Speaker 1: Bloom Line from the Bloomberg Interactive Broker Studios. This is
Speaker 1: Bloomberg Daybreak for Thursday, June sixteen, two. Coming up this hour,
Speaker 1: the post fed rally fades as US future slump recession
Speaker 1: fears return following the biggest increase since nine does the
Speaker 1: Bank of England's turn to increase the interest race and
Speaker 1: Elon Musk is set to address Twitter employees for the
Speaker 1: first time. The gunman who killed black people in a
Speaker 1: racist attack of Buffalo faces federal hate crimes charges. Plus
Speaker 1: hearings resumed today on the January sixth Capitol Riot. I'm
Speaker 1: Michael larn Or Ahead, I'm John Stash Howard Swards. Another
Speaker 1: win for the Yankees, a loss for the meth Colorado
Speaker 1: won the Stanley Cup, Bottle Opener and the US Open
Speaker 1: Gulf agains today. That's all s traded ahead on Bloomberg
Speaker 1: Daybreak on Bloomberg e Live in freon New York, Bloomberg
Speaker 1: nine one, Washington, d C, Bloomberg one oh six one, Boston,
Speaker 1: Bloomberg nine sixties and Francisco Sirius x AM one nineteen
Speaker 1: and around the world Old on Bloomberg Radio dot Com
Speaker 1: and The Bloomberg Business app Good morning. I'm John Tucker,
Speaker 1: I'm Nathan Hagar. US futures are slumping this morning. We're
Speaker 1: coming up to five oh one on Wall Street, and
Speaker 1: we checked the markets every fifteen minutes during the trading
Speaker 1: down Bloomberg. Right now, SMP futures are down two point
Speaker 1: four percent for a drop of ninety points. Staff futures
Speaker 1: down five fifty four. Nasdaq futures leading the declines right
Speaker 1: now down three five points for a drop of two
Speaker 1: point nine percent. The tenure treasuries down twenty five thirty seconds,
Speaker 1: the yield three point three seven percent, yield on the
Speaker 1: two year three point three zero percent. NIMEX screwed right
Speaker 1: now trading at a hundred fifteen dollars ten cents of
Speaker 1: barrel John and Nathan. The reversal in futures comes after
Speaker 1: a rally yesterday following the latest decision from the Fed.
Speaker 1: J Palell engineered the biggest US interest rate increasing in
Speaker 1: twenty eight years to fight inflation. Markets are spotted with
Speaker 1: a rally that halted a five day ten percent route
Speaker 1: in S and P five. We at the Fed understand
Speaker 1: the hardship that high inflation is causing. We're strongly committed
Speaker 1: to bringing inflation back down, and we're moving expeditiously to
Speaker 1: do so. We have both the tools we need and
Speaker 1: the results that it will take to restore price stability
Speaker 1: on behalf of American families and businesses. J Company raising
Speaker 1: rates by seventy five basis points at lifting the target
Speaker 1: range for the federal funds rate to one and a
Speaker 1: half to one and three quarters per cent. Former Richmond
Speaker 1: Fed president Jeffrey Lacker says more is needed. I think
Speaker 1: it's going to have to go to about five and
Speaker 1: a half or six percent. That's my own sense, and
Speaker 1: that's based on just the historical record, uh that indicates
Speaker 1: that real interest rates, inflation adjusted short term policy rates
Speaker 1: have to get above zero in order to have any
Speaker 1: chance of frustraining inflation. Former Bank of Richmond president Jeffrey
Speaker 1: Lacker says the Fed should have raised rates last year. Well,
Speaker 1: the rate hike now has many on Wall Street forecasting
Speaker 1: a recession for the US economy. We caught up with
Speaker 1: Guggenheim Chief investment officer Scott Minored, there's a chance that
Speaker 1: we are already in a recession. And so if if
Speaker 1: we are in a recession or we're close to a
Speaker 1: recession and the FED pushes on this more and then
Speaker 1: we find that that all of a sudden we have
Speaker 1: a decline in asset prices like stocks did in seven.
Speaker 1: Then uh, if the Fed reversus course, they're gonna look
Speaker 1: like they're week on inflation. So this this is a
Speaker 1: very very tough situation that we're maneuvering. Googenheim Chief investment
Speaker 1: officer Scott Minerd says cracks are forming in the credit
Speaker 1: world and the worst is probably not over after the FED.
Speaker 1: Now it's the Bank of England's decision. Their decision comes
Speaker 1: as the Bank of England gets set to deliver a
Speaker 1: fifth straight rate hike later this morning. Investors in accounts
Speaker 1: are betting the UK Central Bank we'll deliver a fifth
Speaker 1: straight hike later this morning, raising the base rate by
Speaker 1: twi bases points to a thirteen year high of one
Speaker 1: and quarter percent. But former Bank of England governor Mark
Speaker 1: Karney says he thinks policy makers are falling behind real
Speaker 1: world events. I think what's clear as central bankers need
Speaker 1: to catch up to their economies. They've you know, they've
Speaker 1: been behind the curves. They've acknowledged this um and they
Speaker 1: need to start to get interest rates uh above inflation effectively,
Speaker 1: or at least perspective inflation inflation expectations. Mark Arney is
Speaker 1: stepping down from the Central Bank of twenty twenty. He's
Speaker 1: now a vice chair at Brookfield Asset Management. Oh, we
Speaker 1: have another interest rate decision in Europe to tell you about, John.
Speaker 1: The Swiss National Bank unexpectedly raised its rates for the
Speaker 1: first time since two thousand seven. Policy makers opted to
Speaker 1: join the global bandwagon of monetary tightening, lifting their policy
Speaker 1: rate by fifty basis points to negative zero point to
Speaker 1: and saying at europe natural anser price is jumping after
Speaker 1: Russia has stepped up an energy war. It's cutting supplies
Speaker 1: to Europe's top buyers. Let's get more from Bloomberg and
Speaker 1: jury reporter Stephen Stephanevsky. This is a big deal, and
Speaker 1: this is like the worst case scenario that that traders
Speaker 1: were expecting in Europe. Absolutely, it is um you know,
Speaker 1: for for weeks, for months, you know, when this war
Speaker 1: broke out, the fear was Russia was going to curb
Speaker 1: supply to customers, and they curbed to some customers. They
Speaker 1: curbed to Poland, to Bulgaria, they curbed to these countries,
Speaker 1: but they're not major buyers. Germany is a major buyer.
