WEBVTT - Bloomberg Daybreak: August 31, 2022 - Hour 1 (Radio) 0:00:03.160 --> 0:00:05.000 And it's now five oh seven on Wall Street, where 0:00:05.000 --> 0:00:07.400 it's seventy two degrees in Central Park. Already got an 0:00:07.400 --> 0:00:10.280 accident at westbound b Quee off ramp to the Brooklyn Bridge. 0:00:10.680 --> 0:00:13.160 Details coming up in traffic. First Michael Barr with what 0:00:13.200 --> 0:00:15.080 else is going on in New York and around the world. 0:00:15.080 --> 0:00:17.759 Good morning, Michael, Good morning Nathan. The earth moved in 0:00:17.760 --> 0:00:21.440 New Jersey last evening. According to the U S Geological Survey, 0:00:21.520 --> 0:00:23.960 two earthquakes at in northern New Jersey. The first to 0:00:24.040 --> 0:00:28.600 two point three magnitude earthquake was just before five fift pm, 0:00:28.640 --> 0:00:32.800 about six miles northwest of Morris Plains at one point 0:00:32.880 --> 0:00:36.200 seven magnitude. After shock was then reported shortly after six 0:00:36.280 --> 0:00:39.720 thirty pm, also in Morris County. The last earthquake in 0:00:39.760 --> 0:00:43.400 New Jersey was in Freehold in twenty recorded at a 0:00:43.479 --> 0:00:47.519 three point when magnitude one. Texas official says migrants crossing 0:00:47.560 --> 0:00:50.240 into El Paso want to come to New York City. 0:00:50.560 --> 0:00:53.960 El Paso has been housing asylum seekers are welcome centers 0:00:53.960 --> 0:00:57.640 there to assist the homeless population. Texas has been bussing 0:00:57.640 --> 0:01:00.360 migrants from the Opportunity center to where they to go. 0:01:00.880 --> 0:01:03.960 Speaking to ABC's k v I A n L pas SO. 0:01:04.160 --> 0:01:07.120 John Martin, the deputy director of the center, says, up 0:01:07.160 --> 0:01:10.200 until now it has been working out well. I've never 0:01:10.200 --> 0:01:13.400 seen individuals run so quickly to take a shower so 0:01:13.440 --> 0:01:15.480 that they could get on a bus. They'll be able 0:01:15.520 --> 0:01:18.640 to go to where they wanted to go, Martin says, 0:01:18.680 --> 0:01:21.280 though it appears to have stopped, a bus schedule to 0:01:21.360 --> 0:01:25.200 leave Monday from the center was postponed. Former Soviet president 0:01:25.319 --> 0:01:29.039 Michael Gorbachov has died. Russian news reports say it happened 0:01:29.040 --> 0:01:32.880 at the Central Clinical Hospital where he was undergoing unspecified 0:01:32.880 --> 0:01:36.959 treatments after a long illness. Michael Gorbachev was ninety one. 0:01:37.440 --> 0:01:40.840 Texas is announcing the first confirmed fatality a monkey pox 0:01:40.880 --> 0:01:44.120 in the US. Dr Jennifer mcquisten says the patient in 0:01:44.200 --> 0:01:48.120 Texas who tested positive for monkey pox had other underlying 0:01:48.160 --> 0:01:50.920 health conditions. It's important to focus that we have mitigation 0:01:51.000 --> 0:01:54.880 letters in place to prevent monkey pots. Get vaccinated, if 0:01:54.880 --> 0:01:57.360 you're sick, go to a doctor, get tested, and if 0:01:57.360 --> 0:01:59.960 you have severe illness, there are treatments that are available. 0:02:00.360 --> 0:02:03.880 Dr mcquisten says only a handful of monkeypox fatalities have 0:02:03.920 --> 0:02:07.880 been reported globally. President Biden announced this Safer America program. 0:02:08.000 --> 0:02:11.560 He proclaimed in Wilkesburry, Pennsylvania, the nation had to fund 0:02:11.560 --> 0:02:15.240 the police, then criticize GOP members of Congress for not 0:02:15.280 --> 0:02:21.480 supporting his plan. Guess what, every single Republican member of Congress, 0:02:22.040 --> 0:02:26.440 every single one in this state, every single one, voted 0:02:26.520 --> 0:02:29.520 against the support for law enforcement and talked about how 0:02:29.600 --> 0:02:33.880 much they love it. They voted against the funding. President 0:02:33.960 --> 0:02:36.359 Biden Global names twenty four hours a day on air 0:02:36.440 --> 0:02:39.480 end on Bloomberg Quittake, powered by more than seven hundred 0:02:39.520 --> 0:02:42.360 journalists analysts more than a d twenty countries. Michael Barn 0:02:42.400 --> 0:02:49.560 this is Bloomberg, Nathan. Thanks Michael. Almost five town on 0:02:49.600 --> 0:02:51.760 Wall Street. Time for the Bloomberg Sports Update. Good morning, 0:02:51.840 --> 0:02:54.400 John Stanshower, The morning, Nathans. We get ready to flip 0:02:54.440 --> 0:02:56.959 the calendar to step Tenbury. Eighty fans would like to 0:02:56.960 --> 0:02:59.480 see their teams play well as they get ready for October. 