WEBVTT - Bloomberg Daybreak: October 14, 2022 - Hour 2 (Radio) 0:00:03.000 --> 0:00:06.240 Live from the Bloomberg Interactive Burgers Studios. This is Bloomberg 0:00:06.320 --> 0:00:09.920 day Break for Friday, October four two. Coming up, the 0:00:09.920 --> 0:00:13.840 Shower Stocks rise. Following the historic rally on Wall Street, 0:00:14.120 --> 0:00:17.480 Banker Niece kick off this morning, Speculation grows the UK 0:00:17.680 --> 0:00:21.160 government will abandon its tax cut plan, and Twitter says 0:00:21.160 --> 0:00:24.919 Elon Musk is being investigated over his attempted acquisition. The 0:00:25.040 --> 0:00:28.880 January six panel has voted to subpoena former President Trump lost. 0:00:28.880 --> 0:00:31.600 The shooting in the Rowley, North Carolina neighborhood has left 0:00:31.680 --> 0:00:35.760 five dead. I'm Michael blomer More, I'm John stashowern Sports, 0:00:35.760 --> 0:00:38.440 the Yankees and Guardians played game to this afternoon. Other 0:00:38.479 --> 0:00:40.920 went for the Astros, the Rangers, one, the Devil's and 0:00:41.000 --> 0:00:46.960 Islanders Long. That's all training head on Bloomberg day Break 0:00:47.320 --> 0:00:51.640 on Bloomberg eleven three on New York, Bloomberg one, Washington, 0:00:51.760 --> 0:00:55.880 d C, Bloomberg one oh six one, Boston, Bloomberg nine sixties, 0:00:55.880 --> 0:00:59.600 San Francisco, Sirius x M one nine Team and around 0:00:59.640 --> 0:01:02.400 the world. Old on Bloomberg Radio dot Com and via 0:01:02.440 --> 0:01:09.520 The Bloomberg Business And Good Morning. I'm Tarin Moscow. I'm 0:01:09.600 --> 0:01:12.240 Nathan Hagar. Bloomberg Day Break brought to you by se I. 0:01:12.240 --> 0:01:16.640 Imagine your asset management firms operational infrastructure as a competitive advantage. 0:01:16.720 --> 0:01:19.000 Let se I show you how at se I C 0:01:19.280 --> 0:01:22.280 dot Com, slash I m S and US Stock Index 0:01:22.360 --> 0:01:24.920 futures are lower. This morning. It is six o one 0:01:24.959 --> 0:01:26.920 on Wall Street, and we check the markets every fifteen 0:01:26.920 --> 0:01:30.040 minutes throughout the trading day. On Bloomberg, SMP futures down 0:01:30.040 --> 0:01:34.199 seven points down, futures down nineteen, nowsday futures down forty three, 0:01:34.319 --> 0:01:36.560 Nathan Karen. We enter this final trading day of the 0:01:36.560 --> 0:01:39.559 week coming off a truly historic day after the SMP 0:01:39.680 --> 0:01:42.880 fire fell two point four percent in reverse course and 0:01:42.880 --> 0:01:46.280 closed up two point six percent. Bloomberg data going back 0:01:46.280 --> 0:01:49.880 to show never before as the market experienced such extreme 0:01:49.880 --> 0:01:52.920 readings both ways in one day. Dave don Ovidian is 0:01:53.000 --> 0:01:56.240 chief investment officer at CIBC Private Wealth. Yeah, I don't 0:01:56.240 --> 0:01:59.640 think a day like this signifies the market bottom. Obviously, 0:01:59.680 --> 0:02:02.320 we had a a really strong market from mid June 0:02:02.320 --> 0:02:04.480 to mid August and it was just a bear market rally. 0:02:04.520 --> 0:02:07.880 But um, yeah, I think we're certainly closer to the 0:02:07.960 --> 0:02:10.040 end than the beginning of this bull market they've done 0:02:10.040 --> 0:02:12.760 o beating and at CIBC Private Wealth thinks triggered automated 0:02:12.760 --> 0:02:17.000 buying helped fuel yesterday's turnaround, but the turnaround maybe sure lived. 0:02:17.040 --> 0:02:19.799 Nathan Bank of America says stock markets in the US 0:02:19.840 --> 0:02:22.720 economy will have to experience more pain before the FED 0:02:22.720 --> 0:02:26.480 pivots away from aggressive policy strategies. At the bank's sake, quote, 0:02:26.480 --> 0:02:29.520 it was a decent counter rally, but Low's won't be 0:02:29.560 --> 0:02:32.239 reached until next year. They say more economic and market 0:02:32.240 --> 0:02:35.360 pain will be necessary before the Fed backs down. Well, Karen, 0:02:35.360 --> 0:02:38.359 the White House was grasping for upside after yesterday's inflation 0:02:38.400 --> 0:02:41.600 reports saw core CPI rise to a forty year high. 0:02:41.800 --> 0:02:44.800 President Biden discussed the reading with reporters in Los Angeles. 