WEBVTT - Bloomberg Daybreak: June 14, 2022 - Hour 2 (Radio) 0:00:01.760 --> 0:00:05.160 Live from the Bloomberg Interactive Brokers Studios. This is Bloomberg 0:00:05.240 --> 0:00:09.080 day Break for Tuesday, June fourteen, two. Coming up this hour, 0:00:09.360 --> 0:00:13.480 US futures rebound after yesterday's massive sell off. Traders bet 0:00:13.480 --> 0:00:16.520 the Fed could turn even more hawkiship this week's policy meeting. 0:00:16.640 --> 0:00:19.799 Oil prices stay high as President Biden prepares to visit 0:00:19.840 --> 0:00:23.560 Saudi Arabia, and Elon Musk addresses Twitter staffers for the 0:00:23.600 --> 0:00:27.000 first time since his takeover. Bed New York State expands 0:00:27.000 --> 0:00:30.800 protections from people seeking abortions. Plus the Republican governor candidates 0:00:30.800 --> 0:00:34.000 debate ahead of New York State primary by Michael Barner. 0:00:34.080 --> 0:00:37.040 More ahead, I'm John stash Our. In sports, the Warriors 0:00:37.080 --> 0:00:39.560 beat the Southeast. They leave the NBA Final three games 0:00:39.560 --> 0:00:41.920 at two. The Mets of Yankees at home games tonight. 0:00:44.520 --> 0:00:48.080 That's all s traded ahead on Bloomberg Daybreak on Bloomberg. 0:00:48.080 --> 0:00:51.960 He Living Free on New York, Bloomberg one, Washington d C, 0:00:52.440 --> 0:00:56.000 Bloomberg one oh six one, Boston, Bloomberg nine sixties and 0:00:56.120 --> 0:01:00.000 Francisco Sirius x M one nineteen and around the world 0:01:00.000 --> 0:01:03.080 Old on Bloomberg Radio dot Com and by the Bloomberg 0:01:03.120 --> 0:01:10.120 Business app. Good morning. I'm Nathan Hagart and I'm John Tucker. 0:01:10.160 --> 0:01:12.880 Bloomberg day Break being brought to you by Informattica in 0:01:12.959 --> 0:01:16.240 the Cloud, your data has the power to do the extraordinary. 0:01:16.520 --> 0:01:19.640 Managed data across any location in the cloud for accurate 0:01:19.680 --> 0:01:24.440 and actionable insights. More at informattica dot com. And futures 0:01:24.440 --> 0:01:26.960 are bouncing back on this Tuesday morning. It's six l 0:01:27.000 --> 0:01:28.760 one on Wall Street and we check the markets every 0:01:28.800 --> 0:01:31.280 fifteen minutes during the trading day on Bloomberg. Right now, 0:01:31.360 --> 0:01:35.200 SNP futures are up sixteen points, Staff futures up, NASTAC 0:01:35.280 --> 0:01:38.200 features higher by eighty points, The tenure Treasury is up 0:01:38.240 --> 0:01:41.120 fourteen thirty seconds. The yield three point three zero percent 0:01:41.200 --> 0:01:44.160 yield on the two year three point to nine nime 0:01:44.280 --> 0:01:46.960 x crew trading at a D one dollar seventy six 0:01:46.959 --> 0:01:50.080 cents of barrel. John. The SNP five hundred finished yesterday's 0:01:50.120 --> 0:01:53.320 trading more than twenty percent below its last record, closed, 0:01:53.680 --> 0:01:56.840 entering a bear market and ending a two year bull 0:01:56.920 --> 0:02:01.320 run defiance. T S Chief investment Officer Sylvia Jablonsky tells 0:02:01.400 --> 0:02:05.360 us she expects more uncertainty moving forward. Has been hot 0:02:05.360 --> 0:02:07.320 for quite some time. It's going to remain hot for 0:02:07.520 --> 0:02:10.440 quite some time, so until that eases up, we're probably 0:02:10.440 --> 0:02:13.040 gonna have this volatility. With US Chief defiance e t 0:02:13.240 --> 0:02:15.960 f c I O Sylvia Jablonsky says inflation headwinds have 0:02:16.040 --> 0:02:19.600 gotten worse since Friday's CPI reading. Well this quarter, John 0:02:19.639 --> 0:02:21.920 is set to deliver the biggest combined loss for global 0:02:21.960 --> 0:02:25.240 bonds and stocks on record. The question for investors now 0:02:25.600 --> 0:02:28.040 is whether the Federal Reserve and other central banks hit 0:02:28.080 --> 0:02:31.639 their economies into recession to curb inflation. Central banks get 0:02:31.680 --> 0:02:34.640 further insight on prices today with the latest reading on 0:02:34.800 --> 0:02:37.760 May Producer prices that day just do out at eight 0:02:37.800 --> 0:02:40.720 thirty am Wall Street time, and also today the Fed 0:02:40.800 --> 0:02:44.200 begins it's today policy meeting, and officials may consider a 0:02:44.280 --> 0:02:47.200 more hawky is she interest rate increase than originally planned. 