WEBVTT - Bloomberg Daybreak: October 3, 2022 - Hour 1 (Radio) 0:00:01.160 --> 0:00:04.359 Live from the Bloomberg Interactive Berger Studios. This is Bloomberg 0:00:04.440 --> 0:00:08.080 Daybreak for Monday, October three, two. Coming up the shower 0:00:08.320 --> 0:00:11.200 and about face, The UK drops a plan to cut 0:00:11.280 --> 0:00:13.960 taxas for the highest earners. We are live in Europe 0:00:13.960 --> 0:00:16.920 with the latest. The fourth quarter begins swallowing three straight 0:00:17.040 --> 0:00:20.400 quarters of luves is for US stocks, Credit Sweet shares 0:00:20.480 --> 0:00:23.440 hit a record low, and Tesla shares drop after missing 0:00:23.480 --> 0:00:27.160 third quarter delivery estimates. Rescue Cruise in Florida continue to 0:00:27.160 --> 0:00:29.640 search for people who decided to grind out hurricane and 0:00:29.760 --> 0:00:33.159 plus Brazil's presidential elections headed for a runoff vote on 0:00:33.320 --> 0:00:35.960 Michael blarm More, I'm John stash Our. In sports, the 0:00:36.080 --> 0:00:38.920 Mets appear headed for a second place finished after getting 0:00:38.960 --> 0:00:41.200 swept in at lant out of the Yankees lost wins 0:00:41.200 --> 0:00:45.839 for the Jets, and John, that's all's training head on 0:00:45.960 --> 0:00:51.600 Bloomberg Daybreak on Bloomberg, Eleving Free on New York, Bloomberg one, Washington, 0:00:51.720 --> 0:00:55.760 d C, Bloomberg one oh six one, Boston, Bloomberg nine sixty, 0:00:55.840 --> 0:00:59.680 San Francisco, Sirius x M one nineteen and around the 0:00:59.720 --> 0:01:02.480 world Old on Bloomberg Radio dot Com and via the 0:01:02.520 --> 0:01:09.800 Bloomberg Business. Good morning. I'm Nathan Hagar and I'm Karen 0:01:09.880 --> 0:01:13.520 Moscow and US DOT Index futures are mixed this morning. 0:01:13.600 --> 0:01:15.000 We are coming up to five o one on Wall 0:01:15.000 --> 0:01:17.200 Street and we check the markets every fifteen minutes throughout 0:01:17.240 --> 0:01:19.800 the trading day on Bloomberg. S and P futures are 0:01:19.840 --> 0:01:23.160 down four points now, futures up forty six and AS 0:01:23.240 --> 0:01:26.480 day futures down fifty eight. Ten year treasury up eleven 0:01:26.520 --> 0:01:28.920 thirty seconds. You have three point seven eight percent and 0:01:28.959 --> 0:01:33.320 they yield on the two year four point one nine percent. Nathan, Karen. 0:01:33.360 --> 0:01:35.760 We begin in the UK, where there has been an 0:01:35.800 --> 0:01:39.080 about face from the government. Prime Minister Liz Trust is 0:01:39.160 --> 0:01:43.120 dropping her controversial plan to cut taxes for the highest earners. 0:01:43.360 --> 0:01:45.280 Let's go to Birmingham, England and get the latest with 0:01:45.319 --> 0:01:48.520 Bloomberg Daybreak. You're a banker, Caroline he Good morning, Caroline, 0:01:48.640 --> 0:01:51.760 Good morning, Nathan and Karen. The Chancellor Quasi Quality has 0:01:51.800 --> 0:01:54.480 said that he has listened and is reversing the plan 0:01:54.640 --> 0:01:56.960 to scrap the top rate of tax in the UK 0:01:57.360 --> 0:02:00.000 announced this part of a mini budget ten days ago, 0:02:00.320 --> 0:02:03.840 which prompted a market route the U turn. Despite the 0:02:03.880 --> 0:02:07.440 denial by the Prime Minister up until yesterday was driven 0:02:07.480 --> 0:02:11.720 by Toy MPs unhappy with the policy as the Conservatives 0:02:11.760 --> 0:02:15.359 plunged in the polls. Sterling and UK guilt have reacted 0:02:15.400 --> 0:02:18.600 positively to the reversal and money markets are paired Bank 0:02:18.639 --> 0:02:21.520 of England rate hike bets, but it is a major 0:02:21.639 --> 0:02:25.840 embarrassment for Trust and Quarting. Less than a month into office. 