WEBVTT - Bloomberg Daybreak: May 16, 2022 - Hour 2 (Radio) 0:00:03.360 --> 0:00:06.720 Live from the Bloomberg Interactive Brooker Studios. This is Bloomberg 0:00:06.800 --> 0:00:10.479 Daybreak for Monday, May sixteen, two. Coming up this hour, 0:00:10.720 --> 0:00:14.520 China's economy pays the price for the government's COVID zero policy. 0:00:14.680 --> 0:00:18.119 Fleomen sacks cluss, It's US academic growth forecast, Finland and 0:00:18.239 --> 0:00:21.960 Sweden moved closer to joining NATO, and President Biden calls 0:00:22.040 --> 0:00:24.360 for action. And the wicked of mass shooting in Buffalo. 0:00:24.920 --> 0:00:27.120 It was a weekend of gun violence in Buffalo and 0:00:27.280 --> 0:00:30.680 other cities as well. Plus Pennsylvania's Lieutenant governor self for 0:00:30.720 --> 0:00:32.480 a stroke because he runs from the U. S. Senate. 0:00:32.760 --> 0:00:36.199 I'm Michael bar More Ahead, I'm John Stashower Sports. The 0:00:36.320 --> 0:00:39.080 Rangers are moving on. They beat the Penguins in overtime 0:00:39.120 --> 0:00:41.199 in Game seven, it went for the Yankees, a tough 0:00:41.280 --> 0:00:45.800 loss for the map. That's all s traindy Head on 0:00:45.960 --> 0:00:51.600 Bloomberg Daybreak on Bloomberg e Living freon New York, Bloomberg one, Washington, 0:00:51.720 --> 0:00:55.320 d C, Bloomberg one, O six one, Boston, Bloomberg nine 0:00:55.400 --> 0:00:59.680 sixties and Francisco Syrius XM one nineteen and around the 0:00:59.720 --> 0:01:02.480 world Old on Bloomberg Radio dot Com and by the 0:01:02.520 --> 0:01:09.959 Bloomberg Business app and good morning. I'm Karen Moscow Antime 0:01:10.040 --> 0:01:12.400 John Sucker. Bloomberg Daybreak being brought to you by b 0:01:12.560 --> 0:01:16.360 n y Melon's Persian Inside conference back in person June 0:01:16.440 --> 0:01:20.640 fifteen through the seventeenth and Grapevine, Texas must attend event 0:01:20.720 --> 0:01:24.960 for financial advisors registered today at Insight dot b n 0:01:25.160 --> 0:01:27.760 y melon dot com. All right, John, thank you, and 0:01:27.840 --> 0:01:30.520 we are watching his headline cross the Bloomberg. McDonald's to 0:01:30.680 --> 0:01:33.520 exit from Russia again. That just crossing the Bloomberg and 0:01:33.560 --> 0:01:36.560 we'll have more details coming up. But first, US futures 0:01:36.600 --> 0:01:39.360 lower this morning at six o one on wallstra On 0:01:39.440 --> 0:01:41.800 Wall Street, we checked the markets every fifteen minutes throughout 0:01:41.800 --> 0:01:44.600 the trading day on bloomberg S and P futures down sixteen, 0:01:44.640 --> 0:01:47.480 Boyds down, futures down fifty eight, and now's day features 0:01:47.520 --> 0:01:51.000 down seventy six. John and Karen, we begin with disappointing 0:01:51.080 --> 0:01:54.560 data out of Asia. China's economy contracted in April as 0:01:54.640 --> 0:01:58.720 COVID lockdown's dragged on the industrial and consumer sectors. Bloomberg 0:01:58.800 --> 0:02:03.360 Daybreak Asia anchor Ryan Curtis has details. Retail sales contracted 0:02:03.440 --> 0:02:06.640 eleven point one percent. That was weaker than a projected 0:02:06.720 --> 0:02:10.359 drop of six point six percent. Industrial output down two 0:02:10.400 --> 0:02:13.160 point nine percent from a year ago and worse than 0:02:13.200 --> 0:02:16.560 an estimate of a modest game. The unemployment rate rose 0:02:16.639 --> 0:02:19.040 to six point one percent, and that was higher than 0:02:19.080 --> 0:02:22.560 the forecast of six percent. Now, despite the slowdown, China's 0:02:22.560 --> 0:02:26.200 Central Bank held back from cutting interest rates. Brian Curtis 0:02:26.200 --> 0:02:29.320 Spoomberg Day Break, Brian, thank you back here in the US. 0:02:29.400 --> 0:02:32.640 Economists at Goldman Sachs are cutting their forecast for US 0:02:32.680 --> 0:02:34.880 growth and we get the latest lie from Bloomberg's or 0:02:34.880 --> 0:02:36.960 I need a young in New York. Good morning, Renty Down, 0:02:36.960 --> 0:02:40.280 Good morning Karen. Goldman SAX economists see the US growing 0:02:40.400 --> 0:02:43.399 two point four percent this year, at one point six 0:02:43.480 --> 0:02:47.120 percent in three that's down from two point six percent 0:02:47.240 --> 0:02:50.720 and two point two percent