0:02:44.960 --> 0:02:47.679 Americans are squeezed by the cost of the living. It's 0:02:47.680 --> 0:02:50.080 been true for years, and folks don't need to be 0:02:50.160 --> 0:02:52.560 a report to tell them there'll be a squeeze. Fighting 0:02:52.600 --> 0:02:54.800 this battle every day is the key reason why I 0:02:54.880 --> 0:02:57.960 ran for president, Nited states. However, President Biden did note 0:02:57.960 --> 0:03:01.240 overall inflation was just two percent over the last three months. 0:03:01.240 --> 0:03:04.120 He said, quote that's down from eleven percent over the 0:03:04.160 --> 0:03:07.080 prior three months, well over the weekend. Nathan the President 0:03:07.120 --> 0:03:10.600 conceded that a slight recession is possible, but one administration 0:03:10.639 --> 0:03:13.799 official notes that it's not inevitable. We spoke to US 0:03:13.840 --> 0:03:17.600 Commerce Secretary Gina Ramando. I talked to CEOs of the 0:03:17.600 --> 0:03:22.919 biggest companies and the smallest companies every day in every industry. Yes, 0:03:22.960 --> 0:03:27.280 they're anxious. Global markets are unstable. The war in Ukraine 0:03:27.600 --> 0:03:32.280 obviously makes everything unstable. But they're also telling me customers 0:03:32.280 --> 0:03:36.200 are buying. Consumers are buying, they are still hiring, American 0:03:36.240 --> 0:03:40.240 companies are innovating. Commerce Secretary Genie Raimondo made the comments 0:03:40.320 --> 0:03:43.040 in an interview on Bloomberg Radio and Television. Catch the 0:03:43.080 --> 0:03:46.880 full conversation online at Bloomberg dot com. One of those CEOs, Karen, 0:03:46.920 --> 0:03:48.600 appears to have a more tep but I'll look on 0:03:48.680 --> 0:03:52.640 the economy. JP Morgan Chases Jamie Diamond discussed inflation and 0:03:52.680 --> 0:03:55.520 the FED at a conference in Washington yesterday. I don't 0:03:55.520 --> 0:03:57.840 know if it could be a soft landing. I don't 0:03:57.920 --> 0:04:02.320 think so. But my mild session or tougher session. My 0:04:02.640 --> 0:04:05.960 point in the tougher session, yeah, you expect the market. 0:04:06.680 --> 0:04:09.360 I'm not gonna keep eyes across those three things. But 0:04:09.920 --> 0:04:11.720 for all of us who have to worry about risk. You, 0:04:11.840 --> 0:04:14.240 of course you should plan for those things. Jamie Diamond says, 0:04:14.240 --> 0:04:16.360 his gut tells him the Federal Reserve will have to 0:04:16.440 --> 0:04:18.479 raise rates higher than four and a half percent in 0:04:18.560 --> 0:04:21.960 order to detain inflation. Well Diamond's bank is among several 0:04:22.080 --> 0:04:24.680 schedule to kick off earning season today, Nathan. We get 0:04:24.680 --> 0:04:27.680 a preview on that from Bloomberg's Jeff Bellinger. By the 0:04:27.680 --> 0:04:30.480 time the markets opened this morning, investors will have heard 0:04:30.520 --> 0:04:34.360 from JP Morgan, Chase, City Group, Morgan Stanley, and Wells Fargo. 0:04:34.720 --> 0:04:38.039 Investors will be interested in the results from the last quarter, 0:04:38.200 --> 0:04:40.719 but they'll likely be even more interested to hear what 0:04:40.800 --> 0:04:45.080 banking executives expect going forward. Bloomberg says the big banks 0:04:45.080 --> 0:04:48.279 will announce they're setting aside billions of dollars to protect 0:04:48.320 --> 0:04:52.040 against expected loan losses as growing numbers of customers get 0:04:52.120 --> 0:04:56.560 squeezed by inflation and high interest rates. Jeff Bellinger Bloomberg 0:04:56.640 --> 0:04:58.480 day Break, All right, Jeff, thank you. We also get 0:04:58.480 --> 0:05:00.640 more economic data to the jest this morning in the 0:05:00.680 --> 0:05:04.320 former retail sales and consumer sentiment here with Morris Bloomberg's 0:05:04.320 --> 0:05:07.120 and he Delt Judice. The prior report covering August showed 0:05:07.240 --> 0:05:11.400 US retail sales rebounded from the July slump. Bloomberg Economics 0:05:11.400 --> 0:05:14.680 as today's data will most likely indicate spending on consumer 0:05:14.720 --> 0:05:18.640 goods move toward pre pandemic levels in September. That's taking 0:05:18.640 --> 0:05:22.560 inflation into account. Also today, the University of Michigan issues 0:05:22.600 --> 0:05:26.240 it's US consumer Sentiment index for