WEBVTT - Bloomberg Daybreak: September 23, 2022 - Hour 2 (Radio) 0:00:03.480 --> 0:00:06.840 Live from the Bloomberg Interactive Broker Studios. This is Bloomberg 0:00:06.920 --> 0:00:10.319 day Break for Friday, September twenty three two. Coming up 0:00:10.360 --> 0:00:13.240 this hour stops fall around the world as higher rates 0:00:13.240 --> 0:00:17.400 field fears of a slowing global economy. Goldman Sack slashes 0:00:17.440 --> 0:00:20.840 its forecast for the SMP five hundred, oils on trackpoorts 0:00:20.880 --> 0:00:24.320 fourth straight weekly decline, and Credit Suite share slumped to 0:00:24.400 --> 0:00:27.360 a record. Law will tell you why officials believe several 0:00:27.400 --> 0:00:30.360 deaths of the Manhattan Nursing Home are from legionnaire's disease. 0:00:30.440 --> 0:00:34.319 Plus referendums begin today in Russian occupied Grainian cities. I'm 0:00:34.320 --> 0:00:37.400 Michael Barr more ahead, and I'm Scott Sedenburg. The chase 0:00:37.479 --> 0:00:40.840 for sixty one will have to wait another day. All 0:00:40.880 --> 0:00:45.080 that and more coming up in sports. That's all s 0:00:45.080 --> 0:00:48.800 train ahead on Bloomberg Daybreak on Bloomberg eleven, Free on 0:00:48.880 --> 0:00:53.199 New York, Bloomberg Ninete one, Washington, d C Bloomberg one 0:00:53.200 --> 0:00:57.720 oh six one, Boston Bloomberg nine sixties and Francisco Syrius 0:00:57.880 --> 0:01:00.320 x M one nineteen and around the world Old on 0:01:00.440 --> 0:01:03.720 Bloomberg Radio dot Com and via the Bloomberg Business app. 0:01:07.360 --> 0:01:10.600 Good Friday morning, I'm Amy Morris, I'm Nathan Hagar. Futures 0:01:10.600 --> 0:01:12.760 are moving lower this morning. We're coming up to six 0:01:12.800 --> 0:01:14.640 oh one on Wall Street, and we checked the markets 0:01:14.680 --> 0:01:17.680 every fifteen minutes during the training day. On Bloomberg, SYMP 0:01:17.840 --> 0:01:21.759 futures are down thirty one points now futures down two two. 0:01:22.160 --> 0:01:25.480 NASAC futures are lower by a hundred fourteen points. The 0:01:25.560 --> 0:01:28.280 tenure treasury is down eight thirty seconds. The yield on 0:01:28.319 --> 0:01:31.880 the benchmark three point seven four percent. Amy, Nathan, it 0:01:32.000 --> 0:01:34.000 is all about the markets this morning. The S and 0:01:34.040 --> 0:01:37.160 P five on track for a second straight weekly loss. 0:01:37.520 --> 0:01:40.480 Yesterday it closed at the lowest level since June ten. 0:01:40.560 --> 0:01:43.319 Year treasury yields are trading near its highest level in 0:01:43.360 --> 0:01:46.560 a decade. The two year rate is climbing for eleven 0:01:46.600 --> 0:01:50.200 straight sessions now. Ryan Dietrich is chief market strategist at 0:01:50.200 --> 0:01:52.400 the Carson Grew. September is the worst months of the 0:01:52.480 --> 0:01:54.880 year when you're weak heading into it, like down teen 0:01:54.920 --> 0:01:56.520 per cent of the year like we were this year. 0:01:56.560 --> 0:01:59.840 Septembers are really really rough and can be dicey. So 0:02:00.240 --> 0:02:02.960 sure the Fed matters, we're not ignoring that, but the 0:02:03.040 --> 0:02:05.880 stage was set, honestly for some for some potential weakness. 0:02:07.080 --> 0:02:10.360 Carson Group Chief market strategist Ryan Dietrich says the SMP 0:02:10.440 --> 0:02:12.720 five hundred is just two and a half percent above 0:02:12.800 --> 0:02:15.400 the low set in June, and there could be even 0:02:15.440 --> 0:02:18.079 more pain ahead. Amy one Wall Street firm says the 0:02:18.120 --> 0:02:20.560 selling is still not over. Let's get the story from 0:02:20.560 --> 0:02:24.400 Bloomberg's Lisa Mateo. Goldman Saxes slashing its year end target 0:02:24.440 --> 0:02:27.160 for the SMP five hundred index to thirty six hundred 0:02:27.200 --> 0:02:29.920 from forty three hundred. That implies a four point two 0:02:29.919 --> 0:02:33.720 percent drop from yesterday's close. Goldman says a dramatic shift 0:02:33.760 --> 0:02:36.360 in the outlook for interest rates moving higher will weigh 0:02:36.360 --> 0:02:39.760 on valuations for equities. The higher interest rate scenario and 0:02:39.840 --> 0:02:43.959 Goldman's valuation model supports a price earnings multiple of fifteen 0:02:44.040 --> 0:02:48.000 times