Speaker 1: And this pipeline they've the North Stream one, they've cut
Speaker 1: supply my Dutch front month gas futures the European benchmark
Speaker 1: rising as much as twelve percent a day after rising
Speaker 1: by forty four percent in the previous two sessions. Back
Speaker 1: here in the US, John the White House says President
Speaker 1: Biden is willing to use emergency measures to ramp up
Speaker 1: gasoline output. Bloomberg's Ed Baxter has the story. This is
Speaker 1: the same Cold War era law he invoked to increase
Speaker 1: production of baby formula and bolster solar manufacturing. Biden saying
Speaker 1: his administration is prepared to use all reasonable government tools
Speaker 1: to increase refinery capacity. Meanwhile, the White House spokesman Karen
Speaker 1: Jean Pierre says the oil companies need to step up.
Speaker 1: We are calling on them to do the right thing,
Speaker 1: to be patriots here, uh and not to use the
Speaker 1: war as an excuse for higher costs leading to higher profits.
Speaker 1: In San Francisco, I'm at bachetor Bloomberg day Break and
Speaker 1: thanks Ed incorporating it was a big day for Twitter
Speaker 1: and Elon Musk. Let's get the latest line from Bloomberg's
Speaker 1: we need a young Good Morning reneaving Good Morningtown. Elon
Speaker 1: Musk is addressing Twitter employees for the first time today
Speaker 1: since agreeing to buy the company for forty four billion dollars.
Speaker 1: At the virtual meeting, Musk will take questions directly from employees,
Speaker 1: many of who have not been happy with him lately. Meantime,
Speaker 1: Twitter CEO recently announced a series of cost cutting measures,
Speaker 1: including canceling the company wide retreat that was scheduled to
Speaker 1: happen in January and a hiring freeze live in New York,
Speaker 1: I'm gonna need a young Bloomberg day break. We need
Speaker 1: to thank you in A big name in the cosmetic
Speaker 1: style is filing for bankruptcy. Revlon is applying for Chapter eleven.
Speaker 1: The company owned by billionaire Ron Perlman, has been unable
Speaker 1: to manage its heavy deathload. Revlon got it start selling
Speaker 1: nail polish and the throws of the Great Depression. Proman's
Speaker 1: holding company could took control in a bitter takeover funded
Speaker 1: with junk debt raised by Michael Milken. This is Bloomberg,
Speaker 1: Thanks Nathan five of seven on Wall Street. Fantime to
Speaker 1: bring in Michael Barr with more on what else is
Speaker 1: going on in New York had around the world. John,
Speaker 1: Thank you, Sarah. The gunman who killed ten black people
Speaker 1: in a racist attack at a Buffalo supermarket has been
Speaker 1: charged with federal hate crimes that could potentially carry a
Speaker 1: death penalty the Department of Justice. As eighteen year old
Speaker 1: Peyton Gendren told investigators as gold was to kill as
Speaker 1: many black people as possible. Attorney General Merrick Girland visited
Speaker 1: at the Top supermarket where the shooting happened. Hate fueled
Speaker 1: acts of violence terrorized not only the individuals who are
Speaker 1: all attacked, but entire communities. Hate brings immediate devastation and
Speaker 1: it inflicts lasting fear. Attorney General Garland places flowers at
Speaker 1: a memorial and met with families. Lawyers for British socialite
Speaker 1: Galaine Maxwell, saying she should face no more than four
Speaker 1: to five years in prison at sentencing later this month
Speaker 1: for her role in financier Jeffrey Epstein's sex abuse of
Speaker 1: teenage girls. Epstein took his own life in August of
Speaker 1: twenty nineteen while awaiting a sex trafficking trial in Manhattan.
Speaker 1: The role of former Vice President Mike Pence will be
Speaker 1: a major focus of today's congressional hearing on last year's
Speaker 1: Capitol riot. The January six committee will focus on the
Speaker 1: pressure put on Pence that day and includes efforts to
Speaker 1: keep PINNs some certifying President Biden's election victory. The House
Speaker 1: January six Select Committee released videos showing Republican Georgia Representative
Speaker 1: Barry Loudermilk leading constituents on a tour around the Capitol
Speaker 1: complex on January five. The committee claim one of the
Speaker 1: participants in the tour marched the Capitol the next day
Speaker 1: and made detailed threats against members of Congress. New York
Speaker 1: Democratic Congress Member Alexandria Ocassio Cortez. The fact that he
Speaker 1: was inviting and letting people in, that he did not
Speaker 1: know when the capital was quotes to the public. The
Speaker 1: fact that he was giving a tour at all is
Speaker 1: extremely concerning, Representative Ocassio Cortez spoke to ABC. Congressman louder
Speaker 1: Milk has denied any wrongdoing. COVID vaccines for infants and
Speaker 1: toddlers from Moderna and Fiser one support from a panel
Speaker 1: of US regulatory advisors. The Committee advising the FDA voted
Speaker 1: unanimously in favor of visors three dose vaccine for youngsters
Speaker 1: ages six months through four years, and gave a strong
Speaker 1: endorsement to Moderna's two dose for children six months through
Speaker 1: five years. Global News twenty four hours a day on
Speaker 1: air and on Bloomberg Quicktake, powered by more than journalists,
Speaker 1: analysts and more in a hundred twenty countries. Michael Bard,
Speaker 1: this is Bloomberg, John Michael, thank you, Roll Street time
Speaker 1: for the Bloomberg Sports Update. And here's John Stes. Thanks Jad.
