WEBVTT - Bloomberg Daybreak: December 28, 2022 - Hour 2 (Radio) 0:00:01.280 --> 0:00:04.080 Life from the Bloomberg Interact Dave Burger Studios. Is this 0:00:04.160 --> 0:00:08.680 Bloomberg day Break for Wednesday, December two, Coming up the shower. 0:00:08.960 --> 0:00:12.920 The CEO of Southwest Airlines apologizes as the carrier keeps 0:00:12.960 --> 0:00:15.880 canceling flights. The White House will comply with the Supreme 0:00:15.920 --> 0:00:19.239 Court decision to keep coronavirus border controls in place, and 0:00:19.440 --> 0:00:22.920 China's decision to abandoned its COVID zero policy val has 0:00:23.040 --> 0:00:27.440 other countries considering restricting entry. Residents in Buffalo continue to 0:00:27.480 --> 0:00:29.840 dig out from the Blizzard of the Century. Plus new 0:00:29.920 --> 0:00:33.519 details from the January six panel on Rudy Giuliani. I'm 0:00:33.520 --> 0:00:36.920 Michael Barre Ahead, John Stash Howard sports an amazing knife 0:00:36.960 --> 0:00:39.479 for Luke and Donston's he led Dallas to an overtime 0:00:39.520 --> 0:00:42.360 will over the next the Islanders won the Rangers long. 0:00:44.479 --> 0:00:48.040 That's all straining Ahead on Bloomberg day Break on Bloomberg 0:00:48.080 --> 0:00:51.600 Elving Free on New York, Bloomberg ninety nine one, Washington 0:00:51.720 --> 0:00:55.320 d C Bloomberg one oh six one, Boston, Bloomberg nine 0:00:55.360 --> 0:00:59.560 sixties and Francisco Sirius x M one nineteen and around 0:00:59.600 --> 0:01:02.320 the World Old on Bloomberg Radio dot Com and via 0:01:02.400 --> 0:01:09.440 the Bloomberg Business app. And good morning. I'm John Tucker 0:01:09.959 --> 0:01:13.000 and I'm Karen Moscow. US Dock index futures are now 0:01:13.040 --> 0:01:15.280 on the rise this morning. We check the markets all 0:01:15.360 --> 0:01:18.200 day long year on Bloombergs, and P futures are now 0:01:18.240 --> 0:01:20.479 adding to their gains up eight points or two tens 0:01:20.480 --> 0:01:23.160 of up percent. DAL futures have a quarter percent or 0:01:23.200 --> 0:01:26.000 ninety one points and NASDACK futures showing strength up to 0:01:26.080 --> 0:01:29.440 tens of uppercent or eighteen points. The decks in Germany 0:01:29.440 --> 0:01:32.039 as it will change ten. Your treasury up five thirty seconds, 0:01:32.080 --> 0:01:34.400 you know, three point two percent, and the yield on 0:01:34.480 --> 0:01:37.440 the two year four point three percent. John and Karen, 0:01:37.440 --> 0:01:40.800 we're gonna begin with the latest on Southwest travel problems. 0:01:41.120 --> 0:01:44.320 The CEO of the yourline now issuing a public apology, 0:01:44.680 --> 0:01:47.520 Bob Jordan released a video statement and to Southwest once 0:01:47.560 --> 0:01:50.680 again canceled flights across the country. I want everyone who 0:01:50.760 --> 0:01:53.160 is dealing with the problems we've been facing, whether you 0:01:53.280 --> 0:01:55.040 haven't been able to get to where you need to 0:01:55.080 --> 0:01:58.080 go or you're one of our heroic employees caught up 0:01:58.080 --> 0:02:01.440 been a massive effort to stabilize the airline, to know 0:02:01.560 --> 0:02:04.080 is that we're doing everything we can to return to 0:02:04.120 --> 0:02:07.360 a normal operation. Southwest that you know, Bob Jordan's says 0:02:07.400 --> 0:02:09.800 the airline that is optimistic it's going to be back 0:02:09.840 --> 0:02:14.040 on track before next week. Well, John, Southwest is responsible 0:02:14.080 --> 0:02:16.919 for almost three quarters of flight cancelations in the US, 0:02:17.000 --> 0:02:20.639 and that's drawing ire from government officials. Bloomberry. Steve Rappaport 0:02:20.720 --> 0:02:23.480 joins US Live with the details. Steve, good morning, Good morning, 0:02:23.560 --> 0:02:26.119 Karen and John. Southwest and the White House agree on 0:02:26.120 --> 0:02:29.000 one thing, the mass disruptions are unacceptable. But as the 0:02:29.040 --> 0:02:32.760 airline attempts to catch up, Transportation Secretary Peat Boutagage wonders 0:02:32.800 --> 0:02:35.680 why the competition had a much easier time recovering from 0:02:35.760 --> 0:02:38.520 last week's storm. This weather event affected everybody, and we 0:02:38.639 --> 0:02:41.520 understand that you can't control the weather, but there is 0:02:41.560 --> 0:02:45.800 no satisfying explanation for why all of the other airlines 0:02:45.840 --> 0:02:48.960 are recovering and moving in the right direction while Southwest 0:02:49.080 --> 0:02:52.960 is still as we speak, canceling a majority of their flights. 