previously, and it's an adjustment 0:02:50.800 --> 0:02:53.880 to reflect the shakeout in financial markets as the Federal 0:02:53.960 --> 0:02:58.600 Reserve titans monetary policy. Goldman Sax also projects the unemployment 0:02:58.720 --> 0:03:01.280 rate will rise to three point seven percent by the 0:03:01.400 --> 0:03:04.320 end of next year, after falling to three point four 0:03:04.400 --> 0:03:07.800 percent in coming months. Live in New York. I'm gonna 0:03:07.800 --> 0:03:09.679 need a young Bloomberg Day Break, All right, thanks for 0:03:09.800 --> 0:03:13.160 NITA On the same day Goldman cut its forecast. The 0:03:13.360 --> 0:03:16.320 firm's former boss, Lloyd Blank, find says the US is 0:03:16.480 --> 0:03:20.040 at a very high risk for recession. It's definitely a risk. 0:03:20.280 --> 0:03:21.919 If I were running a big company, I would be 0:03:22.240 --> 0:03:23.919 very prepared for it. If I was a consumer, I'd 0:03:23.960 --> 0:03:26.160 be prepared for it. But it's not baked in the cake. 0:03:26.320 --> 0:03:29.400 Former Goldman saxy Lloyd Blank find making the comments on 0:03:29.520 --> 0:03:32.120 Face the Nation from CBS. You can catch the program 0:03:32.240 --> 0:03:35.680 Sunday afternoons on Bloomberg Radio. And another note on Goldman 0:03:35.720 --> 0:03:38.320 This Morning, John. In an effort to retain talent, the 0:03:38.360 --> 0:03:41.080 bank will allow senior staff to take an unlimited number 0:03:41.360 --> 0:03:44.400 of vacation days. That's according to a company memo seen 0:03:44.440 --> 0:03:48.080 by Bloomberg News. Junior employees at Goldman still have limits 0:03:48.160 --> 0:03:50.400 on vacation, but at the beginning at least two extra 0:03:50.520 --> 0:03:53.120 days off per year. And we have another big company 0:03:53.200 --> 0:03:56.320 making moves to a track workers Walmart unveiling a fast 0:03:56.360 --> 0:03:59.640 track path to a job as store manager as the 0:03:59.680 --> 0:04:02.560 reeds others, seeks to bolster its supply of managers in 0:04:02.680 --> 0:04:06.640 a tight labor market. More from Bloomberg's Dog Prisoner. The 0:04:06.720 --> 0:04:09.720 position of store manager typically pays more than two hundred 0:04:09.800 --> 0:04:13.000 thousand dollars a year, and traditionally the job takes years 0:04:13.080 --> 0:04:16.320 to get but now Walmart is launching its College two 0:04:16.400 --> 0:04:20.000 career program. It will provide classroom training together with hands 0:04:20.080 --> 0:04:23.600 on experience and mentoring for recent and soon to be grad's. 0:04:24.040 --> 0:04:27.039 Top performers will be offered a role as an emerging coach. 0:04:27.480 --> 0:04:30.000 The position starts with pay of at least sixty five 0:04:30.080 --> 0:04:32.120 thousand dollars a year, with a goal of becoming a 0:04:32.200 --> 0:04:35.280 store manager within two years. In New York, on Doug 0:04:35.320 --> 0:04:37.720 Prisner Bloomberg Daybreak, all right, Dock, thank you, we do 0:04:37.920 --> 0:04:41.080 have some possible deal news this Monday morning. Jeff Blue 0:04:41.120 --> 0:04:43.880 Airways has made a hostile three and a quarter billion 0:04:43.920 --> 0:04:47.200 dollar takeover bid for Spirit Airlines. Jeff Blue is trying 0:04:47.240 --> 0:04:50.640 to block the discount carriers a great takeover by Frontier Group. 0:04:50.920 --> 0:04:53.919 Jeff Blue is offering thirty dollars a share for Spirit. 0:04:54.200 --> 0:04:57.440 Traders appear skeptical, though Spirit shares are trading around twenty 0:04:57.480 --> 0:05:00.279 dollars in the pre market. And another major story we're 0:05:00.279 --> 0:05:03.320 following involves the mass shooting in Buffalo over the weekend. 0:05:03.800 --> 0:05:06.760 The Justice Department he's investigating this as an act of 0:05:07.000 --> 0:05:11.120 racially motivated violent extremism. The shooting leapt ten people dead 0:05:11.240 --> 0:05:13.799 and three wounded. Eleven of the people's shop were black, 0:05:14.000 --> 0:05:17.159 and eighteen year old white man was arrested. President Biden 0:05:17.240 --> 0:05:20.560 discussed the incident at the US Capitol yesterday. We must 0:05:20.600 --> 0:05:24.159 all work together addressed to hate. It remains a stain. 