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Speaker 1: Good morning.

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Speaker 2: I'm Nathan Hager and I'm Karen Moscow. Here are the

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Speaker 2: stories we're following today.

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Speaker 3: We begin in Asia, where stocks surged overnight. China's CSI

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Speaker 3: three hundred rows nearly three percent. The Hangsing and Hong

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Speaker 3: Kong climbed four percent. The catalyst China's Politbureau signaling more

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Speaker 3: support for the economy. Bloomberg Daybreak Asia anchor Brian Curtis

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Speaker 3: as more from Hong Kong.

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Speaker 4: Policymakers are admitting that the recovery has sputtered because of

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Speaker 4: weak confidence. Confidence was mentioned multiple times. The Politburo statement

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Speaker 4: focuses on boosting consumption, helping private business, and carving out

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Speaker 4: a more supportive stance on the property sector. The cumulative

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Speaker 4: weight of so many policies is not lost on investors,

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Speaker 4: from rate cuts to triple our cuts, action to boost

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Speaker 4: household spending, construction, cars, tech, and more. But the key

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Speaker 4: now will be the actual measures to implement the broader

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Speaker 4: policy that's still to come. In Hong Kong and Curtis

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Speaker 4: Bloomberg day.

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Speaker 2: Break, Hi, Brian, thanks well. Markets are applauding the stimulus

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Speaker 2: from China. Now, the question is when we'll see these

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Speaker 2: measures take effect. From that, we turn to Bloombergy China

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Speaker 2: Economy editor Jill Deesis.

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Speaker 5: I would expect that you're going to start seeing this

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Speaker 5: over the course of the next few weeks and months.

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Speaker 5: Remember this is a mid year review meeting. This is

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Speaker 5: the paullup Bura meeting every year where they traditionally set

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Speaker 5: the course for economic agenda not just for the next month,

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Speaker 5: but for the next six months. So I think that

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Speaker 5: you know what that means from what we've been hearing

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Speaker 5: from economists is maybe you see some cuts in policy

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Speaker 5: interest rates toward the end of the year.

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Speaker 2: In Bloombery, Stale desis as the offshore you want is

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Speaker 2: stronger following the news, is currently trading at around seven

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Speaker 2: point one four per dollar.

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Speaker 3: Well back here in the US, Karen, we are laser

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Speaker 3: focused on earnings today. Nearly three dozen companies in the

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Speaker 3: S and P five hundred it'll be reporting, including Microsoft

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Speaker 3: and Google. We get more on the outlook for Microsoft

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Speaker 3: from Bloomberg's Tom Busby.

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Speaker 6: Despite its thirty billion dollar investment in artificial intelligence pioneer

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Speaker 6: Open AI, sales growth at Microsoft is expected to remain

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Speaker 6: below ten percent for last quarter. A midwekening demand for

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Speaker 6: its cloud computing services after years of runaway growth. Still,

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Speaker 6: analysts expect to see adjusted earnings of two dollars fifty

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Speaker 6: five cents a share, that would be a fourteen percent

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Speaker 6: jump over the same period a year ago, and revenues

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Speaker 6: of fifty five and a half billion dollars. Tom Busby

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Speaker 6: Bloomberg Day Break, All right.

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Speaker 2: Tom, thanks, well, whon't we wait for Microsoft's earnings. The

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Speaker 2: corporate world remains a buzz over elon Mus's decision to

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Speaker 2: say bye Bye Birdie. As Bloomberg John Tucker reports, the

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Speaker 2: new rebranding of Twitter could cost the company billions.

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Speaker 7: Analysts and brand agencies tell Bloomberg elon mus move to

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Speaker 7: turn Twitter into Acts wiped out anywhere between four billion

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Speaker 7: and twenty billion dollars in brand value. The call it

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Speaker 7: a mistake, they say, is an understatement. Alan Adamson, the

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Speaker 7: co founder of the marketing at brand consulting group Metaphors,

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Speaker 7: calls the move completely irrational from a business and brand

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Speaker 7: point of view. In the way of an explanation, must

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Speaker 7: tweeted or axed yesterday that the move is not simply

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Speaker 7: a company renaming itself. It's remaking the business into a

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Speaker 7: broad platform for communications and financial transactions in New York Ime.