0:02:53.000 --> 0:02:55.359 Today's travel forecast has more of the same. The flight 0:02:55.400 --> 0:02:59.840 tracking site flight Aware shows Southwest with over cancelations. Live 0:03:00.040 --> 0:03:02.480 New York, I'm Steve Rapp Report Bloomberg Daybreak. All right, 0:03:02.520 --> 0:03:05.080 thanks Steve. Another major story we're following this morning. The 0:03:05.080 --> 0:03:07.600 White House says he is going to comply with and 0:03:07.840 --> 0:03:12.079 enforce the Supreme Court's ruling on Title forty two. Bloomberg's 0:03:12.160 --> 0:03:14.919 ad Baxter has more in this report. Title forty two 0:03:14.960 --> 0:03:17.400 is a Trump era control on border immigration. It was 0:03:17.480 --> 0:03:19.480 due to expire when the challenge went all the way 0:03:19.520 --> 0:03:22.200 to the Supreme Court. The court says it will stay 0:03:22.200 --> 0:03:25.359 in effect while that occasion goes forward, potentially into June. 0:03:25.840 --> 0:03:28.760 So the Biden administration now says it will enforce the rule, 0:03:28.800 --> 0:03:32.000 although it says lifting it is way overdue. The White 0:03:32.000 --> 0:03:34.520 House says it will prepare for eventually being able to 0:03:34.560 --> 0:03:37.760 lift the restrictions and in orderly form, even as it 0:03:37.800 --> 0:03:41.280 continues to enforce them. Now in San Francisco, I'm at 0:03:41.280 --> 0:03:43.880 Baxter Bloomberg Daybreak, All right, and thank you all. Some 0:03:43.920 --> 0:03:47.240 more details this morning on Donald Trump's taxes. Bloomberg News 0:03:47.240 --> 0:03:49.720 has learned that years and the former president's tax returns 0:03:49.720 --> 0:03:53.680 will be released Friday. Key identifying information, such as account numbers, 0:03:53.720 --> 0:03:56.200 will be blacked out. The documents will be the first 0:03:56.280 --> 0:03:59.000 complete look at the former president's tax records for the 0:03:59.080 --> 0:04:01.080 years he was running for office and in the White 0:04:01.120 --> 0:04:03.640 House man turning the markets Now, Hong Kong was the 0:04:03.840 --> 0:04:07.720 performer in Asia overnight. More easing of COVID restrictions self 0:04:07.760 --> 0:04:09.680 fuel a gain of one of the half percent on 0:04:09.720 --> 0:04:13.800 the Hanksang Index. Hong Kong is scrapping Levenza public gatherings 0:04:13.800 --> 0:04:17.440 and no longer requiring proof of vaccination for entry into 0:04:17.520 --> 0:04:21.560 some locations. The Hong Kong's easing follows China's decision to 0:04:21.600 --> 0:04:25.160 abandon its COVID zero policy and reopen its borders John 0:04:25.160 --> 0:04:28.440 and it's now prompting a global response. Countries are considering 0:04:28.440 --> 0:04:31.080 whether to test or restrict travelers from China. Have you 0:04:31.120 --> 0:04:34.440 get more from Bloombergy's island one in Shanghai. Japan was 0:04:34.560 --> 0:04:36.680 the first to say that it's going to require a 0:04:36.760 --> 0:04:41.000 negative COVID tests upon o arrival for mainland Chinese residents, 0:04:41.000 --> 0:04:43.520 but the US is also considering new precautions as well. 0:04:44.400 --> 0:04:47.040 This is based on concern about a new variant emerging 0:04:47.040 --> 0:04:50.919 out of China that ever since the Bision announced that 0:04:51.000 --> 0:04:53.960 is the longer going to quarantine arrivals from January eight, 0:04:54.320 --> 0:04:57.280 and that's also going to start issuing passports again. Bloomberg's 0:04:57.279 --> 0:05:00.960 Island One says, US officials are raising questions about transparency 0:05:01.000 --> 0:05:03.520 of China's data on the spread of the virus, and 0:05:03.640 --> 0:05:07.080 back here in the US, futures are mixed too higher 0:05:07.200 --> 0:05:10.719 right now uh for a down day on Walster yesterday. 