0:02:47.360 --> 0:02:51.560 Bloomberg's Michael McKee gives us a preview. Surprisingly strong pickups 0:02:51.560 --> 0:02:55.280 in consumer prices and inflation expectations now look likely just 0:02:55.360 --> 0:02:59.639 for the biggest interest rate increase its Fed officials had 0:02:59.639 --> 0:03:02.560 coal used around a fifty basis point hike going into 0:03:02.680 --> 0:03:05.560 their two day meeting, which begins this morning, but a 0:03:05.560 --> 0:03:08.440 big rise in the May consumer Price Index, coupled with 0:03:08.480 --> 0:03:13.040 two surveys showing higher inflation becoming embedded in consumer expectations, 0:03:13.400 --> 0:03:17.079 pushed investors to increase bets on a seventy five basis 0:03:17.080 --> 0:03:21.200 point increase. Those bets hardened following media reports Monday the 0:03:21.240 --> 0:03:25.160 central bankers would consider the larger move. Economists that major 0:03:25.200 --> 0:03:28.440 Wall Street firms were quick to change their calls. Goldman, 0:03:28.560 --> 0:03:31.960 Nomra and JP Morgan Chase joined Barclays and Jeffreys in 0:03:32.040 --> 0:03:35.240 forecasting a three quarters point move. The FED decision will 0:03:35.280 --> 0:03:38.480 be announced at two pm Wall Street time on Wednesday. 0:03:38.520 --> 0:03:41.480 Michael McKee Bloomberg Daybreak. All Right, Thanks Mike, and join 0:03:41.600 --> 0:03:43.800 us for live coverage of that FED decision on a 0:03:43.840 --> 0:03:47.120 special edition of Bloomberg Surveillance that kicks off tomorrow at 0:03:47.160 --> 0:03:50.200 one thirty pm Eastern on Bloomberg Radio and Television. Right 0:03:50.360 --> 0:03:53.280 that Johnson Big US banks are signaling more concerned for 0:03:53.320 --> 0:03:56.480 the economy. Investor fears of stagflation are at their highest 0:03:56.480 --> 0:03:59.200 since the two thousand and eight financial crisis, while global 0:03:59.240 --> 0:04:02.000 growth optim him has sunk to a record low. That's 0:04:02.000 --> 0:04:05.680 according to Bank of America's monthly Fund Manager Survey. Morgan Stanley, 0:04:05.720 --> 0:04:08.160 CEO James Gorman says he sees the risk of US 0:04:08.240 --> 0:04:12.280 recession at about fift likely at this stage to go 0:04:12.360 --> 0:04:15.360 into a deeper, long recession. It's possible we go in 0:04:15.400 --> 0:04:21.480 to recession obviously probably now um, but that's that's okay. 0:04:21.720 --> 0:04:25.000 Morgan Stanley CEO James Gorman's Focusterday at the Morgan Stanley 0:04:25.040 --> 0:04:28.719 US Financials, Payments and cre E Conference at Overseas Stocks 0:04:28.800 --> 0:04:32.040 in Europe treading water, not bouncing back from yesterday's lasses. 0:04:32.120 --> 0:04:34.880 The stocks to Your six hundred index right now is 0:04:34.920 --> 0:04:38.640 down four points overnight. In Asia. What he's followed US stocks, 0:04:38.640 --> 0:04:43.200 Flower Bloombridge. Juliet Sally joins us with the latest from Singapore. Juliet, 0:04:43.240 --> 0:04:45.360 good morning, Good morning, John and Nathan. The m s 0:04:45.440 --> 0:04:47.720 c I Asia Pacific Index film more than one and 0:04:47.760 --> 0:04:49.920 a half percent in a day with busses from Japan 0:04:50.000 --> 0:04:53.279 to Charter in Hong Kong all in the red. Australia underperformed. 0:04:53.279 --> 0:04:56.279 Does that market played catch up? Following a public holiday Monday? 0:04:56.480 --> 0:04:58.360 The a SX two hundred was down more than five 0:04:58.400 --> 0:05:00.760 percent during the day's trade. It were a session in 0:05:00.800 --> 0:05:04.000 more than two years. Short dated bonds across the region 0:05:04.120 --> 0:05:07.159 slumped while the Bank of Japan boosted bond purchase operations 0:05:07.200 --> 0:05:10.880 to keep yields in check. In Singapore, Juliet Sally Bloomberg 0:05:11.000 --> 0:05:14.040 Daybreak and Julian has been a wild ride for risk assets. 0:05:14.080 --> 0:05:18.640 Just look at crypto. Bitcoin fell fifteen percent yesterday. Perhaps 0:05:18.680 --> 0:05:22.200 no sector's seen a so off sharper than digital currencies. 0:05:22.520 --> 0:05:26.600 Right now, bitcoins trading at about two dollars and oil 0:05:26.720 --> 0:05:29.839 trading near one hundred two dollars of allars investor's way 0:05:30.160 --> 0:05:33.080 a tight supply outlook. It comes as the White House 0:05:33.080 --> 0:05:35.719 plans for a president buying the visit Saudi Arabia next month. 