WEBVTT - Bloomberg Daybreak: May 2, 2022 - Hour 1 (Radio) 0:00:03.880 --> 0:00:07.119 Live from the Bloomberg Interactive Brokers Studios. This is Bloomberg 0:00:07.240 --> 0:00:10.800 day Break for Monday, May second two. Coming up this hour, 0:00:11.119 --> 0:00:13.560 US stocks begin the new trading month, coming off the 0:00:13.560 --> 0:00:17.040 worst April in more than fifty years. Investors brace for 0:00:17.079 --> 0:00:20.000 this week's Fed decision. Warren Buffett goes on a buying 0:00:20.040 --> 0:00:22.520 spree in the first quarter, and Nancy Pelosi makes a 0:00:22.520 --> 0:00:26.600 surprize visit to Ukraine. A new crime fighting strategy begins 0:00:26.640 --> 0:00:29.159 today in New York City, Plus senators are calling on 0:00:29.280 --> 0:00:32.519 President By to fight disruptions in the solar industry. I'm 0:00:32.560 --> 0:00:36.160 Michael blarn More and I'm John stash Own sports ninth 0:00:36.200 --> 0:00:38.400 straight win for the Yankees, that met to one another 0:00:38.520 --> 0:00:42.120 series NBA playoff Road winds from Milwaukee and Golden State. 0:00:44.520 --> 0:00:48.479 That's all's training ahead on Bloomberg Daybreak on Bloomberg eleven 0:00:48.520 --> 0:00:53.040 three 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 --> 0:01:00.200 Sirius 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. 0:01:07.800 --> 0:01:10.880 Good morning, I'm Nathan Hagart and I'm Karen Moscow. US 0:01:10.959 --> 0:01:14.280 Dock Index futures are rising this morning. We're coming up 0:01:14.280 --> 0:01:15.800 to five o one on Wall Street, and we check 0:01:15.840 --> 0:01:18.480 the markets every fifteen minutes throughout the trading day. On 0:01:18.560 --> 0:01:21.760 Bloomberg SMP Future is up ten points down Future is 0:01:21.840 --> 0:01:25.119 up ninety three and NASDAG futures up forty. Ten year 0:01:25.160 --> 0:01:28.280 Treasury down one thirty second yield two point nine three percent, 0:01:28.319 --> 0:01:30.360 and the yield on the two year two point seven 0:01:30.400 --> 0:01:33.640 two percent, and NIMEX screwed oil is down two point 0:01:33.760 --> 0:01:36.880 six percent. Nathan Well Karen investors begin this month of 0:01:36.920 --> 0:01:40.520 May after coming off a historically bad April. The SNP 0:01:40.680 --> 0:01:43.840 five hundred fell eight point eight percent for the worst 0:01:43.920 --> 0:01:48.480 April performance since nineteen seventy. Tech investors haven't taken a 0:01:48.480 --> 0:01:51.720 beating like this in nearly fourteen years. The NASDAC plunged 0:01:51.800 --> 0:01:55.320 more than thirteen percent in April, it's worst performance since 0:01:55.320 --> 0:01:58.680 October of two thousand eight. Katie Nixon, his chief investment 0:01:58.720 --> 0:02:01.960 officer at Northern Trust. I mean, I think valuation is 0:02:02.200 --> 0:02:05.640 very fragile in this rising rate environment here, and then 0:02:05.680 --> 0:02:08.880 at the same time, you've got some fundamentals that you 0:02:08.919 --> 0:02:11.640 know at best are sort of flattening out and at 0:02:11.680 --> 0:02:14.960 worst are showing some declining trends and nets such is 0:02:14.960 --> 0:02:18.359 sort of the poster child joined now by Amazon, that's 0:02:18.360 --> 0:02:21.480 really showing the weakening of demand. Northern Trust Chief investment 0:02:21.480 --> 0:02:24.320 Officer Katie Nixon notes the SNP and the NASTACK have 0:02:24.400 --> 0:02:28.040 each fallen for four consecutive weeks. Well, bonds have also 0:02:28.200 --> 0:02:30.720 been taking up pounding this year. Nathan and one of 0:02:30.760 --> 0:02:34.040 the biggest investors outside America, things there may be more 0:02:34.160 --> 0:02:36.560 pain ahead. We get the latest live with the Bloombirds, 0:02:36.600 --> 0:02:40.320 John Tucker, John, Good morning, Good morning, Karen. Typically investors 0:02:40.320 --> 0:02:43.680 can take refuge in bonds, especially U S treasuries, and 0:02:43.720 --> 0:02:47.120 for years they've been supported by Japanese buyers, but that 0:02:47.280 --> 0:02:51.040 is no longer the case. Japanese institutional managers are now 0:02:51.120 --> 0:02:54.720 fueling a great bond sell off. The largest overseas holder 0:02:54.720 --> 0:02:58.480 of treasuries has offloaded almost sixty billion dollars over the 0:02:58.480 --> 0:03:01.200 past three months. That's a warding to data from BEMO 0:03:01.280 --> 0:03:06.320 Capital Markets. There are several reasons market volatility, divergent monetary policy, 0:03:06.560 --> 0:03:09.960 and a weaker yen, and Japanese investors may wait for 0:03:10.160 --> 0:03:13.919 higher and higher rates before ever jumping back in live 0:03:13.960 --> 0:03:17.040 in New York on John Tucker Bloomberg Daybreak. John. Thanks. 