0:05:10.880 --> 0:05:13.640 SMP five hundred has fallen more than six percent this month, 0:05:13.839 --> 0:05:17.320 almost twenty percent on the year. In Miller Tabak equity 0:05:17.360 --> 0:05:20.400 strategist Matt Maley says the bear market isn't over yet. 0:05:20.920 --> 0:05:23.640 The biggest problem I think that we face is that 0:05:23.720 --> 0:05:27.119 when whenever the market gets to an extremely overvalued level 0:05:27.400 --> 0:05:29.000 like it did at the end of two thousand twenty 0:05:29.040 --> 0:05:33.120 one this time last year, the bear market always lass 0:05:33.160 --> 0:05:35.440 longer than just a year or so. It's usually last 0:05:35.600 --> 0:05:38.000 eighteen months or even a little bit longer. Miller Tabac 0:05:38.040 --> 0:05:41.360 equity strategist Matt Mayley sees the SMP five hundred going 0:05:41.360 --> 0:05:44.960 down to at least thirty well so far this year, 0:05:45.040 --> 0:05:48.400 John Tesla is the third worst performing stock in the 0:05:48.600 --> 0:05:51.440 SMP five hundred and the tailspin and share shows no 0:05:51.560 --> 0:05:54.320 sign of abating anytime soon. Share has fell more than 0:05:54.360 --> 0:05:57.040 eleven percent yesterday, and we get the story from Bloomberg 0:05:57.160 --> 0:05:59.920 Charlie Pellett. So far this year, the stock is down 0:06:00.160 --> 0:06:04.040 sixty nine percent, and with the latest declines that marks 0:06:04.080 --> 0:06:08.000 their longest losing streak since twenty eighteen. As a report 0:06:08.040 --> 0:06:11.119 of a plan to temporarily halt production at its China 0:06:11.200 --> 0:06:16.520 factory rekindled fears about demand risks, Tesla had its seventh 0:06:16.520 --> 0:06:20.200 straight decline and its steepest one day dropped since April. 0:06:20.600 --> 0:06:24.800 The electric vehicle maker's market valuation has shrunk to roughly 0:06:25.040 --> 0:06:29.120 three D forty five billion dollars, below that of Walmart, JP, 0:06:29.279 --> 0:06:33.640 Morgan Chase and in video in New York Charlie Pellett, 0:06:33.720 --> 0:06:37.080 Bloomberg Day Break, Thanks Charlie. Not as hard hit as 0:06:37.120 --> 0:06:39.920 Tessela an Apple starts the trading day at its lowest 0:06:40.000 --> 0:06:44.040 level since June of one. Apple has fallen almost twenty 0:06:44.080 --> 0:06:48.480 seven percent this year on concerns over iPhone production issues, 0:06:49.000 --> 0:06:51.240 and again futures are higher. This morning, S and P 0:06:51.480 --> 0:06:54.120 Future is up about eight points and straight ahead your 0:06:54.160 --> 0:06:57.720 latest local headlines plus a check of sports, and this 0:06:58.160 --> 0:07:05.400 is Bloomberg. Thanks. Karen six said on Wall Street. We 0:07:05.440 --> 0:07:09.240 have thirty four degrees in Central Park. Let's bring in 0:07:09.320 --> 0:07:11.360 Michael barn Now with more on what else is going 0:07:11.400 --> 0:07:14.360 on in New York and around the world. John, thank 0:07:14.400 --> 0:07:17.240 you very much. Officials in New York say state and 0:07:17.400 --> 0:07:20.040 military police were sent to keep people from driving in 0:07:20.120 --> 0:07:24.360 snow choked Buffalo. The Erie County executive says that police 0:07:24.480 --> 0:07:28.720 being positioned at entrances to Buffalo and at major intersections 0:07:28.760 --> 0:07:32.360 to enforce a ban on driving. Buffalo Mayor Byron Brown, 0:07:32.680 --> 0:07:38.040 we have plowed specifically to get people to medical appointments, chemotherapy, 0:07:38.520 --> 0:07:43.840 uh dialysis. We have done welfare checks for senior citizens 0:07:43.840 --> 0:07:47.320 and families with young children. Buffalo Mayor Brown says more 0:07:47.360 --> 0:07:51.160 than thirty people died in the region. The GOP chairman 0:07:51.320 --> 0:07:55.280 in New York Congressman elect George Santos District is talking 0:07:55.440 --> 0:07:58.360 after the Long Island Republican admitted he lied about his 0:07:58.440 --> 0:08:02.880 personal and professional life during his successful campaign. Run. Chairman 0:08:02.960 --> 0:08:06.960 Joseph Cairo said that he was deeply disappointed and Santos 0:08:07.000 --> 0:08:09.520 may have broken the public trust, but says he will 0:08:09.600 --> 0:08:12.640 carry out the public's will when it