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Speaker 1: Live from the Bloomberg interactave Berger Studios. Is this Bloomberg

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Speaker 1: day Break for Thursday, January nine coming up this hour,

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Speaker 1: stocks drop and treasuries rise as recession fears persist. We

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Speaker 1: take you back to Davos for day four of the

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Speaker 1: World Economic Forum. Apple plans to take on Amazon and

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Speaker 1: Google by expanding its smart home line up, and Netflix

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Speaker 1: gets set to report hrnings this afternoon. I maybe Morris

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Speaker 1: the Supreme Court will not block new gun laws in

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Speaker 1: New York, and Mayor Adams doubles down on his call

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Speaker 1: for a national response to the migrant crisis. I'm trying

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Speaker 1: to stashon sports another home loss for the next meeting.

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Speaker 1: By Washington, the Bruins beat the Islanders. The upsets continue

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Speaker 1: with the Australian Open. That's all s Trady ahead on

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Speaker 1: Bloomberg day Break on Bloomberg eleven three, on New York

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Speaker 1: Bloomberg one, Washington, d C, Bloomberg one oh six one, Boston,

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Speaker 1: Bloomberg nine sixties, and Francisco Syrius x M one nineteen

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Speaker 1: and around the world on Bloomberg Radio dot Com and

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Speaker 1: via The Bloomberg Business. Good morning, I'm Nathan Hagar, and

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

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Speaker 1: We are seeing a turn in the mood on Wall Street.

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Speaker 1: The tech heavy NASTAC one hundred snapped a seven day

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Speaker 1: rally yesterday, and after rising for five straight days, the

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Speaker 1: SMP five hundred fell for a second session. In fact,

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Speaker 1: yesterday's one point six percent decline was the worst in

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Speaker 1: a month week. Economic data are rekindling concern over the

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Speaker 1: outlook for growth. Howard Marks is co founder of oak

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Speaker 1: Tree Capital Group. With the appearance of the UH, of

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Speaker 1: the inflation and the increasing of rates to try to

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Speaker 1: stamp out the inflation, things have gotten harder. I imagine

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Speaker 1: people today saying, well, when are we going back to

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Speaker 1: normal like it was five, six, seven years ago? And

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Speaker 1: and the important thing to know is that that wasn't normal.

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Speaker 1: That was the easiest, the best of times. And I

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Speaker 1: my own belief is we're not going back there. Oak

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Speaker 1: Tree Capital co founder Howard Mark spoke with Bloomberg's remain

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Speaker 1: boss Stick Marx also says the current rally and junk

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Speaker 1: bonds is unlikely to last. Meantime, Nathan, the best start

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Speaker 1: to a year for a bond returns is helping fuel

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Speaker 1: an unprecedented debt sale bonanza. So far, governments and companies

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Speaker 1: around the world have sold more than half a trillion

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Speaker 1: dollars worth of debt. Virtually every corner of the new

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Speaker 1: issue market is booming, thanks in part to a rally

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Speaker 1: that's seen global bonds of all stripes searge four point

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Speaker 1: one percent to start the year. We'll still Karen. The

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Speaker 1: FED remains firmly in focus for fixed income investors now too,

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Speaker 1: FED officials are forecasting a downshift two quarter percent rate

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Speaker 1: hikes as the economy softens and inflation cools. Here's Philadelphia

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Speaker 1: FED President Patrick Harker. I expect that we will raise

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Speaker 1: rates a few more times this year, though to my mind,

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Speaker 1: and I this is my views, the days of us

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Speaker 1: raising them seventy five basis points at a time have

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Speaker 1: surely passed. In my view, hikes of twenty basis points

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Speaker 1: will be appropriate going forward. Those sentiments from the Philly

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Speaker 1: Feds Patrick Harker being echo by Dallas FED President Lorie Logan,

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Speaker 1: who says she favors cutting back the pace of tightening.