early October, and Bloomberg 0:05:26.279 --> 0:05:30.120 Economics anticipates another slugger's reading, the sentiment index at a 0:05:30.160 --> 0:05:32.840 record low earlier in the year. Beneat Dealt Judaic s 0:05:32.839 --> 0:05:35.120 Bloomberg Day Break, Right, Benny, thank you, and you're up 0:05:35.120 --> 0:05:37.480 this morning. It looks like the UK government will abandon 0:05:37.520 --> 0:05:40.800 its plans for massive tax cuts. Details are scarce, but 0:05:40.839 --> 0:05:43.960 Bloomberg News has learned Prime Minister list trust will reverse 0:05:44.000 --> 0:05:47.480 parts of our economic strategy. Begin more from Bloomberg's James 0:05:47.480 --> 0:05:50.760 Wilcock in London. Good morning, James, Good morning, Karen Nathan 0:05:50.800 --> 0:05:54.200 Decas Chancellor quasi class. That's the London, London un especially 0:05:54.240 --> 0:05:56.840 cutting short his trip to Washington, UK ask that's the 0:05:56.880 --> 0:05:59.080 stage a comeback on the news. It's trying to suspect 0:05:59.080 --> 0:06:01.679 a youth sound is down the road Field, Antenia bonds 0:06:01.680 --> 0:06:03.680 pledged to be a full presentment of the market opens 0:06:03.720 --> 0:06:05.280 and it all comes at the back of England to 0:06:05.320 --> 0:06:08.760 wrap up their emergency bond buying program. Late today in London, 0:06:08.839 --> 0:06:12.240 James Wilcock, Bloomberg Daybreak, James, Thanks. In Corporate news this morning, 0:06:12.320 --> 0:06:15.920 lawyers for Twitter say Elon Musk is under investigation over 0:06:16.000 --> 0:06:17.960 his attempt to take the company private. We get the 0:06:17.960 --> 0:06:21.720 details from Bloomberg's Doug Prisner. In April, the SEC sent 0:06:21.800 --> 0:06:24.680 a query to Musko over how he initially disclosed his 0:06:24.760 --> 0:06:27.480 nine percent stake in Twitter. He did so a week 0:06:27.600 --> 0:06:30.880 later than regulations allow, and he used a filing typically 0:06:30.920 --> 0:06:34.679 reserved for passive investors. Then in June, the SEC wanted 0:06:34.720 --> 0:06:38.239 information on Musk, tweeting the deal cannot move forward until 0:06:38.279 --> 0:06:41.760 he was given more information about spam and fraudulent accounts. 0:06:42.080 --> 0:06:45.000 Now in a court filing in Delaware, Twitter's lawyers say 0:06:45.120 --> 0:06:49.880 Musk has exchanged substantive correspondence with federal authorities as they 0:06:49.920 --> 0:06:52.680 look into his conduct, and they say this game of 0:06:52.760 --> 0:06:55.520 hide the ball must end in New York. I'm Doug Prisner, 0:06:55.560 --> 0:06:58.680 Bloomberg Daybreak. All right, thank you, and Bloomberg Daybreak brought 0:06:58.680 --> 0:07:00.960 to you by ib k R and Spin Advisers switched 0:07:01.000 --> 0:07:04.000 to Interactive Brokers for lowest cost global trading and turnkey 0:07:04.040 --> 0:07:07.040 custody solutions, no ticket charges and no conflicts of your 0:07:07.080 --> 0:07:11.000 interests at ibkr dot com. Slash R, I, A, S ANDP. 0:07:11.160 --> 0:07:14.440 Future is now little changed. Straight ahead your latest local 0:07:14.480 --> 0:07:18.760 headlines plus the check of sports and this is Bloomberg. 0:07:22.960 --> 0:07:25.120 Thank you. Carring six O seven on Wall Street fifty 0:07:25.120 --> 0:07:28.080 three degrees in Central Park got a new crash northbound 0:07:28.080 --> 0:07:31.320 Cross Island Parkway at Northern Boulevard. Details coming up in traffic. 0:07:31.360 --> 0:07:33.480 First Michael Barr with what else is going on in 0:07:33.480 --> 0:07:35.520 New York and around the world. Good morning, Michael, Good 0:07:35.520 --> 0:07:39.080 morning Nathan. The final January six Committee hearing's theme was 0:07:39.120 --> 0:07:42.320 that Donald Trump began the plan to stay in office 0:07:42.600 --> 0:07:47.200 as early as July. Bloomberg's headboxter as the story to 0:07:47.360 --> 0:07:50.720 remain no matter what the vote showed in November. Coachair 0:07:50.800 --> 0:07:54.280 List Cheney says, what's left We must seek the testimony 0:07:54.480 --> 0:07:59.440 under oath of January six. Central Player Donald Trump, followed 0:07:59.440 --> 0:08:02.680 by a unit must vote to subpoena from the committee. Meanwhile, 0:08:02.680 --> 0:08:05.160 the Supreme Court has refused to