0:05:25.040 --> 0:05:30.200 I'm the sole American hearts are heavy once again, but 0:05:30.520 --> 0:05:35.360 resolve must never ever waiver. President Biden surging police departments 0:05:35.400 --> 0:05:38.720 to spend federal law enforcement AID, saying it can help 0:05:38.800 --> 0:05:42.280 reduce gun violence. Well. Turning overseas now, John, it's another 0:05:42.360 --> 0:05:46.440 dramatic change triggered by Russia's invasion of Ukraine. NATO members 0:05:46.480 --> 0:05:49.839 are rallying around Finland and Sweden after the country's announced 0:05:49.880 --> 0:05:53.200 plans to join the alliance. Details now from Amy Morris 0:05:53.240 --> 0:05:57.320 in our Bloomberg newsroom in Washington. At the NATO minister's 0:05:57.400 --> 0:06:00.080 meeting in Berlin, u S Secretary of State Antony And 0:06:00.160 --> 0:06:03.960 said Washington will support whatever decisions the two countries make. 0:06:04.320 --> 0:06:07.280 Long supported NATO's up indoor policy and the right of 0:06:07.400 --> 0:06:11.600 all countries to decide their own futures, their policies, their 0:06:11.640 --> 0:06:15.520 security arrangements. NATO members rallied around Finland and Sweden, with 0:06:15.640 --> 0:06:19.920 one country Turkey, voicing concerns. Sweden is sending diplomats to 0:06:19.960 --> 0:06:23.680 Ankara for talks, and NATO's Secretary General John Stoltenberg says 0:06:23.720 --> 0:06:27.120 he does not expect Turkey to delay the membership procedure. 0:06:27.440 --> 0:06:30.279 In Washington, I'm maybe Morris Bloomberg daybreak all right, thanks 0:06:30.320 --> 0:06:32.760 to Amy. Another note out of Europe involving the war 0:06:32.800 --> 0:06:35.800 in Ukraine. Germany says it plans to quit importing Russian 0:06:35.880 --> 0:06:38.600 oil by the end of the year. That's even if 0:06:38.640 --> 0:06:41.120 the European Union fails to agree on a band and 0:06:41.240 --> 0:06:44.480 its next set of sanctions. Russia's share of German oil 0:06:44.560 --> 0:06:48.320 consumption has already declined to twelve percent from about thirty 0:06:48.400 --> 0:06:51.160 five percent before the war began. And the price of 0:06:51.200 --> 0:06:53.719 wheat has skyrocketed since the start of the war, John, 0:06:53.760 --> 0:06:56.280 and it's climbing again today. Wheat prices stored by the 0:06:56.360 --> 0:06:59.919 exchange limit after India moved to restrict export. That shows 0:07:00.000 --> 0:07:02.400 how tight global food supplies are at the moment. Whet 0:07:02.440 --> 0:07:05.320 has written about six this year that's increased the cost 0:07:05.400 --> 0:07:08.400 of everything from bread to cake and noodles and again 0:07:08.520 --> 0:07:11.600 McDonald's to exit from Russia. It's pursuing a sale of 0:07:11.640 --> 0:07:15.400 its entire Russia portfolio. And straight ahead your latest local 0:07:15.440 --> 0:07:19.000 headlines plus the check of sports, and this is Bloomberg 0:07:23.120 --> 0:07:25.200 all right, Thanks Karen six o seven on Wall Street 0:07:25.240 --> 0:07:26.960 and time to bring in Michael Barr to find out 0:07:27.240 --> 0:07:30.000 what else is going on in New York and around 0:07:30.040 --> 0:07:32.360 the world. John, thank you very much, Sir Moore on 0:07:32.440 --> 0:07:35.679 the mass shooting in Buffalo. Vigils were held across Buffalo 0:07:35.800 --> 0:07:38.720 after ten people were killed and three others wounded, and 0:07:38.840 --> 0:07:41.680 what officials are calling a racially motivated attack at a 0:07:41.720 --> 0:07:45.720 busy supermarket. Police say the suspected gunnerman, who is eighteen 0:07:45.880 --> 0:07:49.080 and white, had researched the area that is about seventy 0:07:49.760 --> 0:07:53.280 black Peyton Gendrin appeared in court and pleaded not guilty 0:07:53.360 --> 0:07:57.040 to murder. New York Governor Kathy Hokel. I'm calling out 0:07:57.200 --> 0:08:01.160 the social media platforms where this hate be skewed and 0:08:01.240 --> 0:08:05.080 people are learning how to create guns and violence and weapons. 0:08:05.360 --> 0:08:08.400 Governor hoc called for government action to control the spread 0:08:08.440 --> 0:08:11.240 of guns. One of those killed was a church deacon. 