0:02:26.200 --> 0:02:30.320 The mood from MPs, including from Mike Wood, is still positive. 0:02:30.680 --> 0:02:33.720 Quiet Turning told media here in Birmingham at the party's 0:02:33.760 --> 0:02:38.120 annual conference that he's not considering designing. Instead he's focused 0:02:38.160 --> 0:02:41.720 on delivering growth. He gives his main conference speech at 0:02:41.720 --> 0:02:45.919 four pm UK time today in Birmingham. I'm Caroline Hedger 0:02:46.000 --> 0:02:48.840 Blue Bag day, Bake Caroline, thank you, and the pounder 0:02:48.840 --> 0:02:52.080 has been strengthening. Oh their news checking Sterling right now 0:02:52.120 --> 0:02:55.000 at one point one to oh four against the dollar 0:02:55.160 --> 0:02:57.960 elsewhere and markets today cakes. After start of the fourth quarter, 0:02:58.360 --> 0:03:00.760 us actually coming up there the ridge straight quarter of 0:03:00.840 --> 0:03:03.520 losses for the first time since two thousand nine for 0:03:03.560 --> 0:03:06.120 the NASDAC one hundred. It's the longest of losing streak 0:03:06.160 --> 0:03:09.200 in twenty years. David Bianco, as Chief Investment Officer at 0:03:09.240 --> 0:03:11.639 d w S Group. This is a bear market, So 0:03:11.680 --> 0:03:14.320 I think a key question is is this the beginning 0:03:14.480 --> 0:03:17.440 of a high inflationary period where we're near the end 0:03:17.480 --> 0:03:19.840 of a high inflationary period. If you think we're near 0:03:19.880 --> 0:03:22.440 the end of a high inflationary period, the worst is 0:03:22.520 --> 0:03:26.320 largely behind and the market shouldn't go too much further down. 0:03:26.600 --> 0:03:29.200 But that's the key question. D w S Chief investment 0:03:29.240 --> 0:03:32.519 Officer David Bianco made the comments on Bloomberg's Wall Street 0:03:32.600 --> 0:03:36.520 Week Catch the program every weekend on Bloomberg Radio and television. 0:03:36.640 --> 0:03:39.560 We Karen, one of Wall Street's biggest bears is staying bearish. 0:03:39.680 --> 0:03:43.040 Morgan Stanley chief US equity strategist Mike Wilson says a 0:03:43.160 --> 0:03:46.600 FED pivot is becoming likely as money supply falls, but 0:03:46.680 --> 0:03:50.080 he says that move won't allay concerns about earnings. Wilson 0:03:50.120 --> 0:03:52.760 sees an eventual low for the SMP five hundred coming 0:03:52.840 --> 0:03:55.560 later this year early next at the three thousand to 0:03:55.680 --> 0:03:58.880 thirty four hundred point level. Well Goldman Sachs is also 0:03:59.000 --> 0:04:01.720 staying bearish, and athan with a call that more stock 0:04:01.840 --> 0:04:05.440 selling will take place next year. Goldman strategists say households 0:04:05.440 --> 0:04:08.200 and foreigners could each sell Us stock valued at a 0:04:08.280 --> 0:04:12.720 hundred billion dollars. In corporate news this morning, Karen, we're 0:04:12.720 --> 0:04:16.120 watching shares of Credit Sweee hit a record low. Right now, 0:04:16.160 --> 0:04:19.039 They're down nearly eight and a half percent. A memo 0:04:19.200 --> 0:04:22.400 sent by CEO ol Rick Kerner's raising concerns over the 0:04:22.400 --> 0:04:24.960 health of the Swiss bank. We get more from Bloomberg's 0:04:25.040 --> 0:04:27.960 Charlie Wells in London coroner basically said the banks at 0:04:27.960 --> 0:04:31.159 a critical moment. He reiterated, you know the importance of 0:04:31.240 --> 0:04:33.920 not confusing share price, which we've been hearing a lot 0:04:33.920 --> 0:04:37.359 about this morning, with performance and capital strength. And the 0:04:37.400 --> 0:04:39.680 reason why this generated so much attention was because it 0:04:39.720 --> 0:04:42.400 was the second straight memo that the CEO had to 0:04:42.480 --> 0:04:46.039 send um on a Friday in two weeks, and it also, 0:04:46.240 --> 0:04:49.560 interestingly over the weekend, generated a lot of discussion on 0:04:49.560 --> 0:04:54.120 online boards like Reddit and Twitter. Bloomberg's Charlie Wells says 0:04:54.160 --> 0:04:57.560 Credit Sweez is currently finalizing turnaround plans. Those will likely 0:04:57.600 --> 0:05:00.880 include sweeping changes to its investment bank and thousands of 0:05:01.000 --> 0:05:04.120 jobs over the coming years. Well Nathan shares a Tesla 0:05:04.240 --> 0:05:07.320 are down four points seven percent in early trading. The 0:05:07.360 --> 0:05:10.400 company delivered a record number of vehicles in the last quarter, 0:05:10.480 --> 0:05:13.400 but the results still missed estimates and we get more 0:05:13.480 --> 0:05:16.800 from Bloomberg's Denis Fella Greeny Tesla delivering more than three 0:05:17.440 --> 0:05:21.200 three thousand vehicles, about four percent fewer than expected, possibly 0:05:21.200 --> 0:05:25.840 on supply chain issues. The expenses to get customers actual 0:05:26.000 --> 0:05:29.240 cars in their hands have been astronomical. Danna I've s, 0:05:29.240 --> 0:05:33.359 managing director at web BUSHSLA, has started to balance that 0:05:33.800 --> 0:05:37.280 and BASICUI be fine with ultimate delivers that could push 0:05:37.320 --> 0:05:40.839 quarter quarters. I've says that means watch this quarter very closely. 0:05:41.080 --> 0:05:43.760 Elon Musk tweeting he hopes to smooth out end of 0:05:43.839 --> 0:05:48.880 quarter Russia's for customers sakes. Denise Spella, Greeny Bloomberg day break, Okay, Dennise, 0:05:48.920 --> 0:05:51.200 thank you. Oil is on the rise this morning the 0:05:51.240 --> 0:05:54.359 air indications OPEC could slash production by more than a 0:05:54.400 --> 0:05:57.720 million barrels a day to revive plunging prices. The group 0:05:57.760 --> 0:06:01.000 meets this Wednesday in Vienna. Checking rice is now Nimex 0:06:01.000 --> 0:06:02.800 s crwds hired by four and a half percent of 0:06:02.839 --> 0:06:05.040 three dollar sixty cents at eighty three oh seven of 0:06:05.120 --> 0:06:07.919 barrel Brent is up four point three percent at eighty 0:06:07.960 --> 0:06:11.120 eight dollars seventy seven cents. Well, Nathan. The big economic 0:06:11.160 --> 0:06:13.880 event this week comes on Friday, when the US Labor 0:06:13.920 --> 0:06:16.800 Department issues as monthly payrolls are poor, job growth and 0:06:16.920 --> 0:06:21.080 likely continued in September even as the overall economic outlook dimmed. 0:06:21.279 --> 0:06:24.360 We get more from Bloomberg's mini del judas the Federal 0:06:24.400 --> 0:06:27.680 Reserve is lifting interest rates to pain inflation by applying 0:06:27.680 --> 0:06:31.600 the breaks the economic growth. Even so, US jobs claims 0:06:31.600 --> 0:06:35.080 have been running near historic glows, and economist are forecasting 0:06:35.080 --> 0:06:38.520 employers hired about a quarter million workers in September. We'll 0:06:38.520 --> 0:06:41.600 get the data Friday. Looking ahead, the president of the 0:06:41.680 --> 0:06:44.520 Chicago fet Charles Evans this will take six months for 0:06:44.600 --> 0:06:47.240 the impact of higher interest rates to be felt in 0:06:47.240 --> 0:06:50.640 the labor market. Also on this week's data calendar figures 0:06:50.640 --> 0:06:53.359 on job openings which have been running at his store 0:06:53.480 --> 0:06:56.960 Kis and he dealt Bloomberg debery. Thanks Vinny. Finally, we 0:06:57.000 --> 0:06:59.760 take stock of the damage from Hurricane Ian. It destroyed 0:06:59.760 --> 0:07:02.440 a outlets number of homes and businesses in Florida, but 0:07:02.560 --> 0:07:06.040 skirted