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Speaker 1: A slower pace is just a way to ensure we

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Speaker 1: make the best possible decisions we can, and if necessary,

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Speaker 1: should adjust our overall policy strategy to keep financial conditions restrictive,

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Speaker 1: even as the pace lows. Lori Logan and Patrick Harker

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Speaker 1: are both voting members on the f O m C

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Speaker 1: this year. The feds next policy decision comes February one,

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Speaker 1: but the global economy is also in focus at DeVos

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Speaker 1: Nathan during Gay four of the World Economic Forum, recession

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Speaker 1: talk remains on the front burner. European Economy Commissioner Palelo

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Speaker 1: gent Aloni tells us Europe is already in the midst

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Speaker 1: of a recession. We are, in my view and in

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Speaker 1: the EU estimate, which is more important, in a period

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Speaker 1: of economic contraction. This is for sure we will have

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Speaker 1: a couple of quarters, the previous one and this one

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Speaker 1: of slight contraction. Well, growth is contracting. European Economy Commissioner

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Speaker 1: Polo gent Aloni said the EU likely avoided the case scenario.

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Speaker 1: He made the comments in an interview with Bloomberg's Francy

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Speaker 1: Lakwa this morning. Let's turn to corporate news back here

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Speaker 1: in the US, Karen, we're seeing a new push from

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Speaker 1: Apple to take on Amazon and Google in the smart

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Speaker 1: home space. Bloomberg Steve Rappaport joins US Live with that story.

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Speaker 1: Good morning, Steve, Good morning, Nathan and Karen. Apple's playbook

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Speaker 1: includes rolling out what amounts to a low end iPad

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Speaker 1: meant to control in array of devices. It will allow

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Speaker 1: users to adjust lighting and temperatures, play videos, and much more.

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Speaker 1: iPads already have smart home features, but standalone devices to

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Speaker 1: control everything from one location are gaining popularity. The tech

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Speaker 1: giantess struggled to keep up in a market dominated by

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Speaker 1: Amazon's Alexa and the Google Assistant. Apple will also make

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Speaker 1: adjustments to its Sirie voice controlled service as part of

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Speaker 1: the push. Live in New York. I'm Steve Rappaport, Bloomberg Daybreak.

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Speaker 1: All right, Steve, thank you. Earnings also in focus today

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Speaker 1: as we await results from Netflix the company reports this afternoon,

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Speaker 1: and as Bloomberg Jeaff Bellinger reports analysts are upbeat. Bloomberg

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Speaker 1: Intelligence says things are finally falling into place for the

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Speaker 1: video streaming sir Risk and it could meet or even

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Speaker 1: exceed guidance for the addition of four and a half

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Speaker 1: million subscribers. That's based in part on a solid slate

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Speaker 1: of shows. Investors are hoping to hear more about the

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Speaker 1: rollout of the ad supported tier, and plans for crackdown

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Speaker 1: on password sharing. Analysts say Netflix could report stronger fourth

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Speaker 1: quarter revenue games given the recent weakening of the dollar.

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Speaker 1: Jeff Bullinger, Bloomberg Daybreak, Jeff, Thanks, and California. Elon Musk's

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Speaker 1: fraud trial is underway. Opening arguments are showcasing very different

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Speaker 1: pictures of the Testless CEO. Bloomberg's Baxter has the story.

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Speaker 1: The prosecution depicts Musk as a liar who callously jeopardized

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Speaker 1: the savings of regular people, and the defense as a

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Speaker 1: well intentioned visionary focused on Testla's future. The issue that

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Speaker 1: Musk tweet it he had lined up financing to take

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Speaker 1: Tesla private at a time the stock was slumping amid

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Speaker 1: production problems, and it fueled a rally. The prosecution says

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Speaker 1: he never intended to take the company private. His attorneys

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Speaker 1: say that isn't true, that he thought he had the

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Speaker 1: money lined up. Musk will be the star witness and

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Speaker 1: the two week trial in San Francisco. I'm at Baxter

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Speaker 1: Bloomberg Daybreak. All right, thanks, and let's turn our focus

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Speaker 1: now to corporate earnings. We're seeing shares about CoA down

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Speaker 1: about six and a half percent in early trading. The

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Speaker 1: company said aluminum shipments will be weaker than anticipated this year.