0:08:11.800 --> 0:08:14.960 The church is Pastor Russell Bell It boggles my mind 0:08:15.000 --> 0:08:17.800 that this young man traveled two hundred miles four hours 0:08:18.520 --> 0:08:23.040 to target our community. Pastor Bell says the victim, Hayward Paerson, 0:08:23.240 --> 0:08:26.160 was helping to put groceries in another person's car when 0:08:26.200 --> 0:08:29.040 he was shot and killed. A mass shooting in California 0:08:29.120 --> 0:08:31.480 left one person dead and five others heard after our 0:08:31.520 --> 0:08:35.520 gunman opened fire inside the church in Laguna Woods, Orange County. 0:08:35.559 --> 0:08:37.959 Officials say the suspect as an Asian man in his 0:08:38.120 --> 0:08:42.160 sixties who entered a Taiwanese luncheon at the church. Orange 0:08:42.200 --> 0:08:45.000 County under share of Jack Halleck says the gunman was 0:08:45.080 --> 0:08:48.640 disarmed by members of the church and held until authorities came. 0:08:49.040 --> 0:08:52.080 We believe a group of churchgoers detain him and hog 0:08:52.160 --> 0:08:55.560 tight his legs with an extension court and confiscated at 0:08:55.640 --> 0:08:58.560 least two weapons from him. Under Sheriff Aleck says they 0:08:58.600 --> 0:09:01.400 don't believe the gunman lives in the area. Two people 0:09:01.440 --> 0:09:03.839 were killed three others injured in a shooting near a 0:09:04.000 --> 0:09:08.040 flea market in North Harris County, Texas. The Sheriff's department 0:09:08.040 --> 0:09:10.679 says a fight led to that shooting. Gun violence in 0:09:10.720 --> 0:09:13.680 Milwaukee forced the city to impose a two night curfew 0:09:13.760 --> 0:09:16.960 for people under twenty one. More than twenty people were 0:09:17.000 --> 0:09:19.440 shot in less than two hours in downtown Milwaukee over 0:09:19.480 --> 0:09:21.959 the weekend. One of the front runners in the race 0:09:22.080 --> 0:09:25.439 for a US Senate seat in Pennsylvania's sideline because of 0:09:25.520 --> 0:09:29.600 a stroke. Pennsylvania's Lieutenant Governor John Fetterman, who is atop 0:09:29.720 --> 0:09:33.120 the polls ahead of Tuesday's Democratic Senate primary, says he 0:09:33.240 --> 0:09:35.640 is on his way to a full recovery. The Biden 0:09:35.679 --> 0:09:39.439 administration today released a housing supply Action plan meant to 0:09:39.480 --> 0:09:42.680 help create thousands of affordable housing units in the next 0:09:42.720 --> 0:09:46.040 three years. Global News twenty four hours a day on 0:09:46.240 --> 0:09:49.680 air and on Bloomberg Quicktake, powered by more than twenty 0:09:49.720 --> 0:09:52.920 seven hundred journalist and analysts more than one twenty countries. 0:09:53.240 --> 0:10:00.640 Michael barn This is Bloomberg, John, Michael, thank you, and 0:10:00.760 --> 0:10:02.719 it sounds six ten on Wall Street. Time for the 0:10:02.720 --> 0:10:05.719 Bluebird Sports Upday. Here's John Stesshower. Thanks John. It was 0:10:05.800 --> 0:10:08.079 only a first round series, but what a series it was. 0:10:08.240 --> 0:10:11.559 Rangers and Penguins. It began at the Garden with triple overtime. 0:10:11.600 --> 0:10:14.439 It ended back at the Old at the Garden overtime 0:10:14.600 --> 0:10:20.320 once again. It seen seconds with the Dana Panish top 0:10:20.360 --> 0:10:27.000 the right circle, close hit shoots off, it's open finery 0:10:27.160 --> 0:10:31.280 scores and the Rangers of one game seven in overtime 0:10:32.960 --> 0:10:34.679 the three that's how sound the w e p and 0:10:34.720 --> 0:10:36.679 the Ranger has lost that series over They never let 0:10:36.720 --> 0:10:39.600 in the series until last night. They trailed three games 0:10:39.679 --> 0:10:41.319 to one and then one three in a row. It 0:10:41.360 --> 0:10:43.120 had to come from behind in all three. They trailed 0:10:43.200 --> 0:10:45.760 last night with six minutes left, makings the Bandage tie 0:10:45.800 --> 0:10:47.640 the game or Temmi pinnaer the game winner on the 0:10:47.720 --> 0:10:51.760 power play. Fourt of OT forty two days for egor 0:10:51.840 --> 0:10:54.480 Sis Circuit is the Penguins at fifteen more shots. It's 0:10:54.520 --> 0:10:57.120 on the round two Game one with the Carolina Hurricanes 0:10:57.160 --> 0:11:00.959 Wednesday in Raleigh. The other game seven, also overtime. Calgary 0:11:01.080 --> 0:11:04.040 beat Dallas, but the Dallas Mavericks, who won their Game 0:11:04.120 --> 0:11:06.720 seven and Phoenix by thirty threes of the Suns, who 