get involved in Trump's 0:08:05.160 --> 0:08:09.200 request to return seized documents from our lago. It also 0:08:09.240 --> 0:08:13.000 refused to reinstate a special master. A major victory for 0:08:13.120 --> 0:08:16.480 the Department of Justice in San Francisco. I'm at Baxter 0:08:16.480 --> 0:08:20.520 Bloomberg Gay Break. Connecticut Governor Lamant has ordered flags flown 0:08:20.520 --> 0:08:22.960 at half staff in the state after three officers were 0:08:23.000 --> 0:08:25.360 shot in the line of duty in Bristol. Two of 0:08:25.400 --> 0:08:28.800 the officers are dead. Governor Lamont said there are too 0:08:28.880 --> 0:08:31.560 many illegal guns and not enough cops on the streets. 0:08:31.840 --> 0:08:35.839 I hope when you see your policeman woman on the 0:08:35.880 --> 0:08:37.400 street corner, you go up and say thank you for 0:08:37.440 --> 0:08:39.720 what you do. I hope you show a little respect 0:08:39.840 --> 0:08:43.839 for the folks that are there, Governor Lamont. State police said, 0:08:43.880 --> 0:08:45.920 and a release that the nine one on one called 0:08:46.000 --> 0:08:49.520 Wednesday night about a dispute between two siblings appears to 0:08:49.640 --> 0:08:52.760 have been a deliberate act to lure law enforcement to 0:08:52.840 --> 0:08:56.520 the scene in Bristol. In North Carolina, Raleigh police say 0:08:56.520 --> 0:08:59.560 a male juvenile is in the custody hours after a 0:08:59.600 --> 0:09:02.240 masch dooting that left five people dead, including an off 0:09:02.320 --> 0:09:06.000 duty police officer, in the neighborhood. Raleigh Mayor Mary Anne 0:09:06.000 --> 0:09:09.120 Baldwin praise the responding officers, saying they put their lives 0:09:09.120 --> 0:09:11.760 at a risk to protect the city. You know, you 0:09:11.800 --> 0:09:16.560 pray that something like this will never happen here. It did, 0:09:17.400 --> 0:09:21.600 and I want to thank all the officers who responded 0:09:22.000 --> 0:09:25.480 in the way they did. Raleigh Mayor Baldwin. Police say 0:09:25.520 --> 0:09:28.640 there's no word on a motive. North Korea has fired 0:09:28.760 --> 0:09:32.200 yet another ballistic missile this launch game. As North Korea 0:09:32.280 --> 0:09:35.920 also flew warplanes near the border with South Korea. Beyong 0:09:36.080 --> 0:09:39.120 Yang says they're meant as a warning to Seoul and 0:09:39.240 --> 0:09:43.439 the US about their joint military exercises. Global News twenty 0:09:43.440 --> 0:09:46.240 four hours a day on air and on Bloomberg Quicktake, 0:09:46.440 --> 0:09:49.440 powered by more than twenty seven hundred journalists and analysts 0:09:49.520 --> 0:09:53.679 more than add twenty countries. I'm Michael Barr. This is Bloomberg, Nathan. 0:09:53.760 --> 0:10:00.640 Thank you. Michael. Six o nine on Wall Street. Time 0:10:00.679 --> 0:10:03.679 for the Bloomberg Sports Update with John sten Shower. All right, Nathan, 0:10:03.760 --> 0:10:06.880 Yankees and Guardians two days off between games one and two, 0:10:06.920 --> 0:10:08.880 but set to go at one o'clock at the stadium, 0:10:08.920 --> 0:10:11.680 So unless there's another rain out, no more days off. 0:10:11.679 --> 0:10:14.200 The rain was expected and Aaron Boone was asked before 0:10:14.400 --> 0:10:16.679 and the effect of a postpone man and it would 0:10:16.679 --> 0:10:19.559 probably affect the pitching rotation if he went five games 0:10:19.840 --> 0:10:24.079 and he had to play four in a row. Sure, Um, 0:10:24.200 --> 0:10:27.520 the lineup, no, I mean we play, that's what you 0:10:27.600 --> 0:10:29.959 do is in baseball as you play every day. So 0:10:30.559 --> 0:10:34.959 shouldn't affect that. Um, you know, that's more who we're 0:10:35.000 --> 0:10:37.720 going up against, matchups, things like that. When today starts, 0:10:37.920 --> 0:10:41.040 Est Cortez Shane Bieber for Cleveland, Houston's up to nothing. 