WEBVTT - Bloomberg Daybreak: October 17, 2022 - Hour 1 (Radio) 0:00:03.200 --> 0:00:06.400 By from the Bloomberg Interacted Burger Studios. This is Bloomberg 0:00:06.480 --> 0:00:10.319 day Break for Monday, October seventeen two. Coming up this hour, 0:00:10.640 --> 0:00:14.040 the new UK Chancellor starts laying out plans to unwind 0:00:14.080 --> 0:00:17.079 tax cuts. I defied cheese and pink because the world. 0:00:17.200 --> 0:00:20.400 China is ready to stand its ground. Earnings continue with 0:00:20.520 --> 0:00:23.800 Bank of America reporting this morning, and Gold shakes up 0:00:23.840 --> 0:00:28.120 its leadership ranks. More potential legal trouble for former President Trump. 0:00:28.320 --> 0:00:31.640 Lous Ukraine's capital was under missile attack from Russia to day. 0:00:32.200 --> 0:00:35.519 Michael Barroom more ahead, I'm John Stairs, showering sports. The 0:00:35.640 --> 0:00:38.560 Yankees stayed alive with the wooden cleavel. The decisive Game 0:00:38.640 --> 0:00:41.640 five is today. The winds continue for the Jets and Giants. 0:00:44.520 --> 0:00:48.479 That's all Trading ahead on Bloomberg day Break on Bloomberg eleven, 0:00:48.520 --> 0:00:52.959 Free on New York, Bloomberg one, Washington, d C, Bloomberg 0:00:53.040 --> 0:00:56.720 one oh six one, Boston, Bloomberg nine sixties and Francisco 0:00:57.240 --> 0:01:00.160 Syrius x M one nineteen and around the world. Old 0:01:00.240 --> 0:01:03.720 on Bloomberg Radio dot Com and via the Bloomberg Business app. 0:01:07.560 --> 0:01:10.600 And good morning. I'm Karen Moscow. I'm Nathan Hagar. Bloomberg 0:01:10.680 --> 0:01:13.120 Daybreak is brought to you by SEI. Built on advanced 0:01:13.160 --> 0:01:16.800 technologies and fifty years of innovation. SEI offers asset managers, 0:01:16.840 --> 0:01:20.800 a comprehensive and flexible operations outsourcing platform. Go to se 0:01:21.000 --> 0:01:24.480 I C dot Com, slash Managers and US dot Index. 0:01:24.560 --> 0:01:27.000 Futures on the rise this morning five oh one on 0:01:27.080 --> 0:01:29.199 Wall Street, and we check the markets every fifteen minutes 0:01:29.240 --> 0:01:32.520 throughout the trading day. On Bloomberg. SNP futures up thirty 0:01:32.560 --> 0:01:35.720 two points, DAL futures have two hundred nineteen and ASDAG 0:01:35.800 --> 0:01:39.000 futures up one hundred seventeen. Nathan Karen, We begin this 0:01:39.120 --> 0:01:42.560 morning in Europe, where the pound and UK bonds are rallying. 0:01:42.640 --> 0:01:45.280 That's due to expectations that more of Prime Minister Liz 0:01:45.400 --> 0:01:49.680 Trust's package of unfunded tax cuts maybe reversed. Newly appointed 0:01:49.760 --> 0:01:52.360 Chancellor Jeremy Hunt will make a statement about an hour 0:01:52.480 --> 0:01:55.520 from now. We get more from Bloomberg's Lizzie Burden in London. 0:01:55.840 --> 0:01:58.600 It does seem like Jeremy Hunt is peace by peach 0:01:58.920 --> 0:02:02.800 turning crust and on the in Nacconomic he's excited to 0:02:02.920 --> 0:02:06.720 bring forward more figal uturned in order to calm the market. 0:02:07.080 --> 0:02:09.280 This is really to astonomic things sold the parts and 0:02:09.400 --> 0:02:13.120 exchange the market stability. Bloomberg's Lizzie Burden reports after Haunt's 0:02:13.120 --> 0:02:15.440 address this morning, he will then make remarks to the 0:02:15.480 --> 0:02:18.640 House of Commons. Well in Asia, it's all about China 0:02:18.760 --> 0:02:22.079 this morning, Nathan. President Jijin Ping said he's staying the 0:02:22.240 --> 0:02:25.280 course as the country faces what he calls dangerous storms 0:02:25.360 --> 0:02:28.000 and growing challenges from the US, and in almost two 0:02:28.040 --> 0:02:31.400 hours speech to open the Communist Party Congress, she said 0:02:31.880 --> 0:02:37.120 China will pursue development while ensuring national security. We have 0:02:37.320 --> 0:02:41.600 worked with firm resolve to say for national security, fended 0:02:41.680 --> 0:02:46.440 off and diffused the major risks and enshort social stability. 