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Speaker 1: Alcoa blames ongoing uncertainty is caused by global inflation, dwindling

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Speaker 1: demanding Europe, and a soft outlook in China. It is

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Speaker 1: forty two degrees in Central Park, clear skies. For now,

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Speaker 1: We've got rain moving in. Later today, we'll hit a

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Speaker 1: high near forty five degrees. The rain will taper to

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Speaker 1: a few showers this evening as we head down to

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Speaker 1: near forty. Time Now for a look at some of

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Speaker 1: the other stories making news in New York and around

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Speaker 1: the world. For that, we're joined by Bloomberg's Amy Morris.

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Speaker 1: Good morning, Amy, Good morning Nathan. The U. S. Supreme

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Speaker 1: Court has refused to block new safety in record keeping

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Speaker 1: requirements that apply to New York gun retailers, letting those

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Speaker 1: provisions stay in a act while a legal fight goes forward.

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Speaker 1: The justices, without explanation or dissent, turned away an emergency

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Speaker 1: request by a group of gun dealers who say their

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Speaker 1: Second Amendment rights are being violated. New York City Mayor

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Speaker 1: Eric Adams spoke before the US Conference of Mayors in Washington,

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Speaker 1: d C. Where he laid out a six point action

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Speaker 1: plan to help alleviate what he calls the migrant crisis

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Speaker 1: in New York, and he doubled down on his call

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Speaker 1: for a national response. Cities and mayors have gotten us

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Speaker 1: this far. Nounce time for our entire government to support

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Speaker 1: the rope that we save so many lives. Mayor Adams

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Speaker 1: called for a dedicated point person at the US Mexico border,

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Speaker 1: a decompression strategy, and congressional funding to implement strategies in

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Speaker 1: cities with the greatest need. This as New Jersey Governor

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Speaker 1: Phil Murphy announced free state paid healthcare for thousands of

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Speaker 1: undocumented immigrant children. New Jersey expects to add sixteen thousand

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Speaker 1: non citizens under the age of nineteen for free routine

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Speaker 1: medical care, emergency room visits, and other services. Meanwhile, Mayor

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Speaker 1: Adams is also looking at ways to repurpose vacant commercial

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Speaker 1: real estate because so many people are working remotely, leaving

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Speaker 1: those offices empty. Adams tells Politico that ten million square

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Speaker 1: feet of space is not being used, turning it into

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Speaker 1: the much needed affordable houses. That's that we're looking for childcare.

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Speaker 1: We need to look at the spaces that are available.

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Speaker 1: Mayor Adams estimates about fifty people are in their offices

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Speaker 1: compared to thirty back in April. A bill that would

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Speaker 1: give terminally ill people the right to end their life

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Speaker 1: in Connecticut is once again before the legislature. The Public

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Speaker 1: Health Committee will be taking up the bill, which failed

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Speaker 1: to gain enough support in the Judiciary Committee last year.

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Speaker 1: This year's measure would allow a doctor to prescribe life

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Speaker 1: ending drugs to a person suffering from a terminal illness.

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Speaker 1: Global News twenty four hours a day on airand on

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Speaker 1: Bloomberg Quicktake, powered by more than journalists and analysts and

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Speaker 1: more than one of of twenty countries. I'm Amy Morris.

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Speaker 1: This is Bloomberg, Nathan. Thank you Amy. Now it's time

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Speaker 1: for our Bloomberg Sports Update, brought to you by try

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Speaker 1: stayed OUTI Good morning, John Stanshower, Good morning, Nathan. I

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Speaker 1: gave the next figure to win. They won last weekend.

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Speaker 1: Washington Wizards only eighteen wins on the season, losers of

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Speaker 1: five of their last six, but at the Garden they

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Speaker 1: never trailed, jumped in front by fifteen in the first quarter,

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Speaker 1: and won one sixteen to one oh five. Kyle Kuzma

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Speaker 1: score twenty seven Jalen Brunson lat the next with thirty two.