0:10:41.040 --> 0:10:43.400 In the other a l DS, the Astros had their 0:10:43.400 --> 0:10:45.760 slugger you're Don Alvarez, the fact he hit the game 0:10:45.800 --> 0:10:47.600 winning three run over in game one and he hit 0:10:47.640 --> 0:10:50.320 the go ahead two run shots sixteing the game two 0:10:50.440 --> 0:10:53.079 four two. Astros went over Seattle a couple of game 0:10:53.160 --> 0:10:55.920 threes today tonight in the n LDS, both series are 0:10:55.920 --> 0:10:58.719 tied at one week six underway in Chicago, Washington won 0:10:59.000 --> 0:11:01.319 twelve to seven and in the four game Losings made 0:11:01.320 --> 0:11:04.360 the only Commanders touchdown scored by a rookie running back 0:11:04.400 --> 0:11:06.920 Brian Robinson, who has made a remarka will come back. 0:11:06.960 --> 0:11:09.720 Two months ago, he was shot twice in the leg 0:11:10.080 --> 0:11:12.880 in an attempt at robbery in DC. Jets and Giants 0:11:12.880 --> 0:11:15.800 looking to keep their warning ways going. Sunday, the Jets 0:11:15.880 --> 0:11:17.959 visit Green Bay, the Giants are home for Baltimore on 0:11:18.040 --> 0:11:21.280 the Giants punter is now back home. The native Scott 0:11:21.400 --> 0:11:24.240 Jamie Gillen was unable to fly home with the team 0:11:24.280 --> 0:11:26.840 do a visa issue, so he had been staying at 0:11:26.840 --> 0:11:29.280 an airbnb in London. Rangers already two and oh. They 0:11:29.280 --> 0:11:32.320 won seven three at Minnesota. Chris Cryder fifty two goals 0:11:32.400 --> 0:11:34.559 last year and he had the first and last Ranger goals. 0:11:34.720 --> 0:11:36.960 Islander season opener at three one, Home lost the floor 0:11:37.040 --> 0:11:39.839 to the Devil's lost five to at Philadelphia. John stash 0:11:39.960 --> 0:11:43.560 were Bloomberg Sports, Nathan, thank you, John. We're watching futures 0:11:43.559 --> 0:11:45.840 take a bit of a turn this morning, SMP futures 0:11:45.880 --> 0:11:48.360 in that little change down futures have turned higher, up 0:11:48.400 --> 0:11:52.400 forty two points. Nastack futures still lower down eighteen Tenure 0:11:52.440 --> 0:11:55.680 treasuries now up ten thirty seconds yield three point nine 0:11:55.760 --> 0:11:59.040 zero percent. As we await bank earnings. Will check in 0:11:59.120 --> 0:12:01.880 the next on it with Ken Leon, director of Equity 0:12:01.920 --> 0:12:07.720 Research at c f r A. This is Bloomberg Bloomberg 0:12:07.720 --> 0:12:09.720 eleven three oh weather. We'll clear this afternoon, get up 0:12:09.760 --> 0:12:13.240 to the upper sixties, sunny near seventy tomorrow, partly sunny 0:12:13.280 --> 0:12:16.480 Sunday with highs in the upper sixties right now fifty 0:12:16.520 --> 0:12:24.280 three degrees in Central Park. Markets headlines and breaking news 0:12:24.400 --> 0:12:26.959 twenty four hours a day at Bloomberg dot Com, the 0:12:27.040 --> 0:12:31.160 Bloomberg Business Outland at Bloomberg Quick Tape. He's a Bloomberg 0:12:31.240 --> 0:12:39.719 Business Flash and I'm Karin Moscow. This updates brought to 0:12:39.760 --> 0:12:42.640 you by SEI SI Managers don't get results that are 0:12:42.640 --> 0:12:44.600 off the charts when their solutions are off the shelf. 0:12:44.679 --> 0:12:48.199 Learn how seis operating platform can turn infrastructure into a 0:12:48.280 --> 0:12:52.280 competitive advantage at sei C dot Com, slash Tech u 0:12:52.440 --> 0:12:55.520 s Dock Index futures are well. Little change now as 0:12:55.559 --> 0:12:58.480 investors away key earnings reports from Big Wall Street banks. 0:12:58.760 --> 0:13:02.199 Bonds are advancing lad UK guilts, which benefit from speculation 0:13:02.280 --> 0:13:05.600 that controversial tax cunning plans would be revised. We checked 0:13:05.600 --> 0:13:08.000 the markets every fifteen minutes throughout the trading day on 0:13:08.120 --> 0:13:11.600 Bloomberg s and P futures again, that'll change down. Futures 0:13:11.679 --> 0:13:14.719 up twenty six, NAS day futures down thirty one the 0:13:14.880 --> 0:13:17.600 docks in Germany is up eight tenths of uppercent ten 0:13:17.679 --> 0:13:20.000 year treasury up eleven thirty seconds. You know, three point 0:13:20.040 --> 0:13:22.160 eight nine percent they yield on the two year four 0:13:22.240 --> 0:13:25.120 point four two percent. Nine X Screwed oil is down 0:13:25.200 --> 0:13:27.600 nine ten percent or eighty one cents at eighty eight dollars. 