0:02:47.240 --> 0:02:50.400 We have to vote a great energy to modernizing our 0:02:50.520 --> 0:02:54.799 national defense. President jijin Ping, speaking through an interpreter, also 0:02:54.919 --> 0:02:57.600 pledged Beijing will prevail in its tech battle with the 0:02:57.760 --> 0:03:00.720 US over computer chips. Well back here in US, Karen, 0:03:00.800 --> 0:03:03.440 futures are rising to start the week. It follows another 0:03:03.520 --> 0:03:06.400 sell off on Friday, when the SNP five hundred dropped 0:03:06.400 --> 0:03:09.880 two point four percent. Emily Rowland is co chief investment 0:03:09.919 --> 0:03:13.720 strategist at John Hancock Investment Management. It's tough to say, 0:03:13.760 --> 0:03:16.520 we're in a recession now with unemployment, you know, near 0:03:16.600 --> 0:03:20.240 a fifty year low, but we're probably going there. And frankly, 0:03:20.320 --> 0:03:22.959 some parts of the market are pricing that in you know, 0:03:23.080 --> 0:03:27.880 work down over inequity markets. That's more than two thirds 0:03:27.960 --> 0:03:30.959 of the way there as far as your average bear market, 0:03:31.280 --> 0:03:34.720 but bonds just aren't pricing it in John Hancock's. Emily 0:03:34.840 --> 0:03:37.840 Rowland says inflation has been enemy number one for the 0:03:37.920 --> 0:03:41.280 markets because see a rally and stocks Nathan A's. According 0:03:41.360 --> 0:03:44.680 to Morgan Stanley longtime equity bear Mike Wilson, he says 0:03:44.720 --> 0:03:47.440 stocks are right for a short term rally and the 0:03:47.480 --> 0:03:51.280 absence of earnings capitulation or an official recession. Wilson says 0:03:52.240 --> 0:03:55.000 slump in the SNP five hundred this year has left 0:03:55.040 --> 0:03:57.520 at testing a serious floor of support at its two 0:03:57.600 --> 0:04:00.240 hundred week moving average. He's not ruling out the s 0:04:00.320 --> 0:04:03.000 and P five hundred rising about forty one hundred points. 0:04:03.320 --> 0:04:06.080 That would be about a sixt gain from current levels. 0:04:06.280 --> 0:04:08.960 Inflation and interest rates are still the main focus for 0:04:09.080 --> 0:04:12.160 US markets. Karen St. Louis, FED President Jim Bullard is 0:04:12.200 --> 0:04:14.640 leaving open the possibility that the Central Bank would raise 0:04:14.720 --> 0:04:17.440 interest rates by seventy five basis points at each of 0:04:17.520 --> 0:04:20.080 its next two meetings. At the same time, he says 0:04:20.120 --> 0:04:23.240 it's premature to make that call whether the committee would 0:04:23.320 --> 0:04:27.000 want to full some proposed or thought of policy rate 0:04:27.080 --> 0:04:30.640 increases from three into the December meeting. I think that's 0:04:30.680 --> 0:04:33.640 our judgment. It's it's premature to make St. Louis FED 0:04:33.680 --> 0:04:35.760 President Jim Bullard made the comments at I m F 0:04:35.839 --> 0:04:38.320 and World Bank meetings over the weekend. More earnings are 0:04:38.360 --> 0:04:41.280 also front end center this morning, Nathan. We get results 0:04:41.320 --> 0:04:43.839 from Bank of America shortly, and here are the preview 0:04:43.880 --> 0:04:47.719 as Bloomberg Jeff Bellinger, and let's say it is unlikely 0:04:47.880 --> 0:04:51.360 be of a sidestep the industry wide drop in investment 0:04:51.400 --> 0:04:54.680 banking revenue, but there is uncertainty over just how much 0:04:54.760 --> 0:04:57.640 the company's profit margins on loans were boosted by the 0:04:57.720 --> 0:05:02.039 fed's aggressive series of infest rate hyps. Bloomberg Intelligences, Bank 0:05:02.080 --> 0:05:06.160 of America likely benefited from CEO Brian moynihan strategy of 0:05:06.279 --> 0:05:10.560 pursuing responsible organic gains. Lost provisions are seen as the 0:05:10.720 --> 0:05:14.880 biggest factor for next year. Jeff Bellinger, Bloomberg Day Break. 0:05:14.960 --> 0:05:16.880 All right, Jeff, thank you and We'll talk earnings to 0:05:16.920 --> 0:05:20.160 the Bank of America's CEO Brian moynihan later this afternoon. 