0:03:17.040 --> 0:03:19.720 Of course, both bond and equity investors will be paying 0:03:19.760 --> 0:03:22.640 close attention to this week's policy decision from the Fed. 0:03:22.720 --> 0:03:25.400 It is one of the most anticipated in years. We 0:03:25.480 --> 0:03:28.840 get a preview from Bloomberg's Michael McKay. The government reported 0:03:28.880 --> 0:03:32.480 Friday that employment costs rose the most since nine in 0:03:32.520 --> 0:03:35.880 the first quarter, while the Fed's favorite inflation gauge rose 0:03:35.920 --> 0:03:39.160 to the highest since nine two. And let's say that 0:03:39.240 --> 0:03:41.880 more than seals a fifty basis point grade increase from 0:03:41.920 --> 0:03:44.680 the Fed on Wednesday. It raises the question of whether 0:03:44.680 --> 0:03:47.560 the FED needs to keep raising by fifty or even 0:03:47.640 --> 0:03:51.040 seventy five going forward. They won't say, but Chairman j 0:03:51.200 --> 0:03:53.720 Powe will be asked about it at his news conference. 0:03:54.240 --> 0:03:56.800 The Fed will also be detailing how and when it 0:03:56.840 --> 0:04:00.000 will start reducing the balance sheet and trying to reassure 0:04:00.000 --> 0:04:05.480 Americans inflation is their top priority. Michael McKie Bloomberg Daybreak. Alright, Mike, 0:04:05.520 --> 0:04:07.560 thanks and well, of course, we'll have full coverage and 0:04:07.640 --> 0:04:10.760 analysis of Wednesday's FED decision beginning at one pm Wall 0:04:10.800 --> 0:04:14.360 Street time on both Bloomberg Radio and television care. All right, Nathan, 0:04:14.400 --> 0:04:16.440 thank you. And it's also another busy week for earnings, 0:04:16.440 --> 0:04:18.440 with more than a hundred sixty companies in the S 0:04:18.520 --> 0:04:20.800 and P five hundred reporting. We get a preview from 0:04:20.839 --> 0:04:24.520 Bloomberg s Charlie Pellett. Big technology firms and banks are 0:04:24.560 --> 0:04:27.200 behind us, but we'll be hearing from a broad swath 0:04:27.240 --> 0:04:31.040 of companies as investors assess the ongoing themes of inflation, 0:04:31.360 --> 0:04:36.040 consumer demand, and geopolitics. Sarah Malick is chief investment officer 0:04:36.120 --> 0:04:39.279 at Nouven. Earnings looked strong. Three quarters of companies are 0:04:39.320 --> 0:04:42.680 beating Arnis double digit revenue growth overall and about five 0:04:42.680 --> 0:04:45.159 to six percent Arnis Group. Among some of the names 0:04:45.160 --> 0:04:49.720 reporting this week Airbnb, A, I, G, A M D, Conico, Phillips, 0:04:49.960 --> 0:04:54.520 Uber Lifts, Starbucks, young brands and travel names Expedia, Hilton 0:04:54.720 --> 0:04:58.480 and Marriott in New York. Charlie pet Bloomberg day break. 0:04:58.640 --> 0:05:01.359 All right, Charlie, thanks and why. Company that already reported 0:05:01.400 --> 0:05:04.839 over the weekend was Berkshire Hathaway. The Warren Buffett conglomerate 0:05:04.880 --> 0:05:07.719 eked out a profit gain, but perhaps more importantly, the 0:05:07.800 --> 0:05:10.919 billionaire went on a buying spree in the first quarter 0:05:11.040 --> 0:05:13.960 Let's get the latest line from bloombergs Greneda Young, Good morning, Grenita, 0:05:14.040 --> 0:05:17.520 Good morning. Nathan Warren Buffett made forty one billion dollars 0:05:17.520 --> 0:05:20.520 in net stock purchases during the first quarter. It was 0:05:20.560 --> 0:05:23.120 his biggest buying spree in at least a decade, and 0:05:23.200 --> 0:05:26.480 a war in a soaring US inflation did not deter 0:05:26.720 --> 0:05:30.320 him from doubling down on a tried and tested strategy 0:05:30.400 --> 0:05:33.800 to navigate the fallout. Now, among the purchases, Berkshire raises 0:05:33.839 --> 0:05:37.000 its Chevron holdings and Buffett discloses that the company now 0:05:37.080 --> 0:05:41.279 owns an expanded nine point five percent stake in Activision Blizzard. 