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Speaker 7: John Tucker, Bloomberg Daybreak.

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Speaker 3: Thanks John. Outside of earnings, it's all about the Fed

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Speaker 3: this week. We are one day away from the Central

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Speaker 3: Bank's next policy decision, when it is expected to hike

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Speaker 3: rates by another quarter percent. Higher rates mean bigger earnings

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Speaker 3: for banks like City Group. We spoke with Citigroup Institutional

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Speaker 3: Clients Group CEO Paco Ebarra.

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Speaker 8: Rates is a positive part of the story because we

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Speaker 8: have to remember that we've had many years with zero rates,

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Speaker 8: with rates almost debt. You know, very little uncertainty about

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Speaker 8: the race we're going to do, and we have now

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Speaker 8: a comeback of the race business.

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Speaker 3: That's the good news for big banks. On the flip side,

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Speaker 3: City Group's poco Ebara says new capital requirements that regulators

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Speaker 3: will propose this week could hinder the bank's ability to

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Speaker 3: trade certain products.

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Speaker 2: Well, Nathan, we're getting more detail else about JP Morgan

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Speaker 2: Chase and its alleged ties to disgrace financier Jeffrey Epstein.

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Speaker 2: The US Virgin Islands has filed documents in its lawsuit

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Speaker 2: against the bank. They show then CEO Sandy Warner told

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Speaker 2: Jess Staley in two thousand he should meet with Epstein,

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Speaker 2: calling him quote one of the most connected people I know.

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Speaker 2: The Virgin Islands is seeking at least one hundred and

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Speaker 2: ninety million dollars from JP Morgan in its lawsuit accusing

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Speaker 2: the bank of enabling Epstein's sex trafficking. The bank argues

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Speaker 2: the Virgin Islands turned a blind eye on his crimes

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Speaker 2: and organized visas for his victims.

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Speaker 3: Well Karen, another top name in finance's facing pressure from

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Speaker 3: Capitol Hill over his ties to Epstein. Leon Black of

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Speaker 3: Apollo Global Management is under investigation at the Senate Finance Committee.

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Speaker 3: It's over one hundred and fifty eight million dollars in

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Speaker 3: payments to Epstein for advice on a state planning taxes

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Speaker 3: and running his family office. Lawmakers want to know whether

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Speaker 3: that money amounts to gifts that Black now owes taxes

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Speaker 3: on and politics.

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Speaker 2: This morning, Nathan, there's word of another shake up in

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Speaker 2: the presidential ca campaign of Rohn DeSantis, sources Town Bloomberg,

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Speaker 2: The Florida governor is making a change in leadership after

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Speaker 2: pressure from donors and supporters. DeSantis is elevating digital director

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Speaker 2: Ethan Elion to deputy campaign manager. That's as the presidential

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Speaker 2: hopeful becomes increasingly frustrated by his campaigns spending under current

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Speaker 2: campaign manager Kinera Peck.

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Speaker 1: Where told.

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Speaker 2: Peck's position is being questioned as the campaign enters a

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Speaker 2: critical stretch ahead of the first Republican primary debate next month.

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Speaker 3: Time now to take a look at some of the

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Speaker 3: other stories making news in New York and around the

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Speaker 3: world with Bloomberg's Michael Bark and Bonnie Michael.

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Speaker 9: Good morning, Nathan. We're learning more about the case of

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Speaker 9: suspected Long Island serial killer Rex Huerman. The bodies of victims,

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Speaker 9: all women, were found more than a decade ago on

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Speaker 9: Gilgol Beach. The search has intensified at Huerman's home. Suffolk

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Speaker 9: County Police Commissioner Rodney Harrison clarified what was found inside.

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Speaker 10: There's not a soundproof film. There is a vault where

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Speaker 10: he secured numerous amount of guns. Somehow, I believe that

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Speaker 10: the sound performing the vaults that message got miscushrewed, But

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Speaker 10: there is a vault.