0:05:20.279 --> 0:05:23.080 Catch that interview at two thirty pm Wall Street Time 0:05:23.120 --> 0:05:26.080 on Bloomberg Radio and Television. I meantime, Karen, looks like 0:05:26.120 --> 0:05:28.760 a shake ups coming at Goldman, Sachs. We're getting word 0:05:28.800 --> 0:05:32.080 of a third major reorganization in just four years under 0:05:32.160 --> 0:05:36.280 CEO David Solomon. Bloomberg's Lisa Matteo reports. Sources say the 0:05:36.320 --> 0:05:39.320 Wall Street giant plans to once again combine its expanded 0:05:39.320 --> 0:05:43.080 asset management and private wealth business into one unit. Goldman 0:05:43.120 --> 0:05:46.680 will also fuse its investment banking and trading operations under 0:05:46.720 --> 0:05:49.320 one group, and the money losing consumer unit will be 0:05:49.480 --> 0:05:52.360 broken up. The moves mark a reversal for Salmon, who 0:05:52.400 --> 0:05:55.360 had forged ahead with plans to separate the asset management 0:05:55.400 --> 0:05:59.400 and wealth business two years ago despite skepticism within the bank. 0:05:59.680 --> 0:06:02.880 He was also reluctant to combine investment banking and trading 0:06:02.960 --> 0:06:05.320 into one group, as the firm looked to talk up 0:06:05.400 --> 0:06:09.320 other fee based businesses to win over shareholders. Most visibly, 0:06:09.480 --> 0:06:12.480 he's disbanding the direct to consumer efforts, cutting short the 0:06:12.520 --> 0:06:15.000 retail banking dreams that he had spelled out in his 0:06:15.080 --> 0:06:19.760 early days as CEO. Lisa Mateo Bloomberg Daybreak. At least 0:06:19.800 --> 0:06:21.839 at thanks that it's not just banks that are looking 0:06:21.880 --> 0:06:24.440 at restructuring this morning, we could see a re shuffle 0:06:24.480 --> 0:06:27.280 and geopolitics as well. There's where the wine House is 0:06:27.279 --> 0:06:30.560 giving a security relationship with Saudi Arabia a second look. 0:06:30.760 --> 0:06:33.680 Let we get the story from Bloomberg's and Baxter. The 0:06:33.800 --> 0:06:36.240 two have been bumping heads over a number of issues 0:06:36.279 --> 0:06:38.960 over the past few years. The latest that increase in 0:06:39.080 --> 0:06:42.760 oil production. So not White House National Security Advisor Jake 0:06:42.800 --> 0:06:46.440 Sullivan says things have to move, but with caution. This 0:06:46.560 --> 0:06:49.440 is a relationship that got built over decades on a 0:06:49.520 --> 0:06:53.320 bipartisan basis, and so the President isn't going to act precipitously. 0:06:53.800 --> 0:06:57.120 He's gonna act methodically, strategically and have time to meet 0:06:57.160 --> 0:07:00.480 with members of Congress in San Francisco. I'm at Baxter 0:07:00.560 --> 0:07:03.240 Bloomberg Daybreak. Thanks at S and P. Futures right now 0:07:03.360 --> 0:07:06.560 are up thirty three points. Staff futures up twenty seven 0:07:06.839 --> 0:07:09.280 Nastic futures are hired by a hundred twenty one points. 0:07:09.400 --> 0:07:12.320 Ten Your treasury is up fifteen thirty seconds yield on 0:07:12.360 --> 0:07:16.440 the benchmark three point nine, straight ahead, your latest local headlines, 0:07:16.480 --> 0:07:23.480 and a check of sports. This is Bloomberg and it's 0:07:23.520 --> 0:07:25.720 now five oh seven on Wall Street. Word fifty eight 0:07:25.800 --> 0:07:29.040 degrees in Central Park out of crash northbound Garden State Parkway, 0:07:29.080 --> 0:07:32.200 Exit one thirty nine. Details coming up in traffic. Michael 0:07:32.240 --> 0:07:34.080 Bars here first with more on what's going on in 0:07:34.120 --> 0:07:36.320 New York and around the world. Good morning Michael, Good 0:07:36.400 --> 0:07:40.239 morning Nathan. More potential legal trouble for former President Donald Trump. 0:07:40.800 --> 0:07:44.120 The SEC and federal prosecutors in New York I said 0:07:44.160 --> 0:07:47.679 to be investigating whistle blower claims by a co founder 0:07:47.840 --> 0:07:52.480 that Trump Media violated federal securities law. The Trump Media 0:07:52.720 --> 0:07:57.520 says that whistle blower's account is rife with knowingly false 0:07:57.600 --> 0:08:02.239 and defamatory statements and other goodn't con the cycle dramas. Meanwhile, 0:08:02.280 --> 0:08:05.360 the Trump organization is about stand trial for tax evasion. 