compared with eighteen times previously. Goldman said the risks 0:02:48.080 --> 0:02:51.519 to its latest forecast are still skewed to the downside 0:02:51.639 --> 0:02:54.480 because of the rising odds of recession, a scenario that 0:02:54.480 --> 0:02:57.920 would reduce corporate earnings and wide in the yield gap. However, 0:02:57.960 --> 0:03:01.280 the bank strategists say a year end rally TOD is 0:03:01.320 --> 0:03:04.760 possible if inflation shows clear signs of easing in New 0:03:04.840 --> 0:03:08.880 York Lisa Mateo Bloomberg Daybreak, Thank you Lisa. Meantime, cash 0:03:09.040 --> 0:03:12.160 is king. Bank of America strategists say investors are flogging 0:03:12.160 --> 0:03:15.600 to cash and shunning almost every other asset class as 0:03:15.600 --> 0:03:18.760 they turned the most pessimistic since the global financial crisis. 0:03:19.040 --> 0:03:21.239 The bank says cash had in flows of thirty billion 0:03:21.280 --> 0:03:24.320 dollars this week, while global equity funds saw outflows of 0:03:24.360 --> 0:03:26.800 seven point eight billion dollars. There we saw more equity 0:03:26.840 --> 0:03:29.799 losses in Asia. Overnight. Amy stocks in Hong Kong led 0:03:29.840 --> 0:03:32.800 the declines. Let's get the details from Bloomberg's Juliette Sally. 0:03:32.840 --> 0:03:35.720 In Singapore, the m c I Asia Pacific Index posted 0:03:35.760 --> 0:03:39.200 its sixth weekly decline, the longest streak since May. Equities 0:03:39.200 --> 0:03:42.400 with down Friday in Hong Kong, China, Australia and South Korea. 0:03:42.520 --> 0:03:45.680 Japan was closed for a holiday. Alsie Bondi Old spiked 0:03:45.680 --> 0:03:47.640 the two year up by as much as twenty eight 0:03:47.640 --> 0:03:50.880 basis points, the highest since April twelve, and the off 0:03:50.880 --> 0:03:52.920 show you one continue to hold past seven to the dollar, 0:03:53.000 --> 0:03:56.360 despite the PBOC setting a strongly unfixed for a record 0:03:56.520 --> 0:04:01.240 twenty second day in Singapore, Juliette Sally Bloomberg Break, Thanks Juliette. 0:04:01.240 --> 0:04:03.520 The sell off is also continuing in Europe, where the 0:04:03.520 --> 0:04:06.920 region is poised for another weekly lost for stocks. Let's 0:04:06.920 --> 0:04:09.400 get the details with Bloomberg's You and Parts in London. 0:04:09.440 --> 0:04:12.240 Good morning you. European stocks declining today at the end 0:04:12.280 --> 0:04:14.360 of a week that made very clear that central banks 0:04:14.400 --> 0:04:16.840 are not done yet. You have stocks these hundred now 0:04:16.880 --> 0:04:21.000 down one percentage points, with energy shares leading losses. Adding 0:04:21.040 --> 0:04:23.520 to that decline not for the first time, credits Swiss 0:04:23.640 --> 0:04:27.080 shares slumping to a record load today. That's after the 0:04:27.080 --> 0:04:29.600 troubled Swiss Bank was forced to deny report that it's 0:04:29.640 --> 0:04:33.560 considering exiting the US. Markets and banking also in focus 0:04:33.640 --> 0:04:36.720 in the UK government's mini budget today, the cap on 0:04:36.839 --> 0:04:40.680 bankers bonuses inherited from the European Union is to be scrapped, 0:04:40.880 --> 0:04:44.360 a planned increase in corporation tax also to be scrapped, 0:04:44.520 --> 0:04:47.159 and the top rate of income tax that is going 0:04:47.200 --> 0:04:49.880 as well in London. I'mun Parts, Sploomberg, day break, You 0:04:49.960 --> 0:04:52.159 and thanks. Higher interest rates around the world have oil 0:04:52.200 --> 0:04:55.520 on track for a fourth weekly decline. Crude is poised 0:04:55.560 --> 0:04:57.720 for its first quarterly last and more than two years 0:04:57.760 --> 0:05:00.640 as concerns about a global economic slowdown way on demand. 0:05:00.839 --> 0:05:03.440 Checking prices now name X cruds down two point two 0:05:03.480 --> 0:05:05.320 per cent or a dollar eighty five at eighty one 0:05:05.320 --> 0:05:08.000 dollar sixty four cents of barrel. Brent is down two 0:05:08.000 --> 0:05:11.359 percent at eighty eight dollars sixty five cents, but Nathan 0:05:11.400 --> 0:05:14.120 those losses for oil maybe short lived. Some of the 0:05:14.160 --> 0:05:17.719 Wall Street's biggest banks see crude rebounding in the fourth quarter. 