WEBVTT - Bloomberg Daybreak: May 10, 2022 - Hour 1 (Radio) 0:00:02.960 --> 0:00:06.320 Live from the Bloomberg Interactive Burger Studios is his Bloomberg 0:00:06.400 --> 0:00:10.680 Daybreak for Tuesday May two. Coming up this hour. Stocks 0:00:10.760 --> 0:00:14.400 stabilized following the lowest clothes in thirteen months. It's ed 0:00:14.400 --> 0:00:18.680 warn't of deteriorating liquidity conditions across key financial markets, and 0:00:18.760 --> 0:00:21.840 as gas prices hit a record, President Biden gets ready 0:00:21.880 --> 0:00:25.720 to deliver a speech on combatic inflation. Connecticut's governor signs 0:00:25.720 --> 0:00:28.440 a budget with hundreds of millions and tax cuts, plus 0:00:28.480 --> 0:00:32.560 demand hunt where murder suspected and Alabama corrections officer is over. 0:00:32.760 --> 0:00:35.920 I'm Mikey Blarer. More ahead, I'm John Stashed in sports 0:00:36.000 --> 0:00:38.120 Nightmare night for the Rangers. They lost Game four in 0:00:38.159 --> 0:00:41.720 Pittsburgh seven to two. The Yankees top Texas one to Nuppie. 0:00:44.520 --> 0:00:48.080 That's all s trading ahead on Bloomberg Daybreak on Bloomberg. 0:00:48.120 --> 0:00:51.640 He live in Free on New York Bloomberg one, Washington, 0:00:51.760 --> 0:00:55.360 d C, Bloomberg one oh six one, Boston, Bloomberg nine 0:00:55.440 --> 0:00:59.240 sixties and Francisco Sirius x M one nine team and 0:00:59.320 --> 0:01:02.400 around the world Old on Bloomberg Radio Dot Carmen via 0:01:02.480 --> 0:01:09.399 The Bloomberg Business. Hey, good morning, I'm Nathan Hager and 0:01:09.440 --> 0:01:12.600 I'm Karen Moscow. US DOT index futures on the rise 0:01:12.680 --> 0:01:14.440 this morning. We're coming up to five o one on 0:01:14.480 --> 0:01:16.720 Wall Street, and we check the markets every fifteen minutes 0:01:16.720 --> 0:01:19.959 throughout the trading day. On Bloomberg. Right now, SNP futures 0:01:19.959 --> 0:01:22.760 are up forty two points. Dal future is up three 0:01:22.880 --> 0:01:26.320 hundred and NASDACK futures up one hundred ninety four or 0:01:26.440 --> 0:01:29.560 one point six percent. Ten year treasury of three thirty 0:01:29.680 --> 0:01:33.440 seconds the three point zero two percent, and the yield 0:01:33.440 --> 0:01:36.800 on the two year two point six zero percent. Nathan Well, Karen. 0:01:36.880 --> 0:01:39.600 This rise in futures follows the lowest close for US 0:01:39.640 --> 0:01:42.960 stocks in thirteen months. Hardest hit continues to be the 0:01:42.959 --> 0:01:46.680 tech heavy NASDAC. That index slid another four point three percent. 0:01:46.959 --> 0:01:50.000 The NASTAC one hundred has erased three point four trillion 0:01:50.080 --> 0:01:53.040 dollars since the start of April. Aaron Kennon is CEO 0:01:53.160 --> 0:01:56.120 at Clear Harbor Asset Management. You know, we're continuing to 0:01:56.120 --> 0:01:59.680 see a dramatic sort of leakage of liquidity from the 0:01:59.760 --> 0:02:03.800 capital market system, as the Fed uh titans policy and 0:02:03.840 --> 0:02:08.440 as the fiscal weavers very much close off, and inflation 0:02:08.560 --> 0:02:12.080 is a huge concern clear heartbreas said Managements. Aaron Kennon 0:02:12.120 --> 0:02:15.760 says tomorrow's inflation report, the consumer price index will be 0:02:15.800 --> 0:02:19.320 important for market sentiment. Well before we get that data, Nathan, 0:02:19.360 --> 0:02:22.640 we're seeing heart evidence of price pressures at the gas pump. 0:02:22.720 --> 0:02:25.480 The average retail price of gasoline has hit her record 0:02:25.560 --> 0:02:29.240 four dollars and thirty seven cents per gallon. President Biden 0:02:29.280 --> 0:02:31.520 will have more to say about his effort to combat 0:02:31.760 --> 0:02:34.840 rising prices and his speech today. We get a preview 0:02:34.880 --> 0:02:38.440 from Amy Morris in our Bloomberry one newsroom in Washington. 