0:08:05.760 --> 0:08:08.200 The Attorney General in New York has accused the company 0:08:08.240 --> 0:08:13.320 of fraud. Explosive latent suicide drones have struck Ukraine's capital 0:08:13.400 --> 0:08:16.600 as families were preparing to start their week, the blast 0:08:16.640 --> 0:08:21.080 echoing across keev and sending people scurrying to shelters. Kiev's 0:08:21.280 --> 0:08:25.560 mayor says the strikes are damaging several apartment blocks and 0:08:25.760 --> 0:08:29.560 set fire to a non residential building. Mire Itali Klitchko 0:08:29.640 --> 0:08:32.719 says though Ukrainians are not giving up, the people is 0:08:32.920 --> 0:08:36.520 very good motivated, and that's why I'm more than sure 0:08:36.920 --> 0:08:40.880 we win this war. Because it's our home, it's our families, 0:08:41.240 --> 0:08:43.559 it's our of fusion. We ready to die for them. 0:08:44.160 --> 0:08:47.560 Mere Klitchko told of Vladimir Putin, it's a crazy idea 0:08:47.679 --> 0:08:50.800 to rebuild the U s SR and see Ukraine as 0:08:50.880 --> 0:08:53.839 part of the big Russian Empire. It's an illusion. A 0:08:53.960 --> 0:08:57.800 suspect in a North California serial killing spree that claimed 0:08:57.840 --> 0:09:00.439 the lives of six men will be a rain tomorrow. 0:09:00.840 --> 0:09:04.120 Police say tips from residents in Stockton and Oakland, where 0:09:04.160 --> 0:09:07.360 the men were murdered, help them identify the suspect. Police 0:09:07.440 --> 0:09:11.120 arrested forty three year old Wesley Brownly in Stockton as 0:09:11.200 --> 0:09:14.440 he was reportedly driving around at night looking for another victim. 0:09:15.080 --> 0:09:19.720 Could we one day have a vaccine for cancer? Dr OSLM. Tressey, 0:09:20.000 --> 0:09:23.240 one half of the German team working on a cancer vaccine, 0:09:23.600 --> 0:09:28.120 says she is consciously optimistic as scientists. We are always 0:09:28.480 --> 0:09:31.760 hesitant to say we will have a cure for cancer. 0:09:32.320 --> 0:09:36.360 We have a number of breakfoods and we will continue 0:09:36.400 --> 0:09:39.160 to work on them. Still, she tells the BBC, progress 0:09:39.280 --> 0:09:42.559 is being made every day, every step every patient we 0:09:42.720 --> 0:09:46.040 treat in all cancer fire its helps us to find 0:09:46.400 --> 0:09:50.360 out law. Dr Tressey adds a cancer vaccine could be 0:09:50.400 --> 0:09:53.360 available by the end of the decade. Global News twenty 0:09:53.400 --> 0:09:56.120 four hours a day on air and on Bloomberg Quick Take, 0:09:56.160 --> 0:10:00.400 powered by more than seven journalist analysts in more than countries. 0:10:00.600 --> 0:10:07.480 Michael Barr, this is Bloomberg Nather. Thank you, Michael. Coming 0:10:07.559 --> 0:10:09.079 up to five ten on Wall Street. Time for the 0:10:09.120 --> 0:10:11.880 Bloomberg Sports Uptake and Morning John tesh Ower, Good morning 0:10:11.960 --> 0:10:14.280 eight and Yankees right back in Cleveland the night after 0:10:14.440 --> 0:10:16.360 blowing a two run ninth inning leave for the first 0:10:16.400 --> 0:10:19.080 time in their postseason history, and again they led by 0:10:19.200 --> 0:10:21.400 two bottom of the ninth no issues, this time of 0:10:21.480 --> 0:10:24.280 four to Game four victory of the Guardians that times 0:10:24.360 --> 0:10:27.319 the series of two sets the stage for a decisive 0:10:27.360 --> 0:10:30.120 Game five tonight at the Stadium. Yankee heroes, certainly. Garrett 0:10:30.160 --> 0:10:32.719 Cole pitched like an ace with seven strong innings and 0:10:32.760 --> 0:10:36.240 Harrison Bader continues to hit home runs like Aaron Judge 0:10:36.280 --> 0:10:39.000 his third and four games. Yankee fans wondered why Clay 0:10:39.080 --> 0:10:41.920 Holmes didn't pitch Saturday. He did pitch the eighth inning. 0:10:42.000 --> 0:10:44.240 Last night, Wandy per Alta pitched the ninth the winner. 0:10:44.320 --> 0:10:47.840 Tonight plays Houston, the Alcs third straight week where both 0:10:47.920 --> 0:10:50.319 the Jets and Giants won. The Jets with an upset win. 0:10:50.360 --> 0:10:52.200 They've yet to be favored in the game this season, 0:10:52.280 --> 0:10:55.360 but three big second half plays carried them at Green Bay. 0:10:55.400 --> 0:10:59.000 At Brexton BARRIOSRTT run, a block punt was returned for 0:10:59.040 --> 0:11:01.160 a score, and then the Jets put the game away. 0:11:01.320 --> 0:11:04.000 Zach Wilson takes the snap counter hand off up the 0:11:05.400 --> 0:11:14.160 thirty light touchdown, a little countering side hand off to 0:11:14.280 --> 0:11:17.680 Freee Hall. We'll find some Jet fans in the crowd 0:11:18.280 --> 0:11:21.719 and does the Jets lambo? Yes, and not only a 0:11:21.800 --> 0:11:24.760 Lambeaux eight, but Sauce Gardner