a key US fertilizer production area. That means the 0:07:06.080 --> 0:07:09.680 broader US economy was spared. The worst case scenario. Still 0:07:09.720 --> 0:07:11.400 Ian is set to be one of the top ten 0:07:11.520 --> 0:07:14.440 costliest storms in the US, with estimates as high as 0:07:14.480 --> 0:07:19.240 one D twenty billion dollars. You're listening to Bloomberg daybreak 0:07:23.280 --> 0:07:26.040 in South five oh seven on Wall Street, rain fifty 0:07:26.080 --> 0:07:29.680 degrees in Central Park, New Jersey. Transit services suspended on 0:07:29.720 --> 0:07:32.920 the Note Jersey coastline. It's because of overhead wire problems. 0:07:32.920 --> 0:07:35.600 Will get the details in traffic shortly. First, Michael bars 0:07:35.640 --> 0:07:37.800 here with what else is going on in New York 0:07:37.840 --> 0:07:40.200 and around the world. Good morning, Michael, Good morning Nathan. 0:07:40.200 --> 0:07:42.600 A wig for a murdered f d n Y E 0:07:42.720 --> 0:07:46.320 M S Lieutenant will take place today and tomorrow. Family, 0:07:46.400 --> 0:07:49.160 friends and co workers have been gathering to remember Alison 0:07:49.280 --> 0:07:52.280 Russo Elling. She was stabbed to death in an unprovoked 0:07:52.280 --> 0:07:55.520 attack in the story of Queen's Last Week. The wake 0:07:55.600 --> 0:07:57.880 for Russo Elling, who was sixty one, will take place 0:07:57.920 --> 0:08:02.600 in Commack. Police arrested thirty four year old Peter this Philosophilis, 0:08:02.640 --> 0:08:06.040 who has a history of mental illness. Search and rescue 0:08:06.040 --> 0:08:08.240 efforts are still underway in parts of Florida in the 0:08:08.240 --> 0:08:11.320 wake of Hurricane in Over the weekend, responders took to 0:08:11.320 --> 0:08:15.320 the air, grabbing people from rooftops and evacuating Barrier Island 0:08:15.360 --> 0:08:19.040 residents by boat after Ian wiped away roads leading to 0:08:19.080 --> 0:08:22.280 the mainland. Florida Governor Ron De Santis said teams are 0:08:22.280 --> 0:08:26.200 conducting sweeps and areas hit hardest by the storm. There's 0:08:26.280 --> 0:08:31.560 more urban search and rescue teams in Florida now than 0:08:31.600 --> 0:08:36.320 in any one place in American history since September eleven. Meanwhile, 0:08:36.360 --> 0:08:39.840 President Biden will visit Puerto Rico, hit hard by Hurricane Fiona. 0:08:40.320 --> 0:08:43.720 Brazilian President Jayre Bolsenaaro fought his way to a runoff 0:08:43.720 --> 0:08:47.559 election against his leftist challenger, former President Luis and Natio 0:08:47.800 --> 0:08:51.360 Lula da Silva. Lula got forty eight percent while Bolsinoro 0:08:51.480 --> 0:08:54.960 received forty three percent. However, neither one got the simple 0:08:55.000 --> 0:08:58.640 majority needed for victory. These college students saying that they 0:08:58.760 --> 0:09:03.200 voted for Lula with the Tulula to Brazil the woods 0:09:03.280 --> 0:09:08.559 in the future, bus is opposed to democracy. The candidates 0:09:08.559 --> 0:09:10.920 will face each other in the high stakes October thirty 0:09:11.120 --> 0:09:14.600 presidential runoff. It's a big defeat from Moscow. In Ukraine. 0:09:14.679 --> 0:09:18.479 Last week, Russian President Vladimir Putin used a sham referendum 0:09:18.520 --> 0:09:21.439 to declare four areas of Ukraine as part of Russia. 0:09:21.480 --> 0:09:25.120 But one of those regions, Lemon, almost immediately fell to 0:09:25.240 --> 0:09:29.160 Ukrainian forces. I meanwhile, Vladimir Putin is doomed to lose 0:09:29.200 --> 0:09:32.840 the war in Ukraine. That's from former CIA director David Petrayas. 0:09:33.120 --> 0:09:36.800 The retired four star general says, Russia's army has quote shambolock. 