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Speaker 1: Nicks made only seven of twenty six three pointers. Julius

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Speaker 1: Randall and R. J. Barrett were together oh for nine.

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Speaker 1: The Knicks coach Tom Thibodeaux. We were playing from behind

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Speaker 1: all night. That show that that heard their state. They

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Speaker 1: came out, they were making shots early and h they

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Speaker 1: got a lot of confidence from that. I thought they

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Speaker 1: played really well in uh. You know, we missed shots

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Speaker 1: and we couldn't get our defense. And the struggles continue

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Speaker 1: at home. It's just eleven and thirteen, fourteen and eight

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Speaker 1: on the road at the Garden tonight. Rangers and the

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Speaker 1: team that's dominating the NHL, the Bruins last night beat

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Speaker 1: the Islanders for the one of the Bruins are twelve

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Speaker 1: points better than every other team. College hoops Seaton Hall

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Speaker 1: one point went over fifteenth rank Yukon, who was without

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Speaker 1: its coach Dan Hurley, the Seaton Hall grad. He missed

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Speaker 1: the game due to COVID. This Australian opened the first

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Speaker 1: Grand slamming over twenty years, where the top two scenes

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Speaker 1: on the men's side both failed to get out of

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Speaker 1: the second round. The day after after, you on the

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Speaker 1: data lost. Casper Rude, the two seed who lost into

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Speaker 1: Allen last year's final, upset by twenty two year old

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Speaker 1: American Jensen Brooks. Be Taylor Fritz, the top seeded American,

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Speaker 1: lost in five sets. The Mets have signed veteran outfielder

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Speaker 1: Tommy Fan. Jets interviewed Nathaniel Hackett to be their offensive coordinator.

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Speaker 1: He was just fired as the head coach in Denver.

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Speaker 1: John Stash that one. Bloomberg Sports live from coast to coast,

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Speaker 1: from New York to San Francisco, Boston to Washington, d C.

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Speaker 1: Nationwide on Sirius xamp, the Bloomberg Business app, and Bloomberg

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Speaker 1: dot Com. This is Bloomberg Daybreak. Good morning. I'm Nathan Hagar,

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Speaker 1: bringing you more of our conversation with billionaire Howard Marks,

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Speaker 1: the co chairman of oak Tree Capital Management. Mark sat

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Speaker 1: down with Bloomberg's Remain Bostick to explain why he thinks

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Speaker 1: financial markets maybe in the middle of their third sea

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Speaker 1: change of the last fifty years. Let's listen into that interview. Now,

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Speaker 1: you say we're basically in the middle of a third

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Speaker 1: sea change. What is it? Well, if you look at

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Speaker 1: the period from the end of the global financial crisis

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Speaker 1: UH roughly oh nine through the appearance of the pandemic,

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Speaker 1: and then in the one UH we were you know,

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Speaker 1: the FED took extreme measures to save the economy. They

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Speaker 1: worked very low interest rates the lowest in history zero

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Speaker 1: for much of that time, and UH quantitative easing, the

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Speaker 1: buying of bonds, which puts liquidity into the economy. UM.

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Speaker 1: These things produced what I would call was an easy

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Speaker 1: environment UH in the economy and the markets. It was

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Speaker 1: we had the longest economic recovery in history. It was

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Speaker 1: easy to make money, We had low cost capital, was

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Speaker 1: easy to make a profit, We had very few defaults

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Speaker 1: in bankruptcy. It was easy to stay in business, it

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Speaker 1: was easy to access capital. Um. Everything was easy at

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Speaker 1: that time. And UH in the last year, of course,

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Speaker 1: with the appearance of the UH, of the inflation, and

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Speaker 1: the increasing of rates to try to stamp out the inflation,

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Speaker 1: things have gotten harder. I imagine people today saying, well,

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Speaker 1: when are we going back to normal like it was five, six,

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Speaker 1: seven years ago? And and the important thing to know

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Speaker 1: is that that wasn't normal. That was the easiest, the

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Speaker 1: best of times. And I my own belief is we're

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Speaker 1: not going back there. We're now in an environment of