was wearing a cheese head. 0:11:24.800 --> 0:11:27.840 After they beat the Packers twenty seven to ten, Jets 0:11:27.880 --> 0:11:30.120 for four and two Giants or five and one another 0:11:30.160 --> 0:11:33.120 big comeback it MetLife. They trailed Baltimore by ten just 0:11:33.360 --> 0:11:36.640 over six minutes left down the stracks, two touchdowns, two 0:11:36.720 --> 0:11:39.280 force turnovers, and the Giants beat the Ravens twenty four 0:11:39.360 --> 0:11:42.199 to twenty. NFC E Showdown last night Philadelphia went to 0:11:42.200 --> 0:11:45.760 six and oh beat Dallas twenty six to seventeen. John Stashward, 0:11:45.760 --> 0:11:48.480 Bloomberg Sports, NACOLN, Thank you, john S and p. Futures 0:11:48.559 --> 0:11:50.640 up thirty three points right now down futures have two 0:11:50.679 --> 0:11:52.719 under twenty six nest At futures are highed by a 0:11:52.840 --> 0:11:56.720 hundred twenty one points ten. Your treasuries up fifteen thirty seconds. 0:11:56.800 --> 0:11:59.720 You'll three point nine five percent. We get this trading. 0:11:59.760 --> 0:12:02.760 We started on a busy week for earnings. Next with 0:12:02.840 --> 0:12:08.360 Lori Calvacina at RBC Bloomberg day Break brought to you 0:12:08.360 --> 0:12:10.120 by the New York Community Trust. Your name will live 0:12:10.160 --> 0:12:11.920 on as a champion of the causes you care about 0:12:11.960 --> 0:12:14.640 for years to come through a charitable request to the 0:12:14.679 --> 0:12:18.080 New York Community Trust. Learn more at Philanthropists dot NYC. 0:12:22.120 --> 0:12:25.480 Markets headlines and breaking news twenty four hours a day 0:12:25.640 --> 0:12:29.200 at Bloomberg dot Com, The Bloomberg Business Outland at Bloomberg 0:12:29.280 --> 0:12:39.440 Quick Takes a Bloomberg Business Lash and I'm Cameron Moscow 0:12:39.640 --> 0:12:43.160 and us Dock indise futures are on the rise this morning. 0:12:43.240 --> 0:12:46.960 The pound meanwhile is rallying and UK bonds surging himid 0:12:47.040 --> 0:12:50.120 expectations that more of our Prime Minister list Trust's package 0:12:50.120 --> 0:12:53.160 of unfunded tax cuts will be reversed. And we checked 0:12:53.160 --> 0:12:55.400 the markets every fifteen minutes throughout the trading day. On 0:12:55.480 --> 0:12:58.000 Bloomberg Guess and P futures they're up thirty five points 0:12:58.120 --> 0:13:01.120 now futures up two forty two and nas deack futures 0:13:01.200 --> 0:13:04.280 up one hundred twenty nine. The decks in Germany is 0:13:04.360 --> 0:13:06.240 up a third of upper cent ten year treasury of 0:13:06.320 --> 0:13:09.560 fifteen thirty seconds. Heel three point nine five percent yield 0:13:09.640 --> 0:13:12.520 on the two year four point four four percent. Nine 0:13:12.720 --> 0:13:15.000 x heard oil is down two tents of a percent 0:13:15.120 --> 0:13:17.400 on eighteen cents at eighty five dollars, forty three cents 0:13:17.440 --> 0:13:19.920 of barrel comics gold up seven tenths per cent or 0:13:19.960 --> 0:13:23.360 eleven dollars ninety cents at sixteen sixty eighty announced. The 0:13:23.480 --> 0:13:26.559 Europe point nine seven five one against the dollar, British 0:13:26.600 --> 0:13:28.719 pound one point one to eight two and again one 0:13:28.800 --> 0:13:31.880 forty eight point six nine, and looking at bitcoin it 0:13:32.040 --> 0:13:34.880 is down a quarter percent and nineteen thousand two hundred 0:13:35.000 --> 0:13:37.520 eighty dollars. Today, we do get a report on Empire 0:13:37.600 --> 0:13:40.360 Manufacturing at eight thirty Wall Street Time and Bank of 0:13:40.400 --> 0:13:43.640 America and Charles schwab Her among company scheduled to report 0:13:43.679 --> 0:13:46.800 earnings today. That's a Bloomberg business flash. Now here's Michael 0:13:46.840 --> 0:13:49.280 Barr with more on what's going on around the world. Michael, 0:13:49.320 --> 0:13:52.839 good morning, Good morning, Karen. Ukraine's capital was under a 0:13:52.880 --> 0:13:56.480 missile attack from Russia with so called suicide drones this morning. 