WEBVTT - Bloomberg Daybreak: August 16, 2022 - Hour 2 (Radio) 0:00:03.040 --> 0:00:05.680 My from the Bloomberg and Directed Brooker Studios. This is 0:00:05.760 --> 0:00:09.680 Bloomberg Daybreak for a Tuesday, August sixteen two coming up. 0:00:09.720 --> 0:00:13.480 The shower stocks begin the day at three month highs apples. 0:00:13.520 --> 0:00:16.200 That's another date for workers to return to the office. 0:00:16.200 --> 0:00:19.720 It's primary day with key racist involving Liz Channion Wyoming 0:00:19.760 --> 0:00:22.119 and Sarah Palin in Alaska. And the d o J 0:00:22.239 --> 0:00:24.880 opposes the release of an affidavit in the search of 0:00:24.920 --> 0:00:28.440 Donald Trump's home. Stabbing issues cause headaches at New York 0:00:28.440 --> 0:00:32.040 City airports. Plus former Trump attorney Rudy Giuliani is the 0:00:32.080 --> 0:00:35.800 target of a criminal pro on Michael barn More, I'm 0:00:35.840 --> 0:00:38.320 trying statshout at sports Rock Night for New York baseball. 0:00:38.360 --> 0:00:40.479 The Yankees were shut out again. The Mets lost in 0:00:40.520 --> 0:00:45.800 Atlanta thirteen to one. That's all s. Trady ahead on 0:00:45.920 --> 0:00:49.280 Bloomberg day Break on Bloomberg eleven three on New York, 0:00:49.479 --> 0:00:54.120 Bloomberg one, Washington, d C. Bloomberg one oh six one, Boston, 0:00:54.440 --> 0:00:59.160 Bloomberg nine sixty, San Francisco, Syrius Exam one nineteen and 0:00:59.240 --> 0:01:02.319 around the world down Bloomberg Radio dot Com and via 0:01:02.400 --> 0:01:09.160 the Bloomberg Business app. Good morning, I'm John Tucker and 0:01:09.200 --> 0:01:12.399 I'm Karen Moscow and US dock index futures are lower 0:01:12.480 --> 0:01:14.399 this morning. We're coming up to six oh one on 0:01:14.440 --> 0:01:16.640 Wall Street, and we check the markets every fifteen minutes 0:01:16.640 --> 0:01:19.440 throughout the trading day. On bloomberg S and P Future 0:01:19.480 --> 0:01:22.119 is down about eight points down. Future is down thirty 0:01:22.120 --> 0:01:25.000 four and NASDACK futures down twenty eight. The decks in 0:01:25.040 --> 0:01:27.759 Germany is up six tenths of a percent. Penn your 0:01:27.800 --> 0:01:30.200 treasury down three thirty seconds. You have two point eight 0:01:30.319 --> 0:01:32.720 zero percent. They yield on the two year three point 0:01:32.760 --> 0:01:35.840 two zero percent. Night Max Screwed oil is down about 0:01:35.840 --> 0:01:38.279 half percent, or forty seven cents at eighty eight dollars 0:01:38.840 --> 0:01:41.440 cents a barrel call. Make School down four ten percent 0:01:41.520 --> 0:01:44.680 or seven dollars twenty cents at seventeen ninety ninety announced 0:01:45.000 --> 0:01:47.640 and Bitcoin and this morning is that will change at 0:01:47.640 --> 0:01:50.760 twenty four thousand, eighty dollars. John and Karen, we begin 0:01:50.840 --> 0:01:53.520 today's session with US docks at a three month high. 0:01:54.000 --> 0:01:57.600 The s game for four straight weeks. It's the longest 0:01:57.680 --> 0:02:01.000 winning streak this year. Hex Smith is two investment officer 0:02:01.280 --> 0:02:04.920 at Haverford Trust. Now I think it's anticipating that we 0:02:05.000 --> 0:02:10.280 are beyond peak inflation um and that a lot of factors, 0:02:10.639 --> 0:02:15.840 including the federal reserves policy, is starting to unwind inflation 0:02:16.440 --> 0:02:21.359 and and perhaps perhaps the said might get lucky and 0:02:21.560 --> 0:02:25.240 engineer is somewhat soft landing for a trust. Hank Smith 0:02:25.320 --> 0:02:27.799 says the next batch of retail earnings could be key 0:02:27.960 --> 0:02:30.840 for the markets, and John, we start to hear from 0:02:30.919 --> 0:02:34.160 some of those retailers today right now this morning, home 0:02:34.240 --> 0:02:38.600 Depot reporting second quarter comparable sales that beat analysts estimates. 