WEBVTT - Bloomberg Daybreak: November 1, 2022 - Hour 2 (Radio) 0:00:03.400 --> 0:00:06.840 Live from the Bloomberg Interactive Broker Studios. This is Bloomberg 0:00:06.880 --> 0:00:10.600 day Break for Tuesday, November one, two. Coming up this hour, 0:00:10.760 --> 0:00:13.560 stock teachers rise as we begin a new trading month. 0:00:13.720 --> 0:00:17.480 Can President Biden deliver on promises to impose higher taxes 0:00:17.520 --> 0:00:19.919 on big oil credits? We says the bank is not 0:00:20.280 --> 0:00:23.240 for sale. We'll talk with the Swisslanders chairman, and the 0:00:23.239 --> 0:00:27.000 Fed begins its two day policy meeting. A salary transparency 0:00:27.080 --> 0:00:29.560 law takes effect today in New York City. Plus go 0:00:29.680 --> 0:00:33.800 at the Supreme Court in affirmative action at universities and colleges. 0:00:34.080 --> 0:00:37.520 I'm Michael barr More Ahead, John Stan Shower Sports much 0:00:37.520 --> 0:00:40.199 did it win for the Nets? The Bround's upset the Bengals? 0:00:40.280 --> 0:00:45.680 The World Series got reined out. That's All's trended Ahead 0:00:45.760 --> 0:00:49.320 on Bloomberg Daybreak on Bloomberg Eliving, Free on New York, 0:00:49.479 --> 0:00:54.160 Bloomberg one, Washington, d C, Bloomberg one oh six one, Boston, 0:00:54.480 --> 0:00:59.200 Bloomberg nine sixties, San Francisco, Sirius Exam one nineteen and 0:00:59.280 --> 0:01:02.040 around the world. Old on Bloomberg Radio dot Com and 0:01:02.160 --> 0:01:09.240 via the Bloomberg Business App. Good Tuesday morning, I'm Amy 0:01:09.319 --> 0:01:12.440 Morris I'm Nathan Hagar. Futures are moving higher this morning. 0:01:12.440 --> 0:01:14.479 We're coming up to six o one on Wall Street, 0:01:14.480 --> 0:01:16.480 and we checked the markets every fifteen minutes during the 0:01:16.520 --> 0:01:19.720 trading day. On Bloomberg, SMP futures are up thirty three points, 0:01:19.720 --> 0:01:22.400 STOUT futures up a hundred ninety seven, Nastack futures are 0:01:22.440 --> 0:01:25.440 higher by one twenty three points. The tenure treasury is 0:01:25.480 --> 0:01:29.280 up thirty seconds. The yield three point nine five nim 0:01:29.400 --> 0:01:31.959 X screwed is up one point four percent at eighty 0:01:32.000 --> 0:01:36.119 seven dollars sixty three cents a barrel. Amy Nathan Stocks 0:01:36.120 --> 0:01:39.080 Center the first day of November moving higher. If history 0:01:39.160 --> 0:01:42.960 is any indication, equities made build on October's games, which 0:01:43.000 --> 0:01:47.240 saw the SMP five hundred rise eight percent. Bespoke investment groups, 0:01:47.240 --> 0:01:49.760 as the SMP five hundred has registered in the average 0:01:49.800 --> 0:01:53.760 game of eight tenths of a percent in November. Amanda Gottias, 0:01:53.800 --> 0:01:57.600 chief investment officer at p nc ST Management, we're still 0:01:57.640 --> 0:02:01.040 playing a little bit of defense. We're still leaning US 0:02:01.120 --> 0:02:06.040 over international, larger over smaller capitalization. We kind of neutralize 0:02:06.080 --> 0:02:10.000 our growth and value bets here um. But with valuations 0:02:10.040 --> 0:02:12.960 following six plus, multiple points since the beginning of the year. 0:02:13.040 --> 0:02:14.960 Just on the S and P five you have to 0:02:15.000 --> 0:02:19.679 start getting interested um in opportunities at these leveled P 0:02:19.880 --> 0:02:23.560 n c ST managements. Amanda Gotti says markets will rally 0:02:23.720 --> 0:02:26.400 if the Fed gives a clear message on when rate 0:02:26.480 --> 0:02:28.480 hikes will end. Well, I mean it has been a 0:02:28.520 --> 0:02:31.880 big trading day in Asia. Chinese stocks surged overnight as 0:02:31.919 --> 0:02:36.200 speculation grows of the government's preparing to exit stringent COVID restrictions. 