0:05:36.040 --> 0:05:40.160 The administration won't press the kingdom to increase production, it says, 0:05:40.160 --> 0:05:43.279 But as mp Global Vice Cheer Dan Jurgen says, oil 0:05:43.520 --> 0:05:46.240 will be on the agenda. It's hard to believe that 0:05:46.240 --> 0:05:48.880 he would be going to study if it wasn't for oil. 0:05:49.320 --> 0:05:51.320 I think if he does come, they'll start to put 0:05:51.320 --> 0:05:53.120 more oil to the market. They've done done a little 0:05:53.160 --> 0:05:55.520 bit more. The thing is that there isn't much more 0:05:55.560 --> 0:05:59.960 oil in Saudi Arabia, and the UAE too really significant 0:06:00.160 --> 0:06:03.240 league change the market, s and B Vice chair Dan, 0:06:03.320 --> 0:06:06.320 you're going speaking to David West on Bloomberg's Balance of Power. 0:06:06.440 --> 0:06:09.720 Catch that program Noon Wall Street, Time of Bloomberg Radio 0:06:09.760 --> 0:06:11.960 on TV. All right, let's turn to corporate news now, 0:06:12.040 --> 0:06:14.720 John and talk about Twitter. Elon Musk has set to 0:06:14.760 --> 0:06:18.000 address staff at the social media company directly this week. 0:06:18.240 --> 0:06:20.919 Bloomberg's Rnda Young joins US Live with what we know 0:06:20.920 --> 0:06:23.920 about that so far? Renia, Good morning, Good morning, Nathan Bloomberg. 0:06:24.000 --> 0:06:26.560 Sources say this will be the first time Elon Musk 0:06:26.560 --> 0:06:29.960 addresses Twitter employees since agreeing to buy the company for 0:06:29.960 --> 0:06:33.280 forty four billion dollars, and Musk will take questions as 0:06:33.360 --> 0:06:36.719 the Thursday morning virtual meeting. Now. The company has been 0:06:36.760 --> 0:06:39.320 in a chaotic state since the deal was announced back 0:06:39.320 --> 0:06:42.799 in April, and many employees are not happy with Musk. 0:06:43.040 --> 0:06:45.600 He's been critical of the company and questions the amount 0:06:45.600 --> 0:06:49.480 of spam accounts. Meantime, Twitter CEO has announced a series 0:06:49.520 --> 0:06:53.200 of cost cutting measures since the deal came together. Live 0:06:53.240 --> 0:06:56.160 in New York, I'm Nita Young, Bloomberg Day Break, All Right, 0:06:56.160 --> 0:06:58.680 thanks to Nada and ahead of the cash put on 0:06:58.720 --> 0:07:01.640 Wall Street. Dal futures right now seventy two points higher. 0:07:01.680 --> 0:07:03.920 That's up two tens of percent. The S and P 0:07:04.080 --> 0:07:07.200 future is up twelve and that as the Commany futures 0:07:07.279 --> 0:07:11.480 right now after yesterday's massive sell off sixty three points higher. 0:07:11.720 --> 0:07:13.560 As we look at yields right now, the ten year 0:07:13.720 --> 0:07:17.560 three thirty one that is down four basis points. You're 0:07:17.600 --> 0:07:23.960 listening to Bloomberg day Break pass dound six seven on 0:07:24.040 --> 0:07:26.200 Wall Street Time to bring in Michael Barr to find 0:07:26.240 --> 0:07:28.160 out what else is going on to New York had 0:07:28.560 --> 0:07:30.920 around the world. John, Thank you very much, Sarah. New 0:07:31.000 --> 0:07:34.679 York has expanded legal protections for people seeking and providing 0:07:34.680 --> 0:07:38.800 abortions in the state under legislation signed by Governor Kathy Hokel. 0:07:39.120 --> 0:07:42.400 The Democratic governor pushed for the laws and anticipation of 0:07:42.440 --> 0:07:45.240 the U. S. Supreme Court potentially over ruling it's n 0:07:45.760 --> 0:07:49.720 seventy three Real Vway decision, which established a constitutional right 0:07:49.800 --> 0:07:55.440 to abortion. Must the hard fought battles from my mother's generation, 0:07:56.640 --> 0:08:02.040 my generation, my thirty year old daughters generation have to 0:08:02.080 --> 0:08:07.520 be inherited by my new granddaughter's generation as well. Well. 0:08:07.560 --> 0:08:11.800 Apparently so, Governor Hokel says. One new law protects abortion 0:08:11.840 --> 0:08:15.920 providers from arrest, extradition, and legal proceedings in other states 0:08:16.000 --> 0:08:20.640 by forbidding new York State from cooperating. Most scenarios for 0:08:20.920 --> 