0:02:38.680 --> 0:02:41.880 Those earnings are just crossing the Bloomberg Walmart reports in 0:02:41.960 --> 0:02:43.600 less than an hour from now, and we get a 0:02:43.680 --> 0:02:47.359 preview from Bloomberg's Jeff Bellinger. The giant retailer issued a 0:02:47.400 --> 0:02:49.720 business update less than a month ago in which it 0:02:49.840 --> 0:02:53.920 lowered its profit outlook, so Bloomberg Intelligence says today's really 0:02:54.040 --> 0:02:58.320 should hold few surprises. Inflation has been a significant headwind 0:02:58.440 --> 0:03:01.560 for Walmart, causing customer mers to spend more on food 0:03:01.680 --> 0:03:05.440 and less on discretionary items. The I says a sales 0:03:05.520 --> 0:03:08.320 event in June may have helped to reduce some inventory, 0:03:08.760 --> 0:03:12.160 but Walmart will likely need further markdowns to move over 0:03:12.280 --> 0:03:15.920 stocks of clothing. Jeff Bullinger bloom Bird day Break. All right, 0:03:15.960 --> 0:03:18.200 thanks Jeff on Wall Street. We're learning what some of 0:03:18.240 --> 0:03:21.720 the world's biggest money managers are doing with their stock portfolios. 0:03:22.160 --> 0:03:24.960 Let's get the latest live from Bloomberg's Nita Young. Good 0:03:25.000 --> 0:03:28.120 morning Nita, Good morning John. During the latest quarter, Stanley 0:03:28.200 --> 0:03:32.520 Drucon Miller's family office offloaded Big Tech, selling its entire 0:03:32.600 --> 0:03:36.920 one million dollar position in Amazon and scaling back as 0:03:36.920 --> 0:03:40.840 steak in Microsoft. Sorel's fund Management boosted its steaks in 0:03:40.920 --> 0:03:46.320 Amazon Salesforce and Alphabet. Berkshire Hathaway eliminated a Verizon steak 0:03:46.640 --> 0:03:51.160 and boosted other bets, including Occidental Petroleum, increasing its investment 0:03:51.280 --> 0:03:53.920 there more than it did in any other firm. But 0:03:54.000 --> 0:03:58.080 Apple remains Berkshire's largest holding, and Michael Berry's Scion Asset 0:03:58.200 --> 0:04:02.680 Management exited all equity positions except one it added, private 0:04:02.760 --> 0:04:06.800 prison operator Geo Group, Scion's only stockholding as of the 0:04:06.920 --> 0:04:09.440 end of June. Live in New York. I'm really need 0:04:09.480 --> 0:04:11.800 a Young. Bloomberg Daybreak, all really need to thank you 0:04:12.000 --> 0:04:14.880 Apple making news this morning. Bloomberg News has learned the 0:04:14.960 --> 0:04:18.159 company has laid off many of its contract based recruiters 0:04:18.200 --> 0:04:19.960 in the past week. It's part of a push to 0:04:20.080 --> 0:04:23.000 rain and the tank giants hiring and spending. And in 0:04:23.120 --> 0:04:26.320 another development, Apple has set a September fifth deadline for 0:04:26.440 --> 0:04:29.279 corporate employees to be in the office at least three 0:04:29.360 --> 0:04:32.840 days a week. COVID spikes disrupted Apple's previous attempts to 0:04:32.880 --> 0:04:35.240 have workers back in the office. And let's turn to 0:04:35.360 --> 0:04:39.000 politics now, where it's primary day in Wyoming and Alaska 0:04:39.480 --> 0:04:42.880 Representative Liz Cheney bracing for a loss, while former vice 0:04:42.960 --> 0:04:46.640 presidential candidate Sarah Palin looks at stage of political comeback 0:04:46.760 --> 0:04:51.440 and Bloomberg's Amy Morris has more from oursroom. In Washington, 0:04:52.000 --> 0:04:55.159 Cheney is all but certain to lose to challenger Harriet Hageman, 0:04:55.200 --> 0:04:58.039 who has former President Trump support and leads by nearly 0:04:58.080 --> 0:05:01.000 thirty percentage points in the polls. Like Cheney, supporters say 0:05:01.080 --> 0:05:04.839 she's already charting a rebound. In Alaska, former Governor Sarah 0:05:04.880 --> 0:05:07.120 Palin is trying for a comeback in the open race 0:05:07.200 --> 0:05:10.040 for the state's sole seat in Congress. Her critics say 0:05:10.120 --> 0:05:12.400 she's been more visible on right wing TV in the 0:05:12.440 --> 0:05:14.720 Lower forty eight than in her own home state, but 0:05:14.920 --> 0:05:18.960 she has Trump's endorsement. Also in Alaska, Senator Lisa Murkowski 0:05:19.120 --> 0:05:22.080 is in a re election fight against Trump supported candidate 0:05:22.200 --> 0:05:26.320 Kelly Shabaka in Washington. I'm maybe Morris Bloomberg Daybreak right, Amy, 0:05:26.360 --> 0:05:28.640 thank you, but we also have news about Donald Trump's 0:05:28.680 --> 0:05:30.640 battle with a Justice to Herman. The d o J 0:05:30.960 --> 0:05:34.160 says it's against the release of an affidavit justifying a 0:05:34.279 --> 0:05:37.440 search warrant for documents that the former president's Florida home. 0:05:37.880 --> 0:05:41.480 The search warrant itself has