0:05:41.560 --> 0:05:44.480 And at the annual shareholder meeting, the nine year old 0:05:44.520 --> 0:05:48.240 Buffett and his business partner, year old Charlie Munger, gave 0:05:48.320 --> 0:05:50.920 no indication that they planned to step back from their 0:05:51.000 --> 0:05:54.360 roles anytime soon. Live in New York. I'm Rennita Young, 0:05:54.360 --> 0:05:56.360 Bloomberg day break. All right, rened to thank you and 0:05:56.360 --> 0:05:58.600 a Let's get to the latest on the war in Ukraine. 0:05:58.600 --> 0:06:01.640 After waits, the Russian bamar men civilians are starting to 0:06:01.720 --> 0:06:05.520 leave a besiege steel plant in Mario Pole. President Zelenski 0:06:05.640 --> 0:06:08.120 says about a hundred men, women, and children will arrive 0:06:08.120 --> 0:06:11.559 in Ukrainian Control Territory this morning. And now sticker Nancy 0:06:11.600 --> 0:06:14.760 Pelosi plans to meet with Poland's president today after surprise 0:06:14.880 --> 0:06:18.080 visit to Kiev. We get that story from Bloomberg's and Baxter. 0:06:18.560 --> 0:06:21.599 This was a well kept secret. Pelosi leading a congressional 0:06:21.640 --> 0:06:35.120 delegation pledging continued support, Thank you, and says continued usaid. 0:06:36.040 --> 0:06:39.920 Pelosi then traveled back to Poland in San Francisco, I'm 0:06:39.960 --> 0:06:42.520 at Baxter Bloomberg daybreak. All right, at thanks, Let's turn 0:06:42.560 --> 0:06:45.040 to the pandemic now, where our focus remains in China 0:06:45.200 --> 0:06:48.839 coronavirus lockdowns. They're taking a significant toll on the economy 0:06:49.040 --> 0:06:52.400 over the weekend. Data showed both manufacturing and services activity 0:06:52.440 --> 0:06:54.680 plunged last month to their worst levels in more than 0:06:54.760 --> 0:06:58.960 two years. And in Australia, Nathan Quantas has revived a 0:06:59.000 --> 0:07:02.359 plan for the world's longest NonStop flights. They would connect 0:07:02.400 --> 0:07:05.240 Australia's East coast with New York in London. The airline 0:07:05.279 --> 0:07:07.880 says it's buying twelve Airbus jets that can make the 0:07:07.920 --> 0:07:11.360 twenty hour journeys. Quantis will begin the service from Sydney 0:07:11.400 --> 0:07:16.080 and hen straight ahead We have your latest local headlines, 0:07:16.200 --> 0:07:23.760 plus the check of sports, and this is Bloomberg. All right, Karen. Thanks. 0:07:23.800 --> 0:07:26.000 It's five oh seven on Wall Street, fifty four degrees 0:07:26.040 --> 0:07:28.720 in Central Park. Big problems on the rails this morning. 0:07:28.720 --> 0:07:31.800 New Jersey Transit is suspended from Trent and De Penn station. 0:07:31.960 --> 0:07:34.400 Details coming up in traffic. First. Michael bar with more 0:07:34.400 --> 0:07:36.560 on what's going on in New York and around the world. 0:07:36.560 --> 0:07:39.400 Good morning, Michael, Good morning Nathan. A new crime fighting 0:07:39.400 --> 0:07:43.360 initiative begins today in New York City. Mayor Eric Adams 0:07:43.360 --> 0:07:47.480 says in the most forty most violent precincts, authorities will 0:07:47.480 --> 0:07:52.600 move neighborhood coordinating officers into evening patrols. Other plans include 0:07:52.600 --> 0:07:56.360 sending field intelligence officers to the street. Overall crime is 0:07:56.440 --> 0:08:00.520 up last month compared to April of last year. Violence 0:08:00.600 --> 0:08:03.400 is also on the rise. Mayor Adams also says they 0:08:03.400 --> 0:08:06.720 will fight people who cheat on paying subway fares in 0:08:06.760 --> 0:08:10.400 the city. Broadway theaters are ending the policy of requiring 0:08:10.400 --> 0:08:14.720 customers to show proof of vaccination. The Broadway League says 0:08:14.840 --> 0:08:17.440 in a statement that the owners and operators of all 0:08:17.560 --> 0:08:21.280 forty one Broadway theaters are extending the mass requirement at 0:08:21.360 --> 0:08:23.880 least through the end of May, but many would no 0:08:23.960 --> 0:08:28.360 longer check for vaccination status. President Biden spoke in Minneapolis 0:08:28.440 --> 0:08:32.160 at a memorial service for former Vice President Walter Mondale. 0:08:32.480 --> 0:08:35.800 Mondale died in April of last year at age ninety three. 