0:11:06.760 --> 0:11:09.000 had the NBA's best record, are out the West Finals 0:11:09.040 --> 0:11:11.640 will beat Dallas against Golden State. It will be Miami 0:11:11.720 --> 0:11:13.880 and Boston in the East. The Celtics won Game seven 0:11:13.960 --> 0:11:16.520 over Milwaukee by twenty eight. The Mets of the ninth 0:11:16.520 --> 0:11:18.920 they ain't score twice had the bases loaded. Peter Alonso 0:11:19.000 --> 0:11:20.679 at first appeared to have drawn a game time and 0:11:20.840 --> 0:11:22.720 walk on a three two pitch, but the first phase 0:11:22.880 --> 0:11:25.920 umpire called at strength three. In Seattle one eighth to seven, 0:11:25.960 --> 0:11:27.959 the Metsicans a series for the first time. The Yankees 0:11:28.000 --> 0:11:30.640 won five one at Chicago, not the great outing by 0:11:30.679 --> 0:11:32.800 Nestor Court, as y were out hit four to two. 0:11:32.880 --> 0:11:36.000 The Pirates were out hit for nothing but one wander 0:11:36.120 --> 0:11:38.480 up in the reds through a no hitter and lost 0:11:38.600 --> 0:11:41.599 John Statue Allard Bluebird Sports John Alight. John texts a 0:11:41.640 --> 0:11:43.559 lot hand just ahead of the can't show up a 0:11:43.800 --> 0:11:46.360 Wall Street futures in the red right now down futures. 0:11:46.679 --> 0:11:50.600 They're down forty points, the SMP futures right now fourteen 0:11:50.679 --> 0:11:54.520 points lower, and the ASDA futures are down the seventy three. 0:11:55.080 --> 0:11:57.400 As we take a look at treasuries this morning, the 0:11:57.559 --> 0:12:00.559 benchmark ten year yield at two nineties create that is 0:12:00.600 --> 0:12:03.600 a one basis point. You're listening to Bloomberg tape break, 0:12:07.640 --> 0:12:11.280 and just ahead Bloomberg's Tom mackenzie will join us to 0:12:11.400 --> 0:12:14.000 give us a picture of the world's second largest economy 0:12:14.240 --> 0:12:17.439 at what it means for the investment landscape. This is 0:12:17.520 --> 0:12:25.079 Bloomberg Markets headlines and breaking news twenty four hours a 0:12:25.160 --> 0:12:28.440 day at Bloomberg dot Com, the Bloomberg Business outland at 0:12:28.480 --> 0:12:37.959 Bloomberg Quick Tape. This is a Bloomberg business flash and 0:12:38.040 --> 0:12:40.960 I'm Karen Moscow. And McDonald's is saying it's gonna pull 0:12:41.000 --> 0:12:43.760 out of Russia after more than thirty years of operation 0:12:43.840 --> 0:12:45.920 in the country. It's going to also take a write 0:12:45.920 --> 0:12:48.559 off of one point two billion to one point four 0:12:48.640 --> 0:12:51.720 billion dollars for the move. McDonald says it has initiated 0:12:51.760 --> 0:12:54.800 a process to sell the Russian business after temporarily closing 0:12:54.840 --> 0:12:59.000 its restaurants there. Futures this morning are moving lower. SMP 0:12:59.200 --> 0:13:01.959 futures down four teen points this morning down, futures down 0:13:02.040 --> 0:13:05.360 forty three and nasday features down seventy two. The decks 0:13:05.400 --> 0:13:07.840 in Germany's down six tenths of upper cent ten. Your 0:13:07.880 --> 0:13:11.280 treasury down three thirty seconds, yield two point nine three percent. 0:13:11.360 --> 0:13:13.800 The yield in the two year two point six zero percent. 0:13:14.240 --> 0:13:16.600 Nin Max screwed oil is down half percent, or fifty 0:13:16.679 --> 0:13:18.719 nine cents at a hundred nine dollars ninety cents of 0:13:18.800 --> 0:13:21.240 barrel co makes gold down three tents per cent or 0:13:21.280 --> 0:13:24.120 five dollars seventy cents at eighteen o two forty announced 0:13:24.440 --> 0:13:26.960 the euro one point oh four two one against the dollar, 0:13:27.000 --> 0:13:29.280 British pound one point to two four one, and the 0:13:29.360 --> 0:13:32.079 yen at one twenty nine point three zero. Bitcoin this 0:13:32.240 --> 0:13:35.360 morning lower down four percent at twenty nine thousand, seven 0:13:35.440 --> 0:13:38.520 hundred fifty dollars. That's a Bloomberg business flash. Now here's 0:13:38.520 --> 0:13:41.000 Michael bar with more on what's going on around the world. 0:13:41.120 --> 0:13:44.559 Muggel Karen, thank you very much. NATO members rallied around 0:13:44.640 --> 0:13:48.240 Finland and Sweden after they announced plans to join the Alliance. 