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Speaker 1: From the Bloomberg Interactor Berger Studios. This is Bloomberg day

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Speaker 1: Break for Monday May twenty second. Coming up today, round

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Speaker 1: three of debt talks.

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Speaker 2: President Biden and Speaker McCarthy meet again, with potential default

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Speaker 2: now just ten days away.

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Speaker 1: President Biden says relations which China will improve very shortly.

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Speaker 2: However, shares of Micron technology slide after China bans its chips.

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Speaker 3: I'm Amy Morris. New York City says the migrant wave

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Speaker 3: will cost the city billions of dollars, and the man

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Speaker 3: charged in the New York City subway chokehold depth says

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Speaker 3: it wasn't race related.

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Speaker 4: From John Stash, Aaron Swartz, Brooks Koepka won the PGA,

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Speaker 4: the Miami Heat won again, the Yankees won, and the

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Speaker 4: Mets won twice.

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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. Good, good morning.

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Speaker 2: I'm Nathan Hager.

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

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Speaker 2: The US is now just ten days away from a

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Speaker 2: potential debt default, and talks are about to intensify in Washington.

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Speaker 2: Negotiators for both sides met last night at House Speaker

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Speaker 2: Kevin McCarthy's office. The speaker says he also had a

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Speaker 2: productive phone call with President Biden on his way back

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Speaker 2: from the G seven summit in Japan.

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Speaker 6: I walk through things that I'm looking at, and what

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Speaker 6: I'm looking.

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Speaker 7: At are where our differences are.

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Speaker 4: And how could we solve those And I felt that

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Speaker 4: part was a productive But look, there's no agreement.

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Speaker 8: We're still a part.

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Speaker 2: Speaker McCarthy says they're trying to find common ground on

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Speaker 2: a deal that can pass both chambers of Congress. Before

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Speaker 2: he left Japan, President Biden said he has proposed spending cuts. Now,

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Speaker 2: he says it's up to Republicans to budge on their position.

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Speaker 9: We gave a counter proposal to the counter again, and

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Speaker 9: I know this sounds ridiculous, but that's what we did,

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Speaker 9: and I'm waiting to hear the response to what we

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Speaker 9: are offered. We are willing to cut spending as well

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Speaker 9: as Ray's revenue so people start paying they're fair shared.

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Speaker 2: President Biden made the comments to Bloomberg. San Marie Hordern

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Speaker 2: at a news conference following the summit in Hiroshima.

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Speaker 1: Well Nathan, Janet Yellen is once again stressing the importance

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Speaker 1: of reaching a debt ceiling agreement soon, and the Treasury

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Speaker 1: Secretary says time is running out.

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Speaker 10: It's hard to be absolutely certain about this, but my

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Speaker 10: assessment is that the odds of reaching June fifteenth while

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Speaker 10: being able to pay all of our bills is quite low.

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Speaker 1: And Janet Yellen made the comments on NBC's Meet the Press,

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Speaker 1: Catch the program every Sunday on Bloomberg Radio.

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Speaker 2: Well, Karen, The debt ceiling wasn't the only topic President

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Speaker 2: Biden discussed at the G seven. Geopolitics are also front

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Speaker 2: and center. The President recommitted the Group of Seven nations

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Speaker 2: support for Ukraine.

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Speaker 9: The G seven reaffirmed are shared and unwavering. Let me

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Speaker 9: say it again, our share and on wavery commitment to

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Speaker 9: stand with the brave people of Ukraine as they defend

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Speaker 9: themselves against Russia's brutal war of aggression and the war

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Speaker 9: crimes being committed.

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Speaker 1: The President also addressed relations between the US and China,

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Speaker 1: saying he expects them to improve shortly.

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Speaker 9: We're not looking to decouple from China. We're looking to

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Speaker 9: de risk and diversify our relationship with China. That means

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Speaker 9: taking steps to diversify our supply chains, and we're not

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Speaker 9: so we're not dependent on any one country for necessary product.

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Speaker 11: It is you.

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Speaker 1: President Biden says, relations which China deteriorated sharply after the

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Speaker 1: spy balloon incident.

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Speaker 2: Well, well, the President looks to improve relations with China. Karen.