0:08:36.320 --> 0:08:39.560 President Biden said he and Mondale, who was known as Fritz, 0:08:39.760 --> 0:08:42.719 were close friends. I'm I moved to be with you 0:08:42.720 --> 0:08:46.520 here today as an honor one of the great giants 0:08:47.120 --> 0:08:50.800 in American history. And that's not hyperboway. Fritz was a 0:08:50.840 --> 0:08:56.040 giant in American clinical history. President Biden described Mondale as 0:08:56.080 --> 0:08:59.880 a dedicated to patriot and public servant. The judge Joy 0:09:00.080 --> 0:09:02.480 the Country Music Hall of Fame last night, just today, 0:09:02.480 --> 0:09:07.880 after Naomi Judd died unexpectedly. Naomi's daughters, Winona and Ashley Judd, 0:09:07.920 --> 0:09:10.679 accepted the honor. Wenona Judd, this is the first time 0:09:10.720 --> 0:09:14.840 I've talked since saying goodbye to twenty A kistra on 0:09:14.880 --> 0:09:18.320 the forehead and I walked away, and this is the 0:09:18.360 --> 0:09:21.600 first place I've been. Wenona and Ashley Judd said their 0:09:21.640 --> 0:09:23.880 mother died at the age of seventy six due to 0:09:24.080 --> 0:09:27.720 the disease of mental illness. Nearly two dozen senators today 0:09:27.760 --> 0:09:31.640 called on President Biden to swiftly advance a trade probe 0:09:31.679 --> 0:09:35.320 that they said was already causing massive disruption in the 0:09:35.440 --> 0:09:38.600 U S. Solar industry. According to the letter from twenty 0:09:38.600 --> 0:09:43.120 two senators, the investigation into whether Chinese companies are circumventing 0:09:43.200 --> 0:09:47.880 decades old tariffs by assembling solar cells modules in Southeast 0:09:47.920 --> 0:09:52.560 Asia will severely harm American businesses and workers. Global News 0:09:52.600 --> 0:09:55.600 twenty four hours a day on air and on Bloomberg Quicktake, 0:09:55.880 --> 0:09:58.720 powered by more than twenty seven hundred journalists and analysts 0:09:58.720 --> 0:10:00.880 for more than a hundred twenty country He's Michael bar 0:10:01.040 --> 0:10:08.360 This is Bloomberg, Nathan. Thanks Michael. Coming up to five 0:10:08.400 --> 0:10:10.600 ten on Wall Street. Time for the Bloomberg Sports Uptake. 0:10:10.640 --> 0:10:13.600 Come morning, John s Morton, Nathan. The Mets weekend, of course, 0:10:13.640 --> 0:10:16.000 began with the no hitter. It ended last night with 0:10:16.080 --> 0:10:18.280 Max scherz Are giving up three home runs, but the 0:10:18.360 --> 0:10:21.320 Mets batch produced fifteen hits and a ten six win 0:10:21.400 --> 0:10:23.520 over the Phillies at City Field. Jeff McNeil had four 0:10:23.520 --> 0:10:26.320 of those hits, raising his average to three sixty one. 0:10:26.360 --> 0:10:28.800 Dom Smith had four hits. He drove in three runs, 0:10:28.840 --> 0:10:32.280 so did Starling Marte. The Mets have now playing seven series, 0:10:32.280 --> 0:10:34.839 they have not had a sweep that they've won all seven. 0:10:34.880 --> 0:10:38.160 The Yankees have had three straight series sweeps, nine wins 0:10:38.160 --> 0:10:40.760 in a row. In Kansas City, they trailed four to one, 0:10:40.760 --> 0:10:42.760 took to leave in a seventh inning, scoring two runs 0:10:42.760 --> 0:10:45.040 without a hit, and they went on to win six 0:10:45.120 --> 0:10:47.480 to four. Aaron Judge homer with one out in the 0:10:47.559 --> 0:10:50.079 first inning and hit another with two outs to the night. 0:10:50.160 --> 0:10:53.280 Judge had no homer's over his first thirteen games. He's 0:10:53.320 --> 0:10:55.920 hit seven in his last eight games, and the Yanks 0:10:55.960 --> 0:10:59.079 take this nine game win, streaking tonight's game in Toronto. 0:10:59.200 --> 0:11:02.079 NBA playoffs of Brown two Milwaukee one in Boston one 0:11:02.080 --> 0:11:03.960 oh one to eighty nine on the Son to the 0:11:03.960 --> 0:11:06.880 Compo had a triple double. Golden State in Memphis lost 0:11:06.960 --> 0:11:09.000 Dray Bond Green of the second quarter of objected for 0:11:09.040 --> 0:11:11.439 a flagrant foul. They held at one point lead at 0:11:11.440 --> 0:11:15.360 the end. They will throw it in fine eight Clark 0:11:15.440 --> 0:11:18.160 Clark bounced pass over to Moran. He'll drive in Scooper's 0:11:18.320 --> 0:11:23.319 no good greebout wagers the Warriors win. The Warriors win Memphis. 