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Speaker 9: An excavator has been digging through Hureerman's backyard. The record

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Speaker 9: smashing heat wave across the US continues today. Phoenix, Arizona

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Speaker 9: is expected to see its twenty sixth consecutive day of

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Speaker 9: one hundred ten degrees or hutter and the pavement itself

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Speaker 9: is causing a spike in contact burns. Doctor Kevin Foster

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Speaker 9: is the director of the Arizona Burn Center at Valley

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Speaker 9: Wise Help.

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Speaker 11: Most people don't realize that the pavement, concrete, cement sidewalks rocks.

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Speaker 11: The temperature of those surfaces can get to be one

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Speaker 11: hundred and seventy to one hundred and eighty degrees, which

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Speaker 11: is just a little bit below the boiling temperature of water,

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Speaker 11: so it only takes a fraction of a second to

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Speaker 11: get a really bad burn.

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Speaker 9: Meanwhile, experts say water temperatures in the nineties off Florida

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Speaker 9: could fuel stronger hurricanes this year. New York City Mayor

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Speaker 9: Eric Adams is cracking down on on sidewalk scaffolding. Some

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Speaker 9: have been ie sores for too long. Adams announced the

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Speaker 9: Get Sheds Down Plan.

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Speaker 12: Whilest ibo sheds were created to protect New Yorkers now

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Speaker 12: have become unsafe constructions and it is, as we stated,

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Speaker 12: a safe haven for criminal behavior.

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Speaker 9: There are about eighty nine hundred active sheds in New

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Speaker 9: York City that have been up, averaging four hundred eighty

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Speaker 9: days and some more than ten years. President Joe Biden

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Speaker 9: is expected to sign a proclamation today that establishes a

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Speaker 9: national monument honoring Emmett Till. He was the black teenager

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Speaker 9: from Chicago whose abduction, torture, and killing in Mississippi in

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Speaker 9: nineteen fifty five helped propel the civil rights movement. The

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Speaker 9: White House proposed a set of rules today to improve

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Speaker 9: insurance coverage for mental health conditions. It's part of a

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Speaker 9: broader plan to fight rising rates of anxiety, depression, and

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Speaker 9: other ailments. Global News twenty four hours a day, powered

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Speaker 9: by more than twenty seven hundred journalists and lists in

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Speaker 9: over one hundred and twenty countries. I'm Michael Barr. This

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Speaker 9: is Bloomberg NAGGA.

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Speaker 7: Thank you, Michael.

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Speaker 3: Time out for the Bloomberg Sports update. Here's John Stashout.

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Speaker 1: Thanks Nathan.

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Speaker 13: Mets and Yankees split a couple of one run games

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Speaker 13: last month at City Field. Now they play a two

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Speaker 13: game Subway series at the stadium with tonight, Justin Verlander

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Speaker 13: facing Domingo Herman. Verlander comes off his best outing against

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Speaker 13: the White Sox. He went eight innings, allowed only one run,

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Speaker 13: three hits. Herman had that perfect game a few weeks ago.

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Speaker 13: Last time out at the Angels, he gave up five runs.

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Speaker 13: The two teams the Yanks are chasing for a wildcard

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Speaker 13: spot both won last night Toronto in eleven innings over

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Speaker 13: the Dodgers. Houston in a wild one over Texas ten

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Speaker 13: to nine. The Yanks trail the Blue Jays by two

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Speaker 13: and a half games and the Astros by three and

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Speaker 13: a half. The Orioles one again, three two at Philadelphia.

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Speaker 13: The Yankees are in Baltimore this weekend. The Orioles have

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Speaker 13: won thirteen of their last sixteen. They lead the Al

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Speaker 13: East by two and a half over Tampa Bay. It

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Speaker 13: has to say the LEAs been a rough summer at Northwestern.

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Speaker 13: Allegations of hazing on the football team bullying on.

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Speaker 9: The baseball team.