been released, but the Justice 0:05:41.520 --> 0:05:46.240 Department says the affidavit includes sensitive information about the investigation. St. 0:05:46.320 --> 0:05:49.760 John's University law professor John Barrett says it's a standard 0:05:49.839 --> 0:05:52.480 move by the d o J. It's the details of 0:05:53.160 --> 0:05:57.600 what surveillance information, what inform and information, what prior course 0:05:57.680 --> 0:06:00.960 and dealings led the government to believe that there were 0:06:01.240 --> 0:06:05.919 classified documents in mar Laga, m That's all highly confidential 0:06:06.120 --> 0:06:09.880 and actively part of an investigation. St. John's University law 0:06:09.920 --> 0:06:12.600 professor John Barrett was a guest on Bloomberg's Sound on 0:06:12.800 --> 0:06:15.720 Catch the program weekdays at Philli PM Eastern on Bloomberg 0:06:15.839 --> 0:06:20.039 Radio and Geopolitics. Also in focus this morning, China says 0:06:20.240 --> 0:06:22.960 it's going to fight back against the latest congressional visit 0:06:23.040 --> 0:06:26.440 to Taiwan. Let's get more from Bloomberg's and Baxter. It 0:06:26.560 --> 0:06:29.280 says it will increase patrols both air and see to 0:06:29.360 --> 0:06:33.240 provide a resolute response. In an exclusive interview with Bloomberg 0:06:33.360 --> 0:06:37.000 editor in chief John Mickelswaite, Singapore Deputy Prime Minister Lawrence 0:06:37.000 --> 0:06:41.640 Wang says China and the US mistakenly could sleepwalk into 0:06:41.680 --> 0:06:46.160 a conflict. We are starting to see a series of 0:06:46.279 --> 0:06:49.680 decisions being taken by both countries that will lead us 0:06:49.800 --> 0:06:53.800 into more and more dangerous territory. Wang says neither side 0:06:54.000 --> 0:06:57.920 wants open conflict, but it's very concerned a mistake could 0:06:58.000 --> 0:07:01.520 happen in San Francisco. I'm at Baxter Bloomberg Gay break 0:07:01.680 --> 0:07:03.600 all right, and thank you for watching shares of Home 0:07:03.640 --> 0:07:06.200 Depot this morning up nine tenths of a percent and 0:07:06.279 --> 0:07:09.680 early trading after its earnings crossed the Bloomberg and reported 0:07:09.760 --> 0:07:13.600 second quarter comps, sales that beat analysts estimates, and straight 0:07:13.640 --> 0:07:16.440 to hand your latest local headlines plus the check of sports, 0:07:16.560 --> 0:07:24.360 and this is Bloomberg. Thanks Karen six O seven on 0:07:24.440 --> 0:07:26.840 Wall Street tend to bring in Michael Barr to find 0:07:26.880 --> 0:07:28.680 out what else is going on in New York and 0:07:29.240 --> 0:07:31.520 around the world. Chah, thank you very much, sir. It 0:07:31.720 --> 0:07:35.040 is back to normal this morning. But yesterday travelers that 0:07:35.200 --> 0:07:38.080 New York City area airports were sold by the f 0:07:38.320 --> 0:07:42.240 a A to expect delays because of airline staffing shortages. 0:07:42.640 --> 0:07:45.720 Staffing at a facility that manages the airspace for all 0:07:45.800 --> 0:07:48.760 three major New York airports is said to be the problem. 0:07:49.320 --> 0:07:51.640 The f a A leader tweeted that the problem had 0:07:51.720 --> 0:07:54.360 been solved, but not soon enough for these people. They 0:07:54.400 --> 0:07:57.960 were grounded. Maybe we'll start driving, Maybe that'll be better. 0:07:58.560 --> 0:08:02.280 Maybe we'll see. With the industry struggling with pent up 0:08:02.400 --> 0:08:07.360 demand for travel and a system that's understaff, post COVID airports, 0:08:07.440 --> 0:08:10.120 blame the airlines, and the airlines blame the f a A. 0:08:10.920 --> 0:08:14.240 Prosecutors in Atlanta have told Rudy Giuliani's lawyers that he 0:08:14.480 --> 0:08:17.680 is a target of their criminal investigation in the possible 0:08:17.680 --> 0:08:21.120 illegal attempts by then President Donald Trump and others to 0:08:21.280 --> 0:08:25.600 interfere in the general election in Georgia. Giuliani says, you 0:08:25.680 --> 0:08:28.680 do this to a lawyer, we don't have America anymore. 