0:02:59.600 --> 0:03:01.840 Per half a figure story will be a daily washs 0:03:01.919 --> 0:03:04.760 to see how many home runs their star player ends 0:03:04.840 --> 0:03:07.840 up with. He came up in Anaheim fourth inning, two 0:03:07.840 --> 0:03:12.919 men one to kit will to right. Aaron Judge has 0:03:13.040 --> 0:03:18.520 done it again. Number fifty one for judge. He's ten 0:03:18.680 --> 0:03:21.120 l a from Watch Your Marris. It's a three run 0:03:21.240 --> 0:03:24.320 shot and the inches to go pen it up. It's 0:03:24.400 --> 0:03:27.160 sevens of tunes of the f a n earlier Yankee 0:03:27.160 --> 0:03:30.640 home runs. The Anthony Rizzo is thirty, Andrew Bennettendy in 0:03:30.720 --> 0:03:32.600 the first and Yanks end of the three games slide. 0:03:32.600 --> 0:03:35.600 They've beat the angel seven four with six Yankee relievers 0:03:35.960 --> 0:03:38.680 combining to pitch the last seven, and the Mets schedule 0:03:38.720 --> 0:03:40.560 is gonna get a lot easier. There's nothing easy about 0:03:40.560 --> 0:03:43.200 playing the Dodgers, who won four three in city field. 0:03:43.200 --> 0:03:45.920 They've won twenty six of their last thirty two games. 0:03:45.960 --> 0:03:49.080 The Dodgers are fifty two games over five hundred's the 0:03:49.120 --> 0:03:51.760 only marte Mark Kanna Homer to the loss for the Mets. 0:03:51.800 --> 0:03:54.320 Two days after he went thirty for thirty eight. The 0:03:54.360 --> 0:03:57.640 Giants cut third string quarterback Davis Webb, electing to go 0:03:57.680 --> 0:04:00.440 with only two qbs. The Jets kept white out Denzel 0:04:00.520 --> 0:04:02.680 Mims on the roster. He had recently asked for a 0:04:02.760 --> 0:04:05.320 trade for Rafael at Ole's first US Open match. The 0:04:05.320 --> 0:04:08.000 two has the nineteen you want to improve the sixteen 0:04:08.000 --> 0:04:10.520 and old lifetime. In the opening round, forty two year 0:04:10.520 --> 0:04:13.760 old Venus Williams lost. Unlike Serena, Venus has not say 0:04:13.760 --> 0:04:16.120 anything about retirement. Although she hardly plays these days. Her 0:04:16.160 --> 0:04:20.480 ranking is over fifteen hundred. Serena is retiring, so tonight 0:04:20.880 --> 0:04:23.279 could be her swan songs. She takes on the second 0:04:23.320 --> 0:04:26.480 seed and neck count Delight, huge pro Serena crowd will 0:04:26.520 --> 0:04:29.440 be on hand. John Stashower, Bloomberg Sport cantin. You had 0:04:29.520 --> 0:04:33.400 to say the least thank you, John. Futures fluctuating this morning, 0:04:33.520 --> 0:04:36.440 SMP futures right now down three points down, futures down 0:04:36.520 --> 0:04:41.440 forty six. Nastack futures are up nineteen. You're listening to 0:04:41.480 --> 0:04:49.400 Bloomberg Daybreak Flimberg eleven three oh weather turning nice for 0:04:49.440 --> 0:04:51.960 the rest of this week's sunny, less humid mid eighties today, 0:04:52.080 --> 0:04:56.120 low eighties tomorrow, sunshine Friday, high near eighty degrees. Right 0:04:56.160 --> 0:05:05.360 now seventy two in Central Park, Live from the Bloomberg 0:05:05.360 --> 0:05:09.400 Interactive Burgers Studios. This is Bloomberg Daybreak for Wednesday, August one, 0:05:10.560 --> 0:05:13.440 coming up this hour. Stocks entered the day trading at 0:05:13.480 --> 0:05:16.479 a one month low. More FEDE officials hammer home the 0:05:16.520 --> 0:05:20.560 message of bringing down inflation. Goldman and Morgan Stanley eas 0:05:20.640 --> 0:05:23.640 covid roles so workers can return to the office, and 0:05:23.680 --> 0:05:26.720 new developments involving the search of Donald Trump's Florida home. 0:05:27.160 --> 0:05:30.599 Former Soviet leader Michael Gorberge office died, plus the ground 0:05:30.680 --> 0:05:33.479 moved in New Jersey. I'm Michael Barr Moore on the 0:05:33.480 --> 0:05:37.520 Earthquake Ahead. I'm John Stanton, Sports another errand Judge all Ron. 0:05:37.600 --> 0:05:40.760 The Yankees won the Mets loss Arena. Williams plays tonight 0:05:40.800 --> 0:05:46.560 