Speaker 1: It's not offen. You see a TV thirty games over
Speaker 1: five hundred in mid June. But the Yankees are forty
Speaker 1: six and sixteen at the stadium and Aaron Judge home
Speaker 1: run first any this twenty five. That's seven more than
Speaker 1: anyone else in the majors. Fifth, that ain't three run
Speaker 1: shot for Kyle Agashioka, who had not homer all year
Speaker 1: until he hit two just this past Sunday, and now
Speaker 1: he's got a third. Yanks pe Tampa Bay four to three,
Speaker 1: Nestor Cortez the win of the Safe for Clay Homes
Speaker 1: at City Field. A night to forget for the Mets,
Speaker 1: who lost in Milwaukee ten to two. In Atlanta one again,
Speaker 1: the Braves are fourteen and oh in June, and they're
Speaker 1: now just four games behind the Mets. Second night in
Speaker 1: the row and near no hit her the Dodgers, Tyler
Speaker 1: Anderson lost it when Shoheyo Tani hit a triple with
Speaker 1: one out in the ninth inning overtime to start the
Speaker 1: Stanley Cup Final in Denver, Colorado. Blew at three one,
Speaker 1: wim We got a goal from Andre burakoff game minute
Speaker 1: twenty three and ot for a four three game one
Speaker 1: victory over Tampa Bay. Tonight in Boston, it's Game six
Speaker 1: of the NBA Finals. Either Golden State wins the championship
Speaker 1: or they go back to the Bay area for a
Speaker 1: Game seven with Red Sunday and what a sports day
Speaker 1: in Boston because this morning they tee off to start
Speaker 1: the US Open golf at the country Club of Brookline,
Speaker 1: of course, that first hosted the Open in nineteen thirteen,
Speaker 1: with a victory by Brooklyn native Francis Weamanton in a
Speaker 1: movie about that, Rory Makaroy looking forward to playing in
Speaker 1: historic of course. That is what's so good about golf
Speaker 1: is the history in the tradition and these stories. Um,
Speaker 1: you know the fact that you know he grew up
Speaker 1: just off the seventeen pole here um and we're still
Speaker 1: talking about it to this day, over a hundred years old.
Speaker 1: Like that's so cool. That's the great thing about this sport.
Speaker 1: Hawkeroy won last week. He's the betting favorite to win
Speaker 1: the Open. Has an early tea time today, so does
Speaker 1: defending champ John Ron Johns Dashaward Bloomberg Sports. John, all right,
Speaker 1: thanks John, Ahead of the cans show up and down.
Speaker 1: Futures down five hundred seventy seven points as futures they're
Speaker 1: down blind the nasdack futures down three hundred seven. This
Speaker 1: is Bloomberg. Just to get a Bloomberg day break, We'll
Speaker 1: be joined by Dan Bors, chief market strategist at B
Speaker 1: and P. Whill got his stud the investing landscape in
Speaker 1: this new regime. Markets headlines and breaking news twenty four
Speaker 1: hours a day at Bloomberg dot Com, the Bloomberg Business
Speaker 1: apt and at Bloomberg Quick Take. He's a Bloomberg Business Flash.
Speaker 1: Nathan Hagar, Well, so much for the post Fed rally
Speaker 1: futures this morning. You're signaling a route in stocks today
Speaker 1: after the Fed signaled a willingness to accept the recession.
Speaker 1: And arise in unemployment. In its resolve to contain elevated inflation,
Speaker 1: we checked the markets every fifteen minutes during the trading day.
Speaker 1: On bloomberg SMP futures now or down eighty six points
Speaker 1: or two point three percent, futures down five forty six.
Speaker 1: Nastat future is lowered by three n eighteen points, that
Speaker 1: is a drop of two point seven percent. The tenure
Speaker 1: Treasury is down twenty eight thirty seconds, the yield three
Speaker 1: point nine percent yield on the two year three point
Speaker 1: three one percent Nimex screws down two tenths per cent,
Speaker 1: or twenty six cents at a hundred fifteen dollars eight
Speaker 1: cents of barrel comes. Gold is up nine tenths per
Speaker 1: cent or fifteen dollars forty cents. At eighteen thirty five,
Speaker 1: Even announced the euro one point zero four one one
Speaker 1: against the dollar British pound one point zero six ahead
Speaker 1: of a Bank of England decision later this morning. The
Speaker 1: yen is at one thirty two point eight seven. At
Speaker 1: eight thirty Wall Street time, we get weekly jobless claims,
Speaker 1: along with reports on housing starts and building permits, and
Speaker 1: the Philadelphia FEDS business outlook Kroger reports earnings before the
Speaker 1: opening bell and will get results from Adobe after the close.
Speaker 1: That's a Bloomberg Business Flash. Now here's Michael Barr with
Speaker 1: Forum What's going on around the world. Michael, good morning,
Speaker 1: Good morning, Nathan. The January six Committee is plunging into
Speaker 1: Donald Trump's efforts to pressure your Vice president Mike Benz
Speaker 1: to reject the electoral held. At today's hearing, testimony is
Speaker 1: expected from the Vice President's Council Greg Jacob and a
Speaker 1: retired federal judge, Michael Luddig, who called the plan incorrect
Speaker 1: at every turn, COVID vaccines for infants, hand toddlers from
Speaker 1: MODERNA and finds her one support from a panel of
Speaker 1: US regulatory advisors. In baseball, the red Hot Yankees one again.
Speaker 1: The Mets lost along with the Nationals, Orioles and Giants.
Speaker 1: The Red Sox beat the A's in Game one of
Speaker 1: the NHL Final. The Avalanche beat the Lightning and overtime.
Speaker 1: For three Global News twenty four hours a day on
Speaker 1: air and on Bloomberg Quicktake, powered by more than twenty
Speaker 1: seven hundred journalists and analysts in more than one d
Speaker 1: twenty countries. I'm Michael Barr, and this is Bloomberg, John Michael,
Speaker 1: thank you. Find twenty on Wall Street. We are live
Speaker 1: from the Bloomberg in Trantbroker Studios. This is Bloomberg Daybreak.
Speaker 1: Traders seem to be giving at their initial optimism over
Speaker 1: FED share trum pal's comments that super sized rate hikes
Speaker 1: won't be the norm. Let's get you set up for
Speaker 1: the trading day ahead. Now we're joined by Dan Morris,
Speaker 1: chief market strategist at B and B. Parabout asset management. Dan,
Speaker 1: why do you change in sentiment from yesterday to the
Speaker 1: futures this morning? Firmly in the rent? Yeah? Well, I
Speaker 1: guess you could always find a bit of news to
Speaker 1: focus on, be a positive or negative. And I think
Speaker 1: at this point at least people seem to be picking
Speaker 1: up on the on the recession. Even if you're not
Speaker 1: going to get a hundred basis point hikes, Um, we're
Speaker 1: actually still modestly constructive. So I think the key question
Speaker 1: is you know now that the FED maybe has caught
Speaker 1: up to where it needs to be after having been
Speaker 1: behind the curve up to now, you know, is that enough?