0:11:23.360 --> 0:11:27.480 Scott the look the Morean couldn't finish it head Golden 0:11:27.600 --> 0:11:31.040 State captures State one with Tree Bond grade in the 0:11:31.120 --> 0:11:34.600 locker room game, and they called two more series openers tonight. 0:11:34.640 --> 0:11:36.760 It's also opening night in the Stanley Cup Playoffs, a 0:11:36.840 --> 0:11:40.040 quartet of games, including the Bruins at Carolina. The Hurricanes 0:11:40.040 --> 0:11:42.840 won the three regular season meetings by Combined Sports sixteen 0:11:42.840 --> 0:11:46.160 to one. Rangers and Penguins Game one at the Garden Tomorrow. 0:11:46.440 --> 0:11:50.400 John stash Award Bloomberg Sports Okay, John, thanks SMP futures 0:11:50.480 --> 0:11:52.640 right now up twelve point, Staff futures up a hundred, 0:11:52.640 --> 0:11:55.320 twenty nastack futures up forty five points. The ten Your 0:11:55.360 --> 0:11:59.120 treasury down one thirty second, the yield two point nine 0:11:59.160 --> 0:12:02.680 three percent. Insights on this market next with Brian Levitt 0:12:02.720 --> 0:12:08.680 of Investco. This is Bloomberg Bloomberg eleven three oh Weather 0:12:08.760 --> 0:12:11.040 turning cloudy today with the high in near sixty degrees, 0:12:11.080 --> 0:12:13.720 will be in the mid sixties partly to mostly cloudy tomorrow. 0:12:14.000 --> 0:12:16.720 Showers Wednesday with the high in near sixty Right now 0:12:16.960 --> 0:12:23.760 fifty four degrees in Central Park Markets. Headlines and breaking 0:12:23.800 --> 0:12:26.680 news twenty four hours a day at Bloomberg dot Com, 0:12:26.800 --> 0:12:30.400 The Bloomberg Business Outland at Bloomberg Quicktape. This is a 0:12:30.440 --> 0:12:40.320 Bloomberg Business flash and I'm Karen Moscow. The dollar is 0:12:40.400 --> 0:12:44.640 steady this morning. US DOT Index futures, meanwhile, are higher. 0:12:44.720 --> 0:12:48.440 There are worries over high inflation, tightening monetary policy in 0:12:48.520 --> 0:12:52.240 China's COVID lockdowns that are contributing to some investor caution 0:12:52.480 --> 0:12:56.720 this morning. But again treasuries are moving higher, and this 0:12:56.920 --> 0:12:59.600 was after April's slump, which is among the worst since 0:12:59.640 --> 0:13:02.800 the pen demic. Royal markets right now it's in p 0:13:03.000 --> 0:13:05.600 futures are up about sixteen points down, futures up one 0:13:06.360 --> 0:13:08.839 two and ASDAK futures up forty eight. We checked the 0:13:08.920 --> 0:13:12.360 markets every fifteen minutes throughout the trading day on Bloomberg 0:13:12.760 --> 0:13:15.880 and the Dacks in Germany is down one percent. Ten 0:13:15.960 --> 0:13:18.240 year treasury down one thirty second deal two point on 0:13:18.400 --> 0:13:20.560 three percent. The yield on the two year two point 0:13:20.600 --> 0:13:23.839 seven two percent. Nine X screwed oil is downward than 0:13:23.880 --> 0:13:26.280 three percent on three dollars twenty five cents and one 0:13:26.800 --> 0:13:30.360 dollar four cents of beryl. As a Bloomberg business flash, 0:13:30.440 --> 0:13:32.480 now here's Michael Barr with more on what's going on 0:13:32.559 --> 0:13:35.360 around the world. Muchel, Good morning, Good morning, Karen. The 0:13:35.400 --> 0:13:38.600 evacuation has begun for civilians hold up at a steel 0:13:38.640 --> 0:13:42.280 plan in the Ukrainian city of Mariopol after nearly two 0:13:42.280 --> 0:13:46.319 months under siege by Russian forces. Local officials said people 0:13:46.400 --> 0:13:50.479 sheltering elsewhere in the city would also be allowed out. Today. 0:13:50.679 --> 0:13:53.760 In a surprise visit to Ukraine, how speaker Nancy Pelosi 0:13:54.040 --> 0:13:59.280 promised continued support. Today, Pelosi met with Poland's president. In 0:13:59.320 --> 0:14:01.959 the NBA layoffs, the Celtics lost to the Bucks one 0:14:01.960 --> 0:14:05.000 oh one eighty nine in their opening game of their series. 0:14:05.280 --> 0:14:08.560 The Warriors beat the Grizzlies one seventeen one sixteen in 0:14:08.640 --> 0:14:11.800 their game one. In baseball, the Yankees and Mets one. 0:14:11.880 --> 0:14:15.000 The Orioles beat the Red Sox nine five. The Nationals 0:14:15.000 --> 0:14:18.240 beat the Giants eleven five. The A's lost. Global News 0:14:18.280 --> 0:14:21.560 twenty four hours a day on the airand on Bloomberg Quicktake, 0:14:21.800 --> 0:14:24.760 powered by more than twenty seven hundred journalists and analyst 0:14:24.760 --> 0:14:27.320 are more than a hundred twenty countries. Michael Barr and 0:14:27.400 --> 0:14:30.640 this is Bloomberg. Nathan Alright, Michael, Thanks, It's five nineteen 0:14:30.640 --> 0:14:33.880 on Wall Street Live from the Bloomberg Interactive Broker Studios. 