0:02:38.760 --> 0:02:41.760 President Biden is expected to detail the differences between his 0:02:41.919 --> 0:02:45.160 plan and a GOP proposal by Florida Senator Rick Scott 0:02:45.160 --> 0:02:48.960 that would raise taxes while allowing Social Security and Medicare 0:02:49.000 --> 0:02:52.360 to expire. Consumer prices rose in March at the fastest 0:02:52.400 --> 0:02:56.520 pace since nine one, and of Americans increasingly pessimistic about 0:02:56.520 --> 0:03:00.280 their finances despite strong job growth. It's the biggest worry 0:03:00.320 --> 0:03:03.160 for voters ahead of the November midterms. A CNN poll 0:03:03.240 --> 0:03:06.000 out last week found eight in ten Americans don't believe 0:03:06.000 --> 0:03:09.520 the government is doing enough to fight inflation. In Washington, 0:03:09.600 --> 0:03:12.440 I maybe Morris Bloomberg Daybreak, Amy, thank you and President 0:03:12.520 --> 0:03:15.240 Biden will deliver that speech around eleven thirty am Wall 0:03:15.280 --> 0:03:18.040 Street Time. Catch it right here on Bloomberg Radio. I 0:03:18.160 --> 0:03:21.680 meantime caring. The Federal Reserve is warning of deteriorating liquidity 0:03:21.720 --> 0:03:24.880 conditions across key financial markets. We get the details from 0:03:24.880 --> 0:03:28.560 Bloomberg's Charlie Hellett. In its semi annual report, the FED 0:03:28.680 --> 0:03:32.880 sites rising risks from the war in Ukraine, monetary tightening 0:03:33.080 --> 0:03:36.960 and high inflation. The FED said, according to some measures, 0:03:37.280 --> 0:03:42.000 market liquidity has declined since late one in the markets 0:03:42.080 --> 0:03:46.320 for recently issued US cash treasury securities and for equity 0:03:46.400 --> 0:03:49.920 index futures. FED Governor Lyle Brainerd said the war has 0:03:49.920 --> 0:03:54.360 sparked large price movements and margin calls in commodities markets, 0:03:54.400 --> 0:03:59.080 and highlights of potential channel through which large financial institutions 0:03:59.320 --> 0:04:03.480 could be ex bosed to contagion in New York. Charlie Pellett, 0:04:03.520 --> 0:04:05.840 bloom Road Daybreak. All right, Charlie, thank you. We'll have 0:04:05.880 --> 0:04:07.960 more from the FED later this morning when we speak 0:04:08.040 --> 0:04:11.280 live with Cleveland Fed President Lauretta Mester. That's coming up 0:04:11.280 --> 0:04:14.680 at eleven am Wall Street Time on Bloomberg Radio and television. 0:04:14.960 --> 0:04:17.960 We are seeing some stabilization in the Marcus this morning, Nathan, 0:04:17.960 --> 0:04:20.120 and let's start with a look at Europe, where Bloomberg's 0:04:20.120 --> 0:04:22.719 You and Pots is standing by Live in London. Good 0:04:22.720 --> 0:04:25.159 morning you, and good morning Kardon Nathan. You have being 0:04:25.160 --> 0:04:27.560 stocks back in the green today, the stops under trading 0:04:27.640 --> 0:04:30.920 up one percentage point. That's as dip buyers emerged from 0:04:30.960 --> 0:04:34.680 the ruins of Monday's brutal route. Still plenty of concerns 0:04:34.680 --> 0:04:38.279 about inflation and economic growth, though, but nineteen out of 0:04:38.360 --> 0:04:41.400 twenty industry groups higher on Europe stocks the hundred today, 0:04:41.560 --> 0:04:45.440 with banks, carmakers, and chemicals companies near the top of 0:04:45.480 --> 0:04:47.880 the table. Live in London, I'm you in Pots. Make 0:04:47.920 --> 0:04:50.320 date right, okay, you and thanks. We did see selling 0:04:50.320 --> 0:04:53.680 in Asia overnight. Stocks fell there for a seventh straight session, 0:04:53.720 --> 0:04:56.600 but did pair earlier losses. Let's get the recap from 0:04:56.600 --> 0:04:59.720 Bloomberg's Juliette Sally in Singapore. Good morning, Juliet, Good morning 0:04:59.800 --> 0:05:01.680 nath and Karen. The losses on the m c I 0:05:01.760 --> 0:05:04.760 Asia Pacific Index mirrord the longest losing streaks since March 0:05:04.839 --> 0:05:08.760 twenty twenty, Stokes remaining at July twenty twenty lows. Hong 0:05:08.839 --> 0:05:11.880 Kong Tech shares took a dive on growth concerns, and 0:05:11.920 --> 0:05:15.200 as the city resumed trade after a long weekend. Mainland 0:05:15.279 --> 0:05:18.760 Chinese has rebounded, but black Rock abandoned its bullish stance 0:05:18.839 --> 0:05:22.560 on China, now recommending a neutral stance on Chinese stocks 0:05:22.560 --> 0:05:25.440 and bonds as the country's response to the pandemic takes 0:05:25.440 --> 0:05:29.800 its home in Singapore. Juliet Sale Bloomberg Daybreak, Juliet thank you. 0:05:29.880 --> 0:05:33.479 Bitcoin trading higher this morning after briefly falling below the 0:05:33.560 --> 0:05:37.160 thirty thousand level. The recent