Speaker 1: Are they at the right level? Is the trajectory the
Speaker 1: right one to get inflation? Down or contrarily, do you
Speaker 1: think it's not enough they're going to have to go higher?
Speaker 1: It is going to take a recession to get inflation down.
Speaker 1: So that that's really the judgment. And I guess on
Speaker 1: the minute, on the hour of the market seems to
Speaker 1: to change which view it has. Okay, with a recession,
Speaker 1: the first question we have to ask how deep and
Speaker 1: how long? Well, if you look at the components, you
Speaker 1: basically what's driving core inflation? Uh? And the assessment has
Speaker 1: got to be, you know, how much of those really
Speaker 1: could should turn out to be temporary? I mean, the
Speaker 1: goods inflation should turn out to be temporary, but we
Speaker 1: know there's some of these more persistent factors in particularly
Speaker 1: and also it seemed to have spooked the Fed last
Speaker 1: week was the increase in shelter Uh So how much
Speaker 1: you know, how big of a recession do you need
Speaker 1: to do to get the shelter prices to fall and
Speaker 1: that component, the rent component of core PC to fall.
Speaker 1: And you know, I think that's going to be the
Speaker 1: key assessment. But you know, just to be clear, we're
Speaker 1: not expecting a recession. Okay, Now, how does this change
Speaker 1: the investment landscape? With a more aggressive typing policy from
Speaker 1: the Fed, you say, avoiding a recession at this point,
Speaker 1: if again, if you think that this is enough, and
Speaker 1: really what we've seen so far really over the course
Speaker 1: of the year with this reset, you know, in policy
Speaker 1: rates and particul the increasing real rates, you know, that's
Speaker 1: had primarily an impact on valuations and on on growth
Speaker 1: stock valuations which have fallen dramatically, But now they're at
Speaker 1: at reasonable levels. So if you think real rates aren't
Speaker 1: going to go up any further, that the Fed is
Speaker 1: not going to hike anymore, you're actually pretty good valuations.
Speaker 1: The earnings outlook from that point of view is still fine.
Speaker 1: So I think you can have a modestly constructive view
Speaker 1: on equities, which which we do. It's only in the
Speaker 1: contrary scenario that either you think you need more rate hikes,
Speaker 1: in which valuations would be at risk again, and then
Speaker 1: it would get arguably even worse, because at that point
Speaker 1: you're earnings estaments would start to follow worse. So far,
Speaker 1: they've actually continued to rise despite everything that's happened so
Speaker 1: far this year. So what sectors are you looking to
Speaker 1: right now? We don't have any specific sector allocations and
Speaker 1: more geographics that we're overweight in Japan and China, and
Speaker 1: that's based on one UH and absolute terms attractive valuations.
Speaker 1: You know, if if the US and Europe about average,
Speaker 1: you can argue that Japan, e M China are below average.
Speaker 1: So that's a clear advantage. And also just the difference
Speaker 1: in monetary policy outlook. You know, it said clearly hiking
Speaker 1: the e CBS, you know, ramping up, whereas in Japan
Speaker 1: and China they've they've got a bit more room, they
Speaker 1: can be more patient, and so that's going to be
Speaker 1: more supportive for equity markets. Do you have a view
Speaker 1: for the dollar? Is it higher dollar for the foreseeable future?
Speaker 1: Given those great differentials, it really shouldn't from here. I
Speaker 1: mean clearly, the dollar over the course of you know,
Speaker 1: the last year has continually had to price in these
Speaker 1: writing expectations. But that's actually your historical pattern. As you
Speaker 1: go into your first hike, you know, the dollar tends
Speaker 1: to strengthen. Once the cycle actually starts, it tends to weaken.
Speaker 1: And I think there's two reasons that hasn't exactly happened
Speaker 1: this time. One, we kept or keep having to reset
Speaker 1: our expectations higher. But once we're at that final point
Speaker 1: that should be over. And then also we've had you
Speaker 1: know a bit of risk off just because of the geopolitics,
Speaker 1: and you know dollar tends to strengthening those environments. So
Speaker 1: on the assumption the geopolitics at least doesn't get worse, uh,
Speaker 1: and also the assumption we don't have yet more increases
Speaker 1: and expectations for FED funds. You know, historically the dollar
Speaker 1: does weaken. Let's switch the volatility with the VIX, the
Speaker 1: Wall Street fear gage this morning. How much more elevated
Speaker 1: do you think it it will be? Well, I think
Speaker 1: that really reflects kind of the surprise that we've had
Speaker 1: over the last week with with this last FED meeting.
Speaker 1: I mean historically that I think they tend from the
Speaker 1: central banks is to communicate well ahead of time so
Speaker 1: you don't surprise the markets with with a move that
Speaker 1: they hadn't anticipated, and that clearly wasn't the case this time,
Speaker 1: and so that surprise feeds through into your volatility and
Speaker 1: create indicators pretty much across the board. If at this
Speaker 1: point hopefully no more surprises, volatility really should come back
Speaker 1: to Dan Morris, chief market strategist at Big MP parabout
Speaker 1: asset management. Thanks they had appreciate it ahead of the
Speaker 1: over Wall Street down futures five hundred sixties six points lower,
Speaker 1: s and B futures down that has their futures right
Speaker 1: now points lower. You're listening the Bloomberg Daybreak and the
Speaker 1: Bloomberg Weather from Rob Caroline privately. Mostly cloudy today, chance
Speaker 1: of a shower or a thunderstorm. High temperature today seventy
Speaker 1: five in eighty cloudy tonight blows around seventy. Broadcasting live
Speaker 1: from the Bloomberg Interactive Broker Studio in New York, Bloomberg
Speaker 1: E Living Freedom to Washington, d C, Bloomberg to Boston,
Speaker 1: Bloomberg one O six one to San Francisco, Bloomberg nine
Speaker 1: sixty to the Country Sirius XM Chad one nine and
Speaker 1: around the globe to Bloomberg Business app and Bloomberg Radio
Speaker 1: dot Com. This is Bloomberg Daybreak. It's five thirty on
Speaker 1: Wall Street. Good morning. I'm John Tucker, I'm Nathan Hager.