0:14:33.920 --> 0:14:36.600 This is Bloomberg Daybreak. As we get ready to kick 0:14:36.640 --> 0:14:39.800 off a new trading month. We are joined by Brian Levitt, 0:14:40.120 --> 0:14:42.800 global market strategist at invest Go. Brian, it's great to 0:14:42.840 --> 0:14:44.840 speak with you this morning. And you know the old 0:14:44.880 --> 0:14:48.320 saying selling may go away, but investors already took care 0:14:48.320 --> 0:14:53.720 of that in April. So where now, Brian? Yeah, you know, 0:14:53.760 --> 0:14:56.400 and actually historically selling may and go away hasn't been 0:14:56.440 --> 0:14:59.840 as good as a strategy as as people as people 0:15:00.000 --> 0:15:03.040 think that it's been. Um. Yeah, Look, it's gonna be challenging. 0:15:03.040 --> 0:15:06.720 We're still in an environment where the Federal Reserve needs 0:15:06.720 --> 0:15:09.840 the tightened policy pretty significantly. We we know that we've 0:15:09.880 --> 0:15:12.520 got pretty strong demand, which is good for the economy, 0:15:12.800 --> 0:15:15.600 but we've also got supply challenges and so for the 0:15:15.640 --> 0:15:19.400 Fed to bring down inflationary pressure, they're gonna have to 0:15:19.440 --> 0:15:22.640 work on the demand side, which is tightening of financial conditions, 0:15:22.720 --> 0:15:25.280 which means, you know, equities and credit are still likely 0:15:25.360 --> 0:15:28.280 to be volatile. The good news is, um, a lot 0:15:28.320 --> 0:15:31.680 of pain has has already been brought to these markets. 0:15:31.920 --> 0:15:34.400 We don't think a recession is in the off things, 0:15:34.400 --> 0:15:37.440 so you know, we should start to see some signs 0:15:37.480 --> 0:15:40.640 of of equity markets of bottoming. But but again it's 0:15:40.880 --> 0:15:44.440 gonna be a challenging process. Ultimately, I think we'll we'll 0:15:44.480 --> 0:15:47.440 find our way through it, but but investors should expect 0:15:47.440 --> 0:15:50.360 more volatility along the way. So you don't think this 0:15:50.400 --> 0:15:55.640 market has found bottom yet. I think we're certainly getting closer. Typically, 0:15:55.680 --> 0:16:00.320 what you see is a a larger capitulation amongst tail 0:16:00.360 --> 0:16:03.240 investors um, you know, and I think we're starting to 0:16:03.360 --> 0:16:06.480 get closer. We're starting to see some signs of a 0:16:06.600 --> 0:16:10.520 pretty extreme barishness. We've got a lot of names within 0:16:10.560 --> 0:16:13.960 the embassy is trading well below um, you know, fifty 0:16:14.000 --> 0:16:17.080 and two D day moving averages. So so we're starting 0:16:17.080 --> 0:16:20.360 to get there. I think the challenges that financial conditions 0:16:20.360 --> 0:16:23.760 have tightened, but perhaps have not tightened as as much 0:16:23.800 --> 0:16:26.800 as they need to in order to start bringing inflationary 0:16:26.800 --> 0:16:29.360 pressures down. So you know that, as always, we don't 0:16:29.360 --> 0:16:31.440 want to fight the Fed. The Fed is going to 0:16:31.520 --> 0:16:35.240 have to to tighten financial conditions further, which which could 0:16:35.240 --> 0:16:39.120 put some pressure in markets. But ultimately our view is 0:16:39.200 --> 0:16:43.960 that inflationary pressures will start to trend in the right direction, 0:16:44.040 --> 0:16:48.120 the FED will front load those interest rate hikes UM 0:16:48.440 --> 0:16:51.920 and then the hope is and our belief is is 0:16:51.920 --> 0:16:55.680 that as inflationary pressures moderate, the FED will be able 0:16:55.720 --> 0:16:59.240 to back off their tightening stands and thus not causing 0:16:59.600 --> 0:17:02.240 over I should in the economy, which should provide a 0:17:02.400 --> 0:17:05.919 better backdrop for markets. When you say front loading interest 0:17:06.000 --> 0:17:09.960 rate hikes, are you thinking multiple fifty basis point moves? Uh? 0:17:10.280 --> 0:17:13.520 And how many? Yeah, that's what we're hearing. That's what 