plunge has taken a digital 0:05:37.200 --> 0:05:39.880 token to levels last seen in the middle of last year. 0:05:40.240 --> 0:05:43.440 Like Nova grass Is, founder and CEO of Galaxy Digital, 0:05:43.800 --> 0:05:46.839 I still think thirty thousand should hold, right, We'll see 0:05:46.839 --> 0:05:49.160 if twelve thousand holds of the NASDAC and we bounce 0:05:49.920 --> 0:05:52.440 in the next few days, then I think you'll see 0:05:52.440 --> 0:05:57.240 bitcoin thirty thirty thousand hold. If the NASDAC falls and 0:05:57.279 --> 0:06:00.080 we head towards eleven thousand, you know there's a shot 0:06:00.080 --> 0:06:04.280 that thirty thousand goes. Digital founder Mike Novgrad says trading 0:06:04.320 --> 0:06:06.920 will be volatile for at least the next few quarters. 0:06:06.920 --> 0:06:11.839 In checking bitcoin right now, it's at seven. Turning to 0:06:11.880 --> 0:06:14.320 the war in Europe now Karen. President Biden plans to 0:06:14.320 --> 0:06:17.760 meet with Italian Prime Minister Mario Dronki today as aid 0:06:17.839 --> 0:06:21.120 to Ukraine moves forward on a couple of fronts. Bloomberg's 0:06:21.120 --> 0:06:24.840 at Baxter has the story. Congressional Democrats have drafted an 0:06:24.880 --> 0:06:28.240 aid package worth almost forty billion dollars and plan on 0:06:28.360 --> 0:06:32.839 voting this week without attaching COVID pandemic funding. This tops 0:06:32.839 --> 0:06:36.400 the president's ask of thirty three billion. Biden meanwhile signed 0:06:36.400 --> 0:06:39.880 a World War two era provision sending money to Ukraine 0:06:40.040 --> 0:06:44.880 across to the fight is not cheap, but aggression is 0:06:44.920 --> 0:06:48.760 even more. This provision was enacted in one to help 0:06:48.839 --> 0:06:53.840 Europe fight off Hitler. Congress could act as early as today. 0:06:53.880 --> 0:06:56.880 In San Francisco, I'm at Baxter, Bloomberg daybreak, al right, 0:06:57.120 --> 0:06:59.200 thank you, S and P. Futures right now up forty 0:06:59.240 --> 0:07:02.120 two points down, futures up three hundred two nastact futures 0:07:02.200 --> 0:07:05.479 higher by a hundred ninety two points. The tenure treasury 0:07:05.520 --> 0:07:08.039 is up four thirty seconds. Yield three point zero one 0:07:08.120 --> 0:07:10.360 percent on the tenure note. Yield on the two year 0:07:10.720 --> 0:07:14.360 two point six zero per cent. Straight ahead, your latest 0:07:14.400 --> 0:07:18.800 local headlines plus a check of sports. This is Bloomberg 0:07:23.160 --> 0:07:24.920 kicks out five oh seven on Wall Street where at 0:07:24.920 --> 0:07:27.280 fifty three degrees in Central Park. Already seeing a couple 0:07:27.320 --> 0:07:30.280 accidents northbound FDR Drive, one at ninety six another and 0:07:30.320 --> 0:07:33.400 a hundred sixte more coming up in traffic. First Michael 0:07:33.400 --> 0:07:35.360 Barr with more on what's going on in New York 0:07:35.360 --> 0:07:37.600 and around the world. Good morning, Michael, Good morning Nathan. 0:07:37.680 --> 0:07:40.560 Connecticut tax payers will see six hundred million dollars in 0:07:40.600 --> 0:07:43.440 tax relief following the signing of the fifth school year 0:07:44.240 --> 0:07:48.200 three budget by Democratic Governor Ned Lamont. The law extends 0:07:48.200 --> 0:07:51.640 a gas tax holiday and gild tax credit, as well 0:07:51.680 --> 0:07:55.080 as increasing a property tax credit. Lamont described it as 0:07:55.120 --> 0:07:58.680 the largest tax cut in state history. Voters in Newark, 0:07:58.800 --> 0:08:02.239 New Jersey, are choosing a mayor today. Incumbent ros Baraco 0:08:02.280 --> 0:08:06.440 will face a challenge from Sheila Montage. The Alabama corrections 0:08:06.440 --> 0:08:08.960 employee who was on the run with an escaped inmate, 0:08:09.240 --> 0:08:12.680 is now dead. Authorities in Indiana say Vicky White shot 0:08:12.720 --> 0:08:16.480 herself as U S Marshals closed in. Officers ran the 0:08:16.560 --> 0:08:20.040 vehicle Vicky White and Casey White Ryan, which then crashed. 