Speaker 1: We're about four hours away from the open of US trading.
Speaker 1: Let's get you up to date on the news you
Speaker 1: need to know. At this hour, the post fed rate
Speaker 1: hike rally appears. Over US features are sliding Following US
Speaker 1: Today's games, which halted a five day ten percent route
Speaker 1: in the smp J palen, the fedlifted rate seventy basis
Speaker 1: points of the biggest increase since Former Richmond FED president
Speaker 1: Jeffrey Lanker says policymakers now face the real reality of
Speaker 1: a recession. They dropped a critical sentence indicating they're not
Speaker 1: certain they can do this soft landing that that's an
Speaker 1: indication that they think they they're running the risk of
Speaker 1: a recession. Former Richmond FED President Jeffrey Lanker says rates
Speaker 1: need to go up to six percent to have any
Speaker 1: chance of restraining inflation and Google him. Chief Investment Officers
Speaker 1: Scott Miners says the market is obsessed with inflation. Every
Speaker 1: time we get another bad piece of news on inflation
Speaker 1: which is higher than expectation than we're we're forcing the
Speaker 1: Fed to ratchet up uh their pace or the degree
Speaker 1: of tightening the they're doing. Google him. Chief Investment Officers
Speaker 1: Scott Miners says there are cracks appearing in the credit
Speaker 1: world and the worst is probably not over. The Swiss
Speaker 1: National Bank unexpectedly raised interest rates john for the first
Speaker 1: time since two thousand seven. Policymakers opted to join the
Speaker 1: global bandwagon of monetary tightening, lifting the rate by fifty
Speaker 1: basis points to the policy rate to zero negative zero
Speaker 1: points to five percent. And we'll hear from the Bank
Speaker 1: of England and about ninety minutes from now, accounamis for
Speaker 1: a canceling the b o E will deliver a fifth
Speaker 1: straight rate hike. In corporate news, and it's a big
Speaker 1: day for Twitter and Elon Musk. Let's get more line
Speaker 1: from Bloomberg's Vernita Young. Good morning, Rinita, Good morning. Nathan.
Speaker 1: Elon Musk is addressing Twitter employees for the first time
Speaker 1: today since agreeing to buy the company for forty four
Speaker 1: billion dollars. At the virtual meeting, Musk will take questions
Speaker 1: directly from employees, many of who have not been happy
Speaker 1: with him lately. Meantime, Twitter CEO recently announced a series
Speaker 1: of cost cutting measures, including canceling the company wide retreat
Speaker 1: that was scheduled to happen in January twenty three and
Speaker 1: a hiring freeze. Live in New York, I'm ready to
Speaker 1: Young Bloomberg day Break, Thanks for day to the cosmetics giant.
Speaker 1: Revlon has five Chapter eleven bankruptcy protection. The company owned
Speaker 1: by billionaire Ron Perlman, has been unable to manage its
Speaker 1: heavy deadload. SMP futures down down eighty nine points, down
Speaker 1: futures down five D seventy five. Danstack futures are lower
Speaker 1: by three twenty six points. The tenure treasury is down
Speaker 1: one and six thirty seconds. The yield three point four
Speaker 1: three percent yield on the two year three point three
Speaker 1: five local headlines and a check of sports up next.
Speaker 1: This is Bloomberg. All right, thanks Nathan, and it's time
Speaker 1: to bring in Michael Barr with Moura. What else is
Speaker 1: going out of New York end around the world, John,
Speaker 1: Thank you very much, sir. Federal hate crime charges were
Speaker 1: officially filed and last months shooting at the Buffalo supermarket yesterday,
Speaker 1: Attorney General Merrick Garland placed flowers at the scene at
Speaker 1: the Buffalo grocery store massacre. Garl and declared it an
Speaker 1: unmitigated intentional act of hate based murder. No one in
Speaker 1: this country should have to live in fear that they
Speaker 1: will go to work or shop at a grocery store
Speaker 1: and will be attacked by someone who hates them because
Speaker 1: of the color of their skin. A g Mary Garland
Speaker 1: as prosecutors say, eighteen year old Peyton Gendren's goal was
Speaker 1: to kill as many blacks as possible. Ten black people
Speaker 1: were killed and three others were wounded. The House committee
Speaker 1: investigating the attack on the US Capitol will resume hearings today.
Speaker 1: They will hear from former Vice President Mike Pence's top
Speaker 1: lawyer as it focuses on Donald Trump's pressure on Pence
Speaker 1: to block certifying Joe Biden's presidential election. The panel will
Speaker 1: also show testimony by Pence's chief of staff. Two US
Speaker 1: military veterans have been captured in Ukraine. The two men
Speaker 1: were serving as volunteers with the Ukrainian Army Unit. The
Speaker 1: man Alexander dru Ki and Andy Heynen were reportedly captured
Speaker 1: by Russian forces near Kharkiev. Druki's mother, Lois Druki, said
Speaker 1: her son felt compelled to go to Ukraine to assist
Speaker 1: in the war against Russia. He felt very strongly that
Speaker 1: he needed to help fight for democracy wherever it was
Speaker 1: in the world. Other Westerners have been taken prisoner during
Speaker 1: the war, including two from the UK were sentenced to
Speaker 1: death by Russian back separatists. COVID vaccines for infants and
Speaker 1: toddlers from Moderna and Fiser one support from a panel
Speaker 1: of US regulatory advisors. Meanwhile, Anthony Fauci, the chief medical
Speaker 1: adviser to President Joe Biden, tested positive for COVID. Fauci,
Speaker 1: who was fully vaccinated and boosted twice, is said to
Speaker 1: be experiencing my old symptoms. Global News twenty four hours
Speaker 1: a day on air and on Bloomberg Quicktake, powered by
Speaker 1: more than twenty seven hundred journalists and analysts more than
Speaker 1: a hundred twenty countries. Michael Barr and this is Bloomberg, John, Michael. Thanks,
Speaker 1: and it is now five thirty five on the walls
Speaker 1: for fits. Sorry for the Bloomberg Sports update, hears John Stash,
Speaker 1: all right, John, Yankees having this amazing season, even with
Speaker 1: some players struggling like Kyle Hegashi Yoka, who has of
Speaker 1: justice past. Sunday was batting under one fifty without a
Speaker 1: home run, and then three home runs in the span
Speaker 1: of six at bats had the big glow fifth in
Speaker 1: into the stadium after Tampa Bay woffed Isaiah Kinner Felfa
Speaker 1: intentionally to face Iggy three run homer put the Yanks
Speaker 1: up for nothing. They held on beat the Rays four
Speaker 1: to three, Iron Judge with a homer, and the Yanks
Speaker 1: have won six in a row, thirteen of fourteen their
Speaker 1: thirty games over five hundred. Mets lost in Milwaukee ten
Speaker 1: to two, while Atlanta won its fourteenth in a row,
Speaker 1: moved within four games to the Mets Tuesday the Cardinals
Speaker 1: Miles Nicholas was one out from a no hitter. Last night,
Speaker 1: the Dodgers Tylan Anderson two outs away, lost to milhad
Speaker 1: win Shiotani hit a triple. Stanley Cup Finals Tampa Bay
Speaker 1: going for the three peat, Colorado's first Cup final in
Speaker 1: twenty one years. In Denver, Game one went to overtime. GT.