0:09:37.040 --> 0:09:39.640 He announced the annexation, and he's already lost a really 0:09:39.679 --> 0:09:42.760 critical element in that, a critical city that would have 0:09:42.760 --> 0:09:45.200 been a very key supply hub had they been able 0:09:45.240 --> 0:09:48.000 to go farther. And that's just going to continue. He's 0:09:48.040 --> 0:09:51.560 going to continue to lose on the battlefield. Petrayas spoke 0:09:51.600 --> 0:09:54.599 on ABC's This Week, which can be heard Sundays on Bloomberg. 0:09:54.880 --> 0:09:57.320 Justice Catangi Brown Jackson will make her debut as the 0:09:57.320 --> 0:10:01.040 Supreme Court's new term kicks off today. Global News twenty 0:10:01.040 --> 0:10:03.319 four hours a day on airand home. Bloomberg Quick Take 0:10:03.320 --> 0:10:07.160 powered by more journalists, analysts more than a hundred twenty countries. 0:10:07.400 --> 0:10:14.520 Michael bar this is Bloomberg, Navid. Thanks Michael five ten 0:10:14.600 --> 0:10:16.520 on Wall Street time for the Bloomberg Sports I'll tell 0:10:16.480 --> 0:10:18.559 you what John Stenshown, Thanks, Nathan Mets has been a 0:10:18.600 --> 0:10:21.640 first place team virtually the entire season, but after a 0:10:21.760 --> 0:10:25.640 nightmare weekend in Atlanta, they're almost certainly going to finish second. 0:10:25.679 --> 0:10:28.520 Praise one again Dansby Swanson home for the third straight game, 0:10:28.679 --> 0:10:31.640 x met Travis Darnel at two one single. Atlanta won 0:10:31.679 --> 0:10:34.199 five three to sweep the series. The Braves lead by 0:10:34.280 --> 0:10:37.160 two and own the tiebreaker. A win for them tonight 0:10:37.480 --> 0:10:39.920 clinches the division. The Mets thought they'd be the NLS 0:10:39.960 --> 0:10:42.880 two seed, instead looks like the four and headed for 0:10:42.880 --> 0:10:45.600 a best of three wild cards series this weekend with 0:10:45.960 --> 0:10:48.880 San Diego or Philadelphia for the right to then face 0:10:48.960 --> 0:10:51.400 the Dodgers. All of the games in the wild Card 0:10:51.480 --> 0:10:54.120 series would be at City Field of Stadium. Yankees had 0:10:54.160 --> 0:10:56.040 just four hits lost to Baltimore three to one. Aaron 0:10:56.120 --> 0:10:59.080 Judge struck out three times. He'll try to surpass Roger 0:10:59.160 --> 0:11:02.480 Marris in Texas. Jets finished their four game tour of 0:11:02.520 --> 0:11:05.200 the a f C North two losses, but also two 0:11:05.360 --> 0:11:07.840 thrillion wins. They had that one in Cleveland and in Pittsburgh. 0:11:07.880 --> 0:11:11.080 They trailed midway through the fourth quarter by ten points. 0:11:11.120 --> 0:11:13.440 Zach Wilson a touchdown past to Corey Davis and then 0:11:13.480 --> 0:11:17.000 after a Jets interception of Steelers rookie QB Kenny Pig 0:11:17.040 --> 0:11:20.640 and Breece Hall scored with sixteen seconds left. The Jets 0:11:20.640 --> 0:11:23.400 one twenty four to twenty. Giants and Bears and met 0:11:23.400 --> 0:11:26.120 live only two touchdowns scored all day. Both played the 0:11:26.120 --> 0:11:28.800 same Guykake Jones just gonna poot like and rolling left. 0:11:28.840 --> 0:11:30.800 He's gonna want it again. Kills to the five. Killants 0:11:30.800 --> 0:11:34.880 gives in touchdown Giants Daniel Jones in a twelve yard 0:11:35.000 --> 0:11:37.640 run mother They get foot around the left side, his 0:11:37.760 --> 0:11:40.559 second rushing touchdown of the game, and the Giants have 0:11:40.720 --> 0:11:43.840 wind their lead to thirty six fan The College Giants 0:11:43.840 --> 0:11:45.920 went on to win twenty to twelve, though Jones left 0:11:45.920 --> 0:11:48.439 with an ankle injuring his backup Tyrod Taylor left with 0:11:48.440 --> 0:11:51.280 a concussion. Giants first three and one start since two 0:11:51.280 --> 0:11:55.040 thousand eleven. John stash Award Boomberg Sports Nathan Thanks john 0:11:55.120 --> 0:11:58.360 SMP futures down nine points, right now down, futures up 0:11:58.400 --> 0:12:02.640 two points. Snass that future is lower by seventy eight points. 