0:08:20.480 --> 0:08:24.119 Alabama Sheriff Rick Singleton says that Casey White is never 0:08:24.160 --> 0:08:26.720 getting out again. We got a bangers man off the 0:08:26.760 --> 0:08:30.040 street today. He is never going to see the lot 0:08:30.080 --> 0:08:33.120 of day again. And uh, you know, that's a good 0:08:33.160 --> 0:08:35.520 thing for not just our community, but that's a good 0:08:35.520 --> 0:08:39.120 thing for this country. Sheriff Singleton says this has ended 0:08:39.160 --> 0:08:42.360 a very stressful week and a half. New York's Attorney 0:08:42.400 --> 0:08:45.600 general says her state will safeguard the right to abortion 0:08:45.840 --> 0:08:49.440 if the Supreme Court overturns Roe v. Wade. Latitia James 0:08:49.440 --> 0:08:53.120 says about thirty thousand women just from Pennsylvania and Ohio 0:08:53.200 --> 0:08:56.600 alone could come to New York seeking reproductive care, so 0:08:56.679 --> 0:08:59.600 a fund will be established that James says will help 0:08:59.600 --> 0:09:03.640 those winn James also cast out on why anti abortion 0:09:03.679 --> 0:09:07.040 activists support bans on abortion. What they should do is 0:09:07.080 --> 0:09:09.680 expand the childcare tax credit. What they should do is 0:09:09.679 --> 0:09:12.560 expand universal school lunch. What they should do is provide 0:09:12.559 --> 0:09:16.920 more funding for education and childcare and daycare and prenatal care, 0:09:17.080 --> 0:09:19.920 and the list goes on and on. If you truly 0:09:20.240 --> 0:09:24.680 care about children, A. G. Latitia James. Andy Warhol's shot 0:09:24.800 --> 0:09:28.400 Sage Blue Maryland has sold for a hundred million dollars 0:09:28.440 --> 0:09:31.600 that makes the iconic portrait of actress Marilyn Monroe the 0:09:31.679 --> 0:09:35.080 most expensive artwork by a U S artist ever sold 0:09:35.120 --> 0:09:39.120 at auction. Christie's Auction House in New York held the sale. 0:09:39.360 --> 0:09:42.360 Alex Rotter, as chairman of Christie's twenty and twenty one 0:09:42.520 --> 0:09:47.199 Century Art Department, century Um Works of Art, American Works 0:09:47.200 --> 0:09:50.600 of Art. It's the highest price ever paid, close to 0:09:50.640 --> 0:09:54.120 two hundred million dollars. Uh, let it sink in. It's 0:09:54.200 --> 0:09:57.440 quite something. Rodder with Christie said. An unknown buyer made 0:09:57.440 --> 0:09:59.720 the purchase. Global News twenty four hours a day on 0:09:59.760 --> 0:10:02.200 air and on Bloomberg Quit take Power by more than 0:10:02.600 --> 0:10:05.880 seven hundred journalists analysts more than twenty countries. Michael Barr, 0:10:05.920 --> 0:10:13.240 this is Bloomberg, Nathan. Thanks Michael. Almost five ten on 0:10:13.240 --> 0:10:15.440 Wall Street. Time for the Bloomberg Sports up. Take morning. 0:10:15.480 --> 0:10:18.280 Johns Sesshire, Good morning, Nathan. The Rangers in Pittsburgh with 0:10:18.320 --> 0:10:20.880 hopes of winning Game four to tie the series at two. Instead, 0:10:20.920 --> 0:10:23.880 the Penguins, without five goal onslaught of the second period. 0:10:23.920 --> 0:10:27.240 They scored goals twenty four seconds apart, and later scored 0:10:27.280 --> 0:10:30.200 goals thirty five seconds apart. They won seven to two, 0:10:30.559 --> 0:10:32.760 leave the series three one game fives tomorrow with the 0:10:32.760 --> 0:10:36.120 Garden Rangers. Coach Gerard Gallant has already said igor sh 0:10:36.360 --> 0:10:38.800 Turkin will be in the Ranger goal A little surprising 0:10:38.880 --> 0:10:42.120 considering how poorly Shisterkin played in the two games in 0:10:42.200 --> 0:10:45.640 Pittsburgh and three periods he gave up ten goals. Alex 0:10:45.679 --> 0:10:48.000 Gorgy have relieved him in both games and three periods 0:10:48.040 --> 0:10:50.160 he allowed two goals, But Gallant said last night just 0:10:50.280 --> 0:10:53.440 Turkin is the best goalie in the NHL. Colorado won 0:10:53.520 --> 0:10:56.600 in Nashville to complete a series sweep. Florida beat Washington, 0:10:56.640 --> 0:10:59.000 and overtime Calgary beat Dallas. Those series are tied at 0:10:59.040 --> 0:11:02.920 to the Islanders. Wired coach Barry Trots NBA playoffs Boston 0:11:03.000 --> 0:11:05.960 rally to win in Milwaukee, Golden State beat Memphis. Far 0:11:05.960 --> 0:11:07.600 as crowd at the State and there was a Yankee 0:11:07.640 --> 0:11:10.120 mattenee makeup of a rain out. Those that were there 0:11:10.600 --> 0:11:13.280 saw near no hit or Nest Cortez lost it with 0:11:13.360 --> 0:11:15.280 one out the eighth inning, kind of like fifth going 0:11:15.320 --> 0:11:19.240 into six. I kept, uh looking at the scoreboard, Uh, 0:11:19.320 --> 0:11:21.080 I see where my pitchcont was and stuff like that. 0:11:21.160 --> 0:11:23.560 So and it was in a good spot and and 0:11:23.720 --> 0:11:25.800 you know noticed that I didn't get up a hit, 0:11:25.880 --> 0:11:28.280 so uh you know it was. It was special when 0:11:28.400 --> 0:11:30.480 he scored the game's only run, bottom of the eighth 0:11:30.559 --> 0:11:33.120 riven in a double by Anthony Rizzo. They top Texas 0:11:33.160 --> 0:11:35.680 Onondon up, and they've won thirteen to their last fifteen. 0:11:35.720 --> 0:11:39.960 The Giants tried to trade quarterback James Bradbury. Instead, they 0:11:40.040 --> 0:11:42.280 released one of their best players. They had to for 0:11:42.320 --> 0:11:45.640 salary camp reasons. John Dash went ballooon birth sports, Nathan, 0:11:45.840 --> 0:11:48.080 Thank you, john S andp futures right now at forty 0:11:48.120 --> 0:11:50.480 five point. Staff futures up three to twenty three. Nastack 0:11:50.559 --> 0:11:53.440 futures up two hundred four points, bit a relief after 0:11:53.520 --> 0:11:57.520 the five weeks slide for US stocks. We'll talk about 0:11:57.520 --> 0:12:01.200 this market next with Daniel Morris of BNP Party by 0:12:01.240 --> 0:12:09.320 Asset Management. This is Bloomberg Blomber eleven three oh weather, sunny, breezy, 0:12:09.400 --> 0:12:11.880 upper sixties. Today will be mostly sunny with a high 0:12:11.960 --> 0:12:16.120 near seventy Tomorrow, sunshine mid seventies by Thursday. Right now 0:12:16.320 --> 0:12:23.800 fifty three degrees in Central Park. Markets, headlines and breaking 0:12:23.840 --> 0:12:26.720 news twenty four hours a day at Bloomberg dot Com. 0:12:26.840 --> 0:12:30.439 The Bloomberg Business attend at Bloomberg Quick tape is a 0:12:30.480 --> 0:12:39.520 Bloomberg business flash and I'm Karen Moscow and US DOT 0:12:39.559 --> 0:12:43.160 index futures are rallying this morning along with European shares 0:12:43.200 --> 0:12:46.679 as DIF buyers emerged following yesterday sell off. Sentiment does 0:12:46.720 --> 0:12:50.280 remain fragile over concerns about inflation and economic growth, and 0:12:50.320 --> 0:12:52.679 we checked the markets every fifteen minutes throughout the trading 0:12:52.760 --> 0:12:56.560 day on Bloomberg. SNP futures up forty six points this morning, 0:12:56.600 --> 0:12:59.959 Down futures up three twenty four NASDACK futures up to 0:13:00.000 --> 0:13:03.360 two hundred four or one point seven percent. The decks 0:13:03.400 --> 0:13:06.440 in Germany's up one point seven percent. Ten. Your treasury 0:13:06.480 --> 0:13:08.880 up to thirty seconds, he had three point two percent. 0:13:08.920 --> 0:13:11.280 They yield on a two year two point six zero 0:13:11.360 --> 0:13:14.640 percent nin Max Screwed oil is down three tents percent 0:13:14.679 --> 0:13:16.800 or thirty one cents at a hundred two dollars seventy 0:13:16.800 --> 0:13:19.000 four cents of barrel comex school there is up a 0:13:19.080 --> 0:13:22.120 quarter percent or four dollars fifty cents at eighteen sixty three. 0:13:22.120 --> 0:13:25.280 Ten announce the euro one point oh five six nine 0:13:25.280 --> 0:13:28.600 against the dollar and again one thirty point to four. 0:13:28.760 --> 0:13:31.400 That's a Bloomberg Business Flash. Now, here's Michael Barr with 0:13:31.440 --> 0:13:34.040 more on what's going on around the world. Michael, good morning, 0:13:34.200 --> 0:13:37.760 Good morning, Karen. Ukraining and officials say Russia is pounding 0:13:37.760 --> 0:13:41.959 away at Ukraine's vital southern part of Odessa. Meanwhile, President 0:13:42.000 --> 0:13:44.839 Biden says he's worried that a Russian president Putin doesn't 0:13:44.880 --> 0:13:47.320 have a way out right now of his war in Ukraine. 0:13:47.800 --> 0:13:50.520 NBA Playoffs, the Celtics beat the Bucks to even their 0:13:50.559 --> 0:13:53.440 series of two games apiece. The Warriors beat the Grizzlies. However, 0:13:53.720 --> 0:13:57.040 Warriors coach Steve Kerr tested positive for COVID. In the 0:13:57.200 --> 0:13:59.920 NHL playoffs, the Rangers lost to the Penguins fall behind 0:14:00.000 --> 0:14:03.240 three games to one. Capitals lost to the Panthers. In 0:14:03.320 --> 0:14:06.320 baseball the Yankees Orioles Giants. And He's all One Global 0:14:06.360 --> 0:14:08.600 News twenty four hours a day on air and on 0:14:08.679 --> 0:14:12.520 Bloomberg Quick Take, powered by more than journalists antilists more 0:14:12.520 --> 0:14:16.240 than a hundred twenty countries. Michael Barn, This is Bloomberg. Na. Okay, Michael, 0:14:16.280 --> 0:14:18.480 thank you. It's five nineteen on Wall Street Live from 0:14:18.480 --> 0:14:22.680 the Bloomberg Interactive Broker Studios. This is Bloomberg daybreak and 0:14:22.760 --> 0:14:25.520 Daniel Morris is with a snout, chief market strategist at 0:14:25.560 --> 0:14:28.840 BNP Party Bough Asset Management. As we look at green 0:14:28.920 --> 0:14:31.680 on the screen for a change this morning, Daniel, good morning. 0:14:31.800 --> 0:14:36.000 Are you buying this dept? Good morning. We haven't changed 0:14:36.040 --> 0:14:41.600 our allocations recently. Generally, we're still slightly underweight on equities, 0:14:41.640 --> 0:14:44.040 a little bit cautious. We see too many things that 0:14:44.160 --> 0:14:46.080 could get worse as opposed to getting better in the 0:14:46.160 --> 0:14:49.160 air term. Well, let's dive into some of those things. 0:14:49.240 --> 0:14:51.760 I mean, inflation has got to be front and center. 0:14:51.880 --> 0:14:55.600 Is that front and center for you? Well, I think 0:14:55.680 --> 0:14:58.880 what was quite curious about what happened with this last 0:14:58.920 --> 0:15:01.480 journey season. As you've justus looked at the figures objectively, 0:15:01.520 --> 0:15:05.440 they were pretty good. Growth was was good, surprises were positive, 0:15:05.440 --> 0:15:08.440 Guidance was was average. But in this environment that's actually 0:15:08.640 --> 0:15:11.400 not so bad either. But in contrast what we had 0:15:11.520 --> 0:15:14.000 in the first quarter when earning this came in market 0:15:14.040 --> 0:15:16.160 started rebound, we really didn't see that this time. So 0:15:16.200 --> 0:15:19.040 I think that signals kind of the really fundamental shifting sentiment, 0:15:19.280 --> 0:15:22.280 which is, as you point out, link to inflation and 0:15:22.400 --> 0:15:24.960 really primarily linked to what the central banks are going 0:15:25.000 --> 0:15:26.200 to do what the FET is going to do in 0:15:26.240 --> 0:15:29.200 response to that inflation. So we're focused on the risk 0:15:29.240 --> 0:15:32.600 from rates, particularly the risk of growth stocks from rising 0:15:32.640 --> 0:15:35.640 real yields, and we think that particular phenomenon has not 0:15:35.680 --> 0:15:41.400 played out yet. Are you seeing signs of peak inflation? Well, 0:15:41.440 --> 0:15:44.520 it should on a headline basis be peaky now, But 0:15:44.680 --> 0:15:47.840 that's not particularly comforting because what we're really worried about 0:15:47.840 --> 0:15:49.920 is certainly but the central banks are worried about, you know, 0:15:50.080 --> 0:15:52.600 is core inflation. And it's if you look, for example, 0:15:52.880 --> 0:15:56.640 at core rates in the US versus say the Eurozone. Uh, 0:15:56.760 --> 0:15:59.240 this is where you see a real distinction in kind 0:15:59.240 --> 0:16:02.200 of the analine neck on mcdynamics right now. Headline inflation 0:16:02.360 --> 0:16:05.960 because the bottlenecks because of energy is high pretty much everywhere, 0:16:06.000 --> 0:16:08.480 but cor inflation is much higher in the US, you know, 0:16:08.600 --> 0:16:11.720 driven at this point, I would argue, at least partly 0:16:11.760 --> 0:16:14.240 by the physical stimulus that we had. Of course, there's 0:16:14.280 --> 0:16:17.240 just fundamentally too much demand right now relative to the 0:16:17.240 --> 0:16:20.080 productive capacity of the U S economy. That's pressure in 0:16:20.120 --> 0:16:23.000 wages that's going to worry the central bank, and that's 0:16:23.000 --> 0:16:26.400 why you're expecting a much higher and more rapid increase 0:16:26.520 --> 0:16:28.200 in rates in the US than you see in the 0:16:28.200 --> 0:16:31.800 europhone do you think that the FEDS front loading of 0:16:31.880 --> 0:16:35.000 rates is going to have an impact on where inflation 0:16:35.080 --> 0:16:40.520 goes from here? Well, I mean that's remains the key unknown, 0:16:40.600 --> 0:16:43.160 both for for US as investors and for the FED. 0:16:43.240 --> 0:16:45.320 Is the central bank? I mean really that the bed 0:16:45.440 --> 0:16:48.600 in now? Is that the tightening that they have planned, 0:16:48.640 --> 0:16:51.960 And of course we're still relatively speaking and fairly accommodative 0:16:51.960 --> 0:16:54.560 monetary policy. We're just trying to get back to neutral 0:16:54.760 --> 0:16:58.600 for a start. That with the rollover of a lot 0:16:58.640 --> 0:17:01.320 of these honestly transit or effects be it from energy, 0:17:01.360 --> 0:17:04.720 being from supply chain bottlenecks, that reduces some of the pressure. 0:17:05.080 --> 0:17:07.760 And then with the increase in rates, hopefully you start 0:17:07.840 --> 0:17:11.520 to see the wage gains moderate, because you just can't 0:17:11.560 --> 0:17:14.640 have five to six per year and your wage grains 0:17:14.720 --> 0:17:16.879 when you want to have a two percent inflation target. 0:17:17.240 --> 0:17:19.680 So if between now and say the autumn, you start 0:17:19.720 --> 0:17:21.959 to see that moderate, then we're going to be okay. 0:17:21.960 --> 0:17:24.200 But that's going to be watching more than anything else, 0:17:24.200 --> 0:17:26.960 those wage figures, and if they don't come down enough, 0:17:27.040 --> 0:17:28.919 then there's going to be the concern the market est 0:17:29.040 --> 0:17:31.119 price and yet for their hikes beyond what we already 0:17:31.119 --> 0:17:34.040 have been. As we do see rates begin to go up, Daniel, 0:17:34.080 --> 0:17:36.600 what is that going to mean for tech stocks? We've 0:17:36.640 --> 0:17:40.120 seen that sector in particular get hit pretty hard as 0:17:40.240 --> 0:17:43.600 the market tries to digest what the rate environment is 0:17:43.640 --> 0:17:48.040 going to mean in the next few months. Yeah, well, easy, come, 0:17:48.160 --> 0:17:50.560 easy go. If you look back at where pees were 0:17:50.640 --> 0:17:54.520 prior to the pandemic around you know, two times we 0:17:54.680 --> 0:17:57.680 peeked at about thirty one times, and you know, anyone 0:17:57.720 --> 0:17:59.560 at the time, hopefully it wasn't trying to say, oh 0:17:59.640 --> 0:18:02.880 that's okay, that's rational. It's different this time. So now 0:18:03.000 --> 0:18:04.959 with the sell off, really just back to where we 0:18:04.960 --> 0:18:07.600 were pre pandemic, and that made me enough, you know, 0:18:07.600 --> 0:18:10.840 whether we naturally get peased honestly cheap levels that would 0:18:10.840 --> 0:18:13.000 certainly be far lower from here. You know, we got 0:18:13.000 --> 0:18:15.560 to remember, if you're at fair valuations now for tech, 0:18:15.640 --> 0:18:17.520 which you know is in and of itself a question, 0:18:17.800 --> 0:18:21.639 but you still should have much stronger earnings growth in 0:18:21.720 --> 0:18:24.119 growth stocks kind of by definition, and're gonna have in 0:18:24.160 --> 0:18:26.720 other parts of the market, and that really should, you know, 0:18:26.880 --> 0:18:30.080 play out enough over time that you you still anticipate 0:18:30.119 --> 0:18:32.240 a positive return. It's just whether or not you want 0:18:32.240 --> 0:18:35.760 to be clever. If you will and anticipate for their 0:18:35.800 --> 0:18:38.520 faults and valuations, you know that is possible. I mean, 0:18:38.560 --> 0:18:40.960 real yields are now back to about zero percent for 0:18:41.080 --> 0:18:44.240 ten year, which is a big move. That's what's driven 0:18:44.280 --> 0:18:47.960 the falling valuations on growth stocks. But you could see 0:18:47.960 --> 0:18:50.240 another fifty basis point right. So, like I said, this 0:18:50.280 --> 0:18:52.960 hasn't played itself out completely yet. In our last thirty 0:18:53.000 --> 0:18:54.800 seconds here, Daniel, what do you make of the surge 0:18:54.800 --> 0:18:57.919 we're seeing in European stocks this morning? Don't? Doesn't You're 0:18:58.040 --> 0:19:00.600 still face a lot of headwinds from the war Ukraine 0:19:00.640 --> 0:19:06.199 and the sensitivity to commodity prices. Absolutely, and you know, 0:19:06.240 --> 0:19:09.320 we had kind of the bounce back a couple of 0:19:09.320 --> 0:19:12.800 weeks ago, which we were skeptical about. We'd be skeptical 0:19:12.800 --> 0:19:14.960 about this one because if we look at the horizon 0:19:15.040 --> 0:19:18.560 from here, yeah, again we just see further headwinds because 0:19:18.880 --> 0:19:21.080 because of the conflict. If you look at our ins provisions, 0:19:21.119 --> 0:19:24.360 they've actually been relatively robust. We don't really believe those 0:19:24.480 --> 0:19:26.560 numbers and they have the thing to keep in mind, 0:19:26.840 --> 0:19:29.320 you know, if in your the euro Zone, you get 0:19:29.359 --> 0:19:30.960 the same type of rage fresh as you're having in 0:19:31.000 --> 0:19:34.280 the US. You know the phenomenon of expectations for rising 0:19:34.280 --> 0:19:36.760 policy rates that's going to translate to Europe and we're 0:19:36.760 --> 0:19:40.119 seeing now in the US with that denst Equities, Thanks Daniel, 0:19:40.119 --> 0:19:42.240 good having you on with us this morning. Daniel Morris, 0:19:42.320 --> 0:19:46.360 chief market strategist at BNP Party BA Asset Management. Right now, 0:19:46.480 --> 0:19:49.119 SMP futures are higher by forty two point, Staff futures 0:19:49.160 --> 0:19:54.359 up two, Nasdaq futures up one nineties six points. Just ahead, 0:19:54.480 --> 0:19:57.560 more on this volatile market and President Biden putting a 0:19:57.560 --> 0:20:01.560 focus on inflation. To stories of the morning just ahead 0:20:01.920 --> 0:20:08.560 on Bloomberg day Break. Bloomberg day Break brought to you 0:20:08.560 --> 0:20:10.560 by the New York Community Trust. Your name will live 0:20:10.600 --> 0:20:12.640 on as a champion of the causes you care about 0:20:12.680 --> 0:20:14.840 for years to come through a charitable bequest to the 0:20:14.880 --> 0:20:18.480 New York Community Trust. To learn more at Philanthropist dot NYC. 0:20:22.119 --> 0:20:26.680 Broadcasting live from the Bloomberg Interactive Broker Studio in New York. 0:20:26.760 --> 0:20:31.440 Bloomberg E Living Freedom to Washington, d C, Bloomberg to Boston, 0:20:31.560 --> 0:20:34.960 Bloomberg one O six one to San Francisco, Bloomberg M 0:20:35.040 --> 0:20:38.080 sixteen to the country, Sirius XM to the one nineteen 0:20:38.240 --> 0:20:41.720 and around the globe, the Bloomberg Business and Bloomberg Radio 0:20:41.840 --> 0:20:51.199 dot Com. This is Bloomberg Daybreak. It's five thirty on 0:20:51.200 --> 0:20:54.280 Wall Street. Good morning. I'm Nathan Hager and I'm Karen Moscow. 0:20:54.320 --> 0:20:56.760 We're just about four hours away from the open of 0:20:56.880 --> 0:20:58.800 US trading. Let's get you up to date on the news. 0:20:58.880 --> 0:21:01.159 You need to know what this show. US futures are 0:21:01.240 --> 0:21:03.840 higher a day after stocks closed at their lowest level 0:21:03.880 --> 0:21:06.760 in over a year. Then ast XL four point three 0:21:06.800 --> 0:21:10.240 percent yesterday and has erased over three trillion dollars since 0:21:10.280 --> 0:21:13.479 the start of April. Dan I've, senior equity analysts at 0:21:13.520 --> 0:21:17.240 wed Bush Securities, believes the Tech heavy index is adjusting 0:21:17.280 --> 0:21:20.639 as we move past the pandemic. Long term, it's healthy, 0:21:20.680 --> 0:21:23.840 it's painful in the near term. You got to separate 0:21:23.880 --> 0:21:28.120 the work from home commerce profit list tact that's down 0:21:28.200 --> 0:21:33.360 se versus RAB views more than high quality stalwarts. Where 0:21:33.359 --> 0:21:38.080 we continue in terms of cloud software cyber security exposed names, 0:21:38.160 --> 0:21:41.240 Dan I've said. Wedbush Security says there could be more 0:21:41.359 --> 0:21:44.720 pain ahead for TAC despite a strong long term outlook 0:21:44.840 --> 0:21:48.600 well overall, Karen, investor sentiment does remain fragile. With inflation 0:21:48.760 --> 0:21:52.120 running hot. The FED is warning of deteriorating liquidity conditions 0:21:52.119 --> 0:21:54.800 across several markets. For more on the central bank, stay 0:21:54.840 --> 0:21:57.720 tuned for an interview with Cleveland FED President Loretta Mester 0:21:57.840 --> 0:22:00.400 that's coming up live at eleven am Wall Street Time 0:22:00.480 --> 0:22:03.680 on Bloomberg Radio and television. Well, Nathan, the pain at 0:22:03.680 --> 0:22:07.199 the pump continues. The average retail price of gasoline hit 0:22:07.200 --> 0:22:10.560