0:08:24.000 Republican candidates for New York governor based off last night 0:08:24.040 --> 0:08:27.200 and their first televised debate with two weeks ago before 0:08:27.240 --> 0:08:30.800 the state's primary election. Some of the sharpest exchanges of 0:08:30.840 --> 0:08:34.840 the night came between US Representative Lee Zelden and businessman 0:08:34.920 --> 0:08:37.960 Harry Wilson, who has said he did not vote for 0:08:38.000 --> 0:08:42.360 Donald Trump. In Zelden repeatedly assailed Wilson as a never 0:08:42.440 --> 0:08:45.719 Trumper and a Republican in name only. I believe that 0:08:45.760 --> 0:08:47.840 we're battling for the heart and soul of our country, 0:08:48.080 --> 0:08:50.640 and it's not just the Democrats, but it's the Rhinods 0:08:50.679 --> 0:08:53.440 like Harry Wilson. We're out there making sure that we 0:08:53.520 --> 0:08:55.920 have this moment in time with one party democratic rule 0:08:55.960 --> 0:08:59.800 in Washington. D C. Wilson responded, Now, Mr Zeldon is 0:08:59.800 --> 0:09:01.480 going to go onto a series of attach You saw 0:09:01.559 --> 0:09:02.959 him even before I had a chance to speak, just 0:09:03.040 --> 0:09:05.560 like he started attacking before I ran my campaign, because 0:09:05.559 --> 0:09:09.320 he's scared, because he's a broken candidate. Wilson claimed that 0:09:09.360 --> 0:09:11.800 in January es Elden had asked him to be his 0:09:11.880 --> 0:09:15.040 running mate. The Republican Field Air and on CBS two 0:09:15.120 --> 0:09:20.440 also included former Westchester County executive Rob Astino and Andrew Giuliani, 0:09:20.520 --> 0:09:23.160 the son of former New York City Mayor Rudy Giuliani. 0:09:23.559 --> 0:09:26.520 Attorney General Merritt Garland confirms he is keeping an eye 0:09:26.600 --> 0:09:29.599 on all of the House committees hearings on the January 0:09:29.679 --> 0:09:33.640 sixth Capitol Riot. However, Garland is choosing not to elaborate 0:09:33.679 --> 0:09:37.520 on the current status of a possible investigation against Donald Trump. 0:09:37.720 --> 0:09:41.800 The Justice Department's longstanding position is that we don't commenting 0:09:42.320 --> 0:09:46.040 don't comment an ongoing investigations. During a second day of hearings, 0:09:46.080 --> 0:09:49.760 former Attorney General William Barr said Trump seemed detached from 0:09:49.840 --> 0:09:53.040 reality that he had lost the election. Global News twenty 0:09:53.040 --> 0:09:55.800 four hours a day on air and on Bloomberg Quicktake, 0:09:56.040 --> 0:09:58.880 powered by more than seven hundred journalists and analysts more 0:09:58.920 --> 0:10:02.760 than hundred twenty country Michael barn This is Bloomberg, John, Michael, 0:10:02.800 --> 0:10:09.920 thank you. That's how six ten on Wall Street Bloomberg 0:10:10.000 --> 0:10:12.560 Sports Update. Here's John sent show. Thanks John. Golden State 0:10:12.559 --> 0:10:15.600 Warriors can win the NBA Championship Thursday in Boston. If 0:10:15.640 --> 0:10:17.760 they lose, they'll have another chance with the game seven 0:10:17.840 --> 0:10:21.480 Sunday in San Francisco, where last night the Warriors started 0:10:21.480 --> 0:10:23.360 the fourth quarter with a ten up and running. They 0:10:23.400 --> 0:10:26.440 won Game five by ten one oh four ninety four. 0:10:26.480 --> 0:10:28.720 They leave the series three to two. All five games 0:10:28.720 --> 0:10:31.360 in the series have been won by at least ten points. 0:10:31.360 --> 0:10:34.240 Andrew Wiggins led Going State twenty six points. Clay Thompson 0:10:34.280 --> 0:10:37.760 had twenty one. Steph Curry, who scored forty three points 0:10:37.760 --> 0:10:40.040 in Game four, did not make a single three pointer. 0:10:40.160 --> 0:10:43.480 That had not happened since November of two thousand eighteen, 0:10:43.600 --> 0:10:46.920 two hundred and thirty three games ago. Mets back home 0:10:46.920 --> 0:10:49.120 from the road trip. They'll play Milwaukee, who just daded 0:10:49.120 --> 0:10:51.360 in any team losing straight. The Yankees, winners of a 0:10:51.440 --> 0:10:53.720 letter of the last twelve, host Tampa Bay. It's Garrett 0:10:53.760 --> 0:10:57.079 Cole versus the x Yank Corey club. Cole comes off 0:10:57.120 --> 0:10:59.320 the outing where he gave up five home runs. Josh 0:10:59.360 --> 0:11:02.360 Donaldson and I will serve the one game suspension he 0:11:02.440 --> 0:11:04.920 got for comments made to the White Sox Tim Anderson. 