at the US Open. That's all trading ahead on Bloomberg 0:05:46.640 --> 0:05:51.719 Daybreak on Bloomberg eleven Free on New York, Bloomberg one, Washington, 0:05:51.839 --> 0:05:55.960 d C, Bloomberg one oh six one Boston, Bloomberg nine sixties, 0:05:55.960 --> 0:05:59.800 San Francisco, Syrius x M one nineteen and around the 0:05:59.800 --> 0:06:02.600 world world on Bloomberg Radio dot Com and via the 0:06:02.640 --> 0:06:09.480 Bloomberg Business App. Good morning, I'm Nathan Hagar and I'm 0:06:09.560 --> 0:06:12.839 Karen Moscow and US Dock Index futures are little change 0:06:12.880 --> 0:06:14.600 this morning. We are coming up to five o one 0:06:14.640 --> 0:06:16.520 on Wall Street, and we check the markets every fifteen 0:06:16.560 --> 0:06:18.960 minutes throughout the trading day on Bloomberg. S and P 0:06:19.200 --> 0:06:22.640 futures and Dow futures are little change. Nowaday futures are higher, 0:06:22.960 --> 0:06:26.359 up twenty three and the tenure treasury down eight thirty seconds. 0:06:26.360 --> 0:06:29.160 The three point one three percent yield on the two 0:06:29.240 --> 0:06:32.200 year three point four eight percent. Nathan Karen stocks begin 0:06:32.279 --> 0:06:34.560 this session trading at a one month low as FED 0:06:34.680 --> 0:06:38.880 fears continue to persist in markets. Three regional FED presidents 0:06:38.920 --> 0:06:42.640 yesterday reiterated Chair J. Powell's intention to bring down inflation. 0:06:42.880 --> 0:06:45.480 Amanda Gotti, as chief investment officer at P and C 0:06:45.640 --> 0:06:49.200 Asset Management Group, I actually think that we're going to 0:06:49.320 --> 0:06:54.840 start to see more confirmation and evidence of inflation rolling over. 0:06:54.920 --> 0:06:57.000 And while the Fed, you know, only has a few 0:06:57.080 --> 0:06:59.479 data points to go on here so far, I think 0:06:59.520 --> 0:07:03.560 the market has already adjusted on equity side in terms 0:07:03.560 --> 0:07:06.720 of evaluations, but also on the bond market side in 0:07:06.839 --> 0:07:10.320 terms of you know, futures, probability of rate hikes, and 0:07:10.400 --> 0:07:13.160 where interest rates have moved. To P N C Asset 0:07:13.200 --> 0:07:16.600 Management Samanda Gotti says she's not making any meaningful changes 0:07:16.680 --> 0:07:20.560 right now to her portfolio. Richmond Fed President Thomas Barkin 0:07:20.760 --> 0:07:23.200 is one of the central bank officials beating the drum 0:07:23.240 --> 0:07:26.360 to stop inflation. Nathany val the FED would not flinch 0:07:26.400 --> 0:07:29.000 in its efforts to cool prices, but cautioned it might 0:07:29.040 --> 0:07:32.560 not be a smooth process. We're committed to getting inflation 0:07:32.600 --> 0:07:34.840 under control, and there's a path to get there. A 0:07:34.960 --> 0:07:39.440 recession is obviously a risk in the process. Um, I'll 0:07:39.440 --> 0:07:42.480 just say for context, nobody ever canceled the business cycle. 0:07:43.040 --> 0:07:46.120 So when you say there's a risk of recession, it 0:07:46.120 --> 0:07:50.120 doesn't have to be like a two recession. Richmond Fed 0:07:50.160 --> 0:07:53.360 President Thomas Barkin made the comments in West Virginia yesterday. 0:07:53.520 --> 0:07:56.080 Well Wall Street's worried that the Fed's aggressive battle against 0:07:56.080 --> 0:07:59.240 inflation will lead to higher unemployment and recession. Karen in 0:07:59.240 --> 0:08:01.840 this morning, we get the first read on August jobs 0:08:02.040 --> 0:08:04.680 with the new revamped a DP report. Let's get a 0:08:04.680 --> 0:08:08.400 preview from Bloomberg's Michael McKee. ADP returns from its months 0:08:08.400 --> 0:08:12.200 long hiatus with updated methodology and a range of wage data, 0:08:12.560 --> 0:08:15.160 and avow it's not supposed to be a forecast of 0:08:15.200 --> 0:08:18.840 the government's monthly payroll report. The revamped report, developed with 0:08:18.880 --> 0:08:21.960 the Stanford Digital Economy Lab, will feature the monthly change 0:08:21.960 --> 0:08:25.200 in private employment, as well as weekly payrolls data for 0:08:25.240 --> 0:08:29.960 the preceding month, median annual growth by industry, company size, region, 0:08:30.040 --> 0:08:33.199 gender and age will also now be available. While there 0:08:33.280 --> 0:08:36.600 is a median projection for this month's report, given the changes, 0:08:36.840 --> 0:08:40.560 several Wall Street economists haven't submitted estimates for this month. 