0:12:02.679 --> 0:12:09.439 This is Bloomberg. Bloomberg eleven three oh weather rain today 0:12:09.440 --> 0:12:12.160 with a high near sixty degrees. Occasional rain tomorrow with 0:12:12.240 --> 0:12:15.880 high steer sixty. The showers should end Wednesday low sixties 0:12:15.920 --> 0:12:18.840 for afternoon highs right now showers and fifty degrees in 0:12:18.920 --> 0:12:25.120 Central Park markets. Headlines and breaking news twenty four hours 0:12:25.120 --> 0:12:28.079 a day at Bloomberg dot com, the Bloomberg Business Out 0:12:28.200 --> 0:12:31.559 and at Bloomberg Quick Tape. This is a Bloomberg Business 0:12:31.600 --> 0:12:40.040 Flash and I'm Karen Moscow. This updates brought to you 0:12:40.120 --> 0:12:44.120 by se I Imagine your ousset management firms operational infrastructure 0:12:44.120 --> 0:12:46.520 as a competitive advantage. Let us see I show you 0:12:46.600 --> 0:12:49.360 how at se i C dot com slash I m 0:12:49.440 --> 0:12:52.520 S Global stocks are falling to a two year low, 0:12:52.559 --> 0:12:55.560 while U S stock index futures struggle for direction a 0:12:55.559 --> 0:12:59.120 bit amid concerned hawkish policies by global central banks, Well 0:12:59.120 --> 0:13:02.680 sparker Is says in an earnings contraction, Pound rising as 0:13:02.720 --> 0:13:04.920 the UK WHI drew a plan to abolish the top 0:13:04.960 --> 0:13:08.280 income tax rate, and Credit Suite Group shares hitting record 0:13:08.480 --> 0:13:11.640 lows as traders continue to speculate about its future. We 0:13:11.760 --> 0:13:14.280 checked the markets every fifteen minutes throughout the trading day. 0:13:14.360 --> 0:13:18.600 On Bloomberg, SNP futures down five points down futures higher 0:13:18.679 --> 0:13:21.560 up thirty six and now as dat futures they're falling 0:13:21.600 --> 0:13:24.800 down about sixties seven decks. In Germany's down one point 0:13:24.840 --> 0:13:27.679 one percent. Ten year treasury of ten thirty seconds, you'll 0:13:27.720 --> 0:13:30.400 three point seven eight percent yield on the two year 0:13:30.480 --> 0:13:33.679 four point one nine percent. Nim X screwed oil is 0:13:33.800 --> 0:13:36.160 up four percent of three dollars twenty one cents at 0:13:36.200 --> 0:13:39.079 eighty two dollars seventy cents of barrel Comex gold is 0:13:39.120 --> 0:13:40.760 down a tenth of a per cent or two dollars 0:13:40.800 --> 0:13:44.040 ten cents at sixteen sixty nine nine ounce the euro 0:13:44.200 --> 0:13:46.800 point nine seven nine five against the dollar, British pound 0:13:46.800 --> 0:13:48.920 one point one two oh one and the N one 0:13:49.000 --> 0:13:51.120 forty five point oh nine. And look at a bitcoin 0:13:51.200 --> 0:13:54.040 down a third of u percent at nineteen thousand, one 0:13:54.080 --> 0:13:57.360 hundred sixty dollars. That's a bloomberg business flash. Now here's 0:13:57.400 --> 0:14:00.240 Michael Barr with more on what's going on around the world. Arpel. 0:14:00.280 --> 0:14:02.760 Good morning, Good morning here, and President Joe Biden will 0:14:02.760 --> 0:14:05.959 announce more than sixty million dollars in funding to strengthen 0:14:05.960 --> 0:14:10.040 Porto Rico's resilience to flooding when he visits the island 0:14:10.080 --> 0:14:14.560 to observe recovery efforts from the devastation left by Hurricane Fiona. 0:14:15.000 --> 0:14:18.080 The President and First Lady will fly to Porto Rico today. 