0:13:27.600 --> 0:13:29.960 Twenty nine cents of barrel co mix gold is down 0:13:30.040 --> 0:13:32.960 one percent or sixteen dollars forty cents at sixteen sixty 0:13:33.040 --> 0:13:36.240 fifty announced. The euro point nine seven three two against 0:13:36.280 --> 0:13:38.800 the dollar, British found one point one to eight and 0:13:38.880 --> 0:13:41.640 the end one forty seven point six five. Looking at 0:13:41.640 --> 0:13:43.600 a bitcoin, it's up one and a half percent at 0:13:43.679 --> 0:13:47.240 nineteen thousand, seven hundred dollars. That's a Bloomberg business flash. 0:13:47.320 --> 0:13:49.439 Now here's Michael Barr with more on what's going on 0:13:49.559 --> 0:13:52.240 around the world. Michael Karen, thank you very much. The 0:13:52.320 --> 0:13:56.280 House January six Committee voted unanimously to supoena former President 0:13:56.320 --> 0:14:00.280 Donald Trump or his testimony about the one Capital Often Act. 0:14:00.679 --> 0:14:03.480 Earlier in the hearing, the panel presented new video of 0:14:03.520 --> 0:14:07.000 how Speaker Nancy Pelosi and other congressional leaders pleading for help. 0:14:07.559 --> 0:14:12.120 It also outlined Trump's multipart plan to overturn his twenty 0:14:12.160 --> 0:14:16.400 election loss. President Joe Biden again criticized high US gas 0:14:16.520 --> 0:14:19.440 prices and said he'd announced new actions to combat what 0:14:19.560 --> 0:14:22.880 he described as a key driver of inflation. In baseball, 0:14:22.960 --> 0:14:25.360 the Yankees will play the Guardians in game two of 0:14:25.640 --> 0:14:29.480 their A LBS after last night's rain out. The Astros 0:14:29.600 --> 0:14:31.720 lead two games to zip over the Mariners in their 0:14:31.840 --> 0:14:35.920 A LBS after last night's four to win. Thursday Night Football, 0:14:35.960 --> 0:14:39.280 the Commanders beat the Bears twelve seven. In the NHL, 0:14:39.360 --> 0:14:42.960 the Rangers won, the Devil's Islanders and Capitals all lost. 0:14:43.320 --> 0:14:45.920 Global News twenty four hours a day on air and 0:14:46.160 --> 0:14:49.880 on Bloomberg Quicktake, powered by more than hundred journalists and 0:14:49.880 --> 0:14:52.840 analysts more than a hundred twenty countries. Michael Blar, this 0:14:52.960 --> 0:14:55.400 is Bloomberg, Nathan, I'm Michael. Thank you. It's almost six 0:14:55.440 --> 0:14:58.920 twenty on Wall Street Line from the Bloomberg Interactive Brokers Studios. 0:14:59.000 --> 0:15:01.400 This is Bloomberg Daybreak on what is about to be 0:15:01.560 --> 0:15:04.960 a very busy day in bank earning. Season four of 0:15:05.080 --> 0:15:08.800 the Big six Wall Street firms report before the opening bell. 0:15:09.320 --> 0:15:11.760 Ahead of it. We're joined by Ken Leon, director of 0:15:11.800 --> 0:15:14.960 Equity Research at c f R, A Ken. It's great 0:15:15.000 --> 0:15:17.520 to speak with you on a bank earnings Friday. And 0:15:17.600 --> 0:15:21.120 when we hear from the likes of JP Morgan's CEO 0:15:21.400 --> 0:15:25.800 Jamie Diamond doubling down on his predictions for recession in 0:15:25.880 --> 0:15:29.400 the next few months, I guess the question for investors 0:15:29.560 --> 0:15:35.640 is how bad could these earnings be? Well, good morning, 0:15:35.720 --> 0:15:38.280 and and third quarter results actually are going to be 0:15:38.560 --> 0:15:43.040 fairly resilient, and we'll see strengths in certain areas. The 0:15:43.200 --> 0:15:47.400 consumer will still be stable, um, and rising rates helps 0:15:47.680 --> 0:15:50.720 UH in terms of earnings. But looking ahead, you're right, 0:15:51.360 --> 0:15:54.640 it's really the world of worry is what will these 0:15:54.720 --> 0:15:59.040 banks do UH in a recession next year and certainly 0:15:59.120 --> 0:16:01.440 for the fourth cool it or we're not looking for 0:16:01.640 --> 0:16:05.800 any up check in terms of investment banking. Volatility in 0:16:05.880 --> 0:16:08.840 the markets has made trading an offset to a decline 0:16:08.880 --> 0:16:12.200 in investment banking. But you get to main street and 0:16:12.320 --> 0:16:16.080 the consumer and small business. UH, they're beginning to feel 0:16:16.160 --> 0:16:19.960 some pain points. UM. We're not sure how much the 0:16:20.040 --> 0:16:23.640 managements today will speak to what they see in their 0:16:23.680 --> 0:16:27.120 crystal ball, but they'll say that the consumer is probably 0:16:27.240 --> 0:16:30.440 resilient just based on the third quarter results. Now, we 0:16:30.520 --> 0:16:32.680 did hear that just a couple of days ago from 0:16:32.720 --> 0:16:36.360 Bank of America's CEO Brian moynihan. Where do you think 0:16:36.360 --> 0:16:41.000 we're gonna see that sign of resiliency given that interest 0:16:41.120 --> 0:16:44.320 rates are moving higher? Do you think that helps savers? 