0:02:36.400 --> 0:02:39.240 The Hang Sang in Hong Kong rose five percent. Stocks 0:02:39.240 --> 0:02:42.799 in China gained three point six percent, and Nathan we 0:02:42.840 --> 0:02:46.520 continue to see historic profit from oil companies VP this morning, 0:02:46.520 --> 0:02:50.240 reporting its second highest quarterly profit on record and announcing 0:02:50.240 --> 0:02:53.480 two and a half billion dollars of share buybacks. Bloomberg 0:02:53.480 --> 0:02:56.520 Stephen Stabinski says it's a batter year for big oil. 0:02:56.919 --> 0:02:59.960 It's really hard to see anyone who is really losing 0:03:00.080 --> 0:03:02.639 out on the surging prices. And you've seen it across 0:03:02.680 --> 0:03:05.080 the board over the last week. You've seen you know, 0:03:05.240 --> 0:03:09.560 Shell total at so On bp IS is joining this 0:03:09.760 --> 0:03:12.800 larger group not just in Europe, in the United States, 0:03:12.840 --> 0:03:15.200 but you're also seeing this in you know, Saudi Aramco 0:03:15.639 --> 0:03:19.160 posted their second best quarterly profit ever. When it comes 0:03:19.160 --> 0:03:23.080 to Saudi Aramco, Bloomberg's Steven Stepanski's reports that the company 0:03:23.200 --> 0:03:26.239 posted its second highest earnings on record this morning. The 0:03:26.360 --> 0:03:28.840 results from Big Oil this quarter are do largely to 0:03:29.040 --> 0:03:32.440 surging prices at the pumps. Stephen mentioned amy We've seen 0:03:32.480 --> 0:03:34.960 record profits from Mixed On Mobile as well as Chevron. 0:03:35.280 --> 0:03:37.800 Both companies have masked more than thirty billion dollars in 0:03:37.840 --> 0:03:40.840 combined net income last quarter, and that has President Biden 0:03:40.880 --> 0:03:44.560 calling on Congress to impose higher taxes on oil companies. 0:03:44.600 --> 0:03:48.800 If they're not reinvesting in production, they don't, they're gonna 0:03:48.800 --> 0:03:51.360 pay a higher tax on their excess profits and face 0:03:51.440 --> 0:03:55.440 other restrictions. My team will work with Congress to look 0:03:55.440 --> 0:03:57.840 at these up. These options and are available to us 0:03:57.840 --> 0:04:00.880 and others. It's time for these companies to stop for 0:04:01.120 --> 0:04:04.320 profit cheering. The President Biden's promise to impose higher taxes 0:04:04.360 --> 0:04:07.280 will be hard to deliver. Democrats have unsuccessfully sought a 0:04:07.360 --> 0:04:10.440 so called windfall profit tanction more than a decade. Such 0:04:10.440 --> 0:04:12.560 a proposal would have a hard time passing the Senate 0:04:12.600 --> 0:04:15.400 and its current makeup, and Nathan Central Banks also in 0:04:15.480 --> 0:04:18.240 focus this morning, the FED begins its two day policy meeting, 0:04:18.279 --> 0:04:21.760 where it's expected to hike rates another seventy five basis points. 0:04:22.120 --> 0:04:25.680 At the same time, Australia's Central Bank has raised interest 0:04:25.760 --> 0:04:28.640 rates by a quarter percentage point. It looks like the 0:04:28.760 --> 0:04:31.760 r b A is pivoting away from larger hikes. According 0:04:31.800 --> 0:04:34.520 to Bloomberg's at Garfield Reynolds, it's definitely a pivot for 0:04:34.560 --> 0:04:37.920 the b A. The question is whether other central banks 0:04:37.920 --> 0:04:40.839 are going to be as concerned about the growth side 0:04:40.839 --> 0:04:44.039 of their mandate as the A. B A is signaling 0:04:44.120 --> 0:04:46.880 that it is. It's still concerned about inflation. It says 0:04:46.960 --> 0:04:50.719 more hikes are to come, but reading between the lines, 0:04:50.760 --> 0:04:54.080 it's concerned about growth mean that it's not wanting to 0:04:54.080 --> 0:04:57.480 go more than twenty five basis points of time. Bloomberg's 0:04:57.520 --> 0:05:01.200 chief rates correspondent Garfield Reynolds says cash rate in Australia 0:05:01.240 --> 0:05:04.360 now stands at two point eight five. That's the highest 0:05:04.440 --> 0:05:07.560 level since In corporate news this morning, Amy, we are 0:05:07.600 --> 0:05:10.400 focused on credit Swiss again. The Swiss Bank is not 0:05:10.680 --> 0:05:13.400 for sale. That's what the firm's chairman Axel Lehman saying, 0:05:13.400 --> 0:05:16.640 after shares have fallen more than fifty percent this year, 0:05:16.920 --> 0:05:19.839 Layman spoke to us in Hong Kong. We're going to 0:05:20.080 --> 0:05:23.960 you know, to slife again, so we don't have any 0:05:24.040 --> 0:05:27.080 take over this conscience and at that point we truly 0:05:27.080 --> 0:05:31.239 believe we want to stay independent. Credit Swiss chairman Axel 0:05:31.320 --> 0:05:33.760 Layman made the comments in an interview with Bloomberg News. 0:05:33.800 --> 0:05:36.039 You can catch the full conversation on Bloomberg dot com 0:05:36.080 --> 0:05:38.760 and on the Bloomberg terminal and back here in the US, 0:05:38.839 --> 0:05:42.520 the airline and travel recovery continues as the busy holiday 0:05:42.560 --> 0:05:46.599 season approaches. Delta Airlines pilots have voted to authorize a strike. 