0:11:04.960 --> 0:11:09.120 Donaldson's appeal was denied. The US Open t s off Thursday, 0:11:09.200 --> 0:11:13.160 Brookline mass All Eyes. Yesterday on Phil Mickelson asked repeatedly 0:11:13.200 --> 0:11:16.400 about his decision to leave the PGA tour for the 0:11:16.400 --> 0:11:18.960 new Saudi Back Live Tour, and after that doing that 0:11:19.000 --> 0:11:22.439 when most of the nine eleven terrorists were from Saudi Arabia, 0:11:22.480 --> 0:11:26.920 I would say to everyone that his lost loved ones, 0:11:27.679 --> 0:11:32.439 lost friends and nine eleven that I have deep, deep 0:11:32.440 --> 0:11:38.920 empathy for them. Um. I can't emphasize that enough. Well, 0:11:38.960 --> 0:11:41.240 those that have joined the lift to have been suspended 0:11:41.280 --> 0:11:43.400 by the PG the U s g A runs the 0:11:43.440 --> 0:11:45.880 Open is allowing them to play. Michoelson's never won the Open, 0:11:45.880 --> 0:11:48.920 He's been his second six times. John stash Awar, Bloomberg Sports. 0:11:49.000 --> 0:11:51.240 John all right, thanks John, and ahead of the cash 0:11:51.240 --> 0:11:53.240 show with the Wall Street futures right now in the 0:11:53.360 --> 0:11:59.160 green lead down Futures fifty four points, SMP futures up eleven, 0:11:59.280 --> 0:12:07.360 Banzas up sixty one points. This day, Brick and Japery 0:12:07.400 --> 0:12:10.440 being brown to by Hot University's Frank gez Are School 0:12:10.480 --> 0:12:14.040 of Business, Top rank online NBA program with a real 0:12:14.080 --> 0:12:16.840 world foundation. Learn more. Ad Hofster dot e, d U 0:12:17.080 --> 0:12:25.000 slash go, grab markets, headlines and breaking news twenty four 0:12:25.000 --> 0:12:28.080 hours a day at Bloomberg dot Com, the Bloomberg Business 0:12:28.080 --> 0:12:31.280 at and at Bloomberg Quick Take This is a Bloomberg 0:12:31.360 --> 0:12:41.040 business lash. I'm Nathan Hager. Futures are higher, but they're 0:12:41.080 --> 0:12:42.800 pulling back on some of their games this morning in 0:12:42.800 --> 0:12:46.240 a rebound in European stocks is proving short lived, suggesting 0:12:46.280 --> 0:12:48.680 markets might not be out of the woods just yet, 0:12:48.720 --> 0:12:52.760 after a route driven by expectations of sharper Federal Reserve 0:12:52.880 --> 0:12:55.880 interest rate hikes to fight inflation. We checked the markets 0:12:55.920 --> 0:12:58.680 for you every fifteen minutes during the trading day on Bloomberg. 0:12:58.960 --> 0:13:01.920 Right now, SMP futures are up six points, Dow future 0:13:01.960 --> 0:13:05.160 is up twenty five, Nastack futures higher by forty six points. 0:13:05.360 --> 0:13:07.840 Germany's dex is now down eight tenths of one percent. 0:13:07.880 --> 0:13:10.600 The CACK in paris lower by one point four percent. 0:13:11.120 --> 0:13:13.800 The tenure Treasury is up fourteen thirty seconds, the yield 0:13:13.800 --> 0:13:16.839 three point three zero percent two year just behind at 0:13:16.840 --> 0:13:19.959 three point to nine. I'm x screwed is up a 0:13:20.000 --> 0:13:22.160 half percent of sixty four cents at a hundred twenty 0:13:22.160 --> 0:13:24.880 one dollars fifty seven cents of barrel comex golled down 0:13:24.920 --> 0:13:27.040 four tenths per cent, or six dollars eighty cents at 0:13:27.040 --> 0:13:30.679 eighteen ninety announce. The euro one point zero four three 0:13:30.720 --> 0:13:32.840 eight against the dollar, British pound one point to one 0:13:32.840 --> 0:13:35.520 one two the yen one thirty four point one seven 0:13:35.760 --> 0:13:38.760 Quick check a bitcoin twenty two thousand, three hundred dollars. 0:13:38.800 --> 0:13:41.640 That's a Bloomberg business flash. Now here's Michael barr with 0:13:41.720 --> 0:13:44.480 more on what's going on around the world. Michael Nathan, 0:13:44.480 --> 0:13:47.480 thank you very much. Donald Trump's closest campaign advisors were 0:13:47.520 --> 0:13:51.400 dismantling his false claims of twenty twenty election fraud ahead 0:13:51.440 --> 0:13:54.760 of the January six attack on the Capitol. During yesterday's 0:13:54.800 --> 0:13:58.560 House hearing, former Attorney General William Barrs said the defeated 0:13:58.600 --> 0:14:02.880 presidents seemed that attached firm reality. China has released a 0:14:02.960 --> 0:14:06.600 long detained Bloomberg News employee, Hayes Fan, has been released 0:14:06.600 --> 0:14:08.760 on bail after more than a year and the tension. 