0:16:44.440 --> 0:16:48.560 But in terms of getting loans or taking loans, that 0:16:48.640 --> 0:16:52.160 could make things more difficult, couldn't it. It will, so 0:16:52.320 --> 0:16:55.480 the lending activity will certainly begin to flow down, and 0:16:55.640 --> 0:16:59.680 certainly for respect and UH, that will really reduce the 0:16:59.760 --> 0:17:03.680 full pocity. So so for banks who can charge more 0:17:03.800 --> 0:17:08.160 with rising rates, it's the volume decline. Then it's kind 0:17:08.160 --> 0:17:11.480 of like an offset. So it's not a win win situation. 0:17:12.160 --> 0:17:15.040 And that's kind of the environment ahead. You just don't 0:17:15.119 --> 0:17:19.720 have a great scenario in terms of the economy that's 0:17:19.760 --> 0:17:23.639 going to propel bank earnings higher next year. One of 0:17:23.680 --> 0:17:26.560 the reasons why the stocks have been so low. But 0:17:26.680 --> 0:17:31.240 the banks do have a fortress balacy, as Damie diamond says, 0:17:31.880 --> 0:17:35.160 UM they're well capitalized, but regulators are going to make 0:17:35.200 --> 0:17:39.960 sure that the capital buffers are big enough in case 0:17:40.040 --> 0:17:43.880 there's any unexpected punch. We've seen a lot of news, 0:17:43.920 --> 0:17:48.680 whether it's the Bank of England credits with UM blending 0:17:48.840 --> 0:17:54.439 even into China's construction residential market. You know, there's always 0:17:54.560 --> 0:17:57.439 lots of worries, but right now the bank's balencyats are 0:17:57.600 --> 0:18:01.360 very strong and can really endure any damper next year. 0:18:01.760 --> 0:18:04.080 Are you thinking that that strengthen the balance sheets is 0:18:04.119 --> 0:18:07.800 going to translate into even further provisions for loan losses. 0:18:07.840 --> 0:18:12.960 We've seen billions of dollars on that score. Well, we'll 0:18:13.000 --> 0:18:16.120 probably say some of the banks book anywhere from five 0:18:16.600 --> 0:18:19.040 million to a billion to begin to build a cushion 0:18:19.160 --> 0:18:24.600 or a reserve for consumer credit card losses maybe next year. 0:18:25.040 --> 0:18:28.120 We have not yet seen on the commercial industrial loan 0:18:28.280 --> 0:18:32.239 book any distressed industries, and that's been a run rate 0:18:32.359 --> 0:18:35.720 products for the last five years or so where we 0:18:35.880 --> 0:18:40.119 never really focus on a distress industry. To overall, the 0:18:40.160 --> 0:18:44.080 credit situation actually looks good. But one important thing I 0:18:44.160 --> 0:18:47.439 think for for listeners here is that the banks always 0:18:47.560 --> 0:18:51.800 lend to the best bars, including consumers with high psycho scores, 0:18:52.400 --> 0:18:55.120 and what happens with the saddlebanks might be the first 0:18:55.280 --> 0:18:59.719 cracks that we see what a weakening consumer interesting. Ken 0:18:59.840 --> 0:19:02.119 Ley on great to get your thoughts as we await 0:19:02.280 --> 0:19:06.320 those earnings. Starting with JP Morgan and Wells Fargo. Uh, 0:19:06.400 --> 0:19:08.720 then we'll hear from Morgan Stanley and City Group Oll 0:19:08.840 --> 0:19:11.040 cap things off for us as the first four of 0:19:11.080 --> 0:19:14.359 the Big six report just today, and ken Leon is 0:19:14.400 --> 0:19:17.639 going to be with us throughout this morning as those 0:19:17.840 --> 0:19:21.320 results come in. Ken leyon, director of Equity Research at 0:19:21.400 --> 0:19:23.880 CF are a part of our coverage of bank earnings 0:19:24.040 --> 0:19:27.000 Friday this morning, So check back with Bloomberg Radio and 0:19:27.119 --> 0:19:30.879 Bloomberg Television as we keep things going here with the 0:19:30.960 --> 0:19:35.200 banks reporting kicking off third quarter earning season. Looking ahead 0:19:35.240 --> 0:19:38.680 to the market open this morning, Uh, some churn in 0:19:38.800 --> 0:19:42.040 the futures. SMP futures are now higher by three points 0:19:42.160 --> 0:19:45.480 down futures up sixties seven NASDAC future is still in 0:19:45.520 --> 0:19:47.760 the red, but not by much, now down seven points. 