0:13:48.600 --> 0:13:52.640 It marks another dramatic change triggered by Russia's war in Ukraine. 0:13:53.080 --> 0:13:56.040 Authorities say the white eighteen year old gunmen who killed 0:13:56.080 --> 0:13:59.800 ten people at a Buffalo supermarket during a rampage that's 0:13:59.800 --> 0:14:02.640 are get at black people, had previously made a threat 0:14:02.760 --> 0:14:05.760 at his high school, but they say Peyton Gendrin was 0:14:05.840 --> 0:14:09.560 never charged. In the NHL playoffs and exciting Game seven, 0:14:09.640 --> 0:14:13.200 the Rangers advanced after beating the Penguins in overtime for three. 0:14:13.559 --> 0:14:16.520 In the NBA Playoffs, the Celtics won their Game seven 0:14:16.600 --> 0:14:19.800 against the Bucks. In baseball, the Yankees one the Mets, 0:14:19.840 --> 0:14:23.760 red Sox, Orioles, Nationals, Giants and as all lost Global 0:14:23.840 --> 0:14:26.200 news twenty four hours a day on air, hand on 0:14:26.320 --> 0:14:29.800 Bloomberg Quick Tech, powered by more than seven hundred journalist 0:14:29.840 --> 0:14:32.320 and analysts in more than a hundred twenty countries. I'm 0:14:32.320 --> 0:14:35.040 Michael bar This is Bloomberg John, Thank you, sir. It 0:14:35.440 --> 0:14:38.040 is now six twenty on Wall Street and we are 0:14:38.360 --> 0:14:40.800 live for the Bloomberg in tryn To Brokers Studios. This 0:14:40.920 --> 0:14:44.760 is Bloomberg Daybreak. China's economy paying the price for the 0:14:44.880 --> 0:14:48.120 government's COVID zero policy, and let's take a deeper dive 0:14:48.280 --> 0:14:51.240 this morning into this story. Joining us he is Bloomberg 0:14:51.360 --> 0:14:54.960 Radio anchor Tom mackenzie, who covered China for more than 0:14:55.120 --> 0:14:58.880 five years. So Tom, first of all, thanks for being here. 0:14:59.640 --> 0:15:02.840 One of the figures tell us about China's economy, Well, 0:15:02.920 --> 0:15:05.680 the survey of economists had expected that it was going 0:15:05.720 --> 0:15:07.200 to be bad for the month of April, but not 0:15:07.480 --> 0:15:11.040 this bad. The retail numbers in particular stand out. So 0:15:11.160 --> 0:15:14.280 the Chinese consumer really under pressure as a result of 0:15:14.320 --> 0:15:16.720 these lockdowns that you've seen, of course enforced in cities 0:15:16.760 --> 0:15:20.200 like Shanghai, but also partial lockdowns in cities of Beijing 0:15:20.240 --> 0:15:22.600 and further northeast as well. You saw retail sales falling 0:15:23.080 --> 0:15:26.560 more than eleven percent year on year. The other key 0:15:26.600 --> 0:15:29.400 component that stood out for me was the unemployment rate. 0:15:29.480 --> 0:15:32.120 The jobless rate moving above six percent, and that's only 0:15:32.160 --> 0:15:34.760 a partial slice of the jobless rate that we see 0:15:34.880 --> 0:15:37.840 across China because of the limitations around that survey, so 0:15:37.960 --> 0:15:40.800 the actual real number is probably higher than that. And 0:15:40.960 --> 0:15:45.040 youth unemployment hitting a record, a key concern for the 0:15:45.280 --> 0:15:48.200 stability obsessed Communist Party of China. So these are very 0:15:48.240 --> 0:15:50.920 bad numbers. The second quarter, some economists are saying, could 0:15:50.920 --> 0:15:53.800 see a contraction. It certainly makes the goal, the year 0:15:53.920 --> 0:15:56.120 end goal of getting five point five percent growth, which 0:15:56.160 --> 0:15:59.840 the government said itself incredibly challenging. So does COVID zero 0:16:00.360 --> 0:16:05.080 remain government policy. So this is what analysts and economists 0:16:05.080 --> 0:16:07.280 are watching. Is there going to be any movement? So far, 0:16:07.360 --> 0:16:09.520 you've had present sej Ping and others coming out and 0:16:09.600 --> 0:16:13.000 reiterating that COVID zero is a policy they will continue 0:16:13.440 --> 0:16:16.120 to pursue. But you have had officials in cities like 0:16:16.240 --> 0:16:20.040 Shanghai saying we now have a roadmap for easing these restrictions. 