0:05:46.960 --> 0:05:49.760 We get that story from Bloomberg's Charlie Pellett. It gives 0:05:49.880 --> 0:05:53.240 union leaders the authority to call for a work stoppage 0:05:53.560 --> 0:05:57.120 once they have gone through steps set by federal labor law. 0:05:57.640 --> 0:06:00.720 The Delta unit of the Airline Pilots as Seation says 0:06:00.720 --> 0:06:05.120 about ninety nine percent of pilots who voted approved the proposal. 0:06:05.560 --> 0:06:09.880 The participation rate among Delta's roughly fifteen thousand pilots was 0:06:10.279 --> 0:06:14.440 ninety six percent. While aviators must follow steps set by 0:06:14.480 --> 0:06:18.200 the Railway Labor Act and can't randomly walk off the job. 0:06:18.520 --> 0:06:21.760 The strength of the vote represents Pilot's view about the 0:06:21.839 --> 0:06:26.320 lack of progress in negotiations in New York. Charlie Pilot's 0:06:26.320 --> 0:06:29.480 Bloomberg Daybreak. Thanks Charlie. In another note on the airline industry, 0:06:29.480 --> 0:06:32.280 for the first time since COVID cut air travel, US 0:06:32.360 --> 0:06:36.520 passenger traffic has been running above levels. Just over fifteen 0:06:36.560 --> 0:06:39.159 million people went through TSA security portals in the past 0:06:39.200 --> 0:06:41.839 seven days. That's about thirty nine thousand more than in 0:06:43.000 --> 0:06:45.480 and On the political front, the midterm elections are set 0:06:45.480 --> 0:06:48.080 for a week from today. That means a policy change 0:06:48.080 --> 0:06:51.480 from Twitter. The social media company has frozen some employee 0:06:51.520 --> 0:06:55.320 access to internal tools used for content moderation and other 0:06:55.400 --> 0:06:59.200 policy enforcement, and that's curbing the staff's ability to clamp 0:06:59.240 --> 0:07:02.800 down on missing formation ahead of the election. Bloomberg News 0:07:02.839 --> 0:07:05.440 has learned most people who work in Twitter's Trust and 0:07:05.520 --> 0:07:10.040 Safety organization are currently unable to alter or penalize most 0:07:10.040 --> 0:07:14.800 accounts that break rules around misleading information, offensive posts, and 0:07:14.920 --> 0:07:24.000 hate speech. Futures are higher. This is Bloomberg. It's six 0:07:24.080 --> 0:07:26.320 or seven on Wall Street. Let's bring in Michael Bard 0:07:26.320 --> 0:07:27.960 to find out what else is going on in New 0:07:28.040 --> 0:07:31.160 York and around the world. Good Morning, Michael, Good Morning Amy, 0:07:31.200 --> 0:07:34.280 and a salary transparency law takes effect today in New 0:07:34.360 --> 0:07:37.800 York City. It requires most companies to include a minimum 0:07:37.880 --> 0:07:42.040 and maximum salary ranges when they post job openings. The 0:07:42.120 --> 0:07:45.280 laws supporters say it's intended to close the pay gap 0:07:45.320 --> 0:07:48.200 for women and people of color, but critics are nue 0:07:48.280 --> 0:07:51.520 it will do just the opposite. The Supreme Court kicked 0:07:51.520 --> 0:07:56.200 off hearing arguments over affirmative action at universities. Conservative groups 0:07:56.240 --> 0:07:59.720 have sued both Harvard University and the University of North 0:07:59.720 --> 0:08:03.400 Carolin line up, claiming that their admissions processes aren't fair 0:08:03.480 --> 0:08:07.520 to white or Asian applicants. The courts three liberal justices 0:08:07.600 --> 0:08:10.640 cast a doubt on whether race is the sole indicator 0:08:10.680 --> 0:08:15.600 in admissions processes. Attorney Patrick Strawbridge represents students for Fair 0:08:15.640 --> 0:08:18.560 Admissions in the U n C case and says that 0:08:18.720 --> 0:08:21.560 race should only be used in a broader context of 0:08:21.600 --> 0:08:26.240 an application. Racial classifications are wrong. That principle was enshrined 0:08:26.280 --> 0:08:29.080 in our law at great cost. Following the Civil War, 0:08:29.280 --> 0:08:32.440 Justice Elena Kagan encountered, the race is part of the culture, 0:08:32.440 --> 0:08:34.440 and the culture is part of the race, isn't it. 0:08:34.520 --> 0:08:38.640 I mean that's slicing the Ballooney awfully them. Meanwhile, conservative 0:08:38.720 --> 0:08:41.720 justices have been casting doubt on whether the affirmative action 0:08:41.800 --> 0:08:46.160 programs are needed. A correction officer inside Rikers Island was 0:08:46.200 --> 0:08:49.160 injured after being stabbed over a dozen times. The New 0:08:49.240 --> 0:08:52.320 York City Department of Correction says it happened yesterday afternoon. 