Speaker 1: Coffer down the middle, Copper Hole shoots, It's flock become
Speaker 1: party is okay, k SC and Denver as one four three,
Speaker 1: They're thirty and two in the playoffs. Golden State Warriors
Speaker 1: can win the NBA Championship tonight, games six to the
Speaker 1: finals in Boston, where this morning in the US Open begins.
Speaker 1: Country Club of Brookline Defenny Champ, John Rahm as an
Speaker 1: early tea time, So does Rory McElroy and Jordan's Speak.
Speaker 1: John Stashward Bloomberg Sports, John John, thank you five thirty
Speaker 1: seven on Wall Street Campus time for the Bloomberg Try
Speaker 1: State Business Report. For that we're joined by Ed Quarry.
Speaker 1: New Jersey will expand its planned property tax relief program,
Speaker 1: providing more than two billion dollars to more than two
Speaker 1: million households. Residents with income of up to two hundred
Speaker 1: fifty thousand dollars will be eligible. Homeowners will get as
Speaker 1: much as fifteen hundred bucks, Renters will get as much
Speaker 1: as four hundred fifteen Golden Tree as That management has
Speaker 1: been ordered to pay a one point two million dollar
Speaker 1: bonus to a former chief operating officer. He was fired
Speaker 1: for lying about an affair with a subordinate, making lewd comments,
Speaker 1: and exposing himself. A Manhattan Supreme Court judges sided with
Speaker 1: an arbitrator who said Christians work for the company entitled
Speaker 1: him to the bonus. But the gauge of New York
Speaker 1: state manufacturing activity shrank for a second month in a row.
Speaker 1: In June, a measure of inflationary pressure at producers picked up.
Speaker 1: The Federal Reserve Bank of New York's General Business Conditions
Speaker 1: Index improved the minus one point two from minus eleven
Speaker 1: point six. That your Bloomberg Try State Business report. I'm
Speaker 1: Ed Corey, thanks A five thirty eight on Wall Street.
Speaker 1: Bloomberg Radio is on the air from San Francisco to
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Speaker 1: out with our global insteam for some of the top
Speaker 1: stories heard on our three hundred affiliate radio stations around
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Speaker 1: Los Angeles. We're talking about Twitter canceling a company wide
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Speaker 1: on its electric cars is being wiped out by rising
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Speaker 1: sports tourism industry this spring, and those are some of
Speaker 1: The stories are Twitter. Seven hundred Bloomberg journalists and analyst
Speaker 1: are working on this morning around the world. It is
Speaker 1: thirty nine on Wall Street. The following is an editorial
Speaker 1: from Bloomberg Opinion. The effort to revive the Iranian nuclear
Speaker 1: Deal of fifteen maybe on life support after tear Round
Speaker 1: recent removed nearly half of the cameras monitoring its nuclear facilities.
Speaker 1: The head of the International Atomic Energy Agency said that
Speaker 1: decision could prove a fatal blow to the pack. Well,
Speaker 1: diplomacy shouldn't be abandoned. The U s should be using
Speaker 1: this time to show around what the alternative to a
Speaker 1: deal would look like without setting any redlines Publicly, President
Speaker 1: Biden should make it clear to the Iranians that any
Speaker 1: attempt to enrich uranium to weapons grade or to kick
Speaker 1: out inspectors could trigger military action. Showing that it's prepared
Speaker 1: to defend its interests in the absence of a deal
Speaker 1: maybe the best way for the US to convince Iran
Speaker 1: to sign one. This editorial was written by the Bloomberg
Speaker 1: Opinion Editorial Board. For more Bloomberg Opinion, please go to
Speaker 1: Bloomberg dot com, Slash Opinion or opean go on the
Speaker 1: Bloomberg Terminal. This has been Bloomberg Opinion. Bloomberg Opinion editorial
Speaker 1: is could be heard every weekly, this time terminal customers.
Speaker 1: You can read more at O, P I N go
Speaker 1: ahead of the open of Wall Street. After yesterday's rally,
Speaker 1: down futures right now five hundred eighty five points lower,
Speaker 1: the S and P futures down ninety points, and thans
Speaker 1: that futures they're down three hundred and twenty nine points.
Speaker 1: Tedier yielding in the US three point four three percent.
Speaker 1: You're listening to Bloomberg Daybreak just ahead. How far into
Speaker 1: restrictive territory does the Fed go? Will be joined by
Speaker 1: Sarah House, senior economists at Wells Fargo. This is Daybreak, Markets,
Speaker 1: headlines and breaking news twenty four hours a day at
Speaker 1: Bloomberg dot com, the Bloomberg Business at and at Bloomberg
Speaker 1: Quick Tape is a Bloomberg Business lash and Nathan Hagar.