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Speaker 1: more normal and UH circumstances, and we're going to roughly

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Speaker 1: stay this way. Well do we go back? I mean,

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Speaker 1: what do we go back to? It all? Because when

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Speaker 1: I sort of read that memo and I look at

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Speaker 1: sea changes, it sounds like everything new is new. It's

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Speaker 1: never really a reversion to where we were in the past. Right. Well,

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Speaker 1: that that's what a sea change is. It's a complete transformation, uh,

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Speaker 1: not just a minor UH cyclical fluctuation. So you know, look,

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Speaker 1: I think that the business world, the economic world, is

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Speaker 1: not supposed to be easy. It's not supposed to be

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Speaker 1: easy to make money. UH. It's not supposed to be

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Speaker 1: easy for UH companies with bad business models to stay

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Speaker 1: in business, as it has been for the last fourteen years. UM.

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Speaker 1: So I think we go back to a period in

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Speaker 1: which we have moderate interest rates, we have moderate availability

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Speaker 1: of capital, we have a moderate UH default rate, and

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Speaker 1: so forth, all of which will feel much less accommodative,

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Speaker 1: I think than the last fourteen years. But so much

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Speaker 1: to the ada on the market right now is, of

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Speaker 1: course people trying to figure out what that new rate is,

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Speaker 1: if you want to call it a neutral rate or whatever.

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Speaker 1: But I mean, when was the last time that you

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Speaker 1: can remember that we had a stable and assistant neutral rate. Well,

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Speaker 1: it depends on your definition of stable time wise, But

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Speaker 1: of course I think that the FED became activist with

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Speaker 1: the arrival of Alan Greenspan in the mid nineties, and

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Speaker 1: I think that it's you know, we we had you know,

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Speaker 1: people started to talk about the arrival of the greenspand

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Speaker 1: put that if there was a problem in the economy,

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Speaker 1: the FED would just scored in some liquidity and solve it,

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Speaker 1: and and they frequently did. And they frequently did, including

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Speaker 1: Y two K and another real and imaginary UH crises,

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Speaker 1: the arrival of the bursting of the TMT bubble, for example.

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Speaker 1: So I would say that that's twenty five years that

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Speaker 1: that we haven't had what I call a free market

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Speaker 1: in money. But what gives you conviction that J. Pale

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Speaker 1: and whoever his successor might end up be being are

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Speaker 1: going to sort of move in a different direction where

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Speaker 1: they're not going to necessarily cow to out to the

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Speaker 1: market in a way that the market has come to expect.

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Speaker 1: I'm applying common sense. Uh, you can't always count on

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Speaker 1: common sense, but uh, you know, the events of recent

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Speaker 1: years tell me that it's not great to have interest

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Speaker 1: rates at zero. Zero interest rates are really in an

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Speaker 1: emergency measure. Uh, somebody gets a heart attack, you give

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Speaker 1: them a shot of a greneralman. Works. That doesn't mean

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Speaker 1: you start your day with a shot of a greneralman

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Speaker 1: every day. For seven years. We had rates at seven

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Speaker 1: at zero for seven years, and I think that you know,

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Speaker 1: and by the by the way, by the time uh

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Speaker 1: sixteen seventeen eighteen rolled around, people started saying, well, shouldn't

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Speaker 1: rates be a little higher, so that if we have

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Speaker 1: a recession, the Fed can cut rates and and become accommodative. Well,

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Speaker 1: if rates are zero or a quarter or a half,

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Speaker 1: you can't do that. So I think that's an important

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Speaker 1: reason why rates should be positive. And if you want

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Speaker 1: to fight inflation and and kill off inflationary psychology, which

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Speaker 1: is very important, you need a positive real Fed funds rate,

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Speaker 1: that is, the funds Fed funds rate has to exceed

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Speaker 1: the rate of inflation. And where we have a way

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Speaker 1: to go before that's the case. This is Bloomberg Daybreak today,

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Speaker 1: your morning brief on the stories making news from Wall

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Speaker 1: listen live each morning starting at five am Wall Street

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