0:08:29.440 --> 0:08:32.920 Russia and Ukraine blame each other for the renewed shelling 0:08:33.320 --> 0:08:37.040 near a nuclear power plant in western Ukraine. State Department 0:08:37.120 --> 0:08:40.400 spokesperson Ned Price says the US is closely monitoring the 0:08:40.480 --> 0:08:43.400 activity at the plant. We believe that the fighting there 0:08:44.080 --> 0:08:48.320 is dangerous, it's irresponsible, and we do continue to urge 0:08:48.600 --> 0:08:53.319 into all military operations out of near Ukraine facilities in 0:08:53.400 --> 0:08:57.200 the return of full control of those facilities. Ukraine State 0:08:57.240 --> 0:09:01.599 Department spokesperson Ned Price. Ukrainian President voladimir's Lensky renewed his 0:09:01.720 --> 0:09:05.880 call for fresh sanctions against Moscow. The efforts continue to 0:09:05.920 --> 0:09:08.559 bring w n B A star Britney Grinder and fellow 0:09:08.600 --> 0:09:12.559 American detainee Paul Wheeland back from Prussia. Grinder's attorneys have 0:09:12.720 --> 0:09:15.960 filed an appeal who was recently sentenced to nine years 0:09:16.000 --> 0:09:19.439 in prison in Russia. Bill Richardson, who has worked in 0:09:19.520 --> 0:09:23.280 hostage negotiations through his position at the Richardson Center for 0:09:23.360 --> 0:09:27.120 Global Engagement, says he has talked to both sides. It 0:09:27.320 --> 0:09:32.800 basically says the legal process is over except for the appeal, 0:09:32.920 --> 0:09:36.280 and it's reasonable to have this appeal nine years sentence 0:09:36.360 --> 0:09:40.199 in a penal Connolly now there can be negotiations between 0:09:40.559 --> 0:09:44.360 the United States and Russia. Bill Richardson believes Grinder's legal 0:09:44.480 --> 0:09:47.599 team has been effective global news twenty four hours a 0:09:47.679 --> 0:09:50.560 day on air and on Bloomberg Quick Take power by 0:09:50.600 --> 0:09:54.199 more than journalists analysts more than a hundred, twenty countries. 0:09:54.559 --> 0:10:00.559 Michael Barr, this is Bloomberg, John, Michael, thank you. It's 0:10:00.559 --> 0:10:02.559 not sixteen out of Wall Street. Best time for the 0:10:02.679 --> 0:10:05.720 Rubert Sports Up, johns Seth Show. All right, John's more 0:10:05.720 --> 0:10:08.240 than just a little slump down for the Yankees eleven 0:10:08.360 --> 0:10:10.719 and twenty one over their last thirty two games to 0:10:10.880 --> 0:10:13.560 and ten in their last twelve. Shout out four times, 0:10:13.640 --> 0:10:16.720 including Sunday night in Boston and again last night at 0:10:16.760 --> 0:10:19.400 the Stadium Tampa Bay. Who's five pitchers and one four nothing, 0:10:19.720 --> 0:10:22.360 took advantage of an Aaron Hicks misplay and center field 0:10:22.400 --> 0:10:24.880 to score one run, then scored three more with two 0:10:24.920 --> 0:10:27.040 outs of the ninth inning. Things look bleak, and yet 0:10:27.080 --> 0:10:30.600 Aaron Boone. Ever, the optimists, sure there's some good things happening. 0:10:30.679 --> 0:10:33.439 Our starters continue to really throw the ball well. A 0:10:33.520 --> 0:10:35.800 number of guys out of the pen um, you know, 0:10:35.880 --> 0:10:39.719 even though louse struggle tonight, are are throwing the ball. Well. Um, 0:10:39.960 --> 0:10:42.400 we just gotta get some guys on tracked offensively right 0:10:42.440 --> 0:10:45.960 now and and get guys that should be key contributors 0:10:46.000 --> 0:10:48.280 contributing like they're capable of. Hicks has been a real 0:10:48.360 --> 0:10:50.640 problem five for his last fifty three Yanks had one 0:10:50.640 --> 0:10:53.200 scoring is right. Last night, bases loaded fourth inning, Hicks 0:10:53.640 --> 0:10:56.000 hit into an inning ending double play. The Mets was 0:10:56.080 --> 0:10:59.240 lopside and loss of the season thirteen to one. In Atlanta, 0:10:59.280 --> 0:11:01.079 the Braves at three home runs, the top two in 0:11:01.080 --> 0:11:03.880 their order, Ronald Kuna and Dance Preas wants and combined 0:11:03.960 --> 0:11:06.319 for six hits six rb I seventh trade win for 0:11:06.400 --> 0:11:08.600 Atlanta backed within four and a half of the mets 0:11:08.920 --> 0:11:11.000 eighty win of the year for the Dodgers, they won 0:11:11.080 --> 0:11:14.079 thirteen and fourteen. That's after learning the Walker Bueller, who 0:11:14.200 --> 0:11:16.439 was fourth in the Cy Young voting last years, having 0:11:16.559 --> 0:11:20.840 season ending elbow surgery. Texas Rangers fired their manager, Chris Woodward. 