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Speaker 13: Both coaches have been fired, and now a former volleyball

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Speaker 13: player has filed a lawsuit charging hazing and racism, and

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Speaker 13: another former football player is suing and Lloyd Yates is

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Speaker 13: the first to go public.

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Speaker 14: We were all victims, no matter what our role was

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Speaker 14: at the time, but the culture was so strong there

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Speaker 14: we felt we had to go with it to survive,

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Speaker 14: to be respected, and to earn the trust within the

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Speaker 14: football program.

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Speaker 13: Yeah was a quarterback from twenty fifteen to seventeen. I

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Speaker 13: blow out of the Buffalo Bills that were counting on

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Speaker 13: Nahim Hines to be a big part of their offense

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Speaker 13: and special teams. He had a game last season where

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Speaker 13: he ran two kickoffs back for touchdown, but heinz Will

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Speaker 13: missed the season do an injury suffered as a jet

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Speaker 13: ski accident. The NFL has to spend another player for gambling,

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Speaker 13: bringing the total number this offseason to ten. John Stashchetwar

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Speaker 13: Bloomberg Sports.

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Speaker 15: From coast to coast, from New York to ten Boston

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Speaker 15: to Washington, DC, nationwide on Syrias Exam, the Bloomberg Business app,

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Speaker 15: and Bloomberg dot Com. This is Bloomberg Daybreak. Good morning,

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Speaker 15: I'm Nathan Hager. What's next for the US property sector?

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Speaker 3: Starwood Capitol Group Chairman Barry Sternlick says, between work from home,

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Speaker 3: low mortgage rates, and other post pandemic phenomena, there is

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Speaker 3: a lot of uncertainty and distress. Sternlock sat down on

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Speaker 3: the latest episode of Bloomberg Wealth with David Rubinstein for

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Speaker 3: an extended conversation on the path ahead for US real

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Speaker 3: estate let's listen to part of that conversation.

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Speaker 16: The work from home phenomenon is a US phenomenon. If

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Speaker 16: you go to England or Germany. I was just we

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Speaker 16: have some investments, oh if shore and I was just

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Speaker 16: looking at rents are up in vacancy rates in the

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Speaker 16: top EU German property markets Berlin, Frankfort, Munich, Homberg or

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Speaker 16: less than five percent. You and I go to the

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Speaker 16: Middle East, they're full. We have offices in Asia, they're full.

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Speaker 16: In the US you have two markets. You have the

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Speaker 16: really nice buildings that are ESG compliant, that are lovely,

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Speaker 16: like the one we're sitting in. This place is buzzing,

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Speaker 16: and they're back because it's a fun place to be.

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Speaker 16: And if you're in a building with lots of cubicles

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Speaker 16: and it's dark and there's no life and love, so

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Speaker 16: nice buildings, even in a city is as currently destitute

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Speaker 16: of San Francisco, from an office market perspective, the best

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Speaker 16: buildings are still leased, and so you're going to see

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Speaker 16: a bifurcation of the market in office The nice buildings

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Speaker 16: will stay rented and my guess is at pretty good

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Speaker 16: rates and the B and C stuff is going to

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Speaker 16: be maybe fields of grain or something'll be very pretty.

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Speaker 16: We have all these little mid block parks in New

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Speaker 16: York City because there won't be anything else to do

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Speaker 16: with those buildings, and nobody will carry them because there's

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Speaker 16: no hope. Some of those cities that have issues on commuting,

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Speaker 16: like New York or La Downtown, La Downtown San Francisco,

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Speaker 16: the c that are difficult to commute to, that's where

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Speaker 16: the pressure is so hard from workers saying I don't

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Speaker 16: want to drive into the city an hour and a

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Speaker 16: half and drive home an hour and a half every day.

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Speaker 16: But I also think a nice little recession will clear

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Speaker 16: this and you'll see people come back to the office

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Speaker 16: and in your town. Take the Amazon HQ two. They're

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Speaker 16: expecting people in those offices four days a week come

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Speaker 16: the fall. So the other thing about office day it

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Speaker 16: is AI. AI is going to hit a couple of

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Speaker 16: these industries that have been big users of office space.