0:14:09.120 --> 0:14:12.319 She was held on suspicion of national security law violations. 0:14:12.559 --> 0:14:15.839 The case remains under investigation while Fan is on bail 0:14:15.920 --> 0:14:19.320 pending trial. In Game five of the NBA Finals, the 0:14:19.320 --> 0:14:22.240 Celtics are on the brink of elimination. Boston loss to 0:14:22.280 --> 0:14:25.040 the Warriors one oh four ninety four. In baseball, the 0:14:25.120 --> 0:14:28.960 Nationals and Orioles lost the giants one Global News twenty 0:14:29.000 --> 0:14:31.720 four hours a day on here and on Bloomberg Quicktake, 0:14:32.000 --> 0:14:35.120 powered by more than twenty seven hundred journalists and analysts 0:14:35.200 --> 0:14:39.200 more than twenty countries. Michael barn this is Bloomberg, John, Michael, 0:14:39.240 --> 0:14:41.280 thank you. It is coming up on six twenty on 0:14:41.320 --> 0:14:44.440 Wall Street. We are live from the Bloomberg Interranta Broker Studios. 0:14:44.800 --> 0:14:48.160 This is Bloomberg Day Break. Well the route. Yesterday I 0:14:48.280 --> 0:14:51.840 raised one point three trillion dollars at market capitalization from 0:14:51.880 --> 0:14:54.840 stocks at this quarter, also set to deliver the biggest 0:14:54.840 --> 0:14:58.320 combined loss for global bonds and stocks on record and 0:14:58.520 --> 0:15:01.880 data going back to With that in mind, let's get 0:15:01.880 --> 0:15:04.240 you set up for the training day ahead with Brian Leavitt, 0:15:04.240 --> 0:15:08.320 Global market Strategists at the Investo. Did you see signs 0:15:08.360 --> 0:15:13.800 of capitulation yesterday? Yeah, we're starting to see signs of capitulation, 0:15:13.840 --> 0:15:16.960 which is of course, um not what you want to see, 0:15:17.000 --> 0:15:19.680 but better news as you're moving through a downturn. Now 0:15:19.960 --> 0:15:23.080 we're probably not all the way there. Usually you see 0:15:23.120 --> 0:15:27.360 the volatility index of VICX up around forty UM. Usually 0:15:27.440 --> 0:15:30.680 see the number of stocks trading above their two day 0:15:30.680 --> 0:15:34.120 moving average down, you know, probably around ten percent, We're 0:15:34.160 --> 0:15:36.880 we're still in the twenties, so we're not all the 0:15:36.960 --> 0:15:41.440 way there, but but certainly moving closer. As you know, 0:15:41.480 --> 0:15:44.960 investors become ever more fearful about rising interest rates amid 0:15:45.000 --> 0:15:48.480 all this insulation. What is the expectation for you from 0:15:48.520 --> 0:15:53.120 the Federal Reserve? My expectation was fifty basis points where 0:15:53.160 --> 0:15:57.600 you're starting to see some rumblings that se could be 0:15:58.000 --> 0:16:02.280 in the offing. So, UM, we'll see. But I the 0:16:02.400 --> 0:16:05.880 more there's smoke around seventy five basis points, I suspect 0:16:05.960 --> 0:16:09.000 that we may be heading there. It could be the center, 0:16:09.040 --> 0:16:11.840 it could be the point that you know, this is 0:16:11.840 --> 0:16:15.200 starting to be leaked out to prepare the markets for it. Um. 0:16:15.720 --> 0:16:17.480 I think a lot of investors are saying, let's get 0:16:17.480 --> 0:16:20.320 on with it now, Um, you know where we know 0:16:20.440 --> 0:16:22.920 the rate hikes are coming, let's front load them. Let's 0:16:22.920 --> 0:16:25.320 get on with it. We'll see how the markets respond 0:16:25.400 --> 0:16:27.560 to it. But clearly, if you look at where the 0:16:27.600 --> 0:16:30.120 two year rate is, it has priced in a substantial 0:16:30.160 --> 0:16:34.560 amount of tightening already. He's elevated inflation here to stay. 0:16:34.560 --> 0:16:41.120 In some respects, I would say that inflation is going 0:16:41.240 --> 0:16:43.120 the rate of change inflation is going to come down. 0:16:43.200 --> 0:16:46.080 We're already starting to see it a bit in goods prices. 0:16:46.360 --> 0:16:49.360 What investors need to grapple with is whether we have 0:16:49.400 --> 0:16:53.240 a higher sustained environment than we had in the prior cycle. 