Speaker 1: Stocks rallied after the Fed's decision yesterday, but this morning
Speaker 1: futures are pointing to a route with the FED signaling
Speaker 1: willingness to accept the recession to rain in inflation. We
Speaker 1: check the markets every fifteen minutes during the trading day
Speaker 1: on Bloomberg. Right now, SMP futures are down eighty nine
Speaker 1: points down, futures down five eighty DASTACK futures are lower
Speaker 1: by three twenty five points. The tenure treasury is down
Speaker 1: one in six thirty seconds. The yield three point four
Speaker 1: three percent. Yield on the two year is at three
Speaker 1: point three six percent. Nime X screwed is down four
Speaker 1: tenths per center, forty five cents at a hundred fourteen dollars,
Speaker 1: eighty five cents a barrel comes Gold up seven tenths
Speaker 1: per center, thirteen dollars at eighteen thirty two eight ten
Speaker 1: and ounce. The euro is at one point zero four
Speaker 1: one six against the dollar, British pound one point two
Speaker 1: one three two and again is at one thirty two
Speaker 1: point eight five. That's a Bloomberg business flash. Now here's
Speaker 1: Michael Barr with more on what's going on around the world.
Speaker 1: Michael Pathan, thank you very much. The House Committee investigating
Speaker 1: the January six month riot is holding its third public
Speaker 1: hearing today. The panel is expected to focus on former
Speaker 1: Vice President Pence, who faced threats by Trump's orders less
Speaker 1: than two weeks after restarting production abbots troubled infant Formula
Speaker 1: Plan and Sturgis, Michigan. It's now being forced to shut
Speaker 1: it all back down again. The company says torrential storms
Speaker 1: cause power outages and flooded parts of their facility. In baseball,
Speaker 1: the Yankees one, the Mets lost along with the Nationals,
Speaker 1: Orioles and Giants. The Red Sox beat the A's Game
Speaker 1: one in the NHL Final. The Avalanche beat the Lightning
Speaker 1: and overtime. Four three Global News twenty four hours a
Speaker 1: day on air and on Bloomberg Quick Take, powered by
Speaker 1: more than hundred journalists and analysts more than a hundred
Speaker 1: twenty countries. Michael bar this is Bloomberg, John, Michael, thank you.
Speaker 1: We are live for the Bloomberg Interact, a Broker's studios
Speaker 1: where it is nine on Wall Street. But the Fed
Speaker 1: shair Jerome Powell now has engineered the Central Bank's biggest
Speaker 1: interest rate to increase since And let's take a deeper
Speaker 1: dive into the Fed move now with Sarah House, senior
Speaker 1: economist at Wells Fargo. Sarah, thanks for being with us
Speaker 1: this morning. What are your major takeaways from the meeting
Speaker 1: that we had yesterday? So I think what we saw
Speaker 1: of the meeting was a more realistic take on what
Speaker 1: it would take to bring down inflation, where we're going
Speaker 1: to have to bring policy well into restrictive territory and
Speaker 1: at least some recognition that's going to bring some pain
Speaker 1: along the way. So if you look at the summary
Speaker 1: of Economic projections, you had the unemployment rate beginning to
Speaker 1: to pick up, and in the statement that SID removed
Speaker 1: the line about they expect the labor markets to to
Speaker 1: remain strong. So I think we saw the Fed overall
Speaker 1: get more serious about the inflation problem ahead and recognize
Speaker 1: that we're not going to have a painless escape, how restrictive.
Speaker 1: So the Fed move their media estimates where RACHEL will
Speaker 1: be at the end of this year up to a
Speaker 1: range of three and a quarter three and a half percent.
Speaker 1: We think that they'll go even higher. So we're estimating
Speaker 1: that the upper bound of the said funds rate we'll
Speaker 1: reach four percent by the end of the year, and
Speaker 1: it will climb to four and a half per sent
Speaker 1: by the first quarter of next year. So the Feds
Speaker 1: looking for rates by the end of to be a
Speaker 1: little under four percent. So not quite as aggressive on this,
Speaker 1: but I think certainly signaling that it is going to
Speaker 1: take that restrictive policy stamp to bring down inflation. Does
Speaker 1: the economy really have to go through the ring or
Speaker 1: to break the back of inflation? And is unemployment inevitable
Speaker 1: You're gonna have to go higher, I think, given how
Speaker 1: much of this inflation is driven by demand. So yes,
Speaker 1: you do have some supply chain issues, particularly things like
Speaker 1: the auto sectors, but overwhelmingly to stems from just the
Speaker 1: robust recovery that we've seen and the inability of supply
Speaker 1: to keep up. I think you do have to to
Speaker 1: put policy in restrictive territory, try to slow it below
Speaker 1: trend trend growth. So I think it is a necessary step,
Speaker 1: and unfortunately you can't slow demand in a meaningful way,
Speaker 1: I think without seeing that translate into softer, softer demand
Speaker 1: for workers, which is likely to lead to higher unemployment. Yeah,
Speaker 1: there have been some inevitable comparisons to the era of
Speaker 1: FED share Paul Volker um are are they valid or
Speaker 1: we really going back to those types of rights? So
Speaker 1: I think there's a lot different in today's environment. So
Speaker 1: one is that I think the FED has learned the
Speaker 1: lessons of the Volca era seem similar inflation I think
Speaker 1: that they are more eager to to quash it than
Speaker 1: what we were seeing in the late nineteen seventies, which
Speaker 1: allowed inflation to get so entrenched. One of the big
Speaker 1: catalysts for the shift from what was a very well
Speaker 1: telegraph fifty basis point move coming into this meeting to
Speaker 1: a last minute signal for seventy five basis points was
Speaker 1: the fact that we saw long term inflation expectations shoot
Speaker 1: to a fourteen year high in Friday's University of Michigan
Speaker 1: consumer sentiment survey. So that along with inflation, caused the
Speaker 1: FED to react and shift very quickly. And so I
Speaker 1: think that even the they are behind the curve and
Speaker 1: they've allowed inflation to get to a forty year high,
Speaker 1: I think they are are rapidly making up for that,
Speaker 1: and so that should limit how far rates ultimately have
Speaker 1: to to go. So how do you suppose this is
Speaker 1: going to impact in the long term, at least the
Speaker 1: the appetite for risk. Well, I think that overall we're
Speaker 1: going to see some some some risk shifting, and we're
Speaker 1: going to see it cool as as it does become
Speaker 1: more apparent that the FED is going to have to
Speaker 1: have to raise rates. So we've already seen that to
Speaker 1: some extent that they're they're very well could be more
Speaker 1: to come. Okay, I also wanted to answ you real
Speaker 1: quickly if you could are cracks appearing in the treasury market.