0:05:17.800 --> 0:05:20.680 JP Morgan Chase forecasting Brent crude at one d one 0:05:20.680 --> 0:05:23.040 dollars a barrel the final three months of the year. 0:05:23.279 --> 0:05:27.240 Goldman Sachs is targeting one five dollars Brent trading around 0:05:27.320 --> 0:05:31.400 ninety dollars today. Analysts say low inventories and sustained demand 0:05:31.440 --> 0:05:35.120 will keep prices elevated despite concerns of a global slowdown. 0:05:35.480 --> 0:05:37.719 We have COVID news out of Asia this morning. Amy 0:05:37.760 --> 0:05:41.320 Hong Kong is announcing plans to cut pandemic rescription prescription 0:05:41.400 --> 0:05:46.200 restrictions sorry scrapping hotel quarantines for inbound travelers. Starting Monday, 0:05:46.520 --> 0:05:48.440 those flying to the city will no longer need to 0:05:48.440 --> 0:05:51.320 take a PCR test before departing. Instead, they can take 0:05:51.320 --> 0:05:53.919 a rapid test. They will still need to take PCR 0:05:54.000 --> 0:05:56.920 tests upon arrival, though that's turned to corporate news now 0:05:56.960 --> 0:05:59.640 Boeing is in focus, the company agreeing to settle an 0:05:59.720 --> 0:06:02.600 s e SEE investigation into safety issues on its seven 0:06:02.640 --> 0:06:06.120 thirty seven Max planes. We get details from Bloomberg's Jeff Bellinger. 0:06:06.720 --> 0:06:09.760 Boeing has agreed to pay two hundred million dollars to 0:06:09.760 --> 0:06:13.920 settle sec allegations that the company and former CEO Dennis 0:06:14.000 --> 0:06:17.559 Mullenberg failed to disclose issues with the seven thirty seven 0:06:17.600 --> 0:06:21.400 Max jetliner. Muhlenberg will pay one million dollars as part 0:06:21.400 --> 0:06:24.880 of the agreement. Regulators say Bowing and Muhllenberg did not 0:06:25.000 --> 0:06:28.440 reveal safety problems with the seven thirty seven Max, which 0:06:28.520 --> 0:06:31.560 was involved in two crashes that killed three hundred forty 0:06:31.600 --> 0:06:34.800 six people. The twin tragedies prompted one of the longest 0:06:34.839 --> 0:06:39.040 groundings in aviation history. Boeing previously paid a two hundred 0:06:39.080 --> 0:06:41.960 forty three million dollar fine as part of a two 0:06:42.000 --> 0:06:45.000 and a half billion dollar settlement with the US Justice 0:06:45.040 --> 0:06:49.360 Department to end a criminal investigation that was in January 0:06:49.400 --> 0:06:54.400 of twenty one. Jeff Bellinger, Bloomberg Daybreak, Jeff thanks FedEx's 0:06:54.480 --> 0:06:57.880 cutting costs and increasing rates. The giant package carries looking 0:06:57.880 --> 0:06:59.880 for as much as two point seven billion dollars in 0:07:00.040 --> 0:07:02.920 savings to deal with slowing demand and a tight labor market. 0:07:03.240 --> 0:07:06.400 Last week, FedEx shares suffered their worst day in forty 0:07:06.480 --> 0:07:10.840 years after the company pointed out worsening economic conditions. SMP 0:07:11.000 --> 0:07:14.160 futures are down thirty one point, staff futures down two nine, 0:07:14.240 --> 0:07:17.520 NASTAC futures down a hundred thirteen local headlines and a 0:07:17.600 --> 0:07:24.200 check of sports. Next, This is Bloomberg right, Thank you, Nathan. 0:07:24.240 --> 0:07:26.200 It is six oh seven on Wall Street. We bring 0:07:26.200 --> 0:07:28.240 in Michael Barr now to find out what else is 0:07:28.240 --> 0:07:30.520 going on in New York and around the world. Good 0:07:30.600 --> 0:07:33.480 morning Michael, Good morning Amy. New York City health officials 0:07:33.480 --> 0:07:36.160 believe five people have died in a Manhattan nursing home 0:07:36.200 --> 0:07:40.040 of Legionnaire's disease. The outbreak over the past year took 0:07:40.040 --> 0:07:44.160 place at the Amsterdam Nursing Home in Morningside Heights. Already 0:07:44.200 --> 0:07:47.760 say four deaths have been confirmed to be connected to legionnaires. 0:07:48.000 --> 0:07:51.360 Officials are investigating the fifth depth. Florida Governor Ran De 0:07:51.440 --> 0:07:54.520 Santis is being sued by a state lawmaker for allegedly 0:07:54.800 --> 0:07:57.800 wasting hundreds of thousands of dollars and state funds to 0:07:57.800 --> 0:08:02.640 apply dozens of Venezuelan migrants to Martha's Vineyard, Massachusetts, where 0:08:02.680 --> 0:08:06.240 critics have called a political stunt that trigged vulnerable immigrants. 