0:16:20.400 --> 0:16:23.560 They're looking at between mid to end June to get 0:16:23.600 --> 0:16:26.400 back to some level of normalization, and they've started to 0:16:26.480 --> 0:16:30.080 allow some shops and some services to start reopening again 0:16:30.120 --> 0:16:33.280 in a very gradual phase way. We know that officials 0:16:33.360 --> 0:16:36.520 are looking at additional policy stimulus for this economy, but 0:16:36.600 --> 0:16:39.200 it's very hard to implement when large parts of that 0:16:39.320 --> 0:16:42.680 economy face these kind of restrictions. For now, the top 0:16:42.760 --> 0:16:45.560 line is at COVID zero isn't going away anywhere. Okay, 0:16:45.640 --> 0:16:47.880 what kind of pushback are again? We've all seen those 0:16:48.000 --> 0:16:51.600 videos of confrontations in the streets. It's been substantial. I've 0:16:51.600 --> 0:16:54.120 been in contact with people with friends in Shanghai. There 0:16:54.240 --> 0:16:57.520 is deep resentment, deep anger about this policy, and certainly 0:16:57.560 --> 0:16:59.920 there's been a lot of videos and evidence at the 0:17:00.000 --> 0:17:02.320 heavy had in this of this approach. Do you have 0:17:02.640 --> 0:17:07.360 still hundreds of thousands of people in that key financial city, Shanghai, 0:17:07.440 --> 0:17:10.440 of course, the second most important city in China, the 0:17:10.560 --> 0:17:13.920 beating financial heart of it, lockdown still and they've been 0:17:13.960 --> 0:17:16.760 in that situation for more than fifty days. They've had 0:17:16.800 --> 0:17:20.920 problems around accessing food, around accessing healthcare. Again. The officials 0:17:20.960 --> 0:17:22.960 say they now have a plan to start to gradually 0:17:23.040 --> 0:17:25.080 open up, but there is deep, resenting, deep anger. How 0:17:25.160 --> 0:17:28.080 long that lasts after this is something certainly to watch 0:17:28.119 --> 0:17:33.800 and to gauge how firmly is Shooting ping empower at 0:17:33.840 --> 0:17:38.840 this point. Most China watchers suggest that there's very little 0:17:38.920 --> 0:17:42.320 chance the present Shooting Ping is facing any real threat 0:17:42.520 --> 0:17:46.000 to his power. However, there is some speculation and some 0:17:46.119 --> 0:17:50.879 appointing to potential divisions between him and Premier Lika Chang, 0:17:51.160 --> 0:17:53.520 who has come out and urged greater support for the 0:17:53.600 --> 0:17:57.000 economy and talked of the concerns and the impact of 0:17:57.160 --> 0:18:00.640 these COVID zero policies. Some are reading into the commentary 0:18:00.800 --> 0:18:03.040 by Premier League Chang as a suggesting that there's a 0:18:03.119 --> 0:18:06.440 rift at the top. No one that I know who 0:18:06.520 --> 0:18:09.800 is watching China closely thinks President Using Ping is imminently 0:18:10.040 --> 0:18:13.040 threatened by any of this, But certainly it's likely to 0:18:13.119 --> 0:18:15.280 called tensions within the party because this is a very 0:18:15.320 --> 0:18:17.320 difficult balancing act. All right back to the you can 0:18:17.400 --> 0:18:19.560 have up front, what are the countries targets right now? 0:18:19.600 --> 0:18:22.720 How realistic are they? So? Five point five is the 0:18:22.840 --> 0:18:25.480 end of year GDP target that that they've set themselves. 0:18:25.680 --> 0:18:28.280 And again some economists that we've spoken to have suggested 0:18:28.440 --> 0:18:30.560 you're going to get contraction in the second quarter. Most 0:18:30.600 --> 0:18:33.240 economists think that hitting that five point five GDP is 0:18:33.240 --> 0:18:35.520 going to be very challenging the polit bureau, so the 0:18:35.840 --> 0:18:38.119 leading the top leaders within the Communist Party have come 0:18:38.119 --> 0:18:40.480 out and said they are determined to meet those goals. 0:18:40.920 --> 0:18:43.440 We've seen some changes around the edges in terms of 0:18:43.480 --> 0:18:45.640 policy support. So for example, over the weekend they cut 0:18:45.680 --> 0:18:47.680 the mortgage rate for first time buyers to try and 0:18:47.760 --> 0:18:50.760 bolster the real estate sector. But again it's very challenging 0:18:50.880 --> 0:18:55.160 to implement policy when so much of the economy is lockdown. 0:18:55.440 --> 0:18:57.240 The other element that we saw the data we saw 0:18:57.280 --> 0:19:00.880 on Friday was that loan growth that actually shrine quite considerably. 