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Speaker 2: That country is banning computer chips from a top US company,

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Speaker 2: and we get the details on that story from Bloomberg's

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Speaker 2: John Tucker.

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Speaker 11: John Nathan, there's no cooling of tensions on this front.

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Speaker 11: China is barring semiconductors made by Micron Technology. It's the

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Speaker 11: latest defensive in China's hip war with the United States.

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Speaker 11: Jing said it found relatively serious cybersecurity risks in Micron

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Speaker 11: products sold in the country. Experts say its retaliation for

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Speaker 11: US export controls on semiconductors. The tech sector has become

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Speaker 11: a key battlefield over national security between the two largest economies,

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Speaker 11: Washington having already blacklisted Chinese tech firms, cutting off the

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Speaker 11: flow of sophisticated processors, and banning US citizens from providing

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Speaker 11: certain help to the Chinese chip industry. The US Commerce

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Speaker 11: Department said Beijing's conclusion had no basis. In fact, shares

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Speaker 11: of Micron were down close to six percent in the

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Speaker 11: pre market in New York Income John Tucker, Bloomberg.

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Speaker 1: Daybreak, All right, John, Thanks Well, Another big US tech

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Speaker 1: company is also feeling the heat. This morning, Facebook owner

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Speaker 1: Meta Platforms has been fined a record one point three

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Speaker 1: billion dollars by European Union privacy regulators. Regulators see Meta

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Speaker 1: failed to protect personal information from the eyes of americansecurity services.

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Speaker 2: Turning to the economy now care and there are more

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Speaker 2: signs the Federal Reserve may hold off on raising interest

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Speaker 2: rates now Jones is reporting Minneapolis Fed President Neil Kashkari

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Speaker 2: could support holding rates at current levels at the next

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Speaker 2: meeting in June. Kashkari reportedly says such a decision would

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Speaker 2: be made to give Fed officials more time to assess

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Speaker 2: the effects of passtrate hikes and the inflation outlook.

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Speaker 1: Well. Turning to politics in Europe, now Nathan Greek Prime

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Speaker 1: Minister Carriakos Misutakis appears sent for a new term. His

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Speaker 1: center right party received the most votes in this weekend's election,

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Speaker 1: roughly forty one percent, though that falls short of enough

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Speaker 1: to form his own government. Misutakis will likely offer another ballot.

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Speaker 1: In a month, Greek stocks served on the news, rising

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Speaker 1: more than six percent in Athens.

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Speaker 2: Finally, Karen Let's shift gears and talk Space Exploration. SpaceX

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Speaker 2: is flying four private astronauts to the International Space Station.

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Speaker 2: In Bloomberg's Ed Baxter as the story.

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Speaker 12: The Axiom funded company crew sitting atop a Falcon nine rocket.

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Speaker 3: One it just full power.

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Speaker 2: He lift the Falcon nine go Actim.

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Speaker 12: And the crew makes history for astronauts, including a man

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Speaker 12: and for the first time a woman from Saudi Arabia.

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Speaker 6: Earth Orbit at Astra and Godspeed AX two.

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Speaker 12: Dock with the iss today as Actum wants to build

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Speaker 12: its own. At some point, the Falcon nine rocket came

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Speaker 12: back and successfully landed in San Francisco. I'm at Baxter

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Speaker 12: Bloomberg Daybreak.

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Speaker 2: Local headlines in a check of sports. Next, this is

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Speaker 2: Bloomberg time now to take a look at some of

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

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Speaker 2: the world. For that what you're joined by Bloomberg Zamy Morris,

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Speaker 2: Good morning, Amy, Good.

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Speaker 3: Morning, Nathan. New York Mayor Eric Adams says the city

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Speaker 3: is projected to spend more than four billion dollars on

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Speaker 3: asylum seekers. He says more than seventy thousand migrants have

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Speaker 3: come to New York City in recent months, and forty

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Speaker 3: two thousand are still being cared for by the city.

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Speaker 3: Speaking on CBS's Face the Nation, Mayor Adams blamed partisan politics.

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Speaker 4: Republicans for far too many years have failed to deal

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Speaker 4: with real immigration reform.