0:08:52.600 --> 0:08:54.800 The officer is said to be in stable condition at 0:08:54.800 --> 0:08:58.760 Elmhurst Hospital. Court documents say the man accused of entering 0:08:58.760 --> 0:09:02.079 the San Francisco home of how speaker Nancy Pelosi wanted 0:09:02.120 --> 0:09:05.840 to break her kneecaps. Speaker was not home. Police say 0:09:05.920 --> 0:09:08.840 forty two year Rold David to Pap attacked her husband, 0:09:08.840 --> 0:09:13.720 Paul Pelosi. Meanwhile, Democratic Congresswoman Debbie Dingle of Michigan discussed 0:09:13.720 --> 0:09:17.680 the attack on Paul Pelosi and heightened tensions over political 0:09:17.760 --> 0:09:22.080 rhetoric and violence. She referred to recent Elon Musk tweets 0:09:22.080 --> 0:09:26.320 on Pelosi. The conspiracy theories are also adding to the 0:09:26.360 --> 0:09:30.920 some putting kerosene on and people will read it, so, yeah, 0:09:30.960 --> 0:09:33.360 you know what, I will go after somebody. It's a 0:09:33.400 --> 0:09:37.520 new owner of Twitter's got some responsibilities too, and was 0:09:37.600 --> 0:09:42.160 horrified that he would participate in some of this conspiracy 0:09:42.679 --> 0:09:47.960 here he said it has now no truth Jeit. Congresswoman 0:09:48.040 --> 0:09:51.120 Dingle spoke on sound On, which airs at five pm 0:09:51.120 --> 0:09:54.200 on Bloomberg Global News twenty four hours a day on 0:09:54.280 --> 0:09:58.120 air and on Bloomberg Quicktake, powered by more than hundred 0:09:58.160 --> 0:10:01.440 journalist and analysts more than countries. I'm Michael Barr, and 0:10:01.559 --> 0:10:07.520 this is Bloomberg. Amy, all right, thank you, Michael. It's 0:10:07.520 --> 0:10:09.680 seems so nine on Wall Street. Time. Now for the 0:10:09.720 --> 0:10:12.440 sports report, brought to you by Tri State Audi. Here's 0:10:12.520 --> 0:10:15.120 John stash Our. All right, Amy, Brooklyn Nets have become 0:10:15.240 --> 0:10:17.720 somewhat of a soap opera. Very often has to do 0:10:17.800 --> 0:10:20.520 with Kyrie. I main scenes. It's always something with Kyrie. 0:10:20.600 --> 0:10:23.480 The latest his posting on social media a link to 0:10:23.520 --> 0:10:27.480 an anti Semitic video. Several fans last night sat courtside 0:10:27.480 --> 0:10:31.439 with t shirts that read fight anti Semitism. There's also 0:10:31.520 --> 0:10:34.000 the team's early season struggles, a one in five record, 0:10:34.040 --> 0:10:36.400 worst defensive the NBA so a much needed win at 0:10:36.440 --> 0:10:40.079 Barkley's one sixteen one O nine over Indiana. Chive Sports 0:10:40.600 --> 0:10:43.480 points Kevin Durant at thirty six. The Mother Night gave 0:10:43.480 --> 0:10:46.760 an upset win for Cleveland thirty two to thirteen over Cincinnati. 0:10:46.800 --> 0:10:49.600 The Browns were up twenty five nothing in the fourth quarter. 0:10:49.720 --> 0:10:53.000 NFL trade deadline four o'clock today, Giants could be looking 0:10:53.000 --> 0:10:56.120 for a receiver Jets. Why a Elijah Moore has asked 0:10:56.120 --> 0:10:59.040 to be traded. No quarterback change to the Jets. Despite 0:10:59.120 --> 0:11:02.160 Zach Wilson's th reinterceptions and the loss of the Patriots, 0:11:02.160 --> 0:11:05.480 the Jet coach got full confidence inside. We all do 0:11:05.920 --> 0:11:09.679 um um. You know, it's not like he hasn't had 0:11:09.720 --> 0:11:12.560 bad games before and he stepped up and has followed 0:11:12.559 --> 0:11:14.599 it with good days. So you know the way he 0:11:14.720 --> 0:11:17.600 preps and the way he practices and the questions he asks, 0:11:18.360 --> 0:11:20.400 We've got faith that will continue to continue to find 0:11:20.400 --> 0:11:22.720 ways to get better. Jets. It's up one Sunday against 0:11:22.720 --> 0:11:26.480 six and one Buffalo College Football. Auburn fired Ryan Harrison, 0:11:26.559 --> 0:11:28.920 so he didn't finish the second season of a six 0:11:29.000 --> 0:11:31.840 year contract, though all fifteen million dollars they're still paying. 