0:08:41.040 --> 0:08:44.240 Michael McKey, Bloomberg Daybreak, Ry, Mike, thank You, and Europe. 0:08:44.240 --> 0:08:47.080 Prices in British shops rose this month at the highest 0:08:47.160 --> 0:08:49.400 rate since at least two thousand five. According to the 0:08:49.400 --> 0:08:53.080 British Retail Consortium, Shop price inflation increased a five point 0:08:53.080 --> 0:08:55.680 one percent in August. The price of food rose even 0:08:55.720 --> 0:08:59.280 more nine point three. In Asia, Kare and China's factory 0:08:59.280 --> 0:09:01.960 activity can acted in August for a second straight month. 0:09:01.960 --> 0:09:05.400 Bloomberg Daybreak Asia anchor Brian Curtis has more from Hong Kong. 0:09:05.480 --> 0:09:07.880 The official p m I rose to forty nine point 0:09:07.960 --> 0:09:11.480 four from forty nine in July. The economy has been 0:09:11.559 --> 0:09:14.440 hit by power outages, the crisis in the property market, 0:09:14.600 --> 0:09:18.240 and multiple COVID outbreaks. The reading was slightly higher than 0:09:18.280 --> 0:09:21.360 the estimate of forty nine point two, but still in 0:09:21.440 --> 0:09:25.520 contraction mode. Meantime, the non manufacturing gauge fell to fifty 0:09:25.520 --> 0:09:28.800 two point six from fifty three point eight. The main 0:09:28.840 --> 0:09:33.040 takeaway this economy is still losing speed in Hong Kong. 0:09:33.040 --> 0:09:35.719 Brian Curtis, Bloomberg day Break, Right, Brian, thank you back 0:09:35.720 --> 0:09:38.640 here at home. New allegations of obstruction of justice may 0:09:38.679 --> 0:09:41.200 be added to former President Trump's legal woes. We get 0:09:41.240 --> 0:09:45.160 details from Bloomberg's Amy Morris in our newsroom in Washington. 0:09:45.480 --> 0:09:48.760 The Justice Department has responded to former President Trump's request 0:09:48.800 --> 0:09:51.480 for a special master review of documents he kept at 0:09:51.520 --> 0:09:55.000 his home in Florida. Investigators suggest Trump may have tried 0:09:55.080 --> 0:09:57.960 to obstruct the investigation. The d o J says the 0:09:58.000 --> 0:10:00.720 records that were held in a storage roop marl Lago 0:10:00.960 --> 0:10:04.080 appear to have been moved before the FBI search in June. 0:10:04.360 --> 0:10:07.240 As far as appointing a third party to review those documents, 0:10:07.320 --> 0:10:10.200 the government said that was not only unnecessary, it would 0:10:10.200 --> 0:10:13.719 only serve to delay the ongoing investigation. The judge has 0:10:13.720 --> 0:10:16.200 directed Trump to respond to the d o J filing 0:10:16.240 --> 0:10:19.520 by tonight in Washington. I'm any more as Bloomberg Daybreak, 0:10:19.640 --> 0:10:21.920 thanks Samy on Wall Street. Two of the most prominent 0:10:21.960 --> 0:10:24.720 investment banks are removing some of the final hurdles to 0:10:24.760 --> 0:10:27.400 a full return to the office following the pandemic. More 0:10:27.400 --> 0:10:31.079 from Bloomberg stud Prisner Goldman, Saxon, Morgan Stanley will ease 0:10:31.160 --> 0:10:34.000 some of their remaining COVID nineteen protocols after the Labor 0:10:34.080 --> 0:10:37.840 Day weekend. Goldman will allow employees outside New York to 0:10:37.960 --> 0:10:41.840 enter offices regardless of vaccination status, with no mandate to 0:10:41.880 --> 0:10:46.080 participate in regular testing or to wear face coverings. Last week, 0:10:46.200 --> 0:10:49.560 Morgan Stanley told it's New York staff as of September five, 0:10:49.880 --> 0:10:53.560 it's ending test and control measures. Anyone who test positive 0:10:53.720 --> 0:10:56.360 should still isolate for at least five days, then wear 0:10:56.400 --> 0:10:58.719 a mask for five more. In New York. I'm Doug 0:10:58.760 --> 0:11:01.360 Prisoner Bloomberg Daybreak. All right, Doug, thank you. Let's take 0:11:01.400 --> 0:11:03.880 a look at some stocks moving in early trading. Shares 0:11:03.920 --> 0:11:06.800 of Chewy or down almost eleven percent. The online pet 0:11:06.840 --> 0:11:09.319 supply retailer is kind of its revenue outlook and says 0:11:09.400 --> 0:11:12.800 customer growth is slowed and Bloomberg's sternly pillet is more. 0:11:13.440 --> 0:11:16.400 In a letter to shareholders, Chewy said sales in the 0:11:16.440 --> 0:11:19.400 current fiscal year will total no more than ten billion 0:11:19.440 --> 0:11:23.439 dollars as customers pulled back on discretionary goods such as 0:11:23.520 --> 0:11:27.120 toys and treats. That is down from a previous forecast. 