0:13:56.840 --> 0:14:01.080 Several loud explosions rocked Kiev Russians ranks over the past week. 0:14:01.120 --> 0:14:05.600 If hit infrastructure, including power facilities. The late polls shows 0:14:05.800 --> 0:14:09.319 control of the House is likely to flip to Republicans 0:14:09.679 --> 0:14:12.720 with election day less than a month away. The current 0:14:12.760 --> 0:14:17.840 CBS News You Go polling projection shows that Republicans would 0:14:17.880 --> 0:14:20.640 get two hundred twenty four to two hundred eleven in 0:14:20.720 --> 0:14:24.560 an advantage in the House over Democrats. In baseball, the 0:14:24.680 --> 0:14:27.120 deciding Game five is tonight between the Yankees and the 0:14:27.160 --> 0:14:30.520 Guardians and their a lds. Yesterday, New York survived beating 0:14:30.560 --> 0:14:33.560 Cleveland for two in Game four. In the NFL, the 0:14:33.640 --> 0:14:38.680 Giants beat Ravens, the Jets beat the packers, The Patriots 0:14:38.760 --> 0:14:42.080 won forty nine News lost, Global News twenty four hours 0:14:42.120 --> 0:14:45.120 a day on air and on Bloomberg Quicktake, powered by 0:14:45.200 --> 0:14:47.720 more than twenty seven hundred journalists and analysts more than 0:14:47.760 --> 0:14:51.600 a hundred twenty countries. Michael Barr and this is Bloomberg, Nathan. 0:14:51.640 --> 0:14:53.640 All right, Michael, thanks for coming up to five twenty 0:14:53.680 --> 0:14:56.800 on Wall Street Life from the Bloomberg Interactive Broker Studios. 0:14:56.880 --> 0:15:00.160 This is Bloomberg Daybreak. And Lori Calvasinis here of this 0:15:00.320 --> 0:15:02.720 now to get this trading week started ahead of US 0:15:02.760 --> 0:15:06.720 Equity Strategy at RBC Capital Markets. Laurie, it's great as 0:15:06.760 --> 0:15:08.760 always to speak with you, and I know we're early 0:15:08.920 --> 0:15:12.080 in this earning season, but given the results we've seen 0:15:12.240 --> 0:15:14.400 so far, is it sort of shaking out the way 0:15:14.480 --> 0:15:16.880 you expected or have you gotten any surprises? How do 0:15:16.920 --> 0:15:19.720 you look at earnings right now? Well, thanks for having 0:15:19.800 --> 0:15:21.880 me as always, and you know it's great to finally, 0:15:22.040 --> 0:15:24.240 you know, have this reporting season started. I think it's 0:15:24.280 --> 0:15:27.000 been well anticipated by investors for quite some time, though 0:15:27.040 --> 0:15:29.520 not in a good way. And I would say last week, 0:15:29.680 --> 0:15:31.960 you know, as we read through the transcripts, I wouldn't 0:15:31.960 --> 0:15:34.640 say there are any big surprises on my end, except 0:15:34.760 --> 0:15:36.760 perhaps maybe that we're just hearing a lot of the 0:15:36.840 --> 0:15:39.160 same things that we've heard in the past. So I 0:15:39.200 --> 0:15:41.720 would say, on the positive side, we are hearing commentary 0:15:41.720 --> 0:15:43.880 about supply chains getting a bit better. I think the 0:15:44.000 --> 0:15:46.480 tone of labor is improving though that frankly, that is 0:15:46.560 --> 0:15:48.320 something on both of those weeks been hearing for the 0:15:48.400 --> 0:15:51.840 last couple quarters. Um, it seems to me that companies 0:15:51.920 --> 0:15:54.840 are kind of battening down the hatches, getting cautious. Um. 0:15:54.880 --> 0:15:57.200 But at the same time we had companies saying you, no, look, 0:15:57.240 --> 0:15:59.760 we really aren't seen major crack yet except in certain 0:15:59.840 --> 0:16:02.760 co horse of consumers. So I think to the extent 0:16:02.880 --> 0:16:05.480 that the equity community wants the earnings band aid risked 0:16:05.480 --> 0:16:08.360 off in a big way, last week's reporters didn't tell 0:16:08.400 --> 0:16:10.080 me we're going to get it just yet. We might 0:16:10.120 --> 0:16:12.280 have to wait a little bit longer, alright. So, given 0:16:12.360 --> 0:16:16.840 the futures bounce we're seeing this morning, and perhaps some 0:16:16.960 --> 0:16:21.520 of the trepidation around earnings perhaps priced into heading into 0:16:21.640 --> 0:16:23.840 this earning season, are you looking for a little bit 0:16:24.200 --> 0:16:26.880 more of a bounce for equities or what's the path 0:16:27.000 --> 0:16:30.400 forward for you? So what I'll say on earnings. Is 0:16:30.440 --> 0:16:32.880 that even though we think that the need to reduce 0:16:33.040 --> 0:16:35.480 forecast is going to be ahead wind for the market 0:16:35.560 --> 0:16:38.000 well into next year, it is possible, if you go 0:16:38.080 --> 0:16:41.760 back over history, for stocks to bottom before earnings estimate 0:16:41.800 --> 0:16:44.360 revisions are fully you know, kind of reconciled or are 0:16:44.400 --> 0:16:46.960 fully ratcheted down. In fact, that's not something that can happen. 