0:11:21.000 --> 0:11:23.199 Rangers having a rough year after spending a lot in 0:11:23.280 --> 0:11:26.400 the off season. Tiger Woods will meet today without twenty 0:11:26.440 --> 0:11:28.920 members of the PG eight tour. I pepped off on 0:11:29.000 --> 0:11:31.000 how to make the tour better and fight off the 0:11:31.120 --> 0:11:33.840 challenge from the new Live Tour. Pete Carill has died 0:11:33.880 --> 0:11:36.200 at ninety two. The Hall of fame basketball coach at 0:11:36.280 --> 0:11:40.319 Princeton for twenty nine years. He won thirteen IVY League championships. 0:11:40.400 --> 0:11:43.560 John Stashward, Bloomberg Sports. John, all right, thanks John, hand 0:11:43.600 --> 0:11:45.840 ahead of the cashow on Wall Street. We're looking at 0:11:45.880 --> 0:11:49.040 futures right now, even the red the down, futures down 0:11:49.120 --> 0:11:53.160 thirty two points, spe Mini futures eight point slower. And 0:11:53.320 --> 0:11:56.240 then I say futures right now they are down thirty 0:11:56.320 --> 0:11:58.679 three points. Not make screwed down forty two sons of 0:11:58.760 --> 0:12:03.240 barrel at eighty eight nine. You're listening to Bloomberg Daybreak 0:12:06.880 --> 0:12:11.319 and just ahead, well preview earnings from Walmart breakdown some 0:12:11.440 --> 0:12:14.920 of the other retailers reporting today. We'll speak with John 0:12:15.080 --> 0:12:23.160 Edwards of Bloomberg News. You're listening to Daybreak, markets, headlines 0:12:23.240 --> 0:12:26.199 and breaking news twenty four hours a day at Bloomberg 0:12:26.280 --> 0:12:29.679 dot Com, the Bloomberg Business at and at Bloomberg Quick Tape. 0:12:30.200 --> 0:12:39.199 He's a Bloomberg Business lash and I'm Karen Moscow. And 0:12:39.240 --> 0:12:41.680 we continue to watch shares of home Depot this morning. 0:12:41.800 --> 0:12:45.280 They have turned lower, now down one point seven per cent. 0:12:45.400 --> 0:12:49.000 Home Depot reported second quarter comp sales that beat analysts estimates, 0:12:49.040 --> 0:12:50.840 but it did say that Colm sales for the year 0:12:51.400 --> 0:12:54.760 could just meet what analysts are looking for. Futures this 0:12:54.960 --> 0:12:58.040 morning are lower. SMP Future is down about ten points down, 0:12:58.120 --> 0:13:00.280 futures down fifty seven and as day a few years 0:13:00.320 --> 0:13:03.000 down thirty six. The DACKS in Germany is up about 0:13:03.040 --> 0:13:05.920 half percent. Ten year treasury down to thirty seconds yield 0:13:05.920 --> 0:13:08.520 two point seven nine percent yield on a two year 0:13:08.640 --> 0:13:11.920 three point to zero percent. NIMEX screwed oil is down 0:13:12.000 --> 0:13:14.440 six tents percent or fifty five cents at eighty eight 0:13:14.480 --> 0:13:17.160 dollars eighty five cents of Arrol Comic School down four 0:13:17.200 --> 0:13:20.720 tenths per cent or seven dollars sixty cents A seventy announced. 0:13:21.040 --> 0:13:23.560 The euro one point one four zero against the dollar, 0:13:23.600 --> 0:13:25.880 British found one point to zero to three and again 0:13:25.920 --> 0:13:28.360 at one thirty four point one one. And look at 0:13:28.400 --> 0:13:31.160 a bitcoin it is it'll change at twenty four thousand, 0:13:31.320 --> 0:13:34.320 eighty dollars. That's a bloomberg business flash. Now here's Michael 0:13:34.360 --> 0:13:36.520 Barrow with more on what's going on around the world. 0:13:36.640 --> 0:13:39.640 Michael Karen, thank you very much. The Justice Department Center 0:13:39.760 --> 0:13:43.360 opposes the release of an FBI f A David justifying 0:13:43.440 --> 0:13:46.440 to search for and used to remove documents from former 0:13:46.520 --> 0:13:49.720 President Donald Trump's Marrow logo home in Florida. Last week, 0:13:50.080 --> 0:13:52.280 the do o J asked the judge to keep the 0:13:52.360 --> 0:13:56.800 filing sealed due to the investigation that implicates national security. 