0:08:06.640 --> 0:08:11.400 Florida State Democratic Senator Jason Piso from Miami also asked 0:08:11.480 --> 0:08:14.320 the court to stop the Santis from transporting any more 0:08:14.520 --> 0:08:17.560 migrants to other states. Meanwhile, De Santis says about ten 0:08:17.640 --> 0:08:21.320 thousand dollars paid to an aviation company to fly migrants 0:08:21.320 --> 0:08:24.760 to Delaware has not been put to use. He was vague, though, 0:08:24.800 --> 0:08:28.800 about payments for sending migrants north. The policy is we 0:08:28.840 --> 0:08:33.040 want to voluntarily transport away from Florida so that we 0:08:33.080 --> 0:08:35.679 don't have to bear the costs, and that there's a 0:08:35.800 --> 0:08:39.520 vendor that is doing that for US. Governor De Santis 0:08:39.520 --> 0:08:42.079 made his comments at a news conference in Miami Dade. 0:08:42.720 --> 0:08:46.200 Voting has begun in Moscow held regions of Ukraine on 0:08:46.240 --> 0:08:49.880 referendums to become part of Russia. Ukraine in the West 0:08:49.960 --> 0:08:53.560 have denounced them as shams without any legal force. The 0:08:53.600 --> 0:08:58.920 referendums follow President Vladimir's putin order to have partial mobilization 0:08:59.040 --> 0:09:01.559 that could add to about three thousand Russian troops to 0:09:01.600 --> 0:09:05.880 the fight. Former US Ambassador the Ukraine, William Taylor says 0:09:05.920 --> 0:09:08.960 Putin is looking for ways out of the war now 0:09:09.000 --> 0:09:12.720 that Ukrainian advances have made peace talks less likely. He's 0:09:12.800 --> 0:09:17.120 running out of soldiers. He thinks by instituting this draft 0:09:17.280 --> 0:09:19.760 or this call up, he may be able to replace 0:09:19.800 --> 0:09:23.920 these soldiers that he's losing day after day on the battlefield. 0:09:24.040 --> 0:09:28.440 Former Ambassador Taylor spoke to ABC. NASA plans to slam 0:09:28.440 --> 0:09:32.520 a small, harmless asteroid as an experiment, a spacecraft name 0:09:32.760 --> 0:09:36.320 DART for double Asteroid Redirection test. Weill zero in on 0:09:36.360 --> 0:09:39.120 the asteroid Monday and tent on slamming it head on 0:09:39.640 --> 0:09:43.360 at fourteen thousand miles Brauer. Scientists say the impact should 0:09:43.360 --> 0:09:46.440 be just enough to nudge the asteroid into a slightly 0:09:46.480 --> 0:09:50.520 tighter orbit around its companion, space Rock. NASA scientist Tom Stadler, 0:09:50.960 --> 0:09:52.880 at the end of the day, the real question is 0:09:53.120 --> 0:09:56.440 how effectively did we move the asteroid and can this 0:09:56.559 --> 0:09:59.400 technique of kinnectic impact be used in the future if 0:09:59.440 --> 0:10:02.760 we ever needed to. NASA's Tom Standler says the asteroid 0:10:02.840 --> 0:10:05.560 is about six point eight million miles away Global News 0:10:05.600 --> 0:10:07.720 twenty four hours a day on air and on Bloomberg 0:10:07.760 --> 0:10:10.480 Quick Take Power by more than hundred journalists analyist more 0:10:10.520 --> 0:10:13.559 than a hundred twenty countries. Michael Barr, this is Bloomberg. Amy. 0:10:13.880 --> 0:10:19.360 All right, thank you, Michael. It's six ten on Wall Street. 0:10:19.400 --> 0:10:22.319 Time now for the Bloomberg Sports Update. Here's Scott Seidenberg. 0:10:22.600 --> 0:10:25.320 Good morning, Amy. Yankees fans will have the waits another 0:10:25.600 --> 0:10:29.520 day before seeing Aaron Judge hit home run number sixty one. 0:10:29.600 --> 0:10:32.400 Judge went over to last night with three walks and 0:10:32.559 --> 0:10:35.760 a strikeout, but the Yanks got to win five four 0:10:35.880 --> 0:10:39.000 over the Red Sox in ten innings on Josh Donaldson's 0:10:39.120 --> 0:10:42.920 fourth walk off hit of the season. It's the yankees 0:10:43.160 --> 0:10:47.040 sixteenth walk off win. That's one shy for the most 0:10:47.120 --> 0:10:51.680 walk off wins in a single season in Yankees franchise history. 0:10:51.960 --> 0:10:54.320 Here was Donaldson after the game. You know seven a 0:10:54.320 --> 0:10:57.040 couple of times this year, so you know, it doesn't 0:10:57.040 --> 0:11:02.360 it doesn't. With the win, the Yankees officially clinched a 0:11:02.520 --> 0:11:06.320 postseason spot, and Aaron Boone becomes the first manager to 0:11:06.400 --> 0:11:10.559 reach the postseason in each of his first five seasons. 