comes to tax 0:08:12.640 --> 0:08:16.000 relief and public safety. Even if there's an investigation in 0:08:16.000 --> 0:08:18.640 the House. He would take a two thirds majority in 0:08:18.640 --> 0:08:22.760 the Republican led House to expel Santos from office. Meanwhile, 0:08:22.920 --> 0:08:26.920 a new Congress will take power in January. Representative John 0:08:27.040 --> 0:08:29.920 Katko of New York gave his outlook on what to 0:08:30.040 --> 0:08:33.679 expect from the Congress. Well, I think the extremes on 0:08:33.720 --> 0:08:36.160 both sides. I only know how to vote. Now call 0:08:36.200 --> 0:08:39.080 the vote now, hope yes caucus and they vote over 0:08:39.120 --> 0:08:41.520 the hope you pass it for But I think that 0:08:41.559 --> 0:08:43.880 it's gonna hit natural more give and take with the 0:08:43.920 --> 0:08:46.679 moderate wing of the Democratic Party because we're gonna have 0:08:46.720 --> 0:08:49.560 to get things done. Congressman Kantako spoke with the David 0:08:49.600 --> 0:08:53.000 Weston on Bloomberg's balance of power. We're learning more from 0:08:53.000 --> 0:08:57.120 the transcripts of the January sixth panel. The former president's attorney, 0:08:57.160 --> 0:09:01.040 Rudy Giuliani was in daily content act with Donald Trump 0:09:01.240 --> 0:09:05.600 between November five, twenty twenty, and January fifty one, as 0:09:05.679 --> 0:09:08.840 much as ten times a day. That's according to testimony 0:09:08.880 --> 0:09:12.000 by a former New York Police commissioner, Bernard Carrick. Carrick 0:09:12.040 --> 0:09:14.880 had been police commissioner during former New York Mayor Rudy 0:09:14.920 --> 0:09:18.480 Giuliani's second term. Global News twenty four hours a day 0:09:18.559 --> 0:09:21.760 on air and on Bloomberg Quicktake powered by more than 0:09:21.840 --> 0:09:24.520 twenty seven hundred journalists and analysted more than a hundred 0:09:24.520 --> 0:09:28.440 twenty countries. I'm Michael Barr, and this is Bloomberg, John Michael, 0:09:28.440 --> 0:09:35.000 Thank you guys. Coming up on six ten of Wall 0:09:35.000 --> 0:09:37.400 Street tigned out for the Sports Report being brought you 0:09:37.440 --> 0:09:39.959 by a tri state out of dealers, John Stasher and 0:09:40.040 --> 0:09:42.880 has the update, John Dank Morning, John Nicks went down 0:09:42.920 --> 0:09:45.480 to Dallas. They knew they'd have to deal with mav 0:09:45.559 --> 0:09:48.320 star Luca Donsits. They didn't know. Dons within to night 0:09:48.600 --> 0:09:52.240 with the greatest triple double in NBA history, sixty points, 0:09:52.280 --> 0:09:55.680 twenty one rebounds, tennessis and heroics at the end of 0:09:55.720 --> 0:09:57.520 regulation when he went to the free throw line the 0:09:57.559 --> 0:10:00.440 MAVs down to four seconds left. He us the free 0:10:00.440 --> 0:10:03.800 throw on purpose, got the rebounds, scored the tying basket, 0:10:04.200 --> 0:10:07.720 Dallas one, and overtime one. They had trailed by nine 0:10:07.720 --> 0:10:10.560 with thirty seconds left. Nis were shorthanded due to injuries 0:10:10.600 --> 0:10:12.920 of Jalen Brunson and r. J. Barrett. At the Garden, 0:10:13.000 --> 0:10:15.400 Rangers shut out for the second time. Washington won for 0:10:15.559 --> 0:10:18.640 nothing the Ubs Arena. The Islanders beat Pittsburgh five the one. 0:10:18.679 --> 0:10:21.760 Two goals were both Landers Lee and Matthew Barzel. Marquette 0:10:21.800 --> 0:10:24.400 beat Seaton Hall eight three sixty nine, drops the Pirates 0:10:24.400 --> 0:10:26.559 to oh and three in the Big East. Big game 0:10:26.640 --> 0:10:28.880 for the Giants Sunday against the Colts who are again 0:10:28.880 --> 0:10:32.319 gonna start Nick Foles at quarterback. He just threw three interceptions. 0:10:32.320 --> 0:10:35.079 It's the home finale for Brian Bay Bowls team. We 0:10:35.200 --> 0:10:37.640 worked extremely hard each week to to put a good 0:10:37.640 --> 0:10:40.079 product on the field, and um, you know one of 0:10:40.120 --> 0:10:43.719 the reasons is, you know, for our fan base. Um 0:10:43.760 --> 0:10:48.080 so too. You know, play at home, Um in late December, 0:10:48.640 --> 0:10:52.840 an important game. Um, you know, it's it's important to us. 0:10:53.080 --> 0:10:55.320 I know it's important to them, and we'll do everything 0:10:55.360 --> 0:10:57.400 we can do to be ready to go. Yeah. Game, 0:10:57.400 --> 0:11:00.240 Actually not late December, it's January one the Giant when 0:11:00.240 --> 0:11:02.199 they're in the playoff. J. J. Watt will play two 0:11:02.200 --> 0:11:05.520 more games for Arizona and then retire at age thirty three. 