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Speaker 17: You think artificial intelligence is obviously coming, but what industries

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Speaker 17: you think will be most effective.

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Speaker 16: Legal is probably the number one industry that could be

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Speaker 16: disrupted by AI. You can search every precedent in the

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Speaker 16: history of mankind with a machine. You don't need a

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Speaker 16: paralegal to do that anymore, and they'll write the brief

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Speaker 16: for you. So the legal profession is probably target one.

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Speaker 16: Not far behind is advertising, when the machine is going

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Speaker 16: to update advertising and keep bombarding you with more and

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Speaker 16: more ads, with more and more offers until you take one.

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Speaker 16: Humans won't be there. They'll be maybe guiding it, but

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Speaker 16: it'll be it'll change advertising. It's another big user of

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Speaker 16: space finance. You tell me, I mean, there's a buttons

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Speaker 16: now on your computer. They'll be running a lot of

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Speaker 16: the stuff for you. It could fundamentally shake up permanent

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Speaker 16: demand for office now.

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Speaker 17: Sometimes people are saying that the best investment opportunity now

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Speaker 17: is to stress real estate debt. But you think it's

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Speaker 17: too early for that.

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Speaker 16: They're just beginning to you know, we were going to

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Speaker 16: give back an office building and they said, well, not

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Speaker 16: so fast. If you want to, we'll restructure a loan

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Speaker 16: and we'll cut it the loan in half, and you

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Speaker 16: put the money in here, and we'll take this as

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Speaker 16: a junior note. Because the banks don't want the assets back.

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Speaker 17: And why don't they want them back because they think

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Speaker 17: it's going to go down even further.

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Speaker 16: Yeah, because they got to carry them they're not set

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Speaker 16: up to carry these assets right, and they got to

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Speaker 16: go hire someone. They got to go to the leasing themselves.

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Speaker 16: It's not their business. They'd rather have a GP like

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Speaker 16: your old firm Carlisle or Starwood or Blackstone, hold onto

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Speaker 16: the asset and try to work it out.

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Speaker 17: So a lot of fortunes were made in the real

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Speaker 17: estate world, you know seven oh eight when people bought

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Speaker 17: distressed real estate, and all in late eighties two when

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Speaker 17: the RTC was here. So do you see funds being

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Speaker 17: formed to buy these assets, but you think they won't

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Speaker 17: be available for a year or two.

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Speaker 16: Right now, you have an unusual situation in the real

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Speaker 16: estate market. It's because everyone's sort of looking at the

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Speaker 16: yield curve and it says rates will be lower later.

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Speaker 16: Everyone says, you know, survive till twenty five, hold onto

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Speaker 16: your assets. So transaction volumes have plummeted. Unless you have

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Speaker 16: to sell something today. Nobody wants to sell anything today.

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Speaker 16: They think tomorrow will be rosier. For the most part,

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Speaker 16: everybody's pushing any sales back. And I think transaction advising

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Speaker 16: apartments are down sixty percent, industrial down seventy percent. It's

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Speaker 16: a very dry you know, there's no IPOs and there's

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Speaker 16: no sales in housing.

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Speaker 17: Do you see a recession there because prices are going

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Speaker 17: to come down at some point, or you don't see

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Speaker 17: a recession in housing.

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Speaker 16: The housing markets had a very unusual situation where powells.

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Speaker 16: Increase in rates has diminished supply and people. And I'm

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Speaker 16: not sure we've ever had a situation where so many

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Speaker 16: people have locked to have locked in their mortgage costs.

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Speaker 16: So right now people are sticking in their house, which

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Speaker 16: has diminished the supply of homes for sale. I wonder

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Speaker 16: when rates come down, homes will be sold like people

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Speaker 16: will start because the mortgage will no longer be a

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Speaker 16: reason to hold onto the house. And whether that will

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Speaker 16: offset will probably be an increase in supply as the

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Speaker 16: bills resume a more normal cycle. So maybe the housing

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Speaker 16: market just stagnates for a while, but over time it's

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Speaker 16: headed up.

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