0:14:18.480 --> 0:14:20.800 The Supreme Court begins a new term today. There will 0:14:20.840 --> 0:14:24.160 be day one for Judge Catanji Brown Jackson. In the NFL, 0:14:24.280 --> 0:14:27.600 the Giants and Jets one. The Patriots, Commanders and Ravens lost. 0:14:27.960 --> 0:14:30.800 The forty Niners play the Rams. Tonight. In baseball, the 0:14:30.880 --> 0:14:33.560 Yankees lost to the Orioles three one. The Mets lost 0:14:33.560 --> 0:14:37.080 to the Braves five three. Atlanta swept the series and 0:14:37.160 --> 0:14:39.360 knock the Mets out of the lead. In the NL East, 0:14:39.920 --> 0:14:43.720 the Red Sox and Nationals lost the A's and Giants one. 0:14:44.120 --> 0:14:46.440 Global News twenty four hours a day on air and 0:14:46.600 --> 0:14:50.520 on Bloomberg Quicktake, powered by more than twenty seven hundred 0:14:50.560 --> 0:14:53.480 journalist and analysts more than a hundred twenty countries. Michael Barr, 0:14:53.560 --> 0:14:56.040 this is Bloomberg. Nathan Okay, Michael, thank you for coming 0:14:56.120 --> 0:14:58.520 up to five twenty on Wall Street Live from the 0:14:58.560 --> 0:15:02.800 Bloomberg Interactive Broker Studios. This is Bloomberg Daybreak. As we 0:15:02.840 --> 0:15:05.720 get the fourth quarters started here, we are very pleased 0:15:05.760 --> 0:15:08.520 to be joined this morning by Lori Calvacina, head of 0:15:08.640 --> 0:15:12.240 US Equity Strategy at RBC Capital Markets. Laurie, it's great 0:15:12.280 --> 0:15:15.320 to speak with you as always, And stock investors are 0:15:15.360 --> 0:15:18.720 looking for a winning quarter sometime this year, haven't gotten 0:15:18.720 --> 0:15:20.600 one yet. I think they'll get one in the fourth 0:15:22.200 --> 0:15:24.560 It would be nice. Thanks for having me as always. 0:15:24.600 --> 0:15:26.960 And look, I think that we're at a very sort 0:15:27.000 --> 0:15:30.280 pivotal moment for stock. We've come down, we've tested, retested 0:15:30.280 --> 0:15:32.640 the June love UM. It's interesting as I talked to 0:15:32.720 --> 0:15:34.840 investors last week, I think there is some hope for 0:15:34.920 --> 0:15:37.760 a fourth quarter bounce back. UM. And we are certainly 0:15:37.800 --> 0:15:40.600 are starting to see that valuations are looking interesting again 0:15:40.600 --> 0:15:42.600 in the market. UM. But I do think that we 0:15:42.600 --> 0:15:45.560 should expect folattle conditions to endure for a bit longer. 0:15:46.080 --> 0:15:51.240 Where specifically are you seeing interesting valuations, Well, we see 0:15:51.240 --> 0:15:53.320 it in the broader market generally. If you look at 0:15:53.320 --> 0:15:56.280 where we closed on Friday against our EPs number for 0:15:56.360 --> 0:15:59.720 next year, we've actually gone down right back in line 0:15:59.720 --> 0:16:02.200 with the long term average the word about sixteen point 0:16:02.280 --> 0:16:05.360 nine times long term average about sixteen point eight. And 0:16:05.400 --> 0:16:07.800 when you dig down deeper and look within the S 0:16:07.880 --> 0:16:10.320 and P five hundreds and look specifically at the different sectors. 0:16:10.360 --> 0:16:12.520 I would tell you areas like financials still looks very 0:16:12.560 --> 0:16:16.200 compelling on our work, UM consumer to strectionaries looking interesting. 