0:11:31.880 --> 0:11:35.000 The previous Coach World Series resumes tonight at Philadelphia. After 0:11:35.080 --> 0:11:37.440 last night's Right nowt The Phillies have changed their Game 0:11:37.520 --> 0:11:40.560 three starter out is the x Mett Noah Synder guard 0:11:40.679 --> 0:11:43.200 in his Rangers Swarez the astros are sticky with a 0:11:43.200 --> 0:11:46.120 glance for colors. World Series is tied of one John 0:11:46.240 --> 0:11:49.240 Dash that lub sports and all right, thank you john 0:11:49.320 --> 0:11:51.360 S andd features a thirty four points high or Dell 0:11:51.480 --> 0:11:55.000 features up by one points, nastac features up by one 0:11:55.080 --> 0:12:00.000 hundred twenty seven points. The ten year treasury up thirty seconds, 0:12:00.040 --> 0:12:03.880 the yield at three point nine four percent. This is Bloomberg. 0:12:06.920 --> 0:12:09.240 The Bloomberg Sports Report was brought to you by Audie. 0:12:09.280 --> 0:12:11.480 Don't let someone else drive off in the autie model 0:12:11.600 --> 0:12:14.360 you've always wanted. Visit your local try state autie dealer 0:12:14.360 --> 0:12:16.480 to get behind the wheel of yours today, or visit 0:12:16.520 --> 0:12:23.600 autie Offers dot com for more information, markets, headlines and 0:12:23.720 --> 0:12:27.000 breaking news twenty four hours a day at Bloomberg dot com, 0:12:27.080 --> 0:12:30.360 The Bloomberg Business at and at Bloomberg. Quick Tape Bruce 0:12:30.600 --> 0:12:39.200 is a Bloomberg Business Flash. I'm Nathan Hagar. The dollar 0:12:39.280 --> 0:12:41.880 and treasury yields are falling as investors await the Federal 0:12:41.920 --> 0:12:45.199 Reserves policy meeting. It kicks off today. The decision is tomorrow. 0:12:45.640 --> 0:12:48.560 Stocks and futures are in rally mode this morning. We 0:12:48.640 --> 0:12:50.800 checked the markets for you every fifteen minutes during the 0:12:50.800 --> 0:12:53.600 trading day on Bloomberg S and P futures are up 0:12:53.600 --> 0:12:57.200 thirty four points. Staff futures up two one. Nastack futures 0:12:57.200 --> 0:12:59.600 are higher by a hundred twenty seven points. The tenure 0:12:59.640 --> 0:13:02.560 treasure he is up twenty five thirty seconds yield three 0:13:02.559 --> 0:13:04.960 point nine four percent yield on the two year at 0:13:04.960 --> 0:13:08.520 four point one one p. Nime ex screws up by 0:13:08.800 --> 0:13:10.760 one point six percent, or a dollar forty two at 0:13:10.760 --> 0:13:13.600 eighty seven dollars. Ninety seven cents of Arrol comic gold 0:13:13.679 --> 0:13:15.520 is up eight tenths per cent, or twelve dollar sixty 0:13:15.559 --> 0:13:19.880 cents sixteen fifty three thirty announced. The euro point five 0:13:19.920 --> 0:13:22.199 against the dollar the end one forty seven point to 0:13:22.400 --> 0:13:25.880 five Big coins up one percent twenty thousand, six hundred dollars. 0:13:26.000 --> 0:13:28.840 That's a Bloomberg business flash. Now here's Michael Barr with 0:13:28.880 --> 0:13:30.960 more on what's going on around the world. Michael, thank 0:13:31.000 --> 0:13:33.680 you very much. Nathan. The Supreme Court at arguments in 0:13:33.760 --> 0:13:37.760 cases challenging the consideration of a student's race and college admissions. 0:13:38.160 --> 0:13:41.040 The cases involving Harvor to end the University of North 0:13:41.080 --> 0:13:44.760 Carolina could end affirmative action at public and private schools 0:13:44.760 --> 0:13:50.640 across the country protests by Jenner Bilsonaro supporters intensified as 0:13:50.679 --> 0:13:53.960 the Brazilian president remains silent over his loss to Lula 0:13:54.080 --> 0:13:58.880 da Silva on Sunday's elections protests. Here's block highways. They'll 0:13:58.880 --> 0:14:00.920 try to make up Game three of the World Series 0:14:00.960 --> 0:14:04.800 in Philadelphia. Last night, Phillies and Astro's game was postponed 0:14:04.800 --> 0:14:07.560 because of rain. In the NBA, the Nets one, the 0:14:07.559 --> 0:14:10.439 Wizards lost. In the NHL, the Capitals lost in a 0:14:10.480 --> 0:14:13.320 shootout with the Hurricanes three to The Browns beat the 0:14:13.360 --> 0:14:17.760 Ravens thirty two thirteen and Monday Night Football. Global News 0:14:17.800 --> 0:14:20.680 twenty four hours a day on air and on Bloomberg 0:14:20.720 --> 0:14:23.960 Quick Tank, powered by more than twenty seven under journalist 0:14:24.000 --> 0:14:26.720 and analysts in more than a hundred twenty countries. I'm 0:14:26.760 --> 0:14:30.520 Michael Barron. This is Bloomberg Amy all right, Thank you, Michael. 