WEBVTT - Bloomberg Daybreak: October 21, 2022 - Hour 1 (Radio) 0:00:01.560 --> 0:00:05.280 Life from the Bloomberg Interactive Brooker Studios is Bloomberg Daybreak 0:00:05.320 --> 0:00:08.680 for Friday, October twenty one two Coming up this hour. 0:00:09.119 --> 0:00:12.680 UK leaders consider what's next after the resignation of Liszt. 0:00:12.720 --> 0:00:15.680 Trust stops look to snap a two day losing streak 0:00:15.760 --> 0:00:18.599 to close out the week. The US Ways expanding its 0:00:18.640 --> 0:00:22.799 technology ban on China, and Elon Musk reportedly plans massive 0:00:22.960 --> 0:00:25.799 job cuts at Twitter. It's a tragic end to the 0:00:25.800 --> 0:00:29.520 search for missing Princeton University student. Plus its sentencing day 0:00:29.600 --> 0:00:32.960 for Trump Alloy Steve men In for contempt Michael Barner. 0:00:33.040 --> 0:00:35.960 More ahead, I'm tryn Stashow. In sports, the Yankees lost 0:00:36.000 --> 0:00:38.400 again in Houston Trail. The ALC has stood up in 0:00:38.440 --> 0:00:41.200 the Rangers lost, Devils beat the Islanders. A big trade 0:00:41.200 --> 0:00:46.680 in the NFL. That's olds traded ahead on Bloomberg day 0:00:46.680 --> 0:00:50.960 Break on Bloomberg eleven, Free on New York, Bloomberg nine one, 0:00:51.080 --> 0:00:55.040 Washington d C, Bloomberg one oh six one, Boston, Bloomberg 0:00:55.120 --> 0:00:59.200 nine sixties and Francisco Sirius x M one nineteen and 0:00:59.280 --> 0:01:02.080 around the world. Old on Bloomberg Radio dot Com and 0:01:02.200 --> 0:01:09.040 via the Bloomberg Business. Hey Good Friday morning, I'm Nathan 0:01:09.080 --> 0:01:12.399 Hagar and I'm Karen Monstow. Us not index futures are 0:01:12.400 --> 0:01:14.440 lower this morning. We're gonna be up to five oh 0:01:14.440 --> 0:01:16.320 one on Wall Street, and we check the markets every 0:01:16.319 --> 0:01:19.080 fifteen minutes throughout the trading day. On bloomberg S and 0:01:19.160 --> 0:01:22.160 P futures down twenty two points this morning, DALN futures 0:01:22.160 --> 0:01:25.199 down a hundred twenty five and NASDACK futures down one hundred. 0:01:25.520 --> 0:01:28.160 The decks in Germany's down one and a half percent. 0:01:28.440 --> 0:01:31.119 Ten year treasury down nine thirty seconds, held four point 0:01:31.160 --> 0:01:33.479 to six percent, and they yield on the two year 0:01:33.840 --> 0:01:37.040 four point six zero percent. Nathan Karen will get more 0:01:37.080 --> 0:01:39.039 on the markets in a moment, but we begin this 0:01:39.120 --> 0:01:42.040 morning in the UK, where government leaders are weighing next 0:01:42.120 --> 0:01:46.240 steps following the resignation of Prime Minister Liz Trust. Bloomberg's 0:01:46.280 --> 0:01:48.840 You and Potts joins us live with the very latest 0:01:48.960 --> 0:01:52.040 from London. You and good morning, Good morning, Nathan and Karen. 0:01:52.080 --> 0:01:54.760 Political news moves fast in Britain at the moment. By 0:01:54.800 --> 0:01:57.560 next Friday, the country will have a fifth prime minister 0:01:57.680 --> 0:02:00.560 in less than seven years. The Conservative Party. He will 0:02:00.640 --> 0:02:03.560 choose a new leader after Liz Trust quit becoming the 0:02:03.600 --> 0:02:06.760 shortest ever serving prime minister in the history. Plans are 0:02:06.960 --> 0:02:10.079 very short contest. If lawmakers make a clear choice, we 0:02:10.120 --> 0:02:13.079 could find out as soon as Monday. Former chance that 0:02:13.240 --> 0:02:16.520 Ritchie Sanak is the current favorite with bookmakers, The odds 0:02:16.680 --> 0:02:19.800 on the second favorite candidate have shortened considerably in the 0:02:19.800 --> 0:02:23.720 past few hours. That candidate is former Prime Minister Boris Johnson. 0:02:24.080 --> 0:02:27.160 In London, immun Parts Blimberg, Break You and things that 0:02:27.240 --> 0:02:29.840 we continue to hear from current and former leaders wearing 0:02:29.840 --> 0:02:33.320 in our UK politics. Former Tory leader Michael Howard spoke 0:02:33.360 --> 0:02:36.320 to Bloomberg about the future of the Conservative Party the 0:02:36.360 --> 0:02:38.400 next twelve months so I'm doubt be going to be 0:02:38.520 --> 0:02:41.799 very difficult and very thankful. But after that, I think 0:02:41.840 --> 0:02:45.000 there's every reason to suppose that inflation will be coming down, 0:02:45.160 --> 0:02:47.920 mortgage interest rates will be coming down, and the Prime 0:02:47.919 --> 0:02:50.000 Minister will be able to say we've been to a 0:02:50.120 --> 0:02:52.480 very top of time, that we've taken the right decisions 0:02:52.520 --> 0:02:55.480 and now we're seeing the fruits of those decisions. So 0:02:55.760 --> 0:02:58.160 don't take any risks and don't that labor ruin it. 0:02:58.440 --> 0:03:01.080 Former Tory leader Michael how Words says he is a 0:03:01.120 --> 0:03:04.000 supporter of Rishi Sunac to be the new prime Minister. 0:03:04.280 --> 0:03:07.920 He also believes that Jeremy Hunter remained Chancellor trust resigned 0:03:07.919 --> 0:03:11.160 after forty four days, making her premiership the shortest in 0:03:11.280 --> 0:03:15.360 UK history. Let's stay overseas, Karen to China now, where 0:03:15.400 --> 0:03:19.080 tensions between Beijing and Washington remain in focus. The White 0:03:19.080 --> 0:03:22.040 House is now wearhing a further technology ban on China 0:03:22.080 --> 0:03:26.120 to include quantum computing and artificial intelligence. Bloomberg's John Lou 0:03:26.200 --> 0:03:29.760 reports from Beijing the Biden administration taking as many steps 0:03:29.800 --> 0:03:33.040 as possible to try to limit China's access to these 0:03:33.080 --> 0:03:37.360 emerging technologies. Quantum computing UH is still sort of an 0:03:37.400 --> 0:03:41.640 experimental field, but the implications for the future, how greatly 0:03:41.720 --> 0:03:45.040 this technology could affect the future, I think makes it 0:03:45.680 --> 0:03:48.680 an important point to for the Biden administration to focus 0:03:48.680 --> 0:03:51.320 on now. Bloombergs John lu says it's just the latest 0:03:51.320 --> 0:03:53.480 of many signs of the White House taking a harder 0:03:53.520 --> 0:03:57.400 line on China. Meantime, Nathan US Secretary of State Anthony B. 0:03:57.400 --> 0:04:00.800 Lincoln says relations with Beijing are added in election point, 0:04:00.920 --> 0:04:04.560 and he's building an international coalition to stand up against China. 0:04:04.640 --> 0:04:08.080 Bloomberg said. Baxter has that story Blincoln says, the key 0:04:08.160 --> 0:04:10.520 is starting with Taiwan. The entire world has a stake 0:04:10.600 --> 0:04:12.840 in this and making sure that there is peace and 0:04:12.840 --> 0:04:16.960 stability and along the Taiwan Straight The amount of trade 0:04:17.040 --> 0:04:20.320 and commerce that goes that straight every day is essential 0:04:20.360 --> 0:04:22.640 to the world economy. So b Lincoln says, the US 0:04:22.760 --> 0:04:25.359 is not looking for conflict with China, but the China 0:04:25.440 --> 0:04:28.520 must understand that freedom of commerce with Taiwan as a 0:04:28.560 --> 0:04:31.719 matter of survival for the global community as a whole. 0:04:32.200 --> 0:04:35.400 In San Francisco, I'm at Baxter Bloomberg Day Break, All right, ed, 0:04:35.440 --> 0:04:37.560 thank you. Now let's take a look back at market's. 0:04:37.640 --> 0:04:40.320 US futures are in the red as Wall Street looks 0:04:40.360 --> 0:04:43.400 to reverse a two day slump. Morgan Stanley chief equity 0:04:43.440 --> 0:04:46.039 strategist Mike Wilson thinks stocks may not have bottomed, but 0:04:46.120 --> 0:04:48.440 there is light at the end of the tunnel. The 0:04:48.520 --> 0:04:52.240 kind of final chapter to this bear market probably will 0:04:52.279 --> 0:04:55.279 be fast as well. If we've had this conversation three 0:04:55.320 --> 0:04:57.800 months ago, and we probably did. I thought we could 0:04:57.839 --> 0:05:00.680 have this all wrapped up by thanksg and maybe have 0:05:00.720 --> 0:05:03.520 a nice ending to the holiday period and say, okay, 0:05:03.640 --> 0:05:06.200 we can move forward. But unfortunately I think it may 0:05:06.360 --> 0:05:09.560 you know, linger into next year. Morgan Stanley's Mike Wilson 0:05:09.600 --> 0:05:12.080 says we could see a reckoning of disappointing earnings in 0:05:12.120 --> 0:05:14.960 the next quarter. Well, speaking of earnings, Nathan, we're seeing 0:05:14.960 --> 0:05:18.360 shares of Snap tumble after its latest results. They are 0:05:18.440 --> 0:05:21.839 down more than twenty six percent after reporting the company's 0:05:21.839 --> 0:05:25.240 slowest quarterly sales growth ever, and Bloomberg's Charlie Pellett has 0:05:25.240 --> 0:05:28.040 a story. The maker of the Snapchat apps said third 0:05:28.120 --> 0:05:31.240 quarter sales increase six percent to one point one three 0:05:31.279 --> 0:05:34.520 billion dollars. That was just shy of analyst savage estimate 0:05:34.640 --> 0:05:37.919 of one point one four billion dollars. The social media 0:05:37.960 --> 0:05:42.440 company spent the quarter shrinking and refocusing its business, announcing 0:05:42.440 --> 0:05:45.200 in August that it was cutting twenty of its workforce 0:05:45.400 --> 0:05:49.560 and slashing projects that don't contribute to user or revenue 0:05:49.560 --> 0:05:53.960 growth or to the company's augmented reality efforts in New York. 0:05:54.080 --> 0:05:56.919 Charlie Pellet Bloomberg Daybreak. All right, Charlie, thank you. We 0:05:56.920 --> 0:05:59.400 also have a number of headlines on Twitter this morning. 0:05:59.560 --> 0:06:01.800 Advised is on both sides that are looking to close 0:06:01.839 --> 0:06:04.040 Elon Musk's deal to buy the company by the end 0:06:04.040 --> 0:06:06.080 of the month. At the same time, Twitter is telling 0:06:06.080 --> 0:06:09.479 its staff there will not be widespread layoffs. That's after 0:06:09.560 --> 0:06:13.039 reports Musk wants to slash seventy five per cent of 0:06:13.040 --> 0:06:16.760 Twitter's workforce. Kurt Wagner covers the company from Bloomberg News, 0:06:17.160 --> 0:06:19.680 They're definitely going to be cost cuts at Twitter. I 0:06:19.720 --> 0:06:22.560 think we all know that layoffs are are widely expected. 0:06:22.680 --> 0:06:25.320 I do wonder if this is a little extreme, right. 0:06:25.360 --> 0:06:27.040 What we've seen from Elon in the past is that 0:06:27.120 --> 0:06:29.919 a lot of his estimates have been pretty extreme in 0:06:30.000 --> 0:06:32.120 terms of what he thinks for revenue or user growth, 0:06:32.120 --> 0:06:34.080 and that could be going extreme in the other direction 0:06:34.120 --> 0:06:37.040 to with cost cut. Bloomberg's Kurt Wagner says the number 0:06:37.040 --> 0:06:40.080 of layoffs Twitter might not reach sevent but could still 0:06:40.080 --> 0:06:43.320 exceed other projections. If all that wasn't enough. Elon Musk 0:06:43.440 --> 0:06:46.560 is also coming under scrutiny from the Biden administration. Sources 0:06:46.560 --> 0:06:49.000 tell us White House officials are discussing whether the U 0:06:49.120 --> 0:06:52.920 S should subject some of Musk's ventures to national security reviews, 0:06:52.960 --> 0:06:57.239 including the Twitter deal and Musk's SpaceX Starlink satellite network. 0:06:57.400 --> 0:06:59.919 Were told officials have grown uncomfortable with what they see 0:07:00.320 --> 0:07:04.360 as his increasingly Russia friendly comments. Checking shares of Twitter 0:07:04.360 --> 0:07:06.800 in the pre market right now they are plummeting down 0:07:07.000 --> 0:07:09.960 nine and a quarter per cent. SMP futures are down 0:07:10.000 --> 0:07:12.520 twenty five point, staff futures down a hundred forty eight 0:07:12.600 --> 0:07:15.360 and nastack futures are lower by a hundred twelve points. 0:07:15.360 --> 0:07:18.240 Straight ahead your latest local headlines and a check of sports. 0:07:18.280 --> 0:07:24.920 This is Bloomberg at south five oh seven on Wall 0:07:24.960 --> 0:07:27.520 Street board forty eight degrees in Central Park. Dealing with 0:07:27.560 --> 0:07:29.960 a crash in New Rochelle southbound, New England threw away 0:07:30.000 --> 0:07:33.240 at Boston Road. Details coming up in traffic First. Michael 0:07:33.240 --> 0:07:34.960 Barr is here with more on what's going on in 0:07:34.960 --> 0:07:37.600 New York and around the world. Good Friday morning, Michael, 0:07:37.800 --> 0:07:40.720 Good morning to you Nathan. A tragic end to the 0:07:40.720 --> 0:07:44.679 case of a missing Princeton University student. Missing student twenty 0:07:44.760 --> 0:07:48.280 year old Miss rock You and Nt was found dead 0:07:48.320 --> 0:07:51.720 behind some tennis courts on campus. She hadn't been seen 0:07:51.760 --> 0:07:55.160 since Friday, prompting her friends to report her missing to police. 0:07:55.680 --> 0:07:59.280 Police say a grounds employee founder body with no obvious 0:07:59.320 --> 0:08:02.720 signs of in readding. Her death does not appear suspicious 0:08:02.800 --> 0:08:05.520 or criminal in nature. And on Topsy is pending to 0:08:05.600 --> 0:08:09.280 determine her cause of depth. Thousands are expected today at 0:08:09.280 --> 0:08:12.800 the funerals for two Bristol, Connecticut police officers killed in 0:08:12.840 --> 0:08:16.560 an ambush last week. Officers from across the US and 0:08:16.680 --> 0:08:20.440 in Canada are expected to attend services with Sergeant Dustin 0:08:20.560 --> 0:08:25.520 Deamonte and Officer Alex has Me. The services start or 0:08:25.520 --> 0:08:29.280 Hamsey brother The services start at eleven am. Less than 0:08:29.320 --> 0:08:31.680 three weeks to the mid terms, President Biden paid a 0:08:31.760 --> 0:08:35.760 visit to Pennsylvania. In Pittsburgh, he greeted Democratic Senate candidate 0:08:35.920 --> 0:08:40.600 John Fetterman, predicting that he's going to win. Fetterman, Pennsylvania's 0:08:40.600 --> 0:08:43.839 lieutenant governor, is locked in a tight race with Republican 0:08:43.880 --> 0:08:47.000 doctor memit Oz. President Biden spoke at the side of 0:08:47.000 --> 0:08:50.280 a bridge that collapsed back in January, the President giving 0:08:50.320 --> 0:08:53.000 thanks for the lives that were spared when the fern 0:08:53.080 --> 0:08:57.160 Hollow Bridge went down, by the grace of God. The 0:08:57.200 --> 0:09:00.400 school was delayed that day because of snow, and it 0:09:00.480 --> 0:09:03.520 was just before rush hour, so there was less traffic 0:09:03.679 --> 0:09:06.360 than usual. It had been a normal Had it been 0:09:06.400 --> 0:09:09.560 a normal day, it would have been much much worse. 0:09:10.040 --> 0:09:12.800 The bridge is now the side of an infrastructure Package 0:09:12.800 --> 0:09:17.080 funded reconstruction project. The Pentagon pushed back on Russia's denials 0:09:17.120 --> 0:09:19.880 that it is using Iranian made drones to attack civilian 0:09:19.920 --> 0:09:23.880 targets in Ukraine. State Department spokesman Ned Price. We can 0:09:23.920 --> 0:09:28.720 confirm that Russian military personnel based in Plania have been piloted, piloting, 0:09:28.800 --> 0:09:31.959 piloting excuse me, Iranian ua V s and using the 0:09:32.240 --> 0:09:37.760 conducts kinetic strikes across Ukraine, including in strikes against Kievan. 0:09:37.960 --> 0:09:41.560 In recent days. The European Union has announce sanctions on 0:09:41.640 --> 0:09:44.840 an Iranian aerospace company, Steve Mann, in the schedule to 0:09:44.840 --> 0:09:46.960 be sentenced today, If for a contempt of Congress were 0:09:47.000 --> 0:09:49.920 refusing to comply with the subpoena issued by the Household 0:09:50.040 --> 0:09:53.280 Committee investigating the January six attack on the US Capitol, 0:09:53.559 --> 0:09:55.679 Bannon could face up to two years in prison, but 0:09:55.760 --> 0:09:58.880 the Department of Justice is recommending a lesser sentence of 0:09:58.920 --> 0:10:01.600 six months. In a two a thousand dollar fun Global 0:10:01.800 --> 0:10:03.640 is twenty four hours a day on air end on 0:10:03.640 --> 0:10:06.360 Bloomberg Quicktake power by more than twenty seven hundred journalists, 0:10:06.360 --> 0:10:08.719 analysts more than a hundred twenty countries. I'm Michael Barb 0:10:08.760 --> 0:10:15.880 This is Bloomberg. Nathan, Thanks Michael five tent on Wall Street. 0:10:15.880 --> 0:10:17.439 Time for the Bloomberg Sports up. They brought to you 0:10:17.480 --> 0:10:20.120 by try State Autie. Good morning, John Stanshower, Good morning, 0:10:20.200 --> 0:10:23.199 Nathan to LCS. Games played in Uston. The Yankees and 0:10:23.240 --> 0:10:26.640 the opener had only five hits struck out seventeen times. 0:10:26.720 --> 0:10:30.600 Game two four hits struck out thirteen times. Yankee pitching 0:10:30.640 --> 0:10:33.839 and defense with solid but done in by one Astros 0:10:33.840 --> 0:10:36.040 swinging the bat a team in the third in Everino 0:10:36.160 --> 0:10:40.840 set just about the film and the one too, swinging 0:10:40.960 --> 0:10:51.959 a three pointer good way down town. That's God. Alex 0:10:52.040 --> 0:10:55.360 Bragman with the long ball. It's three nothing Amy to call. 0:10:55.480 --> 0:10:58.280 Yank scored twice in the fourth off Rambert Valdez. It 0:10:58.360 --> 0:11:01.000 was due mostly the Valdesk committee two errors on the 0:11:01.040 --> 0:11:03.800 same play. No scoring after that. Uston won three to two. 0:11:03.920 --> 0:11:05.839 Like the opener. Yanks at the time run On in 0:11:05.880 --> 0:11:08.800 the ninth, getting and Matt Carpenters struck out. He's been 0:11:08.880 --> 0:11:11.960 up seven times in the postseason, has struck out all seven. 0:11:12.000 --> 0:11:15.120 Game three tomorrow, five o'clock start at the stadium at 0:11:15.120 --> 0:11:17.440 the Garden. Rangers have two one lead lost in overtime 0:11:17.480 --> 0:11:19.640 to San Jose three to Herrick Carlson scored for the 0:11:19.640 --> 0:11:22.520 Sharks opening mid to Voute the New Devil I'm j. 0:11:22.679 --> 0:11:25.920 Pollock scored twice New Jersey to the Islanders four to one. 0:11:25.960 --> 0:11:29.160 The next home openers tonight against Detroit. The Nets host Toronto. 0:11:29.240 --> 0:11:32.400 Arizona Cardinals scored twenty two points in a span of 0:11:32.520 --> 0:11:35.280 less than two minutes late second quarterback to back pick 0:11:35.360 --> 0:11:37.920 six is They beat the Saints forty two to thirty four. 0:11:38.200 --> 0:11:40.920 Jets and Giants, both riding three game winning streaks. Sunday 0:11:41.000 --> 0:11:44.319 facing two and four teens Denver in Jacksonville, forty Niners 0:11:44.320 --> 0:11:45.960 with a big pick up late last night and sent 0:11:46.000 --> 0:11:49.079 four draft picks, none of them first rounders, to Carolina. 0:11:49.160 --> 0:11:52.959 For Christian McCaffrey his last full healthy season two thousand nineteen, 0:11:52.960 --> 0:11:55.960 he had over a thousand yards rushing and receiving. John 0:11:56.000 --> 0:11:59.440 Stashower bloom Brook Sports, Nathan Okay, John, thank you, s 0:11:59.520 --> 0:12:02.720 and p Futures down twenty one points right now. This 0:12:03.200 --> 0:12:09.240 is Bloomberg. Bloomberg Sports is brought to you by Audie. 0:12:09.280 --> 0:12:11.320 Don't let someone else drive off in the autie model. 0:12:11.360 --> 0:12:14.240 You've always wanted visit your local tri state autie dealer 0:12:14.320 --> 0:12:16.560 to get behind the wheel of yours today, or visit 0:12:16.600 --> 0:12:23.440 Autie Offers dot com for more information, markets, headlines and 0:12:23.600 --> 0:12:26.840 breaking news twenty four hours a day at Bloomberg dot com, 0:12:26.960 --> 0:12:30.040 The Bloomberg Business at and at Bloomberg Quick Tape. This 0:12:30.440 --> 0:12:39.320 is a Bloomberg Business lash and I'm Karen Moscow stocks 0:12:39.320 --> 0:12:42.400 are dropping as treasury yields continue to climb, which traders 0:12:42.520 --> 0:12:44.959 vetting the Federal Reserve and keep raising interest rates, and 0:12:45.040 --> 0:12:47.920 as investors assess the latest earnings reports. We check the 0:12:47.960 --> 0:12:50.800 markets every fifteen minutes throughout the trading day on Bloomberg 0:12:50.960 --> 0:12:53.720 s and P futures down twenty four points, DAL futures 0:12:53.720 --> 0:12:56.360 down a hundred forty four NASDAG futures down one hundred 0:12:56.480 --> 0:12:59.480 eight the decks in Germany's down one point six per cent. 0:12:59.720 --> 0:13:02.080 Can your treasury down eleven thirty seconds? He had four 0:13:02.160 --> 0:13:04.400 point to seven percent, the yield on the two year 0:13:04.480 --> 0:13:07.679 four point six zero percent. Nine x screwed oils down 0:13:07.720 --> 0:13:10.640 one on ninety eight cents at eighty three dollars, fifty 0:13:10.679 --> 0:13:13.160 three cents of arrol Co make school down seven tenths 0:13:13.160 --> 0:13:17.120 percent or eleven dollars forty cents at sixteen ounce, the 0:13:17.200 --> 0:13:20.120 euro point nine seven five four against the dollar British 0:13:20.120 --> 0:13:22.560 found one point one one three three and the end 0:13:22.559 --> 0:13:25.560 at one fifty point nine three. And look at a bitcoin, 0:13:25.640 --> 0:13:28.360 it's down four ten percent at eighteen thousand, nine hundred 0:13:28.400 --> 0:13:32.120 fifty dollars. American Express among companies scheduled to report earnings 0:13:32.160 --> 0:13:34.880 today and that's a Bloomberg business flash. Now here's Michael 0:13:34.920 --> 0:13:37.480 Barr with more on what's going on around the world. Uncle, 0:13:37.520 --> 0:13:40.360 good morning, Good morning Karen. Now that list Trust is 0:13:40.440 --> 0:13:44.040 out of ten Downing Street. Another leadership votes for the 0:13:44.160 --> 0:13:47.280 Bridges British for the second in the four months, has 0:13:47.360 --> 0:13:50.400 been triggered to decide the country's new prime minister. There's 0:13:50.440 --> 0:13:54.760 a surprising possibility for the country's struggling Conservative Party, Boris 0:13:54.960 --> 0:13:58.200 Johnson has been floated as a possible return as prime minister. 0:13:58.679 --> 0:14:01.360 The Pentagon pushed back to Russia's denials that it is 0:14:01.440 --> 0:14:04.720 using Iranian made drones to attack civilian targets in Ukraine. 0:14:05.160 --> 0:14:07.920 The European Union, as an out sanctions on an Iranian 0:14:07.960 --> 0:14:12.800 aerospace company and three Iranian generals over Iran providing Russia 0:14:13.120 --> 0:14:16.319 with drones to use in Ukraine. In baseball, the Yankees 0:14:16.360 --> 0:14:19.960 are down two games to zip in a LCS against 0:14:20.000 --> 0:14:23.760 the Astros. New York lost last night to Houston. Three two. 0:14:24.240 --> 0:14:26.800 Global News twenty four hours a day on air and 0:14:27.000 --> 0:14:30.120 on Bloomberg Quicktach, powered by more than twenty seven hundred 0:14:30.160 --> 0:14:33.360 journalists analysts more than a hundred twenty countries. Michael barn 0:14:33.440 --> 0:14:35.840 this is Bloomberg, Nathan. Thanks Michael. It's five nineteen on 0:14:35.880 --> 0:14:38.760 Wall Street Line from the Bloomberg Interactive Broker Studios. This 0:14:38.920 --> 0:14:40.920 is Bloomberg Day Breaking. We want to get more now 0:14:41.000 --> 0:14:44.480 on the turmoil in the UK with Conservatives rushing to 0:14:44.600 --> 0:14:48.680 move past Liz Truss's run as Prime Minister. Joining us 0:14:48.720 --> 0:14:52.360 now is Richard Portis, Professor of Economics at London Business School, 0:14:52.360 --> 0:14:56.480 Academic director at a q R Asset Management Institute. Professor. 0:14:56.600 --> 0:14:59.000 It's great to speak with you this morning, although things 0:14:59.120 --> 0:15:03.040 are far from great in the UK right now. What 0:15:04.320 --> 0:15:07.200 do you make of what's happening in your country? Is 0:15:07.320 --> 0:15:13.240 there a quick fix to the damage to the British reputation? Well, 0:15:13.280 --> 0:15:15.480 we've got a little sunshine at least today in London. 0:15:16.200 --> 0:15:19.480 Aside from that, at least there's that. Yeah, aside from that, 0:15:19.680 --> 0:15:23.520 not a lot. We have a what so many people 0:15:23.640 --> 0:15:27.400 have called a moron risk premium in our guilts, that 0:15:27.600 --> 0:15:33.600 is to say, in our long long term securities government securities, 0:15:33.720 --> 0:15:37.480 and so they're higher higher than they uh, the yields 0:15:37.480 --> 0:15:41.040 are higher than they should be. Consumer confidence is terrible, 0:15:41.920 --> 0:15:47.480 consumer finances are terrible. Investment is beset by political uncertainties. 0:15:48.280 --> 0:15:51.760 Uh and um. There's a bright side of the labor 0:15:51.880 --> 0:15:55.440 market that unemployment is still low and there's no sign 0:15:55.520 --> 0:15:59.640 of a wage price spiral building up. So overall the 0:15:59.720 --> 0:16:03.160 pit sure is not great. What what policies are going 0:16:03.240 --> 0:16:05.440 to be introduced? It's hard to say, of course, since 0:16:05.480 --> 0:16:07.000 we don't know who's going to be the Prime minister. 0:16:07.280 --> 0:16:09.640 But we pretty well know who's going to be the 0:16:09.800 --> 0:16:13.680 Chancellor of the Exchequer of the chief uh financial official, 0:16:14.200 --> 0:16:16.920 and that is the one who's right there now, Jeremy Hunt, 0:16:17.600 --> 0:16:21.440 and I expect that we will see substantial fistal tightening. 0:16:22.760 --> 0:16:25.960 On the other hand, Bank of England monetary tightening might 0:16:26.080 --> 0:16:29.000 not go as far as the market seem to expect. 0:16:30.400 --> 0:16:33.280 Is this a political crisis, is it an economic crisis? 0:16:33.440 --> 0:16:36.560 Or can the two be separated? The two can't ready 0:16:36.560 --> 0:16:38.480 to be separated. As I said, I think the political 0:16:38.600 --> 0:16:42.480 uncertainty has some impact on investment behavior, on on what 0:16:42.720 --> 0:16:45.640 entrepreneurs are willing to do, what risks they're willing to 0:16:45.720 --> 0:16:48.440 take at this stage when everything is so unclear. But 0:16:49.040 --> 0:16:52.840 at the same time, Uh, the constraints on fiscal and 0:16:52.960 --> 0:16:58.200 monetary policy are so severe that what whoever comes in 0:16:58.840 --> 0:17:01.640 as prime minister, it's not going to have much wiggle room. 0:17:03.640 --> 0:17:06.040 Not much wiggle room. I mean, what can be done 0:17:06.560 --> 0:17:10.480 in terms of not just getting the fiscal policy back 0:17:10.560 --> 0:17:13.520 in order in the UK, but to bring back some 0:17:14.040 --> 0:17:18.959 form of credibility for voters and for markets in your country. 0:17:20.440 --> 0:17:24.760 How about a little political stability, a little cohesion in 0:17:24.840 --> 0:17:29.240 the governing party. Uh. If you can't have that, then 0:17:29.359 --> 0:17:31.560 you really ought to go to a general election. If 0:17:31.600 --> 0:17:34.479 they're going to continue fighting among each other, whoever they 0:17:34.600 --> 0:17:38.240 choose as prime minister, then that prime minister is not 0:17:38.400 --> 0:17:41.720 going to have much authority. And you will find in 0:17:41.840 --> 0:17:44.200 each and every vote to the House of Commons, whatever 0:17:44.320 --> 0:17:47.480 policies come forward, there's going to be a dissenting group. 0:17:47.920 --> 0:17:51.040 And if that group is allied with the Labor Party, 0:17:51.480 --> 0:17:54.879 then whatever it is won't get through. Well, what is 0:17:54.920 --> 0:17:57.560 it due to confidence though if there is a general 0:17:57.600 --> 0:18:01.720 election called early in the UK, I mean the schedule 0:18:01.880 --> 0:18:06.600 of elections has to do something for for voter confidence 0:18:06.720 --> 0:18:10.000 in some respect, doesn't it? Or or are people clamoring 0:18:10.119 --> 0:18:14.440 now for a change in in the parties. I think 0:18:14.520 --> 0:18:19.399 there is a very substantial groundswell of people saying, come on, 0:18:19.760 --> 0:18:22.080 this is enough. How many prime ministers do we need 0:18:22.160 --> 0:18:25.600 to have that aren't elected? After all, it's time for 0:18:25.680 --> 0:18:30.200 a general election. Of course, the Conservative MPs looking at that, 0:18:31.000 --> 0:18:34.080 looking at the polls say oh gosh, I don't want 0:18:34.119 --> 0:18:37.000 to go out there now because the polls are so 0:18:37.440 --> 0:18:42.600 heavily against them. But but there is a very substantial body, 0:18:42.880 --> 0:18:46.200 and I'm not speaking just for myself, a very substantial 0:18:46.280 --> 0:18:49.960 body of public opinion in this country. We would like 0:18:50.160 --> 0:18:55.119 to have a general election about thirty seconds left here, professor. 0:18:55.320 --> 0:18:58.720 Apart from the crisis of confidence just in the UK, 0:18:58.960 --> 0:19:02.760 where does all the chaos leave the country on the 0:19:02.840 --> 0:19:06.840 world stage? Oh, I think we're much diminished, not just 0:19:07.080 --> 0:19:10.840 because we left the European Union, but because we behaved 0:19:10.920 --> 0:19:14.760 so badly since we left the European Union. Uh and uh, 0:19:15.480 --> 0:19:19.560 you know it will take um a very serious prime 0:19:19.600 --> 0:19:24.879 minister and serious policies to restore some degree of credibility. 0:19:25.680 --> 0:19:28.800 Right now we look a little bit too much like 0:19:29.280 --> 0:19:33.840 a badly functioning emerging market. Wow. Well, we'll leave it 0:19:33.920 --> 0:19:36.720 there for now. Thank you for joining us this morning, Professor, 0:19:36.840 --> 0:19:40.680 really appreciate your insights. Richard Portis is Professor of Economics 0:19:40.760 --> 0:19:43.520 at the London Business School Academic director at a q 0:19:43.840 --> 0:19:48.800 R Asset Management Institute. We're expecting a pretty quick change 0:19:48.800 --> 0:19:52.880 in leadership here, with the candidates expected to be seated 0:19:53.520 --> 0:19:56.800 um as soon as Monday. Looking at the pound right now, 0:19:56.880 --> 0:20:00.959 it is weakening against the dollar. One nine SEP futures 0:20:00.960 --> 0:20:03.240 are down twenty six point, Staff futures down a hundred 0:20:03.280 --> 0:20:08.640 fifty seven. Nasdaq futures lower by a hundred nineteen. Bloomberg 0:20:08.640 --> 0:20:11.040 eleven three oh Weather sunny, low sixties today. It will 0:20:11.040 --> 0:20:12.960 be mostly sunny for much of the day Tomorrow with 0:20:13.080 --> 0:20:16.600 highs in the mid sixties. Cloud Sunday, rain by the afternoon, 0:20:16.760 --> 0:20:20.119 low sixties to end the weekend. Right now forty seven 0:20:22.119 --> 0:20:26.640 broadcasting live from the Bloomberg Interactive Broker Studio in New York. 0:20:26.760 --> 0:20:30.480 Bloomberg Elving Freedo to Washington, d C. Bloomberg ninety nine 0:20:30.560 --> 0:20:33.480 one to Boston, Bloomberg what all six one to San 0:20:33.560 --> 0:20:37.359 Francisco Bloomberg nine six to the country, Sirius XM chto 0:20:37.480 --> 0:20:40.760 one nineteen and around the Blobe, the Bloomberg Business and 0:20:40.880 --> 0:20:50.399 Bloomberg Radio dot Com. This is Bloomberg Daybreak and it's 0:20:50.440 --> 0:20:53.240 five thirty on Wall Street. Good morning. I'm Karen Moscow, 0:20:53.440 --> 0:20:56.159 I'm Nathan Hager. Bloomberg Daybreak brought to you by se I. 0:20:56.320 --> 0:20:59.919 Imagine your asset management firms operational infrastructure as a competit 0:21:00.000 --> 0:21:02.240 of their advantage. Let s e I show you how 0:21:02.680 --> 0:21:05.159 at se I C dot com slash I M S 0:21:05.840 --> 0:21:07.920 and we're just about four hours away from the open 0:21:07.960 --> 0:21:09.600 of US trading. Must get you up to date on 0:21:09.600 --> 0:21:11.440 the news you need to know at this hour. Well. 0:21:11.520 --> 0:21:14.720 UK government leaders are weighing next steps after the resignation 0:21:14.800 --> 0:21:18.360 of Prime Minister List Trust Oz have a Refhi, Sunac, 0:21:18.480 --> 0:21:21.680 Penny Mordaunt and Boris Johnson is the most likely candidates 0:21:21.720 --> 0:21:25.240 to replace Trust. They got reaction from former Chancellor Philip 0:21:25.320 --> 0:21:28.320 Hammon this morning. I'm not gonna say until I know 0:21:28.400 --> 0:21:30.840 who the long enough of candidates is, who I think 0:21:30.920 --> 0:21:35.080 would be the person who will most effectively deliver stability. 0:21:35.320 --> 0:21:37.960 But I don't think going back into the past and 0:21:38.080 --> 0:21:41.040 reincarnating a previous prime minister he's going to be any 0:21:41.080 --> 0:21:44.560 way to reassure markets. Farmer Chancellor Philip Hammond tells US 0:21:44.600 --> 0:21:47.960 the new UK government must avoid signaling more chaos to 0:21:48.040 --> 0:21:52.119 the market. Staying overseas care intensions between Beijing and Washington 0:21:52.240 --> 0:21:54.440 remain in focus. The White House is weighing a further 0:21:54.560 --> 0:21:58.920 technology ban on China to include quantum computing and artificial intelligence. 0:21:59.119 --> 0:22:02.520 Bloomberg's John Lou reports from Beijing. We have the earlier 0:22:02.640 --> 0:22:07.280 Defense position paper out of Washington, which again named China 0:22:07.440 --> 0:22:10.960 as the United States is top strategic competitor. What we 0:22:11.040 --> 0:22:13.560 see now is the United States the Biden administration taking 0:22:13.880 --> 0:22:16.640 as many steps as possible to try to limit China's 0:22:16.640 --> 0:22:20.200 access to these emerging technologies. Bloombergs John lu says it's 0:22:20.200 --> 0:22:22.360 another sign the White House is taking a harder line 0:22:22.400 --> 0:22:25.320 on China. Well. Looking at markets now, Nathan us future 0:22:25.400 --> 0:22:27.959 is in the red after hawk ish fed speaking, sticky 0:22:28.000 --> 0:22:32.000 inflation led to a two day slump. Treasury yields are climbing, 0:22:32.040 --> 0:22:34.880 while most major currencies weaken against the dollar and poor 0:22:34.920 --> 0:22:37.320 earnings are hitting shares of Snap. This morning, karen It 0:22:37.400 --> 0:22:40.840 reported its slowest quarterly sales growth ever. Right now, Snap 0:22:40.920 --> 0:22:44.600 shares are lower by twenty five well. Sticking with corporate news, 0:22:44.720 --> 0:22:47.639 Nathan Advisors on both sides are looking to close Elon 0:22:47.720 --> 0:22:50.000