speaker 13: are right now. So holding short term interest rates or

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Speaker 13: holding short term positions, either in short term te bills

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Speaker 13: or two year notes is probably the place to be

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Speaker 13: for the next twelve to eighteen months. I don't think

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Speaker 13: there'll be much movement and in the state direction higher

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Speaker 13: or lower from here.

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Speaker 2: In our last minute here, Dennis, we've seen a rally

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Speaker 2: at least in the last couple of days in regional

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Speaker 2: bank stocks. What's your outlook for the regionals and the

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Speaker 2: impact that they could have on the brighter stock market.

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Speaker 13: I think we've probably had too much bearishness in the

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Speaker 13: regional bank stocks. If there's one area in the economy

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Speaker 13: where you want to be a buyer, buying the regionals,

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Speaker 13: especially in the southeast here in the United States. So

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Speaker 13: I think that's a very good place to go hide

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Speaker 13: for a while. If you must hold equities, holding them

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Speaker 13: in regional bank stocks that have I think been decimated

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Speaker 13: and unduly so over the course the past month and

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Speaker 13: a half or so. So that's one of the few

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Speaker 13: areas that I can actually put together a bullish pheno,

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Speaker 13: a bullish posture.

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