0:16:53.320 --> 0:16:56.160 Now that of course doesn't mean eight percent inflation, but 0:16:56.600 --> 0:16:58.520 you know, does it settle in somewhere around two and 0:16:58.600 --> 0:17:01.760 a half to three percent versus the prior cycle where 0:17:01.760 --> 0:17:04.000 we were trying to get to two And I would 0:17:04.040 --> 0:17:07.480 suggest that's likely given some of the closer to home 0:17:07.520 --> 0:17:10.480 production that we're going to see. And you know, in 0:17:10.480 --> 0:17:13.320 a two and a half three percent inflation environment, that's 0:17:13.320 --> 0:17:16.959 where value stocks are more interesting. Whereas the prior cycle 0:17:17.480 --> 0:17:21.000 with inflation solo, it was it was all about growth 0:17:21.640 --> 0:17:23.960 because there was never a catalyst to drive value stocks 0:17:24.000 --> 0:17:26.560 higher at a thirty this warning, of course, we're going 0:17:26.640 --> 0:17:30.280 to get the producer price index when trying to determine 0:17:30.280 --> 0:17:33.439 pressure on company margins. How important is this reading going 0:17:33.480 --> 0:17:36.159 to be today? Yeah, it's very important. I mean, anything 0:17:36.200 --> 0:17:39.960 that we're getting right now on inflation is going to 0:17:40.040 --> 0:17:43.280 be watched very closely by the market. Now, the last time, 0:17:43.800 --> 0:17:46.159 excuse me, we got the producer price in X on 0:17:46.280 --> 0:17:50.159 final demand, um, the year over year percent change had 0:17:50.200 --> 0:17:52.680 turned lower. Now we saw that similarly with the headline 0:17:52.680 --> 0:17:55.560 CPI as well, So we want to see signs. I'll 0:17:55.600 --> 0:17:58.359 be watching pp I on final demand. We want to 0:17:58.400 --> 0:18:02.280 see signs that that on your your percent change coming down. 0:18:02.680 --> 0:18:05.879 That would be a positive. We expect goods prices to 0:18:06.560 --> 0:18:09.919 fall in the coming months and the markets will be 0:18:09.920 --> 0:18:13.280 looking for classification on that. Today stocks and bonds have 0:18:13.400 --> 0:18:18.320 been hit. So what's the alternative at this point, Well, 0:18:18.320 --> 0:18:23.080 investors should not be quick to sell government bonds. Now, 0:18:23.119 --> 0:18:26.360 of course you have not seen a very good environment 0:18:26.359 --> 0:18:29.800 with rates going up as rapidly as they have, but 0:18:30.160 --> 0:18:33.840 the concern starts to shift over time from an inflation 0:18:33.920 --> 0:18:36.919 environment to a growth scare, and government bonds in a 0:18:37.040 --> 0:18:40.919 slowdown or dare we even say o recessionary environment should 0:18:41.000 --> 0:18:44.560 perform well, So I would not be moving away from them. 0:18:44.560 --> 0:18:47.040 But you know, investors also want to diversify into other 0:18:47.080 --> 0:18:50.520 parts of the market, particularly those that could hedge inflation 0:18:50.880 --> 0:18:54.440 um assuming that if this were to persist, things like commodities, 0:18:54.720 --> 0:18:57.240 things like real estate investment trusts can do a good 0:18:57.320 --> 0:19:01.080 job of providing some protection against its lation in a portfolio. 0:19:01.680 --> 0:19:05.159 Is it a recession call for you. I think we're 0:19:05.200 --> 0:19:07.800 getting closer. Um. You know, the the odds of a 0:19:07.840 --> 0:19:11.840 recession are elevated. If you think about the the usual 0:19:12.080 --> 0:19:15.320 trappings of a recession, you see high en rising inflation, 0:19:15.840 --> 0:19:18.959 a flat to an inverted heel curve, a strong dollar, 0:19:19.400 --> 0:19:23.359 consumer sentiment weakening. So we have all of that. Of course, 0:19:23.359 --> 0:19:26.200 credit spreads have been holding in, which would be the 0:19:26.280 --> 0:19:28.920 last to go. So I would say that the risks 0:19:28.960 --> 0:19:31.679 to the cycle are elevated. I wouldn't believe that a 0:19:31.720 --> 0:19:33.919 recession is imminent, but the rest of the cycle are 0:19:33.960 --> 0:19:38.639 certainly elevated. Brian olays a pleasure. Brian Levitt, global market strategist, 0:19:38.680 --> 0:19:41.520 to add in, best go with us this morning, and 0:19:41.640 --> 0:19:44.600 we're starting to see the futures deteriorate this