0:11:10.640 --> 0:11:12.680 The Yankees have a seven and a half game lead 0:11:12.800 --> 0:11:15.880 in the A Out East over the Toronto Blue Jays. 0:11:16.200 --> 0:11:19.440 NBA Who's The Boston Celtics have suspended head coachma who 0:11:19.520 --> 0:11:23.520 Duke up for the upcoming season the team, citing violations 0:11:23.600 --> 0:11:27.840 of team policies and its announcement. Assistant coach Joe Missoula 0:11:27.920 --> 0:11:30.640 takes over in the interim. Week three of the NFL 0:11:30.720 --> 0:11:33.520 kicked off last night, the Browns defeating the Steelers twenty 0:11:33.600 --> 0:11:36.960 nine seven team. On Sunday, the Jets will welcome in 0:11:37.160 --> 0:11:40.520 the Bengals. The Giants host the Cowboys on Monday Night Football. 0:11:40.640 --> 0:11:44.600 I'm Scott Seedinberg with Bloomberg Sports. Amy all right, thank you, Scott. 0:11:44.640 --> 0:11:47.880 Futures are lower, SNP down thirty three points, dal features 0:11:47.880 --> 0:11:52.080 down two Hunt four, Nasdaq features down one hundred nineteen points. 0:11:52.280 --> 0:11:55.199 Ten year Treasury down nine thirty seconds, the yield at 0:11:55.280 --> 0:11:58.040 three point seven five percent, the two year yield at 0:11:58.040 --> 0:12:01.520 four point one eight percent. Still ahead on Bloomberg daybreak, 0:12:01.600 --> 0:12:04.800 Oil headed four or fourth weekly decline. This is Bloomberg 0:12:07.880 --> 0:12:10.400 Bloomberg eleven three oh Weather sunny and breezy. We're going 0:12:10.480 --> 0:12:13.280 up to sixty five degrees today with plenty of sunshine 0:12:13.320 --> 0:12:15.680 tomorrow going up to seventy degrees, could see rain on 0:12:15.720 --> 0:12:23.960 Sunday going up to seventy five. Markets, headlines and breaking 0:12:23.960 --> 0:12:26.840 news twenty four hours a day at Bloomberg dot Com, 0:12:27.000 --> 0:12:30.520 The Bloomberg Business at and at Bloomberg Quick Tape. He's 0:12:30.559 --> 0:12:39.520 a Bloomberg Business Flash. I'm Nathan Hagar. Global bond yields 0:12:39.559 --> 0:12:42.560 are surging. Stocks are extending their declines at the end 0:12:42.600 --> 0:12:46.480 of a week that underscored expectations for tighter monetary policy 0:12:46.520 --> 0:12:49.680 and a slowing global economy. We checked the markets every 0:12:49.679 --> 0:12:52.880 fifteen minutes during the trading day. On Bloomberg SMP futures 0:12:52.880 --> 0:12:55.679 are down thirty one points down futures are lower by 0:12:55.720 --> 0:12:58.320 two thirty four and NASTACK futures on the decline by 0:12:58.360 --> 0:13:01.640 one sixteen points, a drop of one percent. The tenure 0:13:01.640 --> 0:13:04.440 Treasury is down seven thirty seconds, the yield three point 0:13:04.480 --> 0:13:06.920 seven four percent. The yield on the two year four 0:13:07.000 --> 0:13:10.240 point one seven percent. NIMEX screwed is down two point 0:13:10.240 --> 0:13:13.040 three percent, or a dollar eighty one dollars fifty seven 0:13:13.080 --> 0:13:16.200 cents a barrel comes golled down one percent or sixteen dollars. 0:13:16.200 --> 0:13:18.880 At sixteen sixty five, ten announced the euro point nine 0:13:18.920 --> 0:13:21.880 seven six five against the dollar British pound one point 0:13:21.920 --> 0:13:23.960 one one to two. The yen is at one forty 0:13:24.000 --> 0:13:27.079 two point seven four. Bitcoin is lower by seven tenths 0:13:27.080 --> 0:13:30.080 percent at nineteen thousand, one hundred dollars. That's a Bloomberg 0:13:30.120 --> 0:13:32.240 business flash. And now here's Michael Barr with more on 0:13:32.320 --> 0:13:34.760 what's going on around the world. Michael Heathan, thank you 0:13:34.840 --> 0:13:37.680 very much. The Special Master in the case of documents 0:13:37.679 --> 0:13:41.240 sees from Donald Trump's Florida homes says the former president's 0:13:41.320 --> 0:13:44.760 lawyers have to state in a court filing whether they 0:13:44.800 --> 0:13:48.559 believe the FBI line about the items. Judge Raymond Deary 0:13:48.640 --> 0:13:52.800 told Trump's legal team that they have until September. Residents 0:13:52.800 --> 0:13:55.720 and occupied parts of Ukraine begin voting today and a 0:13:55.840 --> 0:13:59.680 Russia run referendum on joining Ukraine. The vote has been 0:13:59.679 --> 0:14:03.000 why Lye condemned as a sham. In baseball, the Yankees 0:14:03.040 --> 0:14:05.960 beat the Red Sox five for clinching a playoff birth 0:14:06.240 --> 0:14:09.000 He came close, but Aaron Judge fell short of telling 0:14:09.080 --> 0:14:11.720 Roger Marries a le record of six one on runs. 0:14:12.200 --> 0:14:16.000 The Orioles and Giants won the A's lost. Thursday night football, 0:14:16.040 --> 0:14:20.240 the Browns beat the Steelers twenty nine Global News twenty 0:14:20.240 --> 0:14:23.400 four hours a day on air and on Bloomberg Quicktake, 0:14:23.640 --> 0:14:26.840 powered by more than hundred journalists and analysts more than 0:14:26.880 --> 0:14:30.600 a hundred twenty countries. Michael barn this is Bloomberg Gaming 0:14:30.840 --> 0:14:33.320 all right, Thank you, Michael. It is six twenty on 0:14:33.400 --> 0:14:36.760 Wall Street. We're live from the Bloomberg Interactive Broker Studios. 0:14:37.080 --> 0:14:39.800 This is Bloomberg day Break. Oil is headed for a 0:14:39.880 --> 0:14:43.080 fourth weekly decline after interest rate hikes around the world 0:14:43.160 --> 0:14:46.560 darkened the outlook for energy Deman joining us Bloomberg Senior 0:14:46.600 --> 0:14:50.760 Executive Editor for Energy and Commodities, Will Kennedy. Well, good 0:14:50.760 --> 0:14:52.480 morning to you, Thanks so much for taking the time 0:14:52.480 --> 0:14:55.000 with us on this Friday morning. We know crude is 0:14:55.120 --> 0:14:57.560 on track for its first quarterly loss in more than 0:14:57.600 --> 0:15:00.880 two years. What are you watching for? Well, I think 0:15:00.920 --> 0:15:02.880 the oild market right now is called in a battle 0:15:02.920 --> 0:15:06.680 between macro and economic factors and the nuts and bolts 0:15:06.680 --> 0:15:08.560 of the oil market. On the macro side, the price 0:15:08.640 --> 0:15:12.800 has been facing huge hedge winds as policymakers around the 0:15:12.800 --> 0:15:17.480 world raise interest rates, raising fears of an economic slowdown, 0:15:17.800 --> 0:15:21.320 and the dollar strength and dollar strength is normally inverse 0:15:21.400 --> 0:15:24.040 to oil oil goes in the other direction. So it's 0:15:24.040 --> 0:15:26.640 been battling those head winds and right now those headwinds 0:15:26.680 --> 0:15:29.440 are winning. But it's not clear whether that pattern will 0:15:29.480 --> 0:15:32.080 hold as we go in towards the winter. Globally, supplies 0:15:32.120 --> 0:15:36.760 remain very tight. People are producing a maximum or close 0:15:36.800 --> 0:15:39.640 to maximum all over the world, and global stock piles 0:15:39.680 --> 0:15:43.920 are falling. So there is a view that this slump 0:15:43.920 --> 0:15:46.560 could reverse as we get into the winter, when oil 0:15:46.600 --> 0:15:49.680 demand tends to rise. Let's get into that a little bit. 0:15:49.720 --> 0:15:51.840 Some banks saying that there could be a rebound for 0:15:52.000 --> 0:15:54.600 oil in the fourth core. Some details about how that 0:15:54.680 --> 0:15:58.560 might work. Well, you get a bump in demand are 0:15:58.560 --> 0:16:02.160 you go into the winter some the world, Japan, Northeast, US, 0:16:02.280 --> 0:16:06.080 parts of Europe which use oil for heating, that boost 0:16:06.120 --> 0:16:10.240 demand for Middle Distonance diesel UH and jet fuel around 0:16:10.240 --> 0:16:13.600 the world. Um, So that tends to be a bullish factor, 0:16:13.640 --> 0:16:17.120 and all the more so this year because alternatives such 0:16:17.120 --> 0:16:20.120 as natural gas in Europe especially are incredibly expensive to 0:16:20.120 --> 0:16:23.360 those people who can use oil will use oil. There 0:16:23.360 --> 0:16:26.520 may be also industries that switch out of gas into 0:16:26.600 --> 0:16:30.880 diesel diesel generators that that will be more to supply 0:16:31.400 --> 0:16:35.040 m and then a lot of the One reason the 0:16:35.040 --> 0:16:37.440 old market has stayed under control in recent months is 0:16:37.480 --> 0:16:41.960 this massive supply of oil ou to the strategic Petroleum 0:16:42.000 --> 0:16:45.240 of Reserve in the United States. It's not clear how 0:16:45.320 --> 0:16:47.720 much more oil or keep coming from the SPR and 0:16:47.760 --> 0:16:51.520 that could change the balances on the supply side as 0:16:51.560 --> 0:16:56.400 demand arises. Well, let's talk about what's driving the volatility 0:16:56.520 --> 0:16:59.280 in these markets, in the oil markets, and what could 0:16:59.320 --> 0:17:03.760 settle things down. When are we going to see a break? Well, 0:17:03.760 --> 0:17:05.640 that's a good question. I mean, I think one thing 0:17:05.680 --> 0:17:08.480 about one observation we could make about their old market 0:17:08.520 --> 0:17:11.679 is liquidity is down. There aren't as many people trading 0:17:11.720 --> 0:17:16.240 oil um, and that's because there are a lot of 0:17:16.280 --> 0:17:20.360 investors who feel that the volatility um it's an attractive 0:17:20.359 --> 0:17:24.760 to them. And the fewer people you get, the more um, 0:17:24.880 --> 0:17:27.920 the more volatile it is. Less liquidity means more volatility, 0:17:28.000 --> 0:17:30.600 and it's a bit of a self perpetuating cycle. So 0:17:30.680 --> 0:17:33.000 that's one reason. The other reason is that's just the 0:17:33.040 --> 0:17:36.719 sheer volume of factors that pulling the markets in different directions, 0:17:36.760 --> 0:17:40.280 everything from politics and the war, to OPEC policy, to 0:17:40.320 --> 0:17:43.359 all the financial and macro economic background that I've just 0:17:44.280 --> 0:17:47.439 described and I don't think there's any reason, given the 0:17:47.480 --> 0:17:49.159 flow of events, are seeing the moment for that to 0:17:49.240 --> 0:17:51.840 end anytime soon? Are we looking at a perfect storm 0:17:51.880 --> 0:17:53.960 of events that you just described. I mean, give me 0:17:54.000 --> 0:17:58.320 an historical perspective if we've ever seen this before. I mean, 0:17:58.359 --> 0:18:01.119 the oil market has gone through some video dramatic times before, 0:18:01.200 --> 0:18:04.080 in the pandemic, we saw negative old vices in the 0:18:04.080 --> 0:18:07.560 global financial crisis, the Varna ark War. But I do 0:18:07.680 --> 0:18:11.720 think that, uh, it's a particularly interesting time because you 0:18:11.760 --> 0:18:16.919 have these enormous geopolitical events combining with really big events 0:18:16.920 --> 0:18:21.160 in the market. People trying to contend with the prospect 0:18:21.160 --> 0:18:23.240 of a slowdown on recession on the one hand, and 0:18:23.280 --> 0:18:25.760 the real risk to supply that we're seeing because of 0:18:26.520 --> 0:18:31.040 the war war in Ukraine, and the confluence of those 0:18:31.080 --> 0:18:34.480 two very big things, I think is makes it one 0:18:34.520 --> 0:18:37.280 of the most mentors our markets. And sometimes how much 0:18:37.280 --> 0:18:39.480 of an impact is the war in Ukraine? And I 0:18:39.560 --> 0:18:42.040 asked because we got word this morning that Russia is 0:18:42.080 --> 0:18:46.359 looking to boost its military industry complex by forty some 0:18:46.480 --> 0:18:50.119 odd percent, which indicates that they plan on being in 0:18:50.280 --> 0:18:53.320 Ukraine for a long time to come. Yeah, I mean, 0:18:53.359 --> 0:18:56.520 I think what markets are looking for is two things 0:18:56.520 --> 0:18:58.840 are going to happen. Europe is going to introduce a 0:18:58.960 --> 0:19:01.720 ban on importing and oil and that will change the 0:19:01.720 --> 0:19:05.199 flow of Russian oil all around the world. And traders 0:19:05.200 --> 0:19:07.159 are very interested to know whether Asian bias who have 0:19:07.280 --> 0:19:10.600 kept buying Russian oil and have increased their purchases vassional 0:19:10.680 --> 0:19:14.879 principally India and China, could increase their purchases further, whether 0:19:14.960 --> 0:19:18.119 that banned by the European Union means that some mushan 0:19:18.119 --> 0:19:20.160 i will just won't find a market and production will. 0:19:20.520 --> 0:19:22.359 For the other thing that we have going on policy 0:19:22.359 --> 0:19:25.119 wise is this idea that the G seven would impose 0:19:25.160 --> 0:19:27.359 a price cap on Russian oil, and that's an attempt 0:19:27.560 --> 0:19:29.800 to make sure the oil keeps flowing, but in a 0:19:29.840 --> 0:19:34.600 way where Russia doesn't really benefit from higher prices. Lots 0:19:34.600 --> 0:19:37.080 of skepticism about how that will work, but if it's introduced, 0:19:37.080 --> 0:19:39.840 it will have some impact. So both of those things, 0:19:40.160 --> 0:19:43.199 I'm introducing a lot of uncertainty into the market as 0:19:43.200 --> 0:19:45.520 we go into the crucial winter months. All right, well, 0:19:45.560 --> 0:19:47.280 thank you so much for taking the time with us 0:19:47.280 --> 0:19:50.840 on this morning Friday morning. Will Kennedy is senior executive 0:19:50.920 --> 0:19:54.680 editor for energy and commodities for Bloomberg News futures are lower. 