0:16:47.040 --> 0:16:49.320 That is something that normally happens, and we normally see 0:16:49.360 --> 0:16:51.520 that bottoming and stalks about three to six months before 0:16:51.560 --> 0:16:54.360 the earnings numbers stopped coming down. I think maybe in 0:16:54.400 --> 0:16:56.520 the near term, Nathan, when I'm a little more interested 0:16:56.560 --> 0:16:58.480 in something you guys lad with which is just a 0:16:58.520 --> 0:17:01.560 mid term elections is around the time of year that 0:17:01.640 --> 0:17:03.880 we would typically see the market kind of bottom and 0:17:04.000 --> 0:17:06.520 rally in a midterm election year. And on average and 0:17:06.880 --> 0:17:08.320 you know, kind of the final few months of a 0:17:08.359 --> 0:17:10.480 midterm year, you get a rally about seven percent in 0:17:10.560 --> 0:17:13.080 the stock market. Um, And I do think things are 0:17:13.080 --> 0:17:15.760 starting to maybe turn back in the Republicans direction a bit. 0:17:15.840 --> 0:17:17.720 We have seen momentum earlier and you know, kind of 0:17:17.760 --> 0:17:19.720 late in the summer shifting for the Democrats. I feel 0:17:19.760 --> 0:17:21.440 like maybe that's starting to turn again based on some 0:17:21.520 --> 0:17:23.200 of the data we're seeing. Yeah, I know you have 0:17:23.320 --> 0:17:25.760 been thinking about the midterm election as sort of a 0:17:25.840 --> 0:17:30.000 catalyst for stocks going forward. Here, what's the potential perhaps 0:17:30.080 --> 0:17:33.600 for a surprise in uh in the political aspect of 0:17:33.680 --> 0:17:38.760 this potentially affecting investors. So look, I think that you know, 0:17:38.880 --> 0:17:42.480 there's been sort of expectations slash hope maybe you know, 0:17:42.560 --> 0:17:45.960 kind of moderated hope that Republicans would take back control 0:17:46.000 --> 0:17:47.720 of at least one chamber, and it looks like that 0:17:47.840 --> 0:17:50.560 consensus is starting to get solidified again. I think the 0:17:50.640 --> 0:17:53.639 big negative surprise for markets would be Democrats managing to 0:17:53.720 --> 0:17:55.520 hang on to both chambers, and I don't think that's 0:17:55.520 --> 0:17:57.640 what the polling data is suggesting right now. I think, 0:17:57.840 --> 0:17:59.560 you know, what we're seeing is the Senate looks like 0:17:59.760 --> 0:18:01.840 that's where the Democrats have a bigger chance of keeping 0:18:01.920 --> 0:18:05.040 control um the House. You know, the CBS News poll 0:18:05.119 --> 0:18:07.800 you know, mentioned that things are trending back in favor 0:18:07.800 --> 0:18:09.960 of the Republicans there. But I think, you know, I 0:18:10.280 --> 0:18:11.800 do think it would be a negative reaction in the 0:18:11.840 --> 0:18:14.560 market if the Democrats managed to keep both What about 0:18:14.960 --> 0:18:18.639 the FED impact here? We keep hearing the possibility of 0:18:18.920 --> 0:18:21.800 more jumbo sized rate hikes. We got that hotter than 0:18:21.840 --> 0:18:26.240 expected inflation data. How does the FED factor into your forecast? Well, look, 0:18:26.320 --> 0:18:28.440 it's it's interesting. I mean we've got you know, sort 0:18:28.480 --> 0:18:31.679 of consensus expectations for additional big hikes, you know between 0:18:31.800 --> 0:18:33.840 now and early next year. We've got that big intour 0:18:33.880 --> 0:18:37.160 earnings model. We've got that big entire valuation model. Um. 0:18:37.480 --> 0:18:39.480 You know, I think it's still continues to be on 0:18:39.600 --> 0:18:42.280 the FED. What kind of recession do we end up having? 