0:11:27.160 --> 0:11:30.520 Of as much as ten point four billion dollars. Chewy 0:11:30.679 --> 0:11:33.520 is contending with a broad based fall and demand for 0:11:33.840 --> 0:11:37.960 discretionary items as American consumers shifts spending to food and 0:11:38.040 --> 0:11:43.000 other essentials amid soaring inflation in New York. Charlie Pellett 0:11:43.040 --> 0:11:46.320 Bloomberg Daybreak, Charlie Thanks. Shares of hp or Dan nearly 0:11:46.360 --> 0:11:49.640 seven percent. The company reported quarterly sales that missed estimates 0:11:49.640 --> 0:11:52.600 and reduced its annual profit forecast on falling demand for 0:11:52.679 --> 0:11:56.280 personal computers and printers. Shares of Snapper down seven point 0:11:56.280 --> 0:11:59.400 three percent. Virgus reporting this social media company is planning 0:11:59.400 --> 0:12:03.199 to lay off for it's nearly six thousand, five hundred employees. 0:12:03.440 --> 0:12:05.720 The stock is down about eighty percent so far this 0:12:05.800 --> 0:12:07.679 year as the company is faced to slow down in 0:12:07.840 --> 0:12:12.120 advertising spending and just in euro Area, inflations jumped to 0:12:12.200 --> 0:12:14.800 nine point one percent from a year ago, strengthening the 0:12:14.840 --> 0:12:17.400 case for the European Central Bank to consider a jumbo 0:12:17.480 --> 0:12:23.320 interest rate high when it meets next week. Markets, headlines 0:12:23.400 --> 0:12:26.400 and breaking news twenty four hours a day at Bloomberg 0:12:26.440 --> 0:12:29.840 dot Com, The Bloomberg Business Out and at Bloomberg Victaque. 0:12:30.000 --> 0:12:38.959 This is a Bloomberg business clash, but I'm Karen. Moscow 0:12:39.040 --> 0:12:41.960 stocks sent to resume monthly declines on concern that restrictive 0:12:41.960 --> 0:12:45.760 monetary policy to tackle price pressures will harm the global economy. 0:12:45.880 --> 0:12:48.400 US stock index futures they're little changed, around a one 0:12:48.400 --> 0:12:51.120 month low. Check the markets every fifteen minutes throughout the 0:12:51.120 --> 0:12:53.640 trading day on Bloomberg right now, US and P future 0:12:53.640 --> 0:12:56.400 as well. They're down about five points now Down futures 0:12:56.440 --> 0:12:59.120 down to sixty one, and NASTAG futures are up nineteen 0:12:59.559 --> 0:13:02.079 the day. X in Germany is down one percent. The 0:13:02.120 --> 0:13:04.800 ten year treasury down eleven thirty seconds, held three point 0:13:04.800 --> 0:13:07.480 one four percent, yield on the two year three point 0:13:07.480 --> 0:13:10.520 four eight percent. NIMEX screwed oil is down two point 0:13:10.559 --> 0:13:12.880 six percent, down two dollars forty one cents at eighty 0:13:12.920 --> 0:13:15.520 nine dollars twenty three cents of barrel. COMEX school there 0:13:15.559 --> 0:13:17.920 is down eight ten percent or thirteen dollars forty cents 0:13:17.960 --> 0:13:22.520 is seventeen nine ounce. The euro is at three against 0:13:22.520 --> 0:13:24.880 the dollar. British found one point one six three zero 0:13:24.960 --> 0:13:27.920 and again one thirty eight point seven seven, and Bitcoin 0:13:28.040 --> 0:13:30.520 this morning is of one point two percent. It's it's 0:13:30.559 --> 0:13:34.280 twenty thousand two hundred dollars. That's a Bloomberg business flash. 0:13:34.280 --> 0:13:36.560 Now here's Michael Barr with more on what's going on 0:13:36.600 --> 0:13:39.240 around the world. Michael Karen, thank you very much. The 0:13:39.320 --> 0:13:44.119 Justice Department says classified documents were likely concealed and removed 0:13:44.160 --> 0:13:47.840 from former President Donald Trump's Mara Lago estate as part 0:13:47.840 --> 0:13:50.480 of an effort to obstruct the federal investigation into the 0:13:50.520 --> 0:13:54.720 discovery of the government records. Accord filing last Night shows. 