0:17:13.600 --> 0:17:16.760 the market is already pricing in. So you know, the 0:17:16.800 --> 0:17:20.159 market is already expecting fifty basis point hikes at the 0:17:20.240 --> 0:17:22.600 next three meetings, which I believe is the right way 0:17:22.640 --> 0:17:27.720 to go. Look, the bond market has already priced in 0:17:28.280 --> 0:17:31.760 a lot of the move. Um. Yes, equities have sold 0:17:31.800 --> 0:17:35.840 off as you would expect when policy starts to shift. Um, 0:17:36.080 --> 0:17:39.000 we might as well go ahead and and start to 0:17:39.160 --> 0:17:41.760 deliver on those rate hikes so we can start to 0:17:42.200 --> 0:17:45.560 tighten financial conditions further and and start to bring down 0:17:45.640 --> 0:17:50.080 inflationary pressures. So where do you advise your clients to 0:17:50.280 --> 0:17:54.600 adjust their portfolios in this kind of rate hiking cycle 0:17:54.760 --> 0:17:58.600 with a front loading FED over the next few months. Yeah, 0:17:58.600 --> 0:18:01.439 you start to prepare for the slow down in economic activity. 0:18:01.520 --> 0:18:05.080 Now people think of a slowdown and economic activity is ominous. 0:18:05.119 --> 0:18:09.320 Usually equities performed well in a slowdown in economic activity. 0:18:09.320 --> 0:18:13.840 You want to shift towards higher quality, more defensive, cash 0:18:13.880 --> 0:18:17.800 flow generating businesses, away from the speculative type names that 0:18:17.920 --> 0:18:21.520 drove a lot of the market in in one I 0:18:21.600 --> 0:18:24.560 think is government bonds tend to provide nice ballot in 0:18:24.640 --> 0:18:28.400 a slowdown, and everybody's fleeing government bonds as interest rates 0:18:28.520 --> 0:18:32.399 move up, but an equity government bond bar bell tends 0:18:32.440 --> 0:18:35.560 to do well in a slowdown. The bigger question there, Nathan, 0:18:35.640 --> 0:18:38.400 is due is the next move from there a contraction 0:18:38.840 --> 0:18:41.960 or our inflationary pressure is gonna come down, allowing the 0:18:42.000 --> 0:18:44.320 consumer to start to feel better and we move back 0:18:44.640 --> 0:18:48.160 into a more expansionary environment. The latter would be my view, 0:18:48.240 --> 0:18:52.200 but for now it's a slowdown. Higher quality investments tend 0:18:52.240 --> 0:18:54.520 to do well in a slowdown. So in our last 0:18:54.520 --> 0:18:57.159 thirty seconds here, Brian, you're still expecting that the S 0:18:57.240 --> 0:18:59.640 and P is gonna end this year higher than than 0:18:59.680 --> 0:19:03.560 it did last year. Well, I mean, we've we've certainly 0:19:03.600 --> 0:19:05.760 got a lot to dig out of, so I think 0:19:05.800 --> 0:19:08.920 that'll be a challenge. The question is whether you know 0:19:09.000 --> 0:19:11.560 where we go from here again? I expect some near 0:19:11.680 --> 0:19:15.639 term volatility, but ultimately I think the markets will start 0:19:15.680 --> 0:19:18.400 to to grind higher from where we are now. Now, 0:19:18.480 --> 0:19:20.600 does that mean a positive year for markets? That's gonna 0:19:20.600 --> 0:19:23.200 be tough, right, That would that would envision a pretty 0:19:23.240 --> 0:19:26.360 significant move from where we are now, given how much 0:19:26.440 --> 0:19:29.240 damage has already been done. But can we move higher 0:19:29.280 --> 0:19:32.240 from here? Yeah? Again, it's gonna be volatile, but typically 0:19:33.359 --> 0:19:37.280 markets tend to perform well in a slow down phase 0:19:37.359 --> 0:19:39.359 so long as the FED doesn't have to tighten the 0:19:39.400 --> 0:19:42.600 screws so significantly. Thanks for this, Brian, great having you 0:19:42.640 --> 0:19:46.320 on with us. Brian Levitt, global market strategists at invest 0:19:46.960 --> 0:19:50.160 Right now, SMP futures are moving a little bit higher, 0:19:50.160 --> 0:19:52.480 with OU up seventeen points, Staff futures up a hundred 0:19:52.520 --> 0:19:56.399 sixty three, NASTAC future is higher by sixty points, and 0:19:56.480 --> 0:19:59.280 the tenure Treasury is down one thirty second, the yield 0:19:59.640 --> 0:20:03.680 to point nine three percent. You're listening to Bloomberg Daybreak 0:20:07.440 --> 0:20:09.840 Bloomberg eleven three oh Weather turning cloudy today with a 0:20:09.880 --> 0:20:13.640 high near sixty