0:18:42.400 --> 0:18:44.760 I think a short, shallow recession is pretty darn close 0:18:44.840 --> 0:18:48.120 to bake. Then thirty and one is a twenty seven 0:18:48.200 --> 0:18:50.320 percent draw down from the January peak, which is a 0:18:50.400 --> 0:18:53.679 media and recession draw down. UM. So I think as 0:18:53.760 --> 0:18:56.000 long as you can convince yourself that the economic damage 0:18:56.000 --> 0:18:57.920 isn't going to be more than that, it's reasonable for 0:18:57.960 --> 0:18:59.879 stocks to search for a bottom in here. But I 0:19:00.000 --> 0:19:02.320 think the interesting wrinkle with the mid terms with this, Nathan, 0:19:02.400 --> 0:19:05.280 which is that, um, as long as inflation is a problem, 0:19:05.760 --> 0:19:07.520 that is something that I think is friendly to the 0:19:07.600 --> 0:19:10.760 Republicans because it keeps economic issues into the forefront, which 0:19:11.040 --> 0:19:14.000 Republicans traditionally pulled better on. So, in an indirect way, 0:19:14.600 --> 0:19:17.399 hotter inflation in the short term is probably, you know, 0:19:17.640 --> 0:19:19.800 good for the market in an indirect way because it 0:19:19.880 --> 0:19:21.800 does keep sort of the market family outcome in the 0:19:21.840 --> 0:19:24.639 mid terms on the table. As always, LORI, great to 0:19:24.720 --> 0:19:27.320 get your thoughts. Thanks again for being with us. Lori Calvacina, 0:19:27.640 --> 0:19:31.720 head of US Equity Strategy at RBC Capital Markets. Futures 0:19:31.840 --> 0:19:35.359 right now pointing higher. SMP futures are up thirty four points, 0:19:35.400 --> 0:19:38.359 STOW futures up tune or thirty two NASDAC Future is 0:19:38.440 --> 0:19:40.520 leading the games this morning. They're up a hundred twenty 0:19:40.560 --> 0:19:43.719 six points. That's a gain of one point two percent. 0:19:44.119 --> 0:19:47.200 The tenure Treasury is up sixteen thirty seconds, yield three 0:19:47.240 --> 0:19:49.400 point nine five percent. The yield on the two year 0:19:49.480 --> 0:19:53.359 right now four point four four percent. Look at at 0:19:53.400 --> 0:19:56.280 i'm excrude, it's down two tenths percent at eighty five 0:19:56.840 --> 0:20:01.040 forty three cents a barrel. You're listening to Bomberg Daybreak. 0:20:07.119 --> 0:20:09.960 Bloomberg Daybreak brought to you by Pepack Private Wealth Management. 0:20:10.000 --> 0:20:12.639 Peapack Private Wealth Management knows that the portfolio is more 0:20:12.680 --> 0:20:14.919 than a collection of assets, that's a path to your future. 0:20:15.320 --> 0:20:18.840 Visit Peapack Private dot Com and begin your financial legacy today, 0:20:22.280 --> 0:20:26.760 broadcasting live from the Bloomberg Interactive Broker Studio in New York, 0:20:26.920 --> 0:20:30.000 Bloomberg E Living Free on to Washington, d C, Bloomberg 0:20:30.119 --> 0:20:33.200 ninety nine one to Boston, Bloomberg one O six one 0:20:33.320 --> 0:20:36.760 to San Francisco, Bloomberg Knowing sixteen to the country, Sirius 0:20:36.920 --> 0:20:40.080 XM chto one nineteen and around the globe the Bloomberg 0:20:40.119 --> 0:20:44.560 Business at and Bloomberg Radio dot Com. This is Bloomberg Daybreak. 0:20:50.119 --> 0:20:52.120 It's five thirty on Wall Street. Good morning. I'm Nathan 0:20:52.200 --> 0:20:55.080 Hager and I'm Karen Moscow. We're just about four hours 0:20:55.119 --> 0:20:57.320 away from the open of US trading. Let's yet you 0:20:57.359 --> 0:20:58.720 have to date on the news you need to know 0:20:58.800 --> 0:21:00.880 at this shower in your up The pound in UK 0:21:01.040 --> 0:21:04.119 bonds are rallying. That's due to expectations that Prime Minister 0:21:04.240 --> 0:21:07.840 Liz Trust's package of unfunded tax cuts may be reversed. 0:21:08.119 --> 0:21:12.240 Newly appointed UK Chancellor Jeremy Hunt makes an announcement about 0:21:12.320 --> 0:21:15.000 half an hour from now. After that, he speaks in 0:21:15.040 --> 0:21:18.040 the House of Commons. Bloomberg's Lizzie Burden has more were 0:21:18.080 --> 0:21:21.439 expecting when Hunt makes his statement in the Commons today 0:21:21.680 --> 0:21:24.160 to give us a little more detail on how they're 0:21:24.200 --> 0:21:26.879 going to balance the books because Trust and Omics is 0:21:26.920 --> 0:21:30.000 being dismantled piece by piece, and Peace behind the scenes 0:21:30.040 --> 0:21:32.560 are asking themselves what's the point of having her at 0:21:32.600 --> 0:21:36.240 the top, And Bloomberg's Lizzie Burden says MP's are considering 0:21:36.280 --> 0:21:39.600 whether Trust's days as Prime Minister could be numbered. Meantime, 0:21:39.640 --> 0:21:42.640 in Asia, Karen Chinese President she Jin Pink says he'll 0:21:42.680 --> 0:21:45.840