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Speaker 13: This is a national issue.

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Speaker 3: Mayor Adams also criticized the federal government, saying they're only

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Speaker 3: providing thirty million dollars for a four billion dollar problem.

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Speaker 3: This as more migrants arrived amid a state of emergency

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Speaker 3: in Duchess County after about eighty people were busted in

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Speaker 3: from New York City yesterday afternoon. They were put up

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Speaker 3: at a hotel in Poughkeepsie. New York City is paying

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Speaker 3: for those room rentals, along with one meal a day

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Speaker 3: for at least four months. The man charged in the

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Speaker 3: New York City subway choke hold death of Jordan Neely

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Speaker 3: is addressing criticism that it was racially motivated. Daniel Penny

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Speaker 3: is charged with manslaughter. The marine veteran told The New

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Speaker 3: York Post it had nothing to do with Neely's race.

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Speaker 3: Penny also said he believes footage showing what led up

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Speaker 3: to the incident will prove that he was in the right.

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Speaker 3: Paul Whalen is a former marine who still is imprisoned

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Speaker 3: in Russia. He says he is confident that the US

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Speaker 3: is working to secure his release. Still, he tells CNN

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Speaker 3: that it is depressing to see others who are imprisoned

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Speaker 3: traded for their release while he can continues to wait.

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Speaker 12: I feel that my.

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Speaker 8: Life shouldn't be considered less valuable or important than others

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Speaker 8: who have been previously traded. And I think there are

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Speaker 8: people in DC that feel the same way, and they're

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Speaker 8: moving towards a compromise and resolution to this.

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Speaker 3: Whalen was sentenced to a sixteen year term in twenty

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Speaker 3: twenty on spying charges that he denies. He's been detained

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Speaker 3: since twenty eighteen. Connecticut has changed its highway exit numbers,

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Speaker 3: and this was mandated by the Federal Highway Administration with

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Speaker 3: the aim of standardizing the exit numbering system across the country.

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Speaker 3: The system is tied to the state Department of Transportation's

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Speaker 3: mile marker system, with exit numbers reflecting the mile at

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Speaker 3: which an exit is located. DOT spokesman Josh Morgan tells

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Speaker 3: the Hartford Current that the switch will cost into the

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Speaker 3: tens of millions of dollars. Global News twenty four hours

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Speaker 3: a day, powered by more than twenty seven hundred journalists

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Speaker 3: and analysts in more than one hundred twenty countries. I'm

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Speaker 3: Amy Morris, and this is Bloomberg.

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Speaker 2: Nathan, Thank you, Amy. Time now for a Bloomberg Sports update.

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Speaker 2: For that, we bring in John stan Shauer.

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Speaker 4: All right, Nathan Brooks Kaopka is back. He won four

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Speaker 4: majors in a three year period, but hadn't won one

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Speaker 4: in four years. At Okill in Rochester, kep could play

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Speaker 4: the last three rounds to eleven under par. He won

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Speaker 4: the PGA Championship by two over Victor Hovlin and Scotti Scheffley.

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Speaker 4: But the story that captured everyone was Michael Block, the

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Speaker 4: forty six year old public course pro from California who

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Speaker 4: capped an amazing week on his sixty ninth holes. Takes

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Speaker 4: off on an incredible line tracking ride out of It's

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Speaker 4: the right distance, Holy gow, oh my gosh. It flew

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Speaker 4: right into the center of the hole for a hold

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Speaker 4: one for Michael Block.

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Speaker 6: A dream week for Michael, Block continues, He's.

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Speaker 12: Just now finding out.

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Speaker 2: He hold it on the fly.

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Speaker 4: Joy McElroy had to tell him it went in. It

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Speaker 4: was earlier on Bloomberg Radio. Blocks fifteenth place finished the

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Speaker 4: best buy a club pro at the PGA in thirty

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Speaker 4: seven years. Something happens that's never happened before. The NBA

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Speaker 4: Finals will be Miami against Denver. Both have three nothing leads.