0:13:57.200 --> 0:14:00.960 It is primary day in Wyoming and Alaska. Republican congress 0:14:01.000 --> 0:14:04.160 Womanalist Cheney is fighting to keep her seat after voting 0:14:04.240 --> 0:14:07.599 to impeach Trump. In baseball, the slumpy Yankees lost with 0:14:07.640 --> 0:14:10.560 the Rays for zip the Braves, oh mind, they put 0:14:10.600 --> 0:14:13.200 a what four and y whipping on the Mets thirteen one. 0:14:13.679 --> 0:14:17.400 The Nationals, Orioles and Giants won the A's lost. Global 0:14:17.480 --> 0:14:19.400 news twenty four hours a day on air and on 0:14:19.480 --> 0:14:22.440 Bloomberg Quick Day bower by more than dred journalists and 0:14:22.440 --> 0:14:25.200 analysts more than a hundred twenty countries. How Michael Barr, 0:14:25.240 --> 0:14:27.440 this is Bloomberg, John, Michael, thank you. It is now 0:14:27.520 --> 0:14:30.360 five six twenty on Walster. We're live from the Bloomberg 0:14:30.400 --> 0:14:34.160 interad to Broker Studios. This is Bloomberg Daybreak. Well, analysts 0:14:34.200 --> 0:14:37.520 are seeking clues about how storing inflation is going to 0:14:37.600 --> 0:14:41.120 impact spending during the rest of the year. Retail earnings 0:14:41.360 --> 0:14:45.320 on Tap we we just got home Depot Walmart is 0:14:45.360 --> 0:14:48.200 going to report fiscals or second quarter results before the 0:14:48.280 --> 0:14:51.320 market opened this morning. And joining us now with everything 0:14:51.560 --> 0:14:56.920 retail is John Edwards, us consumer team leader. Let's start 0:14:56.960 --> 0:14:59.040 off with a place where I've yet to buy a 0:14:59.720 --> 0:15:02.360 two by four that isn't warped. They're still buying at 0:15:02.400 --> 0:15:04.800 home Depot. It looks that way. Yeah, there were some 0:15:04.960 --> 0:15:09.760 concerns that the housing slowdown was going to affect Home 0:15:09.840 --> 0:15:13.720 Depot's results, but it turns out that, you know, they 0:15:13.800 --> 0:15:17.960 beat expectations for the quarter, they reaffirmed their expectations for 0:15:18.080 --> 0:15:22.640 the year, and it seems that home improvement spending is 0:15:22.680 --> 0:15:25.560 still holding up. So it it looks like people are 0:15:25.680 --> 0:15:30.080 countering that home sales slow down by trying to fix 0:15:30.160 --> 0:15:32.920 up their homes to make them more appealing in the 0:15:33.120 --> 0:15:36.400 market that's still out there. Okay, um, let's head to 0:15:36.680 --> 0:15:40.320 uh number one retailer, Walmart, and this is a story 0:15:40.640 --> 0:15:45.520 I would imagine about margins. Are people buying stuff that 0:15:45.680 --> 0:15:48.760 they need or stuff that they don't necessarily need with 0:15:49.000 --> 0:15:52.480 higher margins? Now that yeah, that's exactly it. Walmart issued 0:15:52.520 --> 0:15:56.760 a warning in July late July saying that it's the 0:15:56.880 --> 0:15:59.720 mix of its sales was going to hurt its margins 0:15:59.760 --> 0:16:03.840 because because people were backing away from discretionary purchases of 0:16:03.960 --> 0:16:08.440 higher margin items like electronics and uh, you know, other 0:16:09.120 --> 0:16:13.840 discretionary goods and spending more on food and fuel, which 0:16:13.920 --> 0:16:18.840 have lower margins. So the figure to watch is pent 0:16:19.000 --> 0:16:22.680 that's the current estimate for their gross margin for the 0:16:23.080 --> 0:16:26.600 second quarter, and we'll find out at seven o'clock if 0:16:26.680 --> 0:16:28.920 they hit that. Well at the top line, but people 0:16:28.960 --> 0:16:31.400 are still I mean, sales are actually increasing. Do I 0:16:31.480 --> 0:16:34.000 have that right? That's exactly right. Uh, you know what, 0:16:34.200 --> 0:16:36.720 when they issued that profit warning, they also said that 0:16:36.800 --> 0:16:40.520 their sales would actually be higher than expected. And uh, again, 0:16:40.600 --> 0:16:44.280 the problem is not so much sales overall as the mix. 0:16:44.880 --> 0:16:48.800 So uh, they're selling a lot of groceries, um, you know, 0:16:48.960 --> 0:16:52.280 a lot of fuel at their their gas stations, but 0:16:52.920 --> 0:16:56.280 those items have lower profit margins for them, and so 0:16:56.520 --> 0:16:59.240 that's what's hurting their profits. Do these places have a 0:16:59.280 --> 0:17:02.280 lot of stuff in the warehouses that they got to 0:17:02.320 --> 0:17:06.120 get rid of? Absolutely? Yeah, well they you know, Walmart 0:17:06.160 --> 0:17:09.720 and other retailers tried to stock up a lot, you know, 0:17:09.840 --> 0:17:12.600 during the during the pandemic, the height of the pandemic 0:17:12.720 --> 0:17:15.960 because of those supply chain problems, that we were seeing 0:17:16.520 --> 0:17:18.359 and uh, in some ways they might have been too 0:17:18.440 --> 0:17:21.119 successful