degrees mid sixties, partly to mostly cloudy tomorrow, 0:20:13.960 --> 0:20:17.240 showers in the high near sixty on Wednesday. Right now, 0:20:17.280 --> 0:20:23.320 clouds and fifty four degrees in Central Park. Broadcasting live 0:20:23.480 --> 0:20:27.399 from the Bloomberg Interactive Broker Studio in New York, Bloomberg 0:20:27.440 --> 0:20:32.200 Eloving Free to Washington, d C, Bloomberg to Boston, Bloomberg 0:20:32.280 --> 0:20:35.439 one O six one to San Francisco, Bloomberg nine sixty 0:20:35.600 --> 0:20:38.840 to the country, Sirius XM to one nine, and around 0:20:38.840 --> 0:20:42.800 the globe the Bloomberg Business apt and Bloomberg Radio dot Com. 0:20:42.800 --> 0:20:51.879 This is Bloomberg Daybreak. It's five thirty on Wall Street. 0:20:51.880 --> 0:20:55.119 Good morning. I'm Nathan Hager and I'm Karen Moskwer. Just 0:20:55.200 --> 0:20:57.879 about four hours away from the open of US trading. 0:20:57.960 --> 0:20:59.320 Let's get you up to date on the news you 0:20:59.359 --> 0:21:02.160 need to know it issh our traders entering May after 0:21:02.280 --> 0:21:06.160 historically poor April than NASDAK had its worst months since 0:21:06.200 --> 0:21:09.560 October at two eight, and the SMP had its worst 0:21:09.640 --> 0:21:12.960 April since nineteen And it comes, Karen is the Federal 0:21:13.040 --> 0:21:16.399 Reserve is expected to raise interest rates fifty basis points 0:21:16.400 --> 0:21:20.120 at this Wednesday's meetings. Miller Tayback Chief market strategist Matt 0:21:20.200 --> 0:21:24.440 Mayley says, if inflation persists, the FEDS path forward becomes murkier. 0:21:24.840 --> 0:21:26.600 That's the fear that the Fed is going to have 0:21:26.640 --> 0:21:29.720 no choice but to tighten further and and call, you know, 0:21:29.760 --> 0:21:32.560 because of the spears inflation, and that's going to cause 0:21:32.600 --> 0:21:35.399 the market to fall further than it has Matt Malie 0:21:35.400 --> 0:21:38.080 and Miller. Taback says traders should take advantage of the 0:21:38.119 --> 0:21:40.760 recent sell off. And it's not just stocks, Nathan, the 0:21:40.760 --> 0:21:43.720 bond market. It's also coming off a historically bad month 0:21:43.760 --> 0:21:46.520 and there could be more pain ahead. Bloomberry's John Tucker 0:21:46.560 --> 0:21:49.840 tells US that's being fueled by Japanese investors John go 0:21:49.960 --> 0:21:54.560 Mortay Karen Japanese institutional managers known for their legendary US 0:21:54.600 --> 0:21:58.000 step buying sprees and now fueling the Great Bomb sell off. 0:21:58.320 --> 0:22:01.760 The largest overseas holder of view US treasuries as offloaded 0:22:01.800 --> 0:22:05.160 almost sixty billion dollars over the past three months. Currently 0:22:05.200 --> 0:22:08.400 heading costs of off sat the appeal of higher US yields, 0:22:08.720 --> 0:22:12.680 Japanese investors may not return until the benchmark tenure yield 0:22:12.720 --> 0:22:15.920 trades firmly above three percent. Live to New York on 0:22:16.080 --> 0:22:18.960 John Tucker Bloomberg Day Break. All right, John, Thanks over 0:22:19.000 --> 0:22:22.840 the weekend. Warren Buffett conglomerate Burkeshire Hathaway reported earnings, and 0:22:22.880 --> 0:22:26.520 it revealed the billionaire was very active in the first quarter. 0:22:26.600 --> 0:22:29.600 Bloomberg Trinita Young joins us Live with that story. Good morning, Granina, 0:22:29.640 --> 0:22:32.840 Good morning. Nathan Warren Buffett made forty one billion dollars 0:22:32.840 --> 0:22:36.040 in net stock purchases during the first quarter, his biggest 0:22:36.080 --> 0:22:38.800 buying spree in at least a decade, and a warrant 0:22:38.800 --> 0:22:41.720 soaring US inflation did not deter him from doubling down 0:22:41.800 --> 0:22:45.640 on a tried entrusted strategy to navigate the fallout among 0:22:45.720 --> 0:22:49.280 the purchases. Berkshire raises it's Chevron Holdings, and the company 0:22:49.359 --> 0:22:52.280 now owns an expanded nine point five percent stake in 0:22:52.359 --> 0:22:55.840 act division Blizzards, and at the annual shareholders meeting, the 0:22:56.000 --> 0:22:58.840 nine year old Buffett and his business partner, at ninety 0:22:58.880 --> 0:23:01.760 eight year old Charlie Munger, gave no indication that they 0:23:01.840 --> 0:23:05.400