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Speaker 4: No team has ever blown such a lead. Miami cruised

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Speaker 4: to a Game three victory over the Celtics one twenty eight,

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Speaker 4: one oh two. Denver and the Lakers have their Game

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Speaker 4: four tonight in La on the ice. Another overtime game

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Speaker 4: all four on the conference final of going OT that's unprecedented.

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Speaker 4: Vegas scored Layton regulation and then again a minute twelve

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Speaker 4: into OT beat Dallas and leads the series to nothing.

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Speaker 4: The Mets started their co aces and both ends of

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Speaker 4: a city field doubleheader, and Max Sherzer and Justin Verlander

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Speaker 4: were both dominant. Mets swept Cleveland five to four, then

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Speaker 4: two to one. They've won five in a row, all

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Speaker 4: five by one run. Yankees finished the sweep with the

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Speaker 4: other Ohio team winning four to one at Cincinnati. Luis

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Speaker 4: Severino was sharp and his season debut. John Stashedward Bloomberg Sports.

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Speaker 13: Live from coast to coast, from New York to San Francisco,

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Speaker 13: Boston to Washington, d C. Nationwide on Sirius XAM, The

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Speaker 13: Bloomberg Business Happened Bomberg dot Com. This is Bloomberg Daybreak.

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Speaker 13: Good morning. I'm Nathan Hager.

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Speaker 2: We're looking at a market on tenter hooks this morning,

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Speaker 2: ahead of round three of debt ceiling talks between President

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Speaker 2: Biden and House Speaker Kevin McCarthy. Potential government default, according

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Speaker 2: to Treasury Secretary Janet Yellen, is now just ten days away.

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Speaker 2: How could this market react as we get closer to that?

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Speaker 2: X State. Let's bring in Dennis Gartman for some analysis.

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Speaker 13: Now.

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Speaker 2: Dennis's chairman of the University of Akron and Domin Investment Committee,

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Speaker 2: former publisher of the Gartment Letter. Dennis, Good morning, Futures

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Speaker 2: trading flat right now? Do you think that stays the

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Speaker 2: case though as we get closer to June first?

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Speaker 7: I think it stays the case until we get closer

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Speaker 7: to June first. I think that Miss Yellen made it

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Speaker 7: abundantly clear that June first is really a very serious

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Speaker 7: date for her. We'll see if that holds. There's no

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Speaker 7: question that they'll reach an agreement. I mean, this is

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Speaker 7: not going to go into default. We can't do that.

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Speaker 7: It would just be patently absurd. If the United States

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Speaker 7: government to default on its stead, it would send it

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Speaker 7: would be chaotic, without question, and that really can't happen.

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Speaker 7: It really won't happen. They'll at the eleventh hour, fifty

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Speaker 7: ninth a minute, tenth, fifty ninth second, they'll reach some

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Speaker 7: sort of an agreement. Who knows what sort of what

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Speaker 7: sort of agreement they will reach, but they'll reach one.

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Speaker 7: But right now, the markets are taking a deep breath and,

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Speaker 7: for lack of a better term, sort of relaxing for

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Speaker 7: the next several days. We'll just see what happens with

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Speaker 7: the talks between the Speaker of the House and the

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Speaker 7: President as the week progresses. But right now, everybody, I

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Speaker 7: like your term, everybody's on tenter hooks waiting to see

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Speaker 7: what happens. Right the only trades I have on I'm

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Speaker 7: sure I'm a long with a very little amount of gold,

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Speaker 7: and I'm long a lot of two years. The thing

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Speaker 7: that I find most interesting is the largest short position

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Speaker 7: I've seen in the bond market by the speculators as

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Speaker 7: opposed to the largest long position I've seen in since

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Speaker 7: twenty eighteen on the part of hedges, and hedgers are

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Speaker 7: almost always the winners and instance, so if you had

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Speaker 7: to put money on the table, if you had to

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Speaker 7: take a bet on the government bond market doing a

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Speaker 7: good deal better over the course the next several weeks

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Speaker 7: or months. But other than that, I really have very

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Speaker 7: little to talk about.

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Speaker 2: Are you long gold and two years because of the

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Speaker 2: possibility that we do get that agreement at the very

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Speaker 2: very last second, or are there other factors at play

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Speaker 2: that have you looking at policy sensitive treasuries and inflation hedges.