0:13:54.760 --> 0:13:58.760 The FBI also seized more than one hundred classified records 0:13:58.800 --> 0:14:02.960 doing it's August eighth search and found classified documents stashed 0:14:02.960 --> 0:14:06.160 in Trump's office. In tennis, Serena Williams hits the court 0:14:06.200 --> 0:14:09.600 tonight for her second round in the US Open. And baseball, 0:14:09.640 --> 0:14:12.440 the Yankees beat the Angels seven four, aeron Judge at 0:14:12.480 --> 0:14:15.240 his fifty one homer. The Mets lost with the Dodgers 0:14:15.240 --> 0:14:18.360 for three. The A's beat the Nationals ten six, The 0:14:18.400 --> 0:14:22.600 Red Sox, Orioles and Giants lost. Global News twenty four 0:14:22.640 --> 0:14:25.840 hours a day on air and on Bloomberg Quicktake, powered 0:14:25.840 --> 0:14:28.640 by more than seven hundred journalist and analyst more than 0:14:28.680 --> 0:14:33.800 a hundred twenty countries. Michael bar this is Bloomberg. Nathan Okay, Michael. Thanks, 0:14:33.800 --> 0:14:37.280 It's nine on Wall Street Live from the Bloomberg Interactive 0:14:37.280 --> 0:14:40.720 Broker Studios. This is Bloomberg Daybreak and were pleased to 0:14:40.720 --> 0:14:44.360 be joined now by Brian Levitt, global market strategists at 0:14:44.360 --> 0:14:47.440 investcal Brian, good morning. Unless we have some kind of 0:14:47.600 --> 0:14:51.360 giant rally later on today, looks like stocks are gonna 0:14:51.440 --> 0:14:53.920 end the month of August in the red. So what's 0:14:53.960 --> 0:14:57.080 your view as we head into September. Well, it's the 0:14:57.160 --> 0:15:02.160 challenging environment. Um. The economy me has slowed pretty considerably, 0:15:02.560 --> 0:15:05.600 and get inflationary pressures still remain elevating. So the Federal 0:15:05.680 --> 0:15:09.920 Reserve is tightening into a slow down, which is not 0:15:10.160 --> 0:15:13.560 an ideal environment for risk taking. So we had a 0:15:13.680 --> 0:15:18.800 nice uh rally UM in July into the beginning of August, 0:15:18.920 --> 0:15:22.640 but the markets are recognizing that tighter policy is still 0:15:22.680 --> 0:15:25.520 ahead of us, and we still don't have certainty on 0:15:25.560 --> 0:15:27.720 where the terminal rate is going to be for the Fed, 0:15:27.760 --> 0:15:30.560 and so that creates volatility and some pressure on markets. 0:15:31.280 --> 0:15:32.920 How much tighter do you think the Fed is going 0:15:32.960 --> 0:15:37.200 to be at its next meeting. I suspect they're going 0:15:37.280 --> 0:15:40.160 to do fifty basis points. I mean it looks as 0:15:40.200 --> 0:15:45.040 if inflationary pressures have peaked. Um, goods inflation is going 0:15:45.080 --> 0:15:48.520 to start to moderate. So I think the Federal Reserve 0:15:48.560 --> 0:15:52.200 has already front loaded a lot of tightening. Um. I 0:15:52.320 --> 0:15:56.400 suspect they're going to not want to go as tight 0:15:56.480 --> 0:15:59.680 as some fear because they still they haven't had the 0:15:59.720 --> 0:16:03.080 time to reflect on what this means for the economy. 0:16:03.200 --> 0:16:07.320 So um. But nonetheless, the key question is where does 0:16:07.320 --> 0:16:09.480 it send. Does it end at three seventy five on 0:16:09.560 --> 0:16:11.840 the Fed funds rate in the market's already priced this in, 0:16:12.560 --> 0:16:15.200 or does it have to go or does tightening have 0:16:15.320 --> 0:16:18.640 to go further. Good news is inflationary pressures are moderating. 0:16:19.200 --> 0:16:21.040 Challenge is still a little bit too or not a 0:16:21.080 --> 0:16:24.040 little bit too elevated for the Fed's comfort. I guess 0:16:24.240 --> 0:16:26.240 a lot of the market is still wondering how much 0:16:26.280 --> 0:16:28.440 of a challenge the Fed still has when it comes 0:16:28.520 --> 0:16:31.720 to getting some slack back in the labor market. Given 0:16:31.760 --> 0:16:35.880 the latest Jolts jobs openings data we got yesterday, what 0:16:36.000 --> 0:16:39.320 about that? Does that raise the possibility that we could 0:16:39.360 --> 0:16:43.040 see a more aggressive move than you're calling for here? Yeah, 0:16:43.120 --> 0:16:45.760 it does raise the possibility. I mean, that's the challenge 0:16:45.760 --> 0:16:50.240 I mean again, good inflation has peaked, UM, but still 0:16:51.080 --> 0:16:53.680 the challenges in the job market and still challenges for 0:16:53.720 --> 0:16:56.120 wages going up, and we still have the challenges of rent. 0:16:56.200 --> 0:16:58.040 So it's not as if inflation is going to come 0:16:58.080 --> 0:17:01.520 back down to two three per sent quickly. It's gonna 0:17:01.560 --> 0:17:03.360 be a challenge. It's going to take a while to 0:17:03.560 --> 0:17:06.439 get there. UM. So again that's what the market is 0:17:06.480 --> 0:17:10.399 trying to price in. Um. There is the potential that 0:17:10.440 --> 0:17:12.800 the Fed has to tighten even further, and you're seeing 0:17:12.800 --> 0:17:14.280 it in the two year. I mean, the two year 0:17:14.320 --> 0:17:17.720 has reached the fifteen year high, or at least reached 0:17:17.720 --> 0:17:21.200 the fifteen year high this week. UM. You know. Ultimately, 0:17:21.200 --> 0:17:23.680 I think what investors should focus on though, is well, 0:17:24.000 --> 0:17:27.240 there's near term caution ahead of us, or what we 0:17:27.280 --> 0:17:30.840 should be viewing it with near term caution. Ultimately, when 0:17:30.920 --> 0:17:35.400 inflation peaks a year or two three years later, markets 0:17:35.400 --> 0:17:37.520 tend to do very well. UM. So I would use 0:17:38.560 --> 0:17:44.440 as an example where inflation did peak UM still had 0:17:44.480 --> 0:17:48.680 to say drive the economy into our accession by eighty one, UM, 0:17:48.680 --> 0:17:50.600 but it had set the stage for the markets to 0:17:50.640 --> 0:17:54.240 perform a quite well over the subsequent year, two years, 0:17:54.280 --> 0:17:58.520 three years. So for investors, um, you know, intermediate term 0:17:58.560 --> 0:18:01.320 optimism is more and did but we're in a challenging 0:18:01.400 --> 0:18:04.200 environment in the near term. How long do you think 0:18:04.359 --> 0:18:07.240 the FED is going to keep rates higher for longer? 0:18:07.359 --> 0:18:10.680 Of course, we heard from Chairman Powell last week that 0:18:11.400 --> 0:18:14.680 the rates could stay elevated for some time. What does 0:18:14.720 --> 0:18:18.880 sometime mean to you, Well, the market is already starting 0:18:18.920 --> 0:18:23.960 to has already started pricing in rate cuts by by 0:18:24.520 --> 0:18:27.960 h early to middle of three. So it obviously depends 0:18:28.040 --> 0:18:33.200 on how the economy handles UH tighter policy at this juncture. 0:18:33.280 --> 0:18:36.520 So um, you know, I think it's they're they're potentially 0:18:36.640 --> 0:18:40.320 overstating how long rates are going to remain elevat. I mean, 0:18:40.400 --> 0:18:44.560 I think the FIT is working hard to prevent financial 0:18:44.560 --> 0:18:46.920 conditions from easing too much, which of course they did 0:18:47.040 --> 0:18:50.000 in July, and they're trying to keep long term inflation 0:18:50.119 --> 0:18:53.760 expectations low. The good news is long term inflation expectations 0:18:53.800 --> 0:18:56.880 are low, but not only long term inflation expectations. Inflation 0:18:56.920 --> 0:18:59.480 expectations in the bond market one year, three or five 0:18:59.560 --> 0:19:04.040 year k here have come down substantially. So I don't 0:19:04.119 --> 0:19:09.040 believe that the SAID is going to um keep rates 0:19:09.160 --> 0:19:12.280 as elevated for as long as as as some may 0:19:12.400 --> 0:19:16.560 fear this week. UM, I think ultimately this is an 0:19:16.560 --> 0:19:20.880 economy that's going to slow down considerably. Inflationary pressures are 0:19:20.920 --> 0:19:24.000 going to moderate, and you may see a said that 0:19:24.040 --> 0:19:28.959 has to start using policy as we moved through. All right, Brian, 0:19:28.960 --> 0:19:31.399 thanks for this as always great having you on with us. 0:19:31.480 --> 0:19:34.760 That was Brian Levitt joining us this morning. He's global 0:19:34.800 --> 0:19:39.200 market strategist at Invescow Karen Nathan. It is fifty four 0:19:39.200 --> 0:19:42.000 on Wall Street time for our Bloomberg Law Report. He 0:19:42.040 --> 0:19:44.640 had sketted illegal stories we are watching this morning from 0:19:44.640 --> 0:19:50.120 Bloomberg's Do You Have Bellinger? The Food and Drug Administration 0:19:50.160 --> 0:19:54.040 opened an extensive review of opioid regulations, and the agency 0:19:54.119 --> 0:19:57.720 is launching a framework aimed at preventing overdose related deaths. 