morning. The 0:19:44.720 --> 0:19:47.560 DOWN futures now up just twenty one points as and 0:19:47.680 --> 0:19:50.800 b E many futures of just seven points right now 0:19:51.000 --> 0:19:55.480 and after yesterday sell off, the nastac EMNI futures fifty 0:19:55.520 --> 0:19:58.640 five points higher. That's up about half of percent. You're 0:19:58.720 --> 0:20:08.080 listening to Bloomer Daybreak and Bloomberg Daybreak being brought to 0:20:08.119 --> 0:20:10.000 you by the Jewish Community Fund j C M. S. 0:20:10.080 --> 0:20:12.960 Dilner advised flag the smart choice to bandage your philanthropy, 0:20:13.320 --> 0:20:16.800 especially in times of crisis. Make your giving impactful. Visit 0:20:16.880 --> 0:20:23.320 j c f n Y dot or org. Broadcasting live 0:20:23.520 --> 0:20:27.480 from the Bloomberg Interactive Brokers Studio in New York, Bloomberg 0:20:27.480 --> 0:20:31.560 E Living Freedom to Washington, d C, Bloomberg to Boston, 0:20:31.640 --> 0:20:35.080 Bloomberg one O six one to San Francisco, Bloomberg nine 0:20:35.160 --> 0:20:38.359 sixty to the country, Sirius XM to A one nine team, 0:20:38.359 --> 0:20:41.520 and around the globe the Bloomberg Business apt and Bloomberg 0:20:41.600 --> 0:20:50.639 Radio dot com. This is Bloomberg day Break and the 0:20:50.760 --> 0:20:53.159 at six thirty on Wall Street. Good morning, I'm John Tucker, 0:20:53.400 --> 0:20:55.560 I'm Nathan Hager. We're about three hours away from the 0:20:55.600 --> 0:20:57.680 open of US training. It's time for the five Things 0:20:57.720 --> 0:20:59.359 you need to know to start your day, brought to 0:20:59.400 --> 0:21:02.000 you by it are Active Broker's Global Analysts helps you 0:21:02.080 --> 0:21:05.439 find new global investment opportunities to diversify your portfolio and 0:21:05.440 --> 0:21:08.640 discover undervalued companies that may have greater growth potential. Try 0:21:08.720 --> 0:21:11.359 ib KR Global Analysts today at i b k R 0:21:11.440 --> 0:21:15.040 dot com slash g A At first the SMP five 0:21:15.440 --> 0:21:18.600 finished yesterday's trading more than twenty percent below its last 0:21:18.600 --> 0:21:22.640 record close, entering a bear market. Currently, smp futures are 0:21:22.800 --> 0:21:26.280 bouncing back a bit. They're up about ten points right now, 0:21:26.720 --> 0:21:29.080 even with the sell off, define and ct F Chief 0:21:29.080 --> 0:21:33.040 Investment Officer Sylvia Jablonsky tells us there is reason for optimism. 0:21:33.320 --> 0:21:34.679 We're in the first half of the year. It's not 0:21:34.720 --> 0:21:37.119 even over yet, although it feels like a decade, and 0:21:37.560 --> 0:21:40.320 earnings are still looking strong. Consumers strong, corbor balance sheets 0:21:40.320 --> 0:21:41.600 are strong. I know there's a lot of you know, 0:21:41.680 --> 0:21:44.560 debate about that, but the numbers and the big large, 0:21:44.560 --> 0:21:47.600 you know, the larger macroeconomic factors are still fairly positive. 0:21:47.840 --> 0:21:51.240 Sylvia Jablonski, with Chief Definance CTF, says investors could see 0:21:51.320 --> 0:21:54.960 higher returns this year if inflation and supply chain bottlenext ease. 0:21:55.200 --> 0:21:57.480 And still for traders, it's all about the Fed right now. 0:21:57.520 --> 0:22:00.359 The Central Bank begins. It's to the policy meeting today 0:22:00.600 --> 0:22:03.240 and reports in the cave the Fed could raise rates 0:22:03.280 --> 0:22:07.840 by sevent basis points, the highest hike since turning to 0:22:07.920 --> 0:22:10.639 oil cruise holding steady around a hundred twenty two dollars 0:22:10.640 --> 0:22:12.480 of bare old. Now we're learning the White House plans 0:22:12.480 --> 0:22:15.480 for President Biden to visit Saudi Arabia next month. SP 0:22:15.560 --> 0:22:18.159 Global Vice Chair Dan Jurgen says, even if the Kingdom 0:22:18.200 --> 0:22:20.600 increases production, it may not have much of an effect 0:22:20.640 --> 0:22:23.640 on prices. The markets are very tight, and so even 0:22:23.680 --> 0:22:26.439 though you would expect that with what's happened to the overall, 0:22:26.480 --> 0:22:28.960 it seems to be happening to the overall economy is slowing, 0:22:29.119 --> 0:22:31.040 it's not showing up and yet in demand for oil. 0:22:32.080 --> 0:22:34.359