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Speaker 7: You hit it right on the head. That's exactly the

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Speaker 7: reason why I'm doing it that way. I think that

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Speaker 7: if an agreement is reached, I'll have to come out

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Speaker 7: of some of my bond positions and end up being

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Speaker 7: along with the stock market again for the first time

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Speaker 7: in a while, which seems to be breaking out to

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Speaker 7: the upside. But I'm very leery about following it right now.

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Speaker 7: So to me to say this place is to be

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Speaker 7: long of the bond market, long of the gold market,

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Speaker 7: which seemed to be two positions that are contrary one

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Speaker 7: to the other. But I think it's the ultimate hedge position,

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Speaker 7: and I'm really comfortable being in there holding that trade

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Speaker 7: at this point.

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Speaker 2: Interesting that you say that you're thinking about going along

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Speaker 2: the stock market again. We've talked for literally more than

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Speaker 2: a year now about you feel like this is a

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Speaker 2: bear market? Do you think we could be heading into

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Speaker 2: a new bowl market off the back of a deal

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Speaker 2: in Washington?

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Speaker 7: What bothers me? I have been bearished no question about

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Speaker 7: that for the past several years, actually, and as the

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Speaker 7: chairman of the University of Acron's endowment, I got us

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Speaker 7: to move out of our eight percent of our position

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Speaker 7: on January fifth of twenty twenty, which was a timely

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Speaker 7: exit for an endowment. But right now the market, contrary

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Speaker 7: to what I would like to think, the market seems

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Speaker 7: to be breaking out to the upside. And I've learned

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Speaker 7: over the course of forty five years of being in

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Speaker 7: the markets that when the market wants to break out,

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Speaker 7: standing in this way is usually an ill advised decision.

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Speaker 7: So if I turn bullish, it'll be modestly, so the

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Speaker 7: opperative word here being modestly. I won't be aggressive in

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Speaker 7: that position. But it does seem like it doesn't want

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Speaker 7: to go down, It does wants to go higher. It

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Speaker 7: does seem like it's breaking out to the upside. Seems

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Speaker 7: to add anesthetical to what's going on in the government,

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Speaker 7: what's going on in the economy, what's going on with

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Speaker 7: the recession that I think we're already in. But nonetheless,

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Speaker 7: the market seems to want to go higher and fading.

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Speaker 7: It has been an ill advised in a very difficult

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Speaker 7: position to have held for a while.

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Speaker 2: Do you think that a stock market rally can continue

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Speaker 2: if the Fed keeps up with higher for longer interest rates?

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Speaker 2: Do you think this market is right to price in

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Speaker 2: rate cuts later on? This year, we got about a

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Speaker 2: minute left in US.

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Speaker 7: I think the market is ill advised to think that

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Speaker 7: the Set is going to be cutting interest rates anytime soon.

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Speaker 7: I think they made it abundantly clear that the best

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Speaker 7: the best you're going to get for the next year

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Speaker 7: is the FED funds rate going sideways. Maybe maybe we

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Speaker 7: get another twenty five basis point increase at the one

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Speaker 7: of the summer meetings, But the Fed Fund of Futures

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Speaker 7: has seemed to have priced in a cut in the

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Speaker 7: overnight Fed funds rate, and that's simply not going to

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Speaker 7: happen until at least in the twenty twenty four, sometime

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Speaker 7: quite late in twenty twenty four, as far as I'm concerned.

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Speaker 7: So that's that's I've had that opinion for a while.

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Speaker 7: Markets can go up, stock markets can go up with

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Speaker 7: rising rates, stock markets can go up with falling rates.

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Speaker 7: Stock markets can go up on their own accord. And

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Speaker 7: right now the market seems to be breaking out to

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Speaker 7: the upside. Like I said, I've faded it for a while.

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Speaker 7: It seems to have been an ill advised decision, not

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Speaker 7: terribly ill advised, but ill advised, and following it on

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Speaker 7: the upside, it seems to be the proper course of action.

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Speaker 7: So we we shall see if we if we start

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Speaker 7: to take the s and p up about forty two

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Speaker 7: hundred got to be, it'll be breaking out to the upside.

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