0:19:58.000 --> 0:20:02.199 Amazon dot Com and World Dress Entertainment filed lawsuits against 0:20:02.200 --> 0:20:05.640 the much counterfeiters said to be selling replicas of w 0:20:05.920 --> 0:20:09.200 W E title belts through Amazon. A wage and our 0:20:09.280 --> 0:20:12.120 suit filed in federal court in New York claims UPS 0:20:12.160 --> 0:20:16.679 Foods misclassified delivery workers as exempt from minimum wage and 0:20:16.760 --> 0:20:21.640 overtime requirements. Bloomberg Law Everything you need, all on one 0:20:21.760 --> 0:20:26.600 legal research platform, including Guidance Analysis and Bloomberg Market Intelligence. 0:20:26.760 --> 0:20:32.240 Find out more at Bloomberg Law dot com. All right, Jeff, thanks, Now, 0:20:32.320 --> 0:20:35.919 another legal story we're watching this morning. Maderna sued Fiser 0:20:35.960 --> 0:20:38.560 and by On Tech, claiming the technology in their COVID 0:20:38.640 --> 0:20:41.920 nineteen shot infringes on its patents, a move that sets 0:20:41.960 --> 0:20:45.080 the stage for a massive legal clash between the vaccine titans. 0:20:45.320 --> 0:20:48.280 From more Bloomberg's Right Store. Based on the Bloomberg Healthcare 0:20:48.320 --> 0:20:52.119 reporter Angelica Peebles, then the Journey is not seeking to 0:20:52.240 --> 0:20:55.679 stop the sale of Fiser and Bion types vaccine, but 0:20:55.760 --> 0:20:58.920 they are seeking what would be essentially a loyalty, so 0:20:59.200 --> 0:21:02.480 you know, of the money that they make on the 0:21:02.520 --> 0:21:05.879 sales of their vaccine, and they're saying that they only 0:21:05.960 --> 0:21:09.720 want some money um starting from earlier this spring and 0:21:09.800 --> 0:21:13.320 going forward and only in high income countries. And it's 0:21:13.320 --> 0:21:15.919 a little complicated, but it has to do with the 0:21:15.960 --> 0:21:19.359 facts that Madernam made this pledge um two years ago 0:21:19.480 --> 0:21:23.320 saying that it would not enforce its patents during the pandemic, 0:21:23.480 --> 0:21:27.880 and then this spring they said never mind. Actually we 0:21:27.960 --> 0:21:31.920 are only going to in for to not enforce our patents. 0:21:32.040 --> 0:21:36.320 In low income countries. So it's the way that all 0:21:36.359 --> 0:21:38.680 of those steps have played out. It seems like they're 0:21:38.720 --> 0:21:42.280 trying to match up by saying, you know, now we 0:21:42.359 --> 0:21:45.280 are only seeking money from this period of time. But 0:21:45.680 --> 0:21:48.480 the real question is whether they can go back on 0:21:48.560 --> 0:21:51.480 that pledge that they made two years ago. UM. One 0:21:51.560 --> 0:21:54.600 legal expert we spoke to said that they can't. UM. 0:21:54.720 --> 0:21:56.960 So that's something that will be really interesting to watch. 0:21:57.400 --> 0:22:00.760 So is that pledge something that five or and Biotech 0:22:00.880 --> 0:22:05.080 can use in their defense against this lawsuit? Yeah, so UM. 0:22:05.200 --> 0:22:08.160 Jorge can Forrest, the professor from the University of Utah 0:22:08.240 --> 0:22:11.320 who we spoke to. He says that under the law, 0:22:11.480 --> 0:22:16.840 these patent pledges are considered contracts, so the companies they 0:22:16.840 --> 0:22:19.040 it's a public company, they made a public statement, and 0:22:19.119 --> 0:22:23.320 other companies UM can use that information to make decisions 0:22:23.320 --> 0:22:27.880 about their own strategies, which obviously Fiser and BioNTech went 0:22:27.920 --> 0:22:31.600 out and introduced their own COVID vaccine, so they could 0:22:31.680 --> 0:22:35.520 argue that they were just operating under you know, under 0:22:36.119 --> 0:22:40.080 UM the assumption that Madernald was not going to enforce 0:22:40.160 --> 0:22:43.080 his patents. So at the least the way he UM 0:22:43.119 --> 0:22:46.160 he sees it, Eiser and BioNTech have a pretty good 0:22:46.160 --> 0:22:49.159 defense here. It might not even get into all of 0:22:49.200 --> 0:22:51.880 the details of the patents and you know who used 0:22:51.880 --> 0:22:55.199 what and what was patented and what wasn't. But that 0:22:55.240 --> 0:22:58.080