0:16:16.240 --> 0:16:19.360 There are obviously fundamental challenges. Their energy stacks still look 0:16:19.480 --> 0:16:22.120 very compelling materials. And then when we step back from 0:16:22.160 --> 0:16:24.640 the sector, small caps are actually making a very strong 0:16:24.760 --> 0:16:27.200 valuation case right now, so we've actually put an overweight 0:16:27.240 --> 0:16:30.760 in place. There is there still concern that with FED 0:16:30.840 --> 0:16:33.560 tightening and central bank tightening more broadly around the world, 0:16:33.600 --> 0:16:38.160 that that could eat in two earnings. So it's interesting 0:16:38.240 --> 0:16:40.600 if you look at the bottom up consensus for earnings, 0:16:40.680 --> 0:16:44.120 the numbers are still I think around two two, And 0:16:44.320 --> 0:16:46.280 if you're just sort of baking together what south side 0:16:46.280 --> 0:16:48.880 analysts are anticipating in our number for next year is 0:16:48.880 --> 0:16:51.760 actually at to twelve. This year, we're also below consensus 0:16:51.840 --> 0:16:54.120 at to eighteen. I think the consensus still around to 0:16:55.360 --> 0:16:57.560 So I think at this point it's really about the 0:16:57.640 --> 0:17:01.240 economic damage that sparked by the Fed policies um that 0:17:01.360 --> 0:17:04.360 the street is struggling to put in place. UM, we've 0:17:04.359 --> 0:17:06.720 already kind of baked that into our model at this point, 0:17:07.040 --> 0:17:08.960 and so we have earnings growth going nowhere for a 0:17:09.000 --> 0:17:11.520 couple of years to eleven was last year's number, and 0:17:11.680 --> 0:17:13.200 we think it's gonna end up being some of the 0:17:14.320 --> 0:17:16.520 sixteen periods where laradis just chop around for a while, 0:17:16.560 --> 0:17:19.720 it don't really make any progress. Both earnings do stick 0:17:19.760 --> 0:17:22.120 to that forecast and we don't see much movement there. 0:17:22.320 --> 0:17:24.840 If we do get a bounce in the fourth quarter, 0:17:24.920 --> 0:17:26.840 is that just gonna be a short lived bouncer. Where's 0:17:26.840 --> 0:17:29.760 the momentum? Do you think? We know? It's interesting. We 0:17:29.840 --> 0:17:32.359 went back and we we put this note doubt over 0:17:32.440 --> 0:17:34.280 the weekend. We went back and looked at sort of 0:17:34.320 --> 0:17:37.399 prior periods of normalization coming out of the financial crisis, 0:17:37.520 --> 0:17:39.200 coming out of the tech bubble, really kind of the 0:17:39.240 --> 0:17:43.119 O two oh three UM and eleven periods, and you 0:17:43.200 --> 0:17:45.840 did see some pretty vicious rallies and give backs. UM. 0:17:46.440 --> 0:17:48.040 So you know, if we were to follow just the 0:17:48.119 --> 0:17:50.679 two thousand two paths and actually there's been a seventy 0:17:50.720 --> 0:17:53.640 two percent correlation between markets this year and markets back 0:17:53.680 --> 0:17:56.280 in two thousand and two, UM, we would see sort 0:17:56.320 --> 0:17:58.240 of a fierce work que rally and then we would 0:17:58.280 --> 0:17:59.800 give a lot of it back in the first quarter. 0:18:00.040 --> 0:18:02.720 Retest belows again, we'll see if it plays out that way. 0:18:02.920 --> 0:18:04.760 But I would tell you one of the catalyst people 0:18:04.760 --> 0:18:06.680 have been looking for is the mid term elections. We 0:18:06.800 --> 0:18:09.520 do tend to see stocks bottom about a month before 0:18:09.600 --> 0:18:13.840 that event, and we're coming up right on that time horizon. Now, interesting, 0:18:14.040 --> 0:18:17.440 what kind of catalyst could this week's jobs report be? 0:18:17.600 --> 0:18:21.040 What kind of catalyst could it be for the Fed? UM? 0:18:21.119 --> 0:18:23.760 You know, it's interesting with jobs, I think that markets 0:18:23.800 --> 0:18:26.760 are already pricing in a pretty big pickup in jobless 0:18:26.760 --> 0:18:29.359 claims if we think about the Thursday release UM and 0:18:29.440 --> 0:18:31.320 in terms of jobless claims, I'm not going to try 0:18:31.359 --> 0:18:33.080 to predict what how the set is going to react 0:18:33.119 --> 0:18:35.280 to anyone given report, