WEBVTT - Bloomberg Daybreak: August 11, 2022 - Hour 2 (Radio) 0:00:01.240 --> 0:00:04.760 Life from the Bloomberg interacted Berger's studios. This is Bloomberg 0:00:04.840 --> 0:00:08.680 day Break for Thursday, August eleven two. Coming up this hour, 0:00:09.039 --> 0:00:12.680 US futures look to add to yesterday's rally. Softening inflation 0:00:12.840 --> 0:00:15.800 isn't swaying FETE officials when it comes to policy. Gas 0:00:15.800 --> 0:00:18.840 prices continue to fall, dipping below four dollars a gallon, 0:00:18.960 --> 0:00:21.640 and Disney shares search as it beats prophet estimates that 0:00:21.720 --> 0:00:24.639 it announces a price fight for streaming. New York Mayor 0:00:24.720 --> 0:00:28.280 Adams and Texas Governor Rabbit continue to spa over bus 0:00:28.320 --> 0:00:31.640 loads of migrants to the city. Plus former President Trump 0:00:31.720 --> 0:00:34.919 leads the fifth I'm Michael Blaher. More ahead, I'm John 0:00:34.960 --> 0:00:37.320 stash Our. In sports, another win for the red hot Mets. 0:00:37.360 --> 0:00:40.360 The Yankees lost in Seattle. The Giants that their preseason 0:00:40.400 --> 0:00:45.760 opener tonight at New England. That's all's turning ahead on 0:00:45.880 --> 0:00:49.240 Bloomberg day Break on Bloomberg eleven, Free on New York, 0:00:49.440 --> 0:00:54.120 Bloomberg one, Washington, d C, Bloomberg one oh six one, Boston, 0:00:54.400 --> 0:00:58.880 Bloomberg nine sixties and Francisco Sirius XAM one nine team, 0:00:59.080 --> 0:01:02.000 and around the world. The Bloomberg Radio Dot com and 0:01:02.120 --> 0:01:08.240 via the Bloomberg Business app. Think good morning, I'm Nathan 0:01:08.280 --> 0:01:11.560 Higger and I'm Karen Moscow. When US Dock Index futures 0:01:11.560 --> 0:01:13.679 are on the rise this morning. We are coming up 0:01:13.720 --> 0:01:15.720 to six o one on Wall Street, and we check 0:01:15.760 --> 0:01:18.280 the markets every fifteen minutes throughout the trading day. On 0:01:18.319 --> 0:01:21.560 Bloomberg S and P Future is up about thirteen points now, 0:01:21.680 --> 0:01:24.360 Futures up one twenty five and NASDAG future is up 0:01:24.400 --> 0:01:27.479 thirty three. Ten year treasury up to thirty seconds here 0:01:27.560 --> 0:01:29.920 two point seven six percent, and they yield on the 0:01:29.959 --> 0:01:33.399 two year three point one seven percent. Nathan, Well, Karen. 0:01:33.400 --> 0:01:36.880 The rise in futures this morning builds on yesterday's powerful rally. 0:01:36.959 --> 0:01:39.680 The SMP five hundred closed at a three month high, 0:01:39.800 --> 0:01:42.559 while the Nasdaq one hundreds up more than twenty percent 0:01:42.640 --> 0:01:44.800 now from its June bottom. It was all fueled by 0:01:44.959 --> 0:01:48.919 softer than expected inflation data. Alan Lands, director of research 0:01:49.000 --> 0:01:52.040 at Lands Global, is skeptical all of a sudden. Now 0:01:52.680 --> 0:01:56.480 one CPI report and now you know, inflation is is 0:01:56.520 --> 0:01:59.920 calm and taking care of et cetera. So for some reason, investor, 0:02:00.640 --> 0:02:05.120 you know, ream stop sucks back, and you know it's 0:02:05.160 --> 0:02:09.520 just it's just a total exaggeration. Alan Land says he 0:02:09.560 --> 0:02:12.360 remains conscious. He was a guest on Bloomberg Business Week, 0:02:12.400 --> 0:02:16.880 herd Weekday afternoons on Bloomberg Radio and streaming live on YouTube. Well, Nathan, 0:02:16.880 --> 0:02:19.680 the Wall Street rally is now spilled overseas. Stocks in 0:02:19.760 --> 0:02:22.800 Hong Kong and China search more than two percent overnight, 0:02:22.840 --> 0:02:25.920 and we get the recount from Bloomberg's Juliette Sally and Singapore. 0:02:25.960 --> 0:02:28.520 Good Morning, Juliette, Good morning, Nathan, and Karen Tex sches 0:02:28.600 --> 0:02:31.320 Bird gains in the regional index excluding Japan, which was 0:02:31.360 --> 0:02:34.320 closed for a holiday. China's bulls has advanced even as 0:02:34.360 --> 0:02:38.240 investors digested a warning from the PBOC about inflation threats 0:02:38.240 --> 0:02:41.360 and a pledge to avoid massive stimulus. South Korea has 0:02:41.360 --> 0:02:43.560 one gained as much as one percent against the dollar 0:02:43.680 --> 0:02:46.520 as the nation's trade deficit wide and while the Singapore 0:02:46.560 --> 0:02:49.400 dollar retreated as the Ministry of Trade and Industry lowered 0:02:49.400 --> 0:02:52.640 its twenty twenty two growth forecast following a contraction in 0:02:52.680 --> 0:02:56.080 the economy in the second quarter. In Singapore. Juliette Sally 0:02:56.200 --> 0:02:59.720 Bloomberg Daybreak, All Right, juliet thanks softening inflation data, Maybe 0:02:59.760 --> 0:03:02.640 exit adding markets but it's not changing minds at the FED. 0:03:02.840 --> 0:03:06.120 Let's get that story live with Bloomberg's John Tucker John Nathan. 0:03:06.120 --> 0:03:09.079 Minneapolis Fed President Neil Cash car he wants the benchmark 0:03:09.120 --> 0:03:11.200 into his rate at three point nine percent by the 0:03:11.320 --> 0:03:13.680 end of this year and at four point four percent 0:03:13.800 --> 0:03:16.800 by the end of twenty three. The idea that we're 0:03:16.800 --> 0:03:20.560 going to start cutting rates early next year when inflation 0:03:20.680 --> 0:03:22.919 is very likely going to be well, well, well in 0:03:23.000 --> 0:03:26.640 excess of our target, I just think it's not realistic, carries. 0:03:26.680 --> 0:03:30.600 Counterpart Charles Evans of Chicago welcome the lower CPI print, 0:03:30.639 --> 0:03:34.760 but says inflation remains unacceptably high and he wants to 0:03:34.800 --> 0:03:38.040 continue raising rates until next year. I think it'll be 0:03:38.360 --> 0:03:40.680 three and three quarters to four percent, So sort of 0:03:40.680 --> 0:03:43.680 a four percent top funds rate at the end of 0:03:43.760 --> 0:03:46.560 next year is what I'm thinking about. Mary Daly, also 0:03:46.680 --> 0:03:49.600 adding to that call, the San Francisco FED president tells 0:03:49.600 --> 0:03:53.000 the Financial Times it's far too early to declare victory 0:03:53.040 --> 0:03:57.040 over inflation. She's not ruling out a third consecutive bases 0:03:57.040 --> 0:03:59.840 point increase in September. Daily, by the way, is going 0:03:59.880 --> 0:04:02.400 to be on Bloomberg Radio and TV tonight at seven 0:04:02.480 --> 0:04:05.800 thirty Eastern Live in New York. I'm John Tucker, Bloomberg debreak. 0:04:06.000 --> 0:04:08.200 All right, John, thank you well. That sentiment from FED 0:04:08.240 --> 0:04:11.320 officials as being echoed by the U S. Commerce Secretary 0:04:11.400 --> 0:04:14.800 Gina Ramando spoke at the Bloomberg's David weston it is 0:04:14.840 --> 0:04:18.200 good news, although I do think we have to be cautious. 0:04:18.240 --> 0:04:21.560 A big reason for the good news gas prices are 0:04:21.640 --> 0:04:26.320 leveling off, and that's certainly helpful to consumers. But as 0:04:26.360 --> 0:04:29.920 you point out, there are other issues wait, like in housing, 0:04:29.960 --> 0:04:31.719 that we have to still keep our eye on the ball. 0:04:32.680 --> 0:04:35.080 As we've set all along, there's no silver bullet here. 0:04:35.400 --> 0:04:39.719 Commerce Secretary Jenna Ramando mentioned falling gasoline prices, and we 0:04:39.800 --> 0:04:42.000 have more news on that front this morning. Triple A 0:04:42.080 --> 0:04:44.600 reporting the average price of gash in the US has 0:04:44.680 --> 0:04:47.400 now fallen below four dollars a gallon, and we get 0:04:47.480 --> 0:04:50.520 another reading on US inflation this morning. Karen. Economists predict 0:04:50.600 --> 0:04:53.840 July's producer price index rose ten point four percent on 0:04:53.920 --> 0:04:55.880 a year over year basis. That would be less than 0:04:56.000 --> 0:05:00.320 June's historic eleven percent increase. Bloomberg's Viny Del Judai says 0:05:00.360 --> 0:05:03.719 more gasoline prices could be the theme of today's report 0:05:03.839 --> 0:05:07.560 falling gasoline prices. They've been slashing around for two months 0:05:07.560 --> 0:05:10.400 and accounted for almost all of June's and greasing US 0:05:10.440 --> 0:05:14.320 wholesale prices outside of fuel Bloomberg Economics as costs from 0:05:14.360 --> 0:05:17.640 Ain elevated, though the peak is probably behind us. We 0:05:17.720 --> 0:05:21.599 saw a similar pattern and Wednesday's data on July consumer prices. 0:05:21.920 --> 0:05:24.760 But there's a long way to go. Finney, Carl Judaic, 0:05:24.839 --> 0:05:27.320 Bloomberg debreak. All right, Finney, thank you. All Back now 0:05:27.400 --> 0:05:30.120 to the equity market. Shares of Disney up more than 0:05:30.240 --> 0:05:33.280 eight percent in early trading. The media giants third quarter 0:05:33.360 --> 0:05:37.360 results beat estimates for sales, profit and subscriber growth. It's 0:05:37.360 --> 0:05:40.479 also raising the price of its flagship and Disney Plus 0:05:40.560 --> 0:05:44.480 streaming service by thirty eight percent. Beget more from Bloomberg's 0:05:44.600 --> 0:05:47.800 Lucas Shaw. The thing that really Disney announced today is 0:05:47.839 --> 0:05:51.400 not only stronger growth than anybody expected in streaming, which 0:05:51.480 --> 0:05:53.400 kind of bucks the trend we saw everywhere else, whether 0:05:53.440 --> 0:05:57.160 it was Netflix, HBO, Max, Paramount, UH Peacock, but but 0:05:57.240 --> 0:06:00.320 perhaps most importantly, that it's raising prices across the board 0:06:00.360 --> 0:06:02.800 for all of its services, and it feels like it's 0:06:02.880 --> 0:06:05.760 now you know, established itself enough with the customers that's 0:06:05.800 --> 0:06:08.440 able to do that, and Bloomberry so Luke as Shaw says, 0:06:08.480 --> 0:06:11.640 Disney will introduce an and supported version of its flagship 0:06:11.720 --> 0:06:14.279 streaming service and raise the price of the ant free 0:06:14.320 --> 0:06:16.600 option to eleven dollars a month. Well, it's not just 0:06:16.720 --> 0:06:19.000 Disney on the move. This morning, Karen Shares of son 0:06:19.080 --> 0:06:22.520 Nos are plunging down nearly twenty percent in early training. 0:06:22.600 --> 0:06:24.840 Let's get the details live with Bloomberg. Tre need a Young, 0:06:24.839 --> 0:06:27.960 Good morning Grenita, Good morning Nathan. Audio products maker son 0:06:28.040 --> 0:06:31.799 Nos cut its annual revenue view. Company executives are citing 0:06:31.839 --> 0:06:36.480 a more challenging macroeconomic backdrop against an appreciating dollar and 0:06:36.680 --> 0:06:40.320 high inflation, and that's all pressure and consumer sentiment. As 0:06:40.360 --> 0:06:43.720 a result, the company extended its timeline to achieve its 0:06:43.800 --> 0:06:48.400 previously issue targets to beyond fiscal year four. Sons is 0:06:48.440 --> 0:06:52.280 also saying CFO Brittany Badgeley is stepping down to pursue 0:06:52.279 --> 0:06:56.840 another opportunity and names Eddie Lazarus in term CFO Live 0:06:56.920 --> 0:06:59.520 in New York. I'm reneed a Young Bloomberg Daybreak, I 0:06:59.600 --> 0:07:01.960 reneed a thanks Well, Shares a bumble are also following 0:07:02.000 --> 0:07:04.600 this morning, they're down more than seven percent. That's after 0:07:04.680 --> 0:07:08.200 the online dating app company trimmed its revenue forecast for 0:07:08.640 --> 0:07:12.320 the year. Again, futures this morning are on the rise. 0:07:12.880 --> 0:07:16.320 Straight ahead, we have your latest local headlines, plus a 0:07:16.440 --> 0:07:23.520 check of sports. And this is Bloomberg. Thank You're caring. 0:07:23.520 --> 0:07:25.760 At six oh seven on Wall Street, seventy five degrees 0:07:25.960 --> 0:07:28.280 in Central Park. I got an accident in New York 0:07:28.360 --> 0:07:32.400 eastbound Root two at Freeland, His and Avenue. Michael Barr 0:07:32.520 --> 0:07:34.440 is here with more on what's going on in New 0:07:34.560 --> 0:07:37.480 York and around the world, including the latest on the 0:07:37.920 --> 0:07:42.040 migrant influx. Michael, yes here. Another bus load of migrants 0:07:42.120 --> 0:07:44.800 seven shipped to New York City by Texas Governor Greg 0:07:44.920 --> 0:07:48.200 Abbott as a political message to the Biden administration and 0:07:48.280 --> 0:07:51.680 the city's leaders. Other bus loads to so called sanctuary 0:07:51.760 --> 0:07:54.800 cities have been sent to Washington. It is fueling a 0:07:54.840 --> 0:07:58.400 political battle between the Republican governor and the Democratic mayors 0:07:58.480 --> 0:08:01.680 in the cities. Yesterday, nearly a hundred migrants arrived in 0:08:01.760 --> 0:08:05.120 New York City from Texas. New York Mayor Eric Adam 0:08:05.160 --> 0:08:07.360 says he might send the bus load of New Yorkers 0:08:07.400 --> 0:08:11.800 to Texas to help Democratic gubernatorial candidate Beto O'Rourke ou 0:08:12.120 --> 0:08:15.960 Abbott from office. Abbott responded on Fox, go ahead, mayor, 0:08:16.480 --> 0:08:18.680 make my day. However, the mayor is shot back on 0:08:18.880 --> 0:08:23.720 CBS two. I know he thinks he's Clint Eastwood, but 0:08:23.840 --> 0:08:30.440 he's not. He is a anti American governant. Mayor Adam 0:08:30.520 --> 0:08:33.559 says there's nothing successful about treating people with this lack 0:08:33.640 --> 0:08:37.080 of dignity. Donald Trump says he invoked the Fifth Amendment 0:08:37.160 --> 0:08:40.040 and wouldn't answer questions under oath in the long running 0:08:40.040 --> 0:08:43.559 New York civil investigation into his business dealings. Trump was 0:08:43.679 --> 0:08:47.040 at New York Attorney General Letitia James's office yesterday. He 0:08:47.120 --> 0:08:49.480 sent out a statement saying he declined to answer the 0:08:49.559 --> 0:08:53.160 questions under the rights and privileges afforded to every citizen 0:08:53.240 --> 0:08:56.560 under the United States Constitution. And the Randy and official 0:08:56.600 --> 0:08:58.760 has had large one and for the plot to allegedly 0:08:58.800 --> 0:09:03.640 assassinate former National Security advisor John Bolton. Bolton says Iran 0:09:03.720 --> 0:09:06.920 cannot be trusted, especially when it comes to the nuclear 0:09:07.080 --> 0:09:10.439 arms deal. I think it's a totally untrustworthy government. I 0:09:10.520 --> 0:09:14.479 think there is no possibility they will comply with commitments 0:09:14.520 --> 0:09:17.679 that they make they are enemies of America. They hate 0:09:17.840 --> 0:09:20.720 US as the Great Satan, as they hate Israel as 0:09:20.800 --> 0:09:23.679 the little Satan. The Department of Justice has forty five 0:09:23.760 --> 0:09:27.720 year old Iranian operative Shahram por Safi offered three hundred 0:09:27.760 --> 0:09:31.400 thousand dollars to assassinate former National Security Advisor Bolton in 0:09:31.520 --> 0:09:34.800 retaliation for the killing of a top Iranian general in 0:09:35.840 --> 0:09:39.240 Kim Joanne's sister revealed that the North Korean leader suffered 0:09:39.280 --> 0:09:42.000 from a high fever and was seriously ill during a 0:09:42.080 --> 0:09:46.560 recent COVID outbreak. She valed to eradicate South Korean authorities 0:09:46.840 --> 0:09:50.640 if they continue to tolerate propaganda leaflets the regime blames 0:09:50.840 --> 0:09:54.160 for spreading the virus. Global News twenty more hours a 0:09:54.240 --> 0:09:57.280 day on air and on Bloomberg Quick Take, powered by 0:09:57.320 --> 0:09:59.920 more than twenty d journalists and analysts or more than 0:10:00.280 --> 0:10:04.640 twenty countries. Michael Barr and this is Bloomberg. Nathan, Okay, Michael, 0:10:09.320 --> 0:10:11.520 Almost six ten on Wall Street. Time for the Bloomberg 0:10:11.559 --> 0:10:14.160 Sports Update. Here's John Stannshower. All right, Nathan, the Mets 0:10:14.160 --> 0:10:16.319 still on fire. Another easy way, and they led the 0:10:16.400 --> 0:10:18.200 Red six to nothing in the third inning. They won 0:10:18.280 --> 0:10:19.880 ten to two. They've won six in a row and 0:10:19.920 --> 0:10:22.480 the last five and went allowed a total of nine runs. 0:10:22.840 --> 0:10:25.880 They've won fifteen of their last seventeen, and all but 0:10:26.000 --> 0:10:28.079 two of those fifteen wins have been by three wines 0:10:28.200 --> 0:10:31.360 or more. The schedule does get tough for Phillies are hot. 0:10:31.440 --> 0:10:33.480 They come to City Field tomorrow. They rallied to win 0:10:33.600 --> 0:10:36.040 last night. The Fields have won seven a row twelve 0:10:36.120 --> 0:10:38.839 of thirteen. Mets then go to Atlanta for four games. 0:10:38.920 --> 0:10:40.960 The Braves won in Boston, they still filled the Mets 0:10:41.040 --> 0:10:43.360 by seven. After that series, the Mets will go to 0:10:43.440 --> 0:10:46.400 Philly for four. Yankees off tonight and then in Boston 0:10:46.440 --> 0:10:48.800 They'll try to salvage something out of this road chip 0:10:48.880 --> 0:10:51.240 that for the disaster so far. Swept in St. Louis. 0:10:51.640 --> 0:10:54.200 In Seattle, they went nineteen innings without a run. Did 0:10:54.320 --> 0:10:56.720 come alive in the seventh with home runs by Kyla 0:10:56.760 --> 0:10:59.280 Gashioka Aaron Judge at his forty fifth of the year, 0:10:59.360 --> 0:11:02.240 but Seattle came right back bottom of the seven drives 0:11:02.320 --> 0:11:12.640 one right field. That ball is going Carlos Santana, a 0:11:12.880 --> 0:11:17.120 four three league. Carlos breaks it over for seven. Sea 0:11:17.240 --> 0:11:21.200 was whole non numbery eleven and the Mariners and they 0:11:21.360 --> 0:11:23.959 chopping it up here the T Mobile Park. At four 0:11:24.080 --> 0:11:26.320 three of the final Cairo the call home one came 0:11:26.360 --> 0:11:29.560 off Alberta Breo after Nestor Cortez had pitched very well. 0:11:29.600 --> 0:11:31.120 He had a no hitter in the sixth. The Yanks 0:11:31.200 --> 0:11:34.560 just ten and eighteen or last twenty eight games. Dyersville, Iowa. 0:11:34.600 --> 0:11:36.800 Tonight the Field of Dreams game that the Yanks played 0:11:36.800 --> 0:11:38.520 in last year. It's that comes and the Reds Also 0:11:38.559 --> 0:11:41.480 tonight the Giants preseason opener at New England. With a 0:11:41.520 --> 0:11:44.000 new coaching staff and only three preseason games now, new 0:11:44.080 --> 0:11:47.160 coach Brian Table wants to play his starters at least 0:11:47.160 --> 0:11:49.560 in the year over the going John's Dash Award Bloembrook 0:11:49.559 --> 0:11:52.480 Sports Nathan all Right, John, thank you. SMP futures up 0:11:52.520 --> 0:11:55.320 eleven points, Staff futures up a hundred twenty four Danastack 0:11:55.440 --> 0:11:58.439 futures higher by twenty one points. The tenure treasury is 0:11:58.520 --> 0:12:02.360 up to thirty seconds. The yield two point seven six percent. 0:12:02.600 --> 0:12:08.640 This is Bloomberg Bloomberg eleven three oh weather. It will 0:12:08.679 --> 0:12:11.680 turn partly sunny this afternoon with highs near eighty five degrees. 0:12:11.800 --> 0:12:15.880 Mostly sunny, low eighties to end the week. Sunshine Saturday 0:12:16.360 --> 0:12:19.000 R eight right now seventy five and cloudy in Central Park. 0:12:21.920 --> 0:12:25.280 Markets headlines and breaking news twenty four hours a day 0:12:25.440 --> 0:12:29.520 at Bloomberg dot Com, the Bloomberg Business Atland at Bloomberg Quicktake, 0:12:29.800 --> 0:12:38.880 This is a Bloomberg Business flash and I'm Karen Moscow. 0:12:39.080 --> 0:12:41.839 US dot Index futures are on the rise this morning 0:12:41.880 --> 0:12:44.400 after the SNP five hundred hit a three month high. 0:12:44.520 --> 0:12:46.920 We checked the markets every fifteen minutes throughout the trading 0:12:47.000 --> 0:12:50.559 day on Bloomberg. SNP futures up about ten points down, 0:12:50.600 --> 0:12:53.000 futures of A hundred fifteen and nastack future is up 0:12:53.040 --> 0:12:56.240 fifteen The decks in Germany's down at tenth of upper cent. 0:12:56.360 --> 0:12:58.880 Ten year Treasury up three thirty seconds, Yell two point 0:12:58.960 --> 0:13:01.800 seven six percent yield on a two year three point 0:13:01.880 --> 0:13:05.480 one six percent. Nimex Screwede oil is up one cent 0:13:05.600 --> 0:13:07.640 or ninety one cent at ninety two dollars eighty five 0:13:07.720 --> 0:13:10.360 cents of Barrel Comics golled down four ten percent or 0:13:10.400 --> 0:13:13.120 seven dollars ten cents at eighteen o six sixty ounce. 0:13:13.480 --> 0:13:16.520 The euro one point oh three four zero against the dollar. 0:13:16.600 --> 0:13:18.840 British found one point to two one six the yen 0:13:19.000 --> 0:13:21.439 one thirty two point five eight. And look at a 0:13:21.480 --> 0:13:24.199 bitcoin this morning at two point one percent at twenty 0:13:24.280 --> 0:13:28.000 four thousand, four hundred twenty dollars. That's a Bloomberg business flash. 0:13:28.040 --> 0:13:30.480 Now here's Michael Barr with more unless going on around 0:13:30.520 --> 0:13:33.720 the world. Michael Karen, thank you very much. Former President 0:13:33.800 --> 0:13:37.679 Trump appeared before New York's Attorney General force warned deposition 0:13:37.760 --> 0:13:41.280 as part of a civil investigation into his family real 0:13:41.440 --> 0:13:44.600 estate business. Trump signed at the fifth declining to answer 0:13:44.640 --> 0:13:48.520 any questions. US gas prices have dipped under four dollars 0:13:48.559 --> 0:13:50.760 a gallon for the first time in more than five months. 0:13:51.000 --> 0:13:53.880 Triple A says the national average is three nine nine 0:13:54.120 --> 0:13:57.280 for a gallon of regular. In baseball, the Yankees lost 0:13:57.320 --> 0:14:00.440 to the marineris for three. The Mets beat the Reds 0:14:00.520 --> 0:14:04.520 tend to the Red Sox, Nationals, A's and Giants all lost. 0:14:04.920 --> 0:14:07.520 Global news twenty four hours a day on here and 0:14:07.760 --> 0:14:10.760 on Bloomberg Quick Take, powered by more than twenties seven 0:14:10.840 --> 0:14:13.520 hundred journalists and analysts, are more than a hundred twenty countries. 0:14:13.720 --> 0:14:16.360 I'm Michael Barr, and this is Bloomberg. Nathan all right, Michael. 0:14:16.400 --> 0:14:18.480 Thanks At six nineteen on Wall Street Live from the 0:14:18.520 --> 0:14:22.000 Bloomberg Interactive Broker Studios. This is Bloomberg Daybreak, and that 0:14:22.080 --> 0:14:25.480 news we got this morning about gas prices falling finally 0:14:25.800 --> 0:14:28.800 below four dollars AGA and sets us up quite nicely 0:14:28.920 --> 0:14:31.480 for the conversation we've got teed up right now with 0:14:31.800 --> 0:14:37.040 Bloomberg Economics correspondent Michael McKee to talk about what else inflation? Mike, 0:14:37.080 --> 0:14:40.000 good morning. Uh, food and gas. Obviously, that's what a 0:14:40.040 --> 0:14:43.120 lot of consumers care about, you and me. But the 0:14:43.320 --> 0:14:46.880 Fed is looking past that, and it looks like the 0:14:47.000 --> 0:14:50.880 market's kind of looking past the Fed. Yeah, it's a 0:14:51.000 --> 0:14:54.520 little bit odd that the market ure in disagreement with 0:14:54.640 --> 0:14:57.560 the Fed about two thousand twenty three. Mary Daily, the 0:14:57.640 --> 0:15:00.920 San Francisco Fed Bank President, makes marks yesterday to the 0:15:00.960 --> 0:15:03.920 Financial Times to that effect that she doesn't see any 0:15:04.000 --> 0:15:07.280 reason why you would be thinking you'd cut rates uh 0:15:07.480 --> 0:15:10.720 next year, given that the inflation fight is far from one. 0:15:11.600 --> 0:15:15.280 All of the FEDE officials who spoke yesterday pointed out that, yes, 0:15:15.400 --> 0:15:18.280 we had a software than expected CPI report, but the 0:15:18.400 --> 0:15:21.280 year over year levels still eight and a half percent. Yeah, 0:15:21.320 --> 0:15:24.520 we're gonna hear more from San Francisco Fed President Mary 0:15:24.640 --> 0:15:27.160 Daily is gonna be on with Kathleen Hayes later on 0:15:27.240 --> 0:15:31.640 this evening, seven thirty Wall Street Time here on Bloomberg Radio. 0:15:31.760 --> 0:15:35.880 What more, Mike, do you want to hear from FEDE officials. 0:15:35.960 --> 0:15:38.920 It seems like there's been h tell me if I'm wrong, 0:15:39.000 --> 0:15:41.800 a pretty fair amount of unanimity when it comes to 0:15:42.800 --> 0:15:47.040 staying aggressive keeping the fight up against inflation with aggressive 0:15:47.120 --> 0:15:50.520 rate hikes. Yeah, there's a general agreement that their work 0:15:50.680 --> 0:15:53.240 is not done, that rates need to go higher. We're 0:15:53.600 --> 0:15:55.200 in the range of two and a quarter to two 0:15:55.200 --> 0:15:58.000 and a half percent right now, and pretty much all 0:15:58.080 --> 0:16:00.760 of them are aiming to get to between three and 0:16:00.840 --> 0:16:02.520 three and a half percent by the end of the year, 0:16:02.600 --> 0:16:06.320 so another hundred basis points. And then there's a bit 0:16:06.400 --> 0:16:09.400 of a division about how far you go beyond that. 0:16:09.720 --> 0:16:12.040 There seems to be a general feeling that once you 0:16:12.120 --> 0:16:13.600 get to three and a half, you can see what 0:16:13.720 --> 0:16:17.120 the data are telling you about inflation and about jobs, 0:16:17.200 --> 0:16:18.960 because of course they're they're keeping an eye on that 0:16:19.080 --> 0:16:23.160 as well. Uh, some like Neil cash Cary think they 0:16:23.240 --> 0:16:26.640 need to go as high as four and a half. So, uh, 0:16:26.920 --> 0:16:29.480 we'll have to wait and see where the terminal rate 0:16:29.560 --> 0:16:32.000 turns out to be. But they've all made it clear 0:16:32.040 --> 0:16:34.120 that where we are now is not where we need 0:16:34.200 --> 0:16:37.040 to be. Yeah, there's a delicate balance, isn't there while 0:16:37.040 --> 0:16:41.280 they fight inflation while still trying to preserve I guess 0:16:41.480 --> 0:16:46.600 the strong jobs numbers that we've seen the labor market 0:16:47.080 --> 0:16:51.160 continues to thrive despite the more aggressive moves we've seen 0:16:51.200 --> 0:16:54.000 from the Fed and the more aggressive talk. It's your 0:16:54.040 --> 0:16:57.880 surprised everybody with the July numbers earlier this month, and 0:16:58.440 --> 0:17:02.160 the question is can that continue a lot of job openings, 0:17:02.280 --> 0:17:04.480 but then you have the matching problem with the jobs 0:17:04.560 --> 0:17:07.280 that are open suitable for the kind of workers who 0:17:07.320 --> 0:17:10.960 are looking for jobs. We'll find that out as time 0:17:11.080 --> 0:17:13.159 goes on. But with unemployment falling to three and a 0:17:13.160 --> 0:17:16.000 half percent, even as inflation comes down, that's the best 0:17:16.040 --> 0:17:18.480 of all worlds for the FED. Does that make the 0:17:18.600 --> 0:17:22.480 job tougher for the Fed to pull off the soft 0:17:22.640 --> 0:17:25.320 landing that everybody's looking for when we have this kind 0:17:25.359 --> 0:17:28.520 of strengthen the job market, It could work both ways. 0:17:28.600 --> 0:17:31.760 In a sense, the FED is happy because unemployment is 0:17:31.880 --> 0:17:35.800 so low that the labor market can absorb a little 0:17:35.840 --> 0:17:40.000 bit higher unemployment and a little bit less demand out there. 0:17:40.560 --> 0:17:42.840 But if we keep going the way we're going and 0:17:43.680 --> 0:17:47.080 unemployment stays low and companies can't find workers, that creates 0:17:47.119 --> 0:17:50.199 more wage pressure. So if unemployment is not going up, 0:17:50.280 --> 0:17:54.159 you have to assume that wages are still rising, and 0:17:54.280 --> 0:17:57.840 that creates inflation pressure on its own. Expecting that we're 0:17:57.880 --> 0:18:00.359 going to get a little bit more clarity on the 0:18:00.560 --> 0:18:04.240 inflation picture later this morning when producer prices come out, 0:18:04.359 --> 0:18:08.399 because like you and many others have rightly noted, there's 0:18:08.440 --> 0:18:12.160 a lot of data between now and the next meeting, 0:18:12.359 --> 0:18:16.760 much less between now and Jackson Hole. Yeah, in terms 0:18:16.800 --> 0:18:18.480 of the p p I this morning, and it'll be 0:18:18.560 --> 0:18:22.040 its own discrete indicator. It tells us what companies are 0:18:22.240 --> 0:18:26.600 receiving for their goods and services uh. And and that 0:18:26.760 --> 0:18:29.880 includes services, which is an important component of of all 0:18:29.960 --> 0:18:33.040 of this, and whether or not they are slowing the 0:18:33.200 --> 0:18:36.120 pace of rate hikes uh and not rate hikes, I'm sorry, 0:18:36.160 --> 0:18:39.320 price hikes. And so that's gonna be an interesting data 0:18:39.359 --> 0:18:42.520 point for the FED to see. But because companies absorb 0:18:42.800 --> 0:18:46.040 a lot of their costs in their margins, this isn't 0:18:46.119 --> 0:18:48.840 going to tell us specifically what's going to happen to 0:18:48.960 --> 0:18:51.760 inflation going forward, but it is a data point along 0:18:51.840 --> 0:18:55.760 that road. Uh, you're absolutely right. Though. We have another 0:18:55.840 --> 0:18:59.560 CPI report, we have another jobs report, we have a 0:18:59.680 --> 0:19:02.840 retail el sales report coming up next week. All of 0:19:02.880 --> 0:19:06.320 those will feed into FED thinking. So if you asked 0:19:06.320 --> 0:19:07.919 if ed official what they were going to do at 0:19:07.960 --> 0:19:10.200 the next meeting, they would tell you probably raise rates. 