at that. You know, they stocked up on a 0:17:21.200 --> 0:17:24.440 lot of things that people were wanting back in the 0:17:25.359 --> 0:17:29.080 height of the the pandemic, and uh, now that people 0:17:29.119 --> 0:17:32.359 have shifted their their spending, uh, they're stuck with a 0:17:32.440 --> 0:17:34.440 lot of goods that they need to move and so 0:17:34.600 --> 0:17:38.240 they've had to uh bring in bigger discounts on those things, 0:17:38.320 --> 0:17:41.720 and that again is hurting margins even more. Uh it's 0:17:41.840 --> 0:17:45.800 back to school. Are they also preparing for um, you know, 0:17:46.080 --> 0:17:50.280 Halloween and Christmas even absolutely? Yeah, yeah they are. They're 0:17:50.320 --> 0:17:53.679 getting ready. You know, Halloween stuff is probably already at 0:17:53.760 --> 0:17:56.560 least in the warehouses, if not starting to hit the shelves, 0:17:57.119 --> 0:17:59.639 and uh yeah, they want to be ready for the 0:18:00.080 --> 0:18:03.320 Christmas season as well. But again, you know, the concern 0:18:03.480 --> 0:18:06.000 right now is not so much being fully stocked. I 0:18:06.040 --> 0:18:10.239 think they feel like they're their shelves will be full enough. Uh, 0:18:10.359 --> 0:18:13.920 it's getting rid of those uh that excess inventory. Okay, 0:18:13.960 --> 0:18:15.200 so that means I can go in and get a 0:18:15.240 --> 0:18:17.320 good discount, right if I want to buy something that 0:18:17.400 --> 0:18:22.280 nobody else wants record that's exactly a yeah, how much 0:18:22.359 --> 0:18:25.200 is that going to impact the margin their their profitability 0:18:25.280 --> 0:18:29.000 going forward. Uh, well, it's it's certainly. Again they issued 0:18:29.040 --> 0:18:31.560 a warning for the full year, so they expect that 0:18:31.680 --> 0:18:35.600 to hurt their profits through the rest of their fiscal year. Uh. 0:18:35.680 --> 0:18:38.080 And we'll see what the recovery is like. And we'll 0:18:38.119 --> 0:18:41.440 we'll also see if they managed to exceed expectations their 0:18:41.480 --> 0:18:45.200 lowered expectations. The way Home Depot managed to beat their estimates. 0:18:45.359 --> 0:18:47.760 As Bell weathers, what does this all tell us the 0:18:48.160 --> 0:18:51.440 bottom line about the American consumer right now? Well, it 0:18:51.840 --> 0:18:53.720 it tells us that, you know, there is actually some 0:18:53.840 --> 0:18:56.639 consumer strength out there. It's it's just you know, a 0:18:56.720 --> 0:18:58.680 matter of you know, we I mean, we see that 0:19:00.720 --> 0:19:04.000 obviously inflation is hitting people and and you know, sort 0:19:04.040 --> 0:19:07.240 of shifting them away again from those sort of discretionary, 0:19:07.320 --> 0:19:11.480 big ticket purchases. But people are still employed, you know, 0:19:11.600 --> 0:19:15.400 unemployment is low and uh so people do have money 0:19:15.480 --> 0:19:18.719 to spend. It's just they're spending it more on essentials 0:19:18.880 --> 0:19:22.359 like like food and uh and fuel. John, a pleasure, 0:19:22.400 --> 0:19:25.000 appreciate it. Thanks for stopping buying this morning. John Edwards, 0:19:25.119 --> 0:19:28.879 the U S Consumer team leader here at Bloomberg. Again, 0:19:28.960 --> 0:19:32.840 we're waiting for Walmart earnings this morning before the opening 0:19:32.880 --> 0:19:36.320 bill on Wall Street. Home Depot did report comparable sales 0:19:36.359 --> 0:19:40.560 for the second quarter that did beat the average analysts estimate. 0:19:40.920 --> 0:19:42.760 Head of the cash open on Wall Street. Looking at 0:19:42.800 --> 0:19:45.120 futures right now, they're in the red. The down futures 0:19:45.520 --> 0:19:48.840 fifty one points lower, smp E many futures there down 0:19:48.960 --> 0:19:52.280 seven points, and then as day futures right now twenty 0:19:52.400 --> 0:19:54.960 four points lower. As far as yields go, the ten 0:19:55.040 --> 0:19:57.840 year yield to seventy nine, the two year at three 0:19:57.960 --> 0:20:02.720 twenty and night nex crew Dow eight two A barrel. 0:20:03.160 --> 0:20:11.040 You're listening the Bloomberg and just a haad top stories. 