0:14:30.600 --> 0:14:33.560 It is six nineteen on Wall Street Live from the 0:14:33.560 --> 0:14:37.280 Bloomberg Interactive Broker Studios. This is Bloomberg Daybreak. The White 0:14:37.280 --> 0:14:39.840 House has been calling on oil companies to invest more 0:14:39.920 --> 0:14:43.240 in production for months, but Bloomberg data show the biggest 0:14:43.240 --> 0:14:46.840 companies like Exxon and Shell and Chevron are all handling 0:14:47.000 --> 0:14:48.880 a lot of that money and they're handing it over 0:14:48.920 --> 0:14:52.440 to their shareholders and then just reinvesting only a fraction 0:14:52.480 --> 0:14:55.600 of their windfall. So now comes a warning from President 0:14:55.600 --> 0:14:58.880 Biden for oil companies, as the administration is promising higher 0:14:58.880 --> 0:15:02.440 taxes on oil company these that record those windfall profits 0:15:02.480 --> 0:15:05.760 without reinvesting in production. Joining us now to talk about it, 0:15:05.840 --> 0:15:08.800 President of the Short Group, Stephen Short, Stephen, thank you 0:15:08.840 --> 0:15:10.720 so much for taking the time with us this morning. 0:15:11.280 --> 0:15:13.720 The President is going to have to get congressional support 0:15:13.760 --> 0:15:15.920 to do this, But the question is if you can 0:15:16.080 --> 0:15:19.240 get that support, Willie Well, I think a lot of 0:15:19.240 --> 0:15:22.000 it amy depends on I guess, in about a week 0:15:22.080 --> 0:15:25.360 or so after the mid terms, who has control of Congress. 0:15:26.080 --> 0:15:29.760 I think if we still have the current uh Democrat 0:15:29.840 --> 0:15:36.000 control with the Vice president as the tiebreaker, Uh, then yeah, 0:15:36.120 --> 0:15:38.320 well we'll probably get this flow to by Congress, and 0:15:38.360 --> 0:15:42.240 Congress would probably try to enact uh some sort of 0:15:42.240 --> 0:15:46.280 windfall profit tax. Of course, on the other hand, UH, 0:15:46.320 --> 0:15:48.840 if we see any sort of red wave or or 0:15:48.960 --> 0:15:54.080 even a red tide where Republicans gained control on one 0:15:54.080 --> 0:15:59.000 of both houses, uh, then the likelihood of attacks uh 0:15:59.360 --> 0:16:02.720 windfall prof attacks UH dimensions greatly I think will be 0:16:02.760 --> 0:16:05.280 non existence. So now I think Amy. The question is, 0:16:05.960 --> 0:16:08.880 with a week Togo and some of the prediction markets, 0:16:09.520 --> 0:16:12.760 I markets you could bet on the outcome of next 0:16:12.800 --> 0:16:16.920 week's elections, do you seem to indicate that the Republicans 0:16:16.960 --> 0:16:20.360 will win at this point? Uh So, a lot of 0:16:20.360 --> 0:16:22.920 the rhetoric that we heard yesterday is what we've heard 0:16:23.360 --> 0:16:26.960 in the past. And perhaps it is just nothing but 0:16:27.680 --> 0:16:32.000 the campaign trail, trying to rally the troops before the election, 0:16:32.520 --> 0:16:35.440 but so close to the election, is it too little, 0:16:35.480 --> 0:16:39.040 too late? Well, it's all about rhetoric. Right. Markets trade 0:16:39.040 --> 0:16:41.640 on perception. They don't trade on reality. Often they trade 0:16:41.640 --> 0:16:45.320 on perception. Uh these are futures markets we are talking about. 0:16:46.000 --> 0:16:50.160 Uh So, what this will do is it casts the 0:16:50.200 --> 0:16:54.600 oil companies, whether it is the Western oil companies or OPEC, 0:16:55.080 --> 0:16:58.640 casts them as the villain. It takes the shine off 0:16:59.200 --> 0:17:02.760 of whatever ability you might have had in the situation, 0:17:02.960 --> 0:17:05.760 and it gives you talking points. The bottom line is 0:17:05.800 --> 0:17:08.200 the windfall profit tax. We've tried it before. We tried 0:17:08.240 --> 0:17:10.400 in the nineteen eighties and nineteen eight and nine nine. 0:17:10.880 --> 0:17:13.679 It did not work then, and if it were to 0:17:13.720 --> 0:17:18.480 be reenact, we reenacted. Uh then certainly, I am highly 0:17:18.480 --> 0:17:21.520 skeptical that it will work this time. Yeah, I wanted 0:17:21.560 --> 0:17:24.439 to get into that historical perspective. We have seen this 0:17:24.480 --> 0:17:27.160 before then in the nineteen eighties, Why didn't it work? 0:17:27.200 --> 0:17:30.800 Then we have a survey or not serve excuse me, 0:17:30.800 --> 0:17:36.800 a study put up by the Congressional Research um UH group, 0:17:37.359 --> 0:17:40.199 And essentially we've tried this in the nineteen eighties. And 0:17:40.240 --> 0:17:44.159 what happened was we had a price cap um after 0:17:44.400 --> 0:17:48.000 prices were decent um de regulated in the seventies, and 0:17:48.080 --> 0:17:51.280 that price cap what was taken off. And then Congress 0:17:51.359 --> 0:17:54.240 enacted this under the belief that oil companies were earning 0:17:54.240 --> 0:17:59.320 windfall profits. And this study that was put forth by 0:18:00.040 --> 0:18:04.760 um excuse me, by this independent congret me. As I said, 0:18:04.800 --> 0:18:10.080 the the crs UH determined that, UH, the tax ended 0:18:10.160 --> 0:18:13.680 up reducing the amount of oil produced because you're raising 0:18:13.680 --> 0:18:17.359 the cost of capital UH and thereby cutting off the 0:18:17.400 --> 0:18:21.040 supply of capital for the industry. So production was was 0:18:21.119 --> 0:18:26.000 cut in. Our dependence on foreign oil actually grew UH 0:18:26.119 --> 0:18:29.639 during the n UH. So effectively, what you had was 0:18:29.680 --> 0:18:32.960 the government being encounters over those ten years, estimated that 0:18:33.040 --> 0:18:36.560 the windfall tax revenues they would collect the I r 0:18:36.640 --> 0:18:40.800 s two dree billion, whereas they only create and they 0:18:40.800 --> 0:18:45.320 only collected eight billion at this point. Because once again, uh, 0:18:45.359 --> 0:18:48.960 you're looking at a situation when you tax something, Ideally, 0:18:49.000 --> 0:18:52.640 you're going to reduce the supply of whatever you're being uh, 0:18:52.760 --> 0:18:55.040 whatever you're being taxed on, because you're raising the cost 0:18:55.080 --> 0:19:00.399 of production. And just as this congressional research study put forward, 0:19:00.560 --> 0:19:04.120 uh effectively, Uh, it happened before. We'll reduce the cost 0:19:04.160 --> 0:19:07.199 of capital, you reduce production, you'll increase in ports, and 0:19:07.200 --> 0:19:10.320 you'll do nothing to impact price. Stephen very quickly thirty 0:19:10.320 --> 0:19:12.399 seconds here turning to the price of oil. Where do 0:19:12.440 --> 0:19:15.400 you see it headed from here right now? It depends 0:19:15.480 --> 0:19:18.720 on whether or not we are in recession. I know, 0:19:19.040 --> 0:19:21.240 I think uh, I think a big bank came out 0:19:21.280 --> 0:19:24.119 said a second quarter will be in recession. Certainly if 0:19:24.160 --> 0:19:28.000 we see that are modeling hat takes oil down below 0:19:28.040 --> 0:19:31.359 fifty dollars a barrel at this point, as uh, the 0:19:31.400 --> 0:19:34.840 economy drives up as demand drives up. Are modeling coming 0:19:34.880 --> 0:19:38.800 in so far from the new year is mid eighties two, 0:19:38.840 --> 0:19:40.960 about a hundred and twenty that would be arranged, so 0:19:41.040 --> 0:19:43.760 around a hundred dollars a barrel, assuming we do not 0:19:43.800 --> 0:19:47.840 go into recession. You go into recession forty all right, 0:19:47.920 --> 0:19:50.640 Steven Stork, thank you very much. Always great to get 0:19:50.640 --> 0:19:53.760 to your insight. Stephen Shark is president of the Short Group. 0:19:53.920 --> 0:19:56.440 S and P Futures now thirty six points higher, del 0:19:56.560 --> 0:19:59.280 Futures up two hundred fifteen points, NASDAC features up a 0:19:59.320 --> 0:20:02.880 hundred thirty nine points. Much more to come on Bloomberg Daybreak. 0:20:02.960 --> 0:20:08.120 This is Bloomberg. Bloomberg Daybreak is brought to you by 0:20:08.160 --> 0:20:10.960 the Jewish Communal Fund. For fifty years, j c f's 0:20:11.040 --> 0:20:14.680 donor advised funds have been helping families create charitable legacies. 