0:19:10.240 --> 0:19:12.720 But by how much that's an open question. And you 0:19:12.840 --> 0:19:14.359 have to think that all that data is going to 0:19:14.440 --> 0:19:17.480 feed into market volatility as well. Thanks for this, Mike, 0:19:17.560 --> 0:19:20.800 great having on with us this morning, Bloomberg Economics correspondent 0:19:21.160 --> 0:19:24.639 Michael McKee, As we await those producer prices doout eight 0:19:24.760 --> 0:19:27.040 thirty Wall Street Time. And again another reminder, we'll be 0:19:27.119 --> 0:19:30.160 speaking live with San Francisco FED President Mary Daily seven 0:19:30.240 --> 0:19:33.960 thirty Wall Street Time this evening. Catch that conversation on 0:19:34.000 --> 0:19:37.040 Bloomberg Radio and on Bloomberg Television. Ahead of all that, 0:19:37.680 --> 0:19:41.680 futures still moving higher. SMP futures up ten points, some 0:19:41.800 --> 0:19:45.280 modest gains. STAL futures up a D eighteen. Nasdaq future 0:19:45.320 --> 0:19:47.600 is highed by eighteen points, but building off the rally 0:19:47.680 --> 0:19:51.239 that we saw yesterday off the back of consumer prices. Uh. 0:19:51.280 --> 0:19:53.879 The tenure Treasury right now up four thirty seconds. The 0:19:53.960 --> 0:19:56.840 yield two point seven six yield on the two year 0:19:57.080 --> 0:20:00.879 three point one six percent Your list snake. It's a 0:20:00.920 --> 0:20:09.640 Bloomberg Daybreak Bloomberg eleven three oh weather partly Sunday today, 0:20:09.680 --> 0:20:12.840 mid eighties for an afternoon high low eighties, mostly sunny 0:20:12.880 --> 0:20:16.919 tomorrow for Friday sunshine Saturday high near eighty right now 0:20:17.000 --> 0:20:23.480 seventy five and cloudy in Central Park. Broadcasting live from 0:20:23.520 --> 0:20:27.320 the Bloomberg Interactive Broker Studio in New York, Bloomberg e 0:20:27.400 --> 0:20:32.080 Living Freedom to Washington, d C. Bloomberg to Boston, Bloomberg 0:20:32.119 --> 0:20:35.480 one oh six one to San Francisco, Bloomberg sixty to 0:20:35.560 --> 0:20:38.639 the country, Sirius XM chandle one nine team and around 0:20:38.680 --> 0:20:42.159 the globe the Bloomberg Business apt in Bloomberg Radio dot Com. 0:20:42.640 --> 0:20:51.480 This is Bloomberg Daybreak. It's six thirty on Wall Street. 0:20:51.520 --> 0:20:54.600 Good morning. I'm Nathan Hagger and I'm Karen Moscow. We're 0:20:54.680 --> 0:20:57.560 just about three hours away from the open of US trading. 0:20:57.600 --> 0:20:59.639 It's time for the five things you need to notice 0:20:59.680 --> 0:21:03.399 start your day. Brought to you by Interactive Brokers. Interactive 0:21:03.440 --> 0:21:06.440 Brokers charges margin loan rates from two point three percent 0:21:06.520 --> 0:21:09.159 to three point three percent. Their clients can also are 0:21:09.200 --> 0:21:11.560 an extra income by lending their fully paid shares of 0:21:11.680 --> 0:21:14.200 stock rate subject to change. Learn more at i dk 0:21:14.400 --> 0:21:17.880 R dot com. Slash compare First US Future is adding 0:21:17.920 --> 0:21:21.240 to yesterday's rally if you'd by softer than expected inflation 0:21:21.359 --> 0:21:25.120 data and a Stajamroso, chief investment strategist and I Capital 0:21:25.240 --> 0:21:28.480 says it might be time to add equity exposure. The 0:21:28.600 --> 0:21:31.119 time to do this was not in February and retrospect 0:21:31.200 --> 0:21:33.280 when we still had three hundred basis points or more 0:21:33.320 --> 0:21:35.439 of rate hikes to go. But if we have seventy 0:21:35.480 --> 0:21:38.480 five or a hundred, that should not pressure the multiples 0:21:38.520 --> 0:21:41.760 as much anymore. So I would be selectively looking to 0:21:41.960 --> 0:21:44.400 add to some of the thematic stocks, to high growth 0:21:44.440 --> 0:21:46.480 stocks that have not worked in the last six months. 0:21:46.800 --> 0:21:50.320 High Capital Center Stagia Muroso says positioning will be important 0:21:50.359 --> 0:21:54.200 for buyers and current market conditions. Really. Softening inflation data 0:21:54.240 --> 0:21:57.120 maybe exciting market scaren, but it's not changing minds. At 0:21:57.160 --> 0:21:59.960 the FED. We get that storyline from Bloomberg's John Talk 0:22:00.000 --> 0:22:02.960 here John Nathan. Minneapolis FED President Neil kesh Carry says 0:22:03.000 --> 0:22:04.920 the idea of the FEDS going to start cutting rates 0:22:04.960 --> 0:22:08.000 early next year is unrealistic. I think much more likely 0:22:08.040 --> 0:22:10.960 scenario if we will raise rates to some point and 0:22:11.040 --> 0:22:14.320 then we will sit there until we get convinced that 0:22:14.440 --> 0:22:16.560