0:19:54.840 --> 0:19:57.880 S ANDP down thirty eight points, STUT futures down two three, 0:19:58.119 --> 0:20:01.520 NASAC futures down on seven points. Much more still to come. 0:20:01.560 --> 0:20:08.400 On Bloomberg Daybreak. This is Bloomberg Bloomberg eleven three oh 0:20:08.440 --> 0:20:11.160 weather sunny and breezy, going up to sixty five degrees. 0:20:11.200 --> 0:20:13.720 We'll see seventy degrees with sunshine tomorrow and then on 0:20:13.760 --> 0:20:16.560 Sunday at chance of rain going up to seventy five degrees. 0:20:25.080 --> 0:20:29.600 Broadcasting wide from the Bloomberg Interactive Broker's studio in New York, 0:20:29.720 --> 0:20:32.800 Bloomberg E Living Free on to Washington, d C. Bloomberg 0:20:33.800 --> 0:20:37.000 to Boston, Bloomberg one O six one to San Francisco, 0:20:37.080 --> 0:20:40.560 Bloomberg sixty to the Country Sirius XM Chad A one 0:20:40.640 --> 0:20:43.720 nine and around the globe the Bloomberg Business app and 0:20:43.800 --> 0:20:53.440 Bloomberg Radio dot Com. This is Bloomberg Daybreak. It's six 0:20:53.520 --> 0:20:56.520 thirty on Wall Street. Good Friday morning. I'm Amy Morris, 0:20:56.600 --> 0:20:58.880 I'm Nathan Hagar. We are about three hours away from 0:20:58.880 --> 0:21:00.640 the open of US training to I'm for the five 0:21:00.680 --> 0:21:02.480 things you need to know to start your day. Brought 0:21:02.520 --> 0:21:05.320 to you by Interactive Brokers. Global Analysts helps you find 0:21:05.440 --> 0:21:09.399 new global investment opportunities to diversify your portfolio and discover 0:21:09.520 --> 0:21:12.520 undervalued companies that may have greater growth potential. Try i 0:21:12.640 --> 0:21:15.359 b k OUR Global Analysts today at i b k 0:21:15.560 --> 0:21:18.840 R dot com. Slash g a up first. The SMP 0:21:18.960 --> 0:21:22.160 five hundreds on track for a second straight weekly loss. Yesterday, 0:21:22.160 --> 0:21:24.919 the index closed at its lowest level since June, as 0:21:25.000 --> 0:21:27.840 higher interest rates continue to hit sentiment. Jess meant and 0:21:27.880 --> 0:21:32.720 covers equities for Bloomberg News technology sector, looking at discretionary shares. 0:21:32.760 --> 0:21:36.520 Also industrial companies really coming under pressure following what happened 0:21:36.520 --> 0:21:38.440 with that sell off after the Fed's move, but also 0:21:38.720 --> 0:21:41.480 more globally, this isn't even just the FED. Investors are 0:21:41.480 --> 0:21:44.600 really trying to digest what's happening because it's been over 0:21:44.680 --> 0:21:47.360 five basis point moved by global central banks right now 0:21:47.400 --> 0:21:50.720 getting aggressive to tackle what's happening with inflation, and traders 0:21:50.800 --> 0:21:53.639 really trying to reprice. Bloomberg's jessment and says it appears 0:21:53.640 --> 0:21:56.360 investors aren't expecting the FED to cut rates until sometime 0:21:56.440 --> 0:21:58.879 next year, and there could be more pain ahead. Nathan 0:21:58.920 --> 0:22:01.160 when Wall Street firm says the selling is not over. 0:22:01.240 --> 0:22:03.639 Goldman SATs is slashing its year end target for the 0:22:03.720 --> 0:22:06.760 SMP five hundred to thirty six hundred. That's down from 0:22:06.840 --> 0:22:09.760 forty three und You're watching the dash to cash this morning. 0:22:09.760 --> 0:22:12.359 Amy Bank of America strategist say investors are flocking to 0:22:12.480 --> 0:22:14.879 cash as they turn their most pessimistic since the global 0:22:14.880 --> 0:22:18.399 financial crisis. Jennifer Lee, senior economist with BEMO Capital Market, 0:22:18.440 --> 0:22:21.600 says firms like hers are lowering growth forecast, but still 0:22:21.640 --> 0:22:24.239 there is strength in the labor market. We've actually been 0:22:24.280 --> 0:22:26.520