0:20:14.920 --> 0:20:16.800 Start now and open a j c F fund before 0:20:16.920 --> 0:20:19.000 year and visit j c F and why dot org. 0:20:22.080 --> 0:20:26.639 Broadcasting live from the Bloomberg Interactive Broker Studio in New York. 0:20:26.720 --> 0:20:29.840 Bloomberg E Living Free on to Washington, d C, Bloomberg 0:20:29.920 --> 0:20:34.040 nine to Boston, Bloomberg one O six one to San Francisco, 0:20:34.119 --> 0:20:37.320 Bloomberg Ning sixty to the country, Sirius XM to the 0:20:37.400 --> 0:20:40.320 one nine team, and around the globe, the Bloomberg Business 0:20:40.359 --> 0:20:45.320 app and Bloomberg Radio dot Com. This is Bloomberg Daybreak. 0:20:50.480 --> 0:20:53.120 It's six thirty on Wall Street. Good Tuesday morning. I'm 0:20:53.119 --> 0:20:55.720 Ane Morris, I'm Nathan Hager. We're about three hours away 0:20:55.720 --> 0:20:57.520 from the open of US trading. It's time for the 0:20:57.560 --> 0:20:59.280 five Things you need to know to start your day. 0:20:59.320 --> 0:21:02.639 Brought to you by Interactive Brokers IBKR. Event Trader offers 0:21:02.640 --> 0:21:05.280 a new way to trade futures. Use event contracts to 0:21:05.280 --> 0:21:07.680 trade your opinion on yes or no questions and key 0:21:07.760 --> 0:21:11.600 CME futures markets. Learn more at event trader dot Interactive 0:21:11.600 --> 0:21:15.320 Brokers dot com. First US futures are higher as investors 0:21:15.320 --> 0:21:18.240 geara for this week's FED meeting and the October jobs report. 0:21:18.280 --> 0:21:21.200 The Fed is front and center. That's according to Bloomberg 0:21:21.200 --> 0:21:25.160 macro strategist Vince Signarella, the Fed made pivots sooner than expected. 0:21:25.480 --> 0:21:27.560 I think that's what the markets are hoping for, some 0:21:27.640 --> 0:21:31.640 indication that the Fed acknowledges that their work is starting 0:21:31.720 --> 0:21:34.240 to find its way through the economy, specifically in housing, 0:21:34.240 --> 0:21:36.639 as we saw last week pending home sales down over 0:21:37.400 --> 0:21:39.560 on a month over month basis. That's what the market 0:21:39.600 --> 0:21:42.719 is hoping for, and Bloomberg Cingerella says markets will respond 0:21:42.720 --> 0:21:46.040 negatively if the FED does not forecast easy monetary policy 0:21:46.040 --> 0:21:48.600 in the near future. Expectations are for the FED to 0:21:48.640 --> 0:21:52.040 raise rates seventy five basis points tomorrow, followed by fifty 0:21:52.080 --> 0:21:55.800 in December. Meantime, Australia's Central Bank haik to interest rates 0:21:55.840 --> 0:21:59.200 today by just a quarter percentage point. That's sparked bets 0:21:59.280 --> 0:22:02.240 that the RB is pivoting away from large heights. Let's 0:22:02.280 --> 0:22:04.200 been a big day in Asia and each Chinese stocks 0:22:04.200 --> 0:22:07.280 surged overnight of speculation grows the government's preparing to exit 0:22:07.359 --> 0:22:10.200 COVID restrictions. The hang second Hong Kong Ros five percent 0:22:10.480 --> 0:22:13.320 stocks in China gained three point six percent. And Nathan, 0:22:13.320 --> 0:22:16.240 we're seeing historic profits from big oil, Saudi Aramco and 0:22:16.320 --> 0:22:20.040 VP posting their second highest quarterly earnings this morning after 0:22:20.119 --> 0:22:23.560 record profit from Exxon and Chevron. It has President Biden 0:22:23.600 --> 0:22:26.800 calling on Congress to impose higher taxes on big oil. 0:22:27.040 --> 0:22:30.560 Rather than increasing no investments in America or giving American 0:22:30.640 --> 0:22:33.439 consumers of break their excess profits, You're going back to 0:22:33.480 --> 0:22:36.760 their shareholders and buying back their stocks and the executive page, 0:22:36.960 --> 0:22:39.520 I'm going to skyrocket, give me a break. Enough is 0:22:39.680 --> 0:22:43.280 enough by President Briden's promise to impose higher taxes will 0:22:43.320 --> 0:22:46.880 be hard to deliver Democrats have unsuccessfully sought a windfall 0:22:46.960 --> 0:22:49.640 profit tax for more than a decade. The Incorporate News 0:22:49.680 --> 0:22:52.320 this morning, we're talking Credit Swiss again. Amy chairman Axcel 0:22:52.359 --> 0:22:54.800 Layman tells us the Swiss Bank is not for sale. 0:22:54.840 --> 0:22:57.120 If we picked out where we need to go, and 0:22:57.160 --> 0:23:01.119