0:19:47.840 --> 0:19:51.200 Tenure Treasury is up twelve thirty seconds, yield three point 0:19:51.280 --> 0:19:54.080 eight nine percent, yield on the two year four point 0:19:54.160 --> 0:19:57.199 four one percent. British Pound trading at one point one 0:19:57.280 --> 0:20:01.040 to six eight on reports UK Time Minister Liz Trust 0:20:01.160 --> 0:20:05.040 may reverse some of her mini budget. This is Bloomberg 0:20:06.920 --> 0:20:09.640 Bloomberg eleven three oh Weather clearing this afternoon with highs 0:20:09.640 --> 0:20:12.320 in the upper sixties, will be sunny tomorrow, high near 0:20:12.400 --> 0:20:16.080 seventy upper sixties once again on a partly sunny Sunday. 0:20:16.359 --> 0:20:22.880 Right now, it's fifty four degrees in Central Park. Broadcasting 0:20:23.000 --> 0:20:26.680 live from the Bloomberg Interactive Broker Studio in New York. 0:20:26.800 --> 0:20:30.639 Bloomberg E Living Free to Washington, d C. Bloomberg On 0:20:30.880 --> 0:20:34.080 to Boston, Bloomberg one O six one to San Francisco, 0:20:34.200 --> 0:20:37.600 Bloomberg NOME sixteen to the Country Sirius XM Gentle one 0:20:37.720 --> 0:20:40.800 nineteen and around the globe the Bloomberg Business Act and 0:20:40.880 --> 0:20:50.560 Bloomberg Radio dot Com. This is Bloomberg Daybreak six thirty 0:20:50.600 --> 0:20:52.959 on Wall Street. Good morning, I'm Nathan Hagar and I'm 0:20:53.040 --> 0:20:55.399 Karen Moscow. We are just about three hours away from 0:20:55.400 --> 0:20:57.440 the open of US trading. Time to the five Things 0:20:57.640 --> 0:20:59.560 you need to Notice start your day. Brought to you 0:20:59.720 --> 0:21:03.800 by Interactive Brokers. Interactive Brokers charges margin loan rates from 0:21:03.840 --> 0:21:05.840 three point five eight percent to four point five eight 0:21:05.920 --> 0:21:08.520 percent rate subject to change. Learn more at i dk 0:21:08.720 --> 0:21:12.080 R dot com slash timpare. First, we enter the week's 0:21:12.119 --> 0:21:15.359 final trading session, coming off a volatile day. The S 0:21:15.440 --> 0:21:19.439 and P fell two point four percent after yesterday's CPI reading, 0:21:19.560 --> 0:21:23.520 only to close up two point six percent, Lori Calvasino's 0:21:23.520 --> 0:21:26.960 head of US equity strategy at RBC Capital Markets, you 0:21:27.080 --> 0:21:29.399 have to really look stock by stocks, sector by sector, 0:21:29.480 --> 0:21:31.320 different parts of the market, figure out where you think 0:21:31.359 --> 0:21:33.240 most of the bad news is baked and where you 0:21:33.280 --> 0:21:35.240 want to be for the longer term, and start layering 0:21:35.280 --> 0:21:37.200 in and it may go down more before it goes 0:21:37.280 --> 0:21:41.159 back up. Lori Calvasino with RBC says, we likely have 0:21:41.320 --> 0:21:44.440 not seen a bottom yet and yesterday's turnaround maybe short 0:21:44.480 --> 0:21:46.440 lived here. And that's according to Bank of America. That 0:21:46.520 --> 0:21:48.960 firm strategists say stock markets in the U s economy 0:21:49.000 --> 0:21:51.800 will have to experience more pain before the Fed pivots 0:21:51.840 --> 0:21:54.440 away from aggressive tightening. They don't expect the bottom until 0:21:54.480 --> 0:21:57.920 next year. The White House. Meantime, Nathan was grasping for 0:21:58.160 --> 0:22:00.920 upside after US inflation rose to a forty year high 0:22:01.040 --> 0:22:04.160 last month. President Biden spoke to reporters in Los Angeles. 0:22:04.440 --> 0:22:06.760 We also need to make more progress bringing down the 0:22:06.800 --> 0:22:10.800 prices across the board. That's why I just couldn't disagree 0:22:10.840 --> 0:22:13.920 more with my Republican friends who say the biggest problem 0:22:14.000 --> 0:22:17.359 our economy right now is it working. Folks are making 0:22:17.480 --> 0:22:20.800 too much money. President Biden also says too many Americans 0:22:20.880 --> 0:22:23.480 are being squeezed by the current cost of living. Okay, 0:22:23.560 --> 0:22:26.200 Let's saw corporate earnings now, Karen JP, Morgan's City Group, 0:22:26.200 --> 0:22:28.800 Morgan Stanley, and Wells Fargo all report before the market 0:22:28.880 --> 0:22:31.280