0:19:00.880 --> 0:19:03.920 People have alsely homeowners and people wanted to buy cars 0:19:04.040 --> 0:19:07.040 and service their apartments aren't taking out loans because they 0:19:07.119 --> 0:19:09.360 are concerned, of course about their job prospects, and many 0:19:09.400 --> 0:19:11.360 of them are locked into their own homes. So loan 0:19:11.400 --> 0:19:13.960 growth has shrunk considerably, meaning the credit isn't getting to 0:19:14.000 --> 0:19:16.439 the system. So there's a transmission problem between the PBOC, 0:19:16.520 --> 0:19:18.880 the People's Bank of China and people living and operating 0:19:18.880 --> 0:19:21.040 on the ground. There are real, real quick or the 0:19:21.080 --> 0:19:25.600 implication for supply chains. Well, we've seen analysis by Bloomberg 0:19:25.720 --> 0:19:29.320 hundred eighty companies out of the earnings sector conglomerates, those 0:19:29.359 --> 0:19:32.000 with exposers to China have talked about supply chains and 0:19:32.400 --> 0:19:34.560 concerns about the impacts and Chinese seen the lights of 0:19:34.640 --> 0:19:36.840 Tesla have hit been hit by this. The factory in 0:19:36.920 --> 0:19:39.679 Shanghai was locked down for three or three weeks. Who 0:19:39.720 --> 0:19:41.479 had to stop production for three weeks. They're now back 0:19:41.560 --> 0:19:43.320 up and running. Apple has been impacted this, so the 0:19:43.320 --> 0:19:47.280 supply change challenges are certainly significant. Bloomberg Radio anchored to 0:19:47.440 --> 0:19:50.720 McKenzie tub thanks very much, we appreciate it. And ahead 0:19:50.760 --> 0:19:53.040 of the market open ad was free futures on the 0:19:53.080 --> 0:19:55.560 red right now down Future is down sixty three s 0:19:55.640 --> 0:20:00.399 and futures down sixteen. The nandact future is any point slower. 0:20:00.680 --> 0:20:06.920 You're listening to Bloomberg day Break and day Break being 0:20:06.920 --> 0:20:09.080 brount to you by the Jewish Communal Fund j c F. 0:20:09.160 --> 0:20:11.760 S don't er advised. Fought is the smart choice to 0:20:11.840 --> 0:20:15.239 manage your philanthropy, especially in times of crisis. Make your 0:20:15.280 --> 0:20:18.960 giving impactful. Visit j c F n y dot org 0:20:22.080 --> 0:20:26.600 broadcasting live from the Bloomberg Interactive Broker studio in New York, 0:20:26.720 --> 0:20:30.680 Bloomberg E Living Free to Washington, d C. Bloomberg one 0:20:30.800 --> 0:20:34.600 to Boston, Bloomberg one six one to San Francisco, Bloomberg 0:20:34.720 --> 0:20:37.800 nine sixty to the country, Sirius XM total one nine 0:20:37.840 --> 0:20:40.720 te and around the globe the Bloomberg Business app and 0:20:40.840 --> 0:20:45.760 Bloomberg Radio dot com. This is Bloomberg Day Break bloom 0:20:49.880 --> 0:20:52.240 It's six thirty on Wall Street. Good morning. I'm John 0:20:52.280 --> 0:20:55.440 Tucker and I'm Karen Moscow. We're just about three hours 0:20:55.480 --> 0:20:57.760 away from the open of US trading. Time to the 0:20:57.800 --> 0:20:59.920 five things you need to notice start your day. Ron 0:21:00.040 --> 0:21:03.240 to you by I b k R. Investment Advisers switched 0:21:03.280 --> 0:21:06.520 to Interactive Brokers for lowest cost global trading and turnkey 0:21:06.600 --> 0:21:10.040 custody solutions, no ticket charges and no conflicts of your 0:21:10.119 --> 0:21:14.080 interests at ibkr dot com. Slash r i a up first. 0:21:14.240 --> 0:21:17.679 Industrial output and retail sales in China fell in April, 0:21:17.720 --> 0:21:22.159 while unemployment climbed. COVID lockdowns are being blamed. Shetan a 0:21:22.520 --> 0:21:26.240 chief Asia Economists, and Morgan Stanley says outlook remains strong 0:21:26.400 --> 0:21:29.960 once China moves past its COVID zero policy. You do 0:21:30.160 --> 0:21:33.960 need solution to this near zero COVID policy. It's not 0:21:34.160 --> 0:21:38.000 about just the economic policy easing itself. Now. We need 0:21:38.080 --> 0:21:40.879 to see that, you know, economy gets going with freeing 0:21:40.920 --> 0:21:45.720 up of restrictions on mobility. Morgan Stanley Shetania says China 0:21:45.800 --> 0:21:49.800 supply chain constraints also appear to be easing and back 0:21:49.880 --> 0:21:53.359 here in the US, Goldman sacks cutting growth forecast. Bloomberg's 0:21:53.400 --> 0:21:55.440 Reany the Young joins us Live in New York with 0:21:55.520 --> 0:21:58.919