0:20:11.440 --> 0:20:24.359 You're listening to Bloomberg Daybreak, broadcasting live from the Bloomberg 0:20:24.440 --> 0:20:28.119 Interactive Broker's studio in New York. Bloomberg E Living Freedom 0:20:28.280 --> 0:20:32.520 to Washington, d C, Bloomberg to Boston, Bloomberg one oh 0:20:32.640 --> 0:20:36.080 six one, does San Francisco, Bloomberg nine sixty to the country, 0:20:36.240 --> 0:20:39.200 Sirius xm ch A one nine and around the globe, 0:20:39.320 --> 0:20:43.280 the Bloomberg Business and Bloomberg Radio dot Com. This is 0:20:43.320 --> 0:20:51.640 Bloomberg Daybreak. It's there's thirty on Wall Street. Good Morning, 0:20:51.680 --> 0:20:54.399 I'm John Tucker and I'm Karen Moscow. We are just 0:20:54.520 --> 0:20:57.240 about three hours away from the open of US trading time. 0:20:57.320 --> 0:20:59.040 To the five things that you need to notice start 0:20:59.080 --> 0:21:03.359 your day, Bronzie, you buy Interactive Brokers. Interactive Brokers Global 0:21:03.400 --> 0:21:06.680 Analysts helps you find a global investment opportunity. Should diversify 0:21:06.720 --> 0:21:10.200 your portfolio and discover undervalued companies that may have greater 0:21:10.280 --> 0:21:13.280 growth potential. Try i v k our Global Analysts today 0:21:13.359 --> 0:21:16.840 at ib k R dot com slash g A. First, 0:21:16.920 --> 0:21:19.480 we begin today with stocks at a three month high. 0:21:19.800 --> 0:21:22.840 That's just find concerns over inflation and a potential recession. 0:21:23.200 --> 0:21:27.560 Julie Beale's portfolio manager at Kane Anderson Rudnick. The ways 0:21:27.640 --> 0:21:29.399 that you can kind of stay out of trouble, I 0:21:29.440 --> 0:21:33.399 think is investing in businesses that typically just serve other businesses. 0:21:33.560 --> 0:21:35.800 And I like software because they have high levels of 0:21:35.840 --> 0:21:38.840 recurring revenue and very good profitability. I think that makes 0:21:38.880 --> 0:21:42.040 them more durable. Julie b l with Kane Anderson Rudnick 0:21:42.119 --> 0:21:45.080 says it's crucial for the Fed to reign in inflation 0:21:45.320 --> 0:21:48.760 and to earnings. Now Home Depot reported sales above analysts 0:21:48.880 --> 0:21:51.119 estimates about these stock is down more than one percent 0:21:51.400 --> 0:21:53.880 we'rena hear from retail giant Walmart in about a half 0:21:53.920 --> 0:21:57.560 an hour and Bloomberg's Charlie Pellett as a preview. Analysts 0:21:57.560 --> 0:22:01.639 surveyed by Bloomberg's see Walmart reporting second quarter adjusted earnings 0:22:01.720 --> 0:22:04.359 for share of a dollar sixty three on revenue of 0:22:04.520 --> 0:22:08.719 one hundred fifty one point one billion dollars. Walmart's insights 0:22:08.760 --> 0:22:12.280 into shopper behavior will be under scrutiny, was analystsic clues 0:22:12.320 --> 0:22:15.720 about how soaring inflation will affect spending during the rest 0:22:15.800 --> 0:22:18.520 of the year. The retail giant cut ITTs earnings outlook 0:22:18.600 --> 0:22:22.040 three weeks ago in New York Charlie pet Bloomberg day Break, 0:22:22.080 --> 0:22:24.280 All right, turning, thanks Well this morning, we're learning of 0:22:24.400 --> 0:22:27.320 moves from the world's biggest money managers on Bloombergy's Renny 0:22:27.320 --> 0:22:30.000 to Young joins us Live with more. Good morning Nia, 0:22:30.119 --> 0:22:33.439 Good morning Karen. During the latest quarter, Stanley drugon Miller's 0:22:33.480 --> 0:22:37.640 family office sold its entire one ninety nine million dollar position, 0:22:37.720 --> 0:22:41.800 and Amazon and scaled back at steak in Microsoft Sorol's 0:22:41.840 --> 0:22:45.359 fund management meanwhile boosted it states in Amazon salesforce and 0:22:45.520 --> 0:22:50.280 Alphabet Berkshire Hathaway eliminated a Verizon steak and boosted other bets, 0:22:50.359 --> 0:22:55.160 including Occidental Petroleum and Michael Berry's Scion. Asset Management exited 0:22:55.240 --> 0:22:59.880 all equity positions except private prison operator Geo Group. It's 0:23:00.000 --> 0:23:02.920 only stockholding as at the end of June. Live in 0:23:03.000 --> 0:23:08.040 New York. I'm gonna need a young Bloomberg Daybreak, all right, thanks, 0:23:08.320 --> 0:23:10.080 thanks for NTO. Those are the fine things you need 0:23:10.160 --> 0:23:11.920 to know to start your day. Brought to by it, 0:23:12.040 --> 0:23:15.160 brought you by Interactive Brokers, said ahead of the cash 0:23:15.240 --> 0:23:18.520