Speaker 1: There have been some liquidity concerns as well, so I'm
Speaker 1: not sure about whether there are cracks being there. Of course,
Speaker 1: we had the start of QT this month, and so
Speaker 1: we are beginning to see to see that transition. I
Speaker 1: think overall, you know, we are seeing a rapid shift
Speaker 1: in policy. So the FEDS see not the most aggressive
Speaker 1: paths of policy titan that they have seen since the
Speaker 1: early nineteen eighties, and I think that's going to come
Speaker 1: with some pain and some bumpsa along along the way. Yes, Sarah,
Speaker 1: thanks very much. Appreciated. Sara House, senior economists at Wells Fargo.
Speaker 1: Nathan all right, John, thank you. It's five fifty three
Speaker 1: on Wall Street. It's time for our Bloomberg Law Report.
Speaker 1: Let's get to the legal stories we're watching this morning.
Speaker 1: From Bloomberg's Jeff Bellinger, Amazon, Uber, and Meta Platforms are
Speaker 1: among several technology companies calling on Congress to pass permanent
Speaker 1: protections for so called dreamers, undocumented immigrants brought to the
Speaker 1: US as children. The Occupational Safety and Health Administration is
Speaker 1: developing an enforcement program directed at preventing falls in all industries,
Speaker 1: and CROCS issuing a Japan based dollar store chain for
Speaker 1: trademark infringement. CROCS accuses the store of selling knockoffs of
Speaker 1: its popular rubber clocks. Bloomberg Law everything you need, all
Speaker 1: on one legal research platform, including guidance analysis and Bloomberg
Speaker 1: Market Intelligence. Find out more at Bloomberg Law dot com.
Speaker 1: Now another legal story we're watching. The January sixth Committee
Speaker 1: holds its third public hearing this afternoon, laying out the
Speaker 1: case for holding former President Donald Trump and others responsible
Speaker 1: for instigating the violence at the Capitol. There's reportedly a
Speaker 1: rift among committee members about whether to make a criminal
Speaker 1: referral of Trump to the Justice Department. But a referral
Speaker 1: is it actually needed for d o J to bring charges,
Speaker 1: and the members are clearly united in presenting their strongest
Speaker 1: case against the former president. For more, Bloomberg's June Grosso
Speaker 1: speaks to Jordan Strauss, a fellow at the Croll Institute.
Speaker 1: Regardless of whether the Committee makes a criminal referral to
Speaker 1: the Justice Department or not. Is it pretty obvious that
Speaker 1: what the committee is doing is trying to lay out
Speaker 1: a roadmap for d o J to prosecute Trump. Treaty
Speaker 1: is absolutely trying to lay out the roadmap to prosecute
Speaker 1: the president and others in the pres its orbit. I
Speaker 1: think it's hard to stay until they've closed their case
Speaker 1: and until they've finished presenting information who could be charged
Speaker 1: with what? And I think it's also very important to
Speaker 1: remember that the standard of proof in a criminal case
Speaker 1: is beyond a reasonable doubt. You know, when I was
Speaker 1: at the Justice Department, I can say that the level
Speaker 1: of certainty not just of guilt, but also that guilt
Speaker 1: could be proven to a jury beyond a reasonable doubt
Speaker 1: for a prosecutor before they move forward, needed to be
Speaker 1: in the minds of the prosecutor, even though that's not
Speaker 1: the legal standard, right, it needed to be that high
Speaker 1: before they move forward. So there's a lot of nuanced here.
Speaker 1: And I think that the Department thus far has taken
Speaker 1: a very careful approach to charging and charging decisions, and
Speaker 1: I think that's going to continue. And I think that
Speaker 1: unless there is really really incredibly incredibly strong evidence, I
Speaker 1: think it's unlikely the Department would elect to move forward
Speaker 1: with charges that are that novel against someone that senior.
Speaker 1: So then do you think that the Justice Department is
Speaker 1: looking for more then they would normally look for in
Speaker 1: a case, more than just you know, being convinced that
Speaker 1: someone is guilty and that you can prove it because
Speaker 1: they know what's at stake. So when they are high
Speaker 1: profile or high consequence criminal defendants, they always receive more attention.
Speaker 1: So be it a high profile of terrorism case or
Speaker 1: a high profile securities broad case, it's always going to
Speaker 1: receive extra layers. One of the reasons that it receives
Speaker 1: extra layers is when you're doing something high consequence, you
Speaker 1: want to make sure that senior leadership knows. You know,
Speaker 1: you might want to stress test the theory of the
Speaker 1: case a little bit more than usuals. One of the
Speaker 1: reasons might be that you're making a novel application of
Speaker 1: the law, or you're using a law like the dedicious
Speaker 1: conspiracy that's just not used very often, so you know,
Speaker 1: you combine that with the complexity of the fact finding. Yes,
Speaker 1: I do think that they're probably receiving additional attention. That said,
Speaker 1: Judge Garland has head that the approach of the Department
Speaker 1: is going to be to work its way up and
Speaker 1: to bring more complex and more meaningful cases as the
Speaker 1: more complex and more meaningful facts submerge. And they've they've
Speaker 1: done just that so far. Nice Jordan Krause of the
Speaker 1: Cral Institute speaking with Bloomberg June Grosso. You can catch
Speaker 1: more of that interview, plus analysis of the latest legal
Speaker 1: news by listening to the Bloomberg Law Show. There's a
Speaker 1: ten pm Eastern time on Bloomberg Radio. You can listen
Speaker 1: anytime by subscribing to the Bloomberg Law podcast s. Andp
Speaker 1: Futures down down eighty three point, Stole futures down five seven,
Speaker 1: Dance Deck futures are lower by three nine points. The
Speaker 1: tenure Treasury is down down one and nine thirty seconds.
Speaker 1: The yield three point four or four percent yield on
Speaker 1: the two year three point three six percent. Bloomberg Dave
Speaker 1: break continues. This is Bloomberg