0:11:05.880 --> 0:11:08.439 Three time Defensive Player of the Year while with Uston, 0:11:08.520 --> 0:11:10.920 Wat to lock some day for the Pro Football Hall 0:11:10.960 --> 0:11:13.920 of Fame. John Stash Bloomberg Sport John, all right, thanks 0:11:13.920 --> 0:11:17.199 for lunch on and the Sports Report brought you by Audie. 0:11:17.320 --> 0:11:19.480 Don't let someone else drive off on the Audi model. 0:11:19.600 --> 0:11:21.600 You've always wanted to visit your local try and state 0:11:21.640 --> 0:11:24.079 Audie dealer. Get behind the wheel of years today or 0:11:24.200 --> 0:11:29.000 visit Audie Offers dot com for more information. And as 0:11:29.040 --> 0:11:32.400 we look ahead to the open, up today's trading Dow 0:11:32.520 --> 0:11:35.800 futures right now point to a higher open eighty nine 0:11:35.840 --> 0:11:38.640 points higher right now, that is a three tens of percent. 0:11:38.720 --> 0:11:41.679 The smp Emuni futures eight points higher. They're up to 0:11:41.840 --> 0:11:45.040 tens of percent, and then I sa Emuni futures. They've 0:11:45.080 --> 0:11:48.320 been fluctuating between gains and losses all morning long. Right 0:11:48.320 --> 0:11:52.040 now they're up about nineteen points, arise of about two 0:11:52.080 --> 0:11:56.320 tenths of eight percent, and tend your treasury yield three 0:11:56.400 --> 0:12:03.439 eight two. You're listening to Bloomberg day Break live from 0:12:03.600 --> 0:12:06.840 coast to coast, from New York to San Francisco, Boston 0:12:06.920 --> 0:12:10.880 to Washington, d C. Nationwide on Sirius, example of Bloomberg 0:12:10.920 --> 0:12:15.000 Business app and Bloomberg dot Com. This is Bloomberg Daybreak, 0:12:16.160 --> 0:12:18.439 and good morning. I'm John Tucker. It is the final 0:12:18.480 --> 0:12:22.400 week of a dismal year for markets. Global equities have 0:12:22.520 --> 0:12:24.280 lost about a fifth of their value This is the 0:12:24.360 --> 0:12:27.840 largest decline since two thousand and eight on an annualized 0:12:27.840 --> 0:12:31.640 spasis also an index of global bonds that has slumped 0:12:31.760 --> 0:12:36.520 sixteen percent. So now what We're joined by Linda Distll, 0:12:36.720 --> 0:12:41.160 the Federated Herme's senior vice president and senior equity strategist. 0:12:41.240 --> 0:12:43.880 This morning gets you set up for the trading day 0:12:44.440 --> 0:12:49.240 hand the final trading day of two Hey Linda, thanks 0:12:49.240 --> 0:12:50.839 for me weather US appreciate it. At the end of 0:12:50.880 --> 0:12:54.719 the day, it's all about earnings. Is earnings growth adequately 0:12:54.800 --> 0:12:59.160 priced in? As we start the new year? Uh well, Hi, 0:12:59.240 --> 0:13:01.600 good morning, John, and happy new year to you and 0:13:01.640 --> 0:13:05.600 to all your listeners. Pleasure to be on. That's what's 0:13:05.600 --> 0:13:08.760 gonna make it very interesting next year is what is 0:13:08.840 --> 0:13:12.560 going to happen to earnings. They've been going up steadily 0:13:12.840 --> 0:13:17.320 for years. Here consensus thinks that they'll go up again. 0:13:17.360 --> 0:13:19.839 If if it's I's SMP earnings this year is about 0:13:19.840 --> 0:13:24.040 two dollars per share, then the consenus, which has been 0:13:24.080 --> 0:13:28.240 coming down is at last I checked, two hundred thirty 0:13:28.280 --> 0:13:32.000 four dollars. This is very tricky and very tricky then 0:13:32.040 --> 0:13:34.000 to figure out what next year will be like for 0:13:34.040 --> 0:13:38.040 the market, because we had Federated Hermes actually think to 0:13:38.280 --> 0:13:40.520 thirty four is way too high. We think Earnie's will 0:13:40.520 --> 0:13:44.360 go down maybe ten or twelve percent next year, and 0:13:44.440 --> 0:13:49.280 that is definitely not priced into the markets. So we're 0:13:50.000 --> 0:13:53.920 kind of barished going into the new year. Um So 0:13:54.200 --> 0:13:57.040 do you see selling a hand of forst selling, especially 0:13:57.679 --> 0:14:03.960 given some of the margins well selling has been you know, 0:14:04.120 --> 0:14:08.960 has been increasing here in the back piece of this year. Uh. 0:14:09.080 --> 0:14:10.840 Earlier this month, I think we dine. I think we 0:14:10.840 --> 0:14:13.600 were done like nine percent from fort We were at 0:14:13.600 --> 0:14:17.160 forty not that long ago. Uh, and so we had 0:14:17.559 --> 0:14:20.960 a nice pullback. It's in a short term basis. You 0:14:20.960 --> 0:14:23.280 could still get that Santa Claus rally. Santa Claus could 0:14:23.320 --> 0:14:27.400 still come even if he comes after the new year hits, 0:14:28.200 --> 0:14:31.040 because you've pulled back so much. In fact, the S 0:14:31.080 --> 0:14:32.840 and P for the quarter looks like it's going to 0:14:32.880 --> 0:14:36.920 be the second best quartersince n So basically all kinds 0:14:36.960 --> 0:14:40.760 of cross currents going on, and why we haven't had 0:14:41.280 --> 0:14:44.400 that pick up already for the Santa Cross the rally 0:14:44.440 --> 0:14:47.840 may have something to do with tax loss harvesting, which 0:14:47.880 --> 0:14:50.880 is kind of the silver lining that we're telling our clients, 0:14:50.920 --> 0:14:53.680 you know, might as well. Do it's been horrible year. 0:14:53.720 --> 0:14:57.440 Just as you said on introduction, just about everywhere you 0:14:57.480 --> 0:15:00.440 went to, no place to hide. That can get some 0:15:00.480 --> 0:15:03.320 things out of the way. So maybe then our Santa 0:15:03.320 --> 0:15:06.200 Claster rally comes at the very beginning of the year. Yeah, 0:15:06.200 --> 0:15:08.040 if history is any guide, I'd look at some of 0:15:08.040 --> 0:15:10.800 the data from cf R A there's a pretty good 0:15:10.840 --> 0:15:13.000 chance there will be one. Um. Let me ask you 0:15:13.040 --> 0:15:17.000 about the recession signals. How strong are they at this 0:15:17.080 --> 0:15:19.360 point and what are the imply in terms of how 0:15:19.520 --> 0:15:22.240 long and how deep any recession is going to be. 0:15:24.160 --> 0:15:28.360 Uh Yeah, another another interesting question about next year and 0:15:28.600 --> 0:15:34.640 what will unfold. Definitely, the the leading economic indicators in 0:15:34.680 --> 0:15:37.880 the US, it's one of the very best metrics to 0:15:37.920 --> 0:15:40.560 look at to say what's going to happen with with 0:15:40.640 --> 0:15:43.840 the economy, and they're pointing down. They've been right pretty much. 0:15:44.360 --> 0:15:47.280 You know, every time I recycled over the years, they 0:15:47.360 --> 0:15:51.520 do point to an economic recession. But markets, we have 0:15:51.600 --> 0:15:57.280 to remember our forecasting mechanisms and of CEO believe there's 0:15:57.280 --> 0:16:01.680 a recession coming in. For much of people in our 0:16:01.720 --> 0:16:05.200 business belief there's a recession. So that's why we have 0:16:05.280 --> 0:16:10.080 to start asking ourselves what is priced in and the 0:16:10.200 --> 0:16:13.320 earnings maybe are not priced in yet. Maybe there is 0:16:13.360 --> 0:16:17.960 some downside, but it's not about probably whether there'll be 0:16:18.000 --> 0:16:21.360 a recession, but how difficult will it be. And we 0:16:21.480 --> 0:16:25.800 think it's going to be a mild economic recession, only bad, 0:16:25.880 --> 0:16:27.600 you know if you're the one is losing your job. 0:16:27.640 --> 0:16:31.600 But the job market is so very strong. And I 0:16:31.680 --> 0:16:34.960 think that's something we need to remember into this recession 0:16:35.720 --> 0:16:40.360 is the balance sheets of both businesses and consumers are 0:16:40.440 --> 0:16:44.200 really quite strong. If we're heading into an economic recession, 0:16:44.880 --> 0:16:48.960 that should make it milder, uh for you, for both 0:16:49.000 --> 0:16:52.560 sides of our economy. As a stock market investor, I'm 0:16:52.600 --> 0:16:57.440 worried about the earnings of corporate America. If interest rates 0:16:57.440 --> 0:17:01.560 have been going up steadily, which they have done year well, 0:17:01.600 --> 0:17:04.800 I have to bear in mind that cash on corporate 0:17:04.840 --> 0:17:08.240 balance sheets is really high, and if debt is a 0:17:08.359 --> 0:17:11.840 record highs on corporate balance sheets, their ability to service 0:17:11.920 --> 0:17:15.800 that debt is also near a record high. Because they 0:17:15.800 --> 0:17:19.960 were piling on debt at generational low interest rate. They 0:17:20.000 --> 0:17:23.359 don't care if the interest rates are going up. If 0:17:23.400 --> 0:17:27.760 they have debt that's termed out for basically six to 0:17:27.880 --> 0:17:32.600 eight years, and of the debt and large gap companies 0:17:32.720 --> 0:17:37.439 is fixed, so it should be mild for this reason. Linda, 0:17:37.720 --> 0:17:40.359 thanks all, I appreciate it. You'll be back Linda Distel, 0:17:40.520 --> 0:17:45.199 senior aquity strategist at Federated Hermes, and we'll continue our conversation. 0:17:45.240 --> 0:17:48.560 At just a moment. It is five eighteen of Wall Street. 0:17:48.600 --> 0:17:50.480 Just to hand on Bloomberg Daberg, We're gonna check out 0:17:50.520 --> 0:17:54.520 the markets, bringing the latest news of business, economics and finance. 0:17:54.560 --> 0:18:03.240 I'm John Sucker. You're listening to Boomberg Daybreak, markets headlines 0:18:03.280 --> 0:18:06.280 and breaking news twenty four hours a day at Bloomberg 0:18:06.320 --> 0:18:10.400 dot Com, the Bloomberg Business at and at Bloomberg Victap's 0:18:10.440 --> 0:18:19.640 a Bloomberg Business Flash, and I'm Karen Moscow. Any West 0:18:19.640 --> 0:18:23.119 Dot Index futures are higher this morning as news of 0:18:23.200 --> 0:18:27.040 further moves by China to reopen his economy lifts investors 0:18:27.040 --> 0:18:29.520 sentiment in the final week of a dismal year from markets. 0:18:29.520 --> 0:18:31.600 We checked the markets all day long here on Bloomberg. 0:18:31.720 --> 0:18:34.160 U S and P futures up six points, are about 0:18:34.160 --> 0:18:36.680 two tenths of uppercent. OUR futures up seventy three points, 0:18:36.720 --> 0:18:39.120 or two tenths of uppercent and nastack futures up ten 0:18:39.160 --> 0:18:41.320 points or a tenth of uppercent, and a ten year 0:18:41.359 --> 0:18:43.640 treasury of three thirty seconds. You have three point eight 0:18:43.640 --> 0:18:46.480 two percent, and that's a Bloomberg business flash. Now here's 0:18:46.520 --> 0:18:48.919 Michael Barr with more on what's going on around the world. 0:18:49.000 --> 0:18:52.320 Michael Karen. The Supreme Court is keeping pandemic air limits 0:18:52.320 --> 0:18:55.080 on people seeking asylum in place for now. The courts 0:18:55.080 --> 0:18:58.159 set a February timeline for an arguments in the title 0:18:58.200 --> 0:19:02.119 forty two case. Southwest CEO says he is optimistic the 0:19:02.119 --> 0:19:05.240 airline will be back on track before next week after 0:19:05.280 --> 0:19:07.680 it had to cancel thousands of flights because of the 0:19:07.680 --> 0:19:11.880 winter storm. The Vaticans has retired. Pope Benedict's health is worsening. 0:19:11.960 --> 0:19:14.600 The Vatican says Pope Frances went to see him. In 0:19:14.640 --> 0:19:17.520 the NBA, the next lost in overtime the Celtics Wizards 0:19:17.520 --> 0:19:20.919 and Warriors one. In the NHL, the Islanders won, the 0:19:21.000 --> 0:19:23.760 Capitals beat the Rangers for zip. The Bruins lost in 0:19:23.800 --> 0:19:26.919 the shootout. Global News twenty four hours a day on 0:19:27.040 --> 0:19:29.920 air and on Bloomberg Quick Take, powered by more than 0:19:30.000 --> 0:19:32.480 twenty seven under journalists and analysts, more than a hundred 0:19:32.520 --> 0:19:35.960 twenty countries. Michael Barb, this is Bloomberg. Jump all right, Michael, 0:19:35.960 --> 0:19:37.920 thank you very much. It is now six twenty three 0:19:37.920 --> 0:19:42.080 on Wall Streets. This is Bloomberg Daybreak. Let's continue our 0:19:42.240 --> 0:19:46.240 discussion this morning with Linda Disol Federated Herme's senior vice president, 0:19:46.280 --> 0:19:49.840 senior equity strategists looking at futures right now, they're in 0:19:49.960 --> 0:19:53.200 the green. Linda, can I ask you how close are 0:19:53.200 --> 0:19:56.359 we to a FED pivot and what factors are you 0:19:56.440 --> 0:20:01.520 looking at to make that decision? Uh, we don't think 0:20:01.560 --> 0:20:03.880 we're at all close to a FED pivot. I think 0:20:03.880 --> 0:20:05.960 that's what's one thing that's gonna be very key next 0:20:06.080 --> 0:20:10.679 year is um You know, we all understand that inflation 0:20:10.760 --> 0:20:13.160 has peaked and it's probably gonna come down hard next year. 0:20:13.480 --> 0:20:16.199 But where we had Federated her we disagree with consensus 0:20:16.280 --> 0:20:18.960 is well is it going to fall to? And that 0:20:19.000 --> 0:20:22.720 has everything to do with the FED pivot. It's consensus 0:20:22.800 --> 0:20:25.520 is the core pc I, c p E, whatever you 0:20:25.720 --> 0:20:29.520 wish goes to two percent and change. We're at the 0:20:29.600 --> 0:20:35.320 high threes by year end. We think inflation is going 0:20:35.359 --> 0:20:39.800 to be stubborn and therefore no pivot next year they're 0:20:39.800 --> 0:20:43.800 going to stay stay at a very high rate relative 0:20:43.880 --> 0:20:46.760 to what we've been used to five all year long. 0:20:46.840 --> 0:20:48.920 We're it's going to take us a while to realize 0:20:48.920 --> 0:20:53.600 that and get used to that, and so um, yeah, 0:20:53.600 --> 0:20:56.280 it's I wouldn't I wouldn't count on that for next year, 0:20:56.280 --> 0:20:58.080 which is one reason why we have pretty much a 0:20:58.080 --> 0:21:00.679 flattish year in the market. Next year. You're gonna have 0:21:00.720 --> 0:21:04.080 to really pick your spot and investing next year. Well, 0:21:04.119 --> 0:21:06.280 it leads me to my next question. I'll put you 0:21:06.320 --> 0:21:08.280 on the spot. What do you see at the end 0:21:08.320 --> 0:21:10.280 of the year for the SMP five D next year? 0:21:10.520 --> 0:21:13.600 That's a tough call, and maybe for a race as well, 0:21:13.680 --> 0:21:18.760 with the the tenure yield. Yeah, it is a tough call. 0:21:18.800 --> 0:21:20.639 It's gonna be tough all year to try to figure 0:21:20.640 --> 0:21:24.280 out where the earnings if I if I see earnings 0:21:24.320 --> 0:21:28.800 down ten that is actually is not much compared to average. 0:21:28.800 --> 0:21:32.040 Recessions may be done twenty or even on earnings. The 0:21:32.080 --> 0:21:35.960 ps been priced to earnings. Racier has been hit fairly significantly. 0:21:36.359 --> 0:21:39.840 If I give myself, you know, a high teams multiple, 0:21:40.320 --> 0:21:44.800 I'm looking at four thousand SMP for next year. We 0:21:44.840 --> 0:21:47.200 had thirty nine for this year and for months, and 0:21:47.240 --> 0:21:49.280 looks like we're going to come in close to that. 0:21:49.280 --> 0:21:53.320 That is a flat year pretty much basically. But underneath 0:21:53.320 --> 0:21:56.080 the surface, you're gonna want to look for fat pitches. 0:21:56.480 --> 0:21:59.919 I find bonds have the yields now creeping up again, 0:22:00.359 --> 0:22:03.879 up towards four percent level. Bonds punished as we all 0:22:03.920 --> 0:22:06.120 know very badly. This year could be a very interesting 0:22:06.240 --> 0:22:09.480 year for bonds as we really settle into the notion 0:22:09.560 --> 0:22:12.399 that this is going to last longer than what we 0:22:12.440 --> 0:22:15.879 would all like in terms of the higher rates of inflation, 0:22:16.480 --> 0:22:22.400 slower growth, slower economic earnings, economic growth, earnings growth. You'll 0:22:22.400 --> 0:22:25.679 get some yield on the long end. Stuff front end 0:22:25.680 --> 0:22:27.640 will keep it, keep you in a good yield position, 0:22:28.160 --> 0:22:31.320 and then look for those pockets of value where you're 0:22:31.320 --> 0:22:34.359 really getting some excellent what I like to call fat 0:22:34.359 --> 0:22:39.199 pitches next year. Areas like home builders, banks, medals, and 0:22:39.480 --> 0:22:43.120 energy still looking really really good to us throughout next year, 0:22:43.160 --> 0:22:46.480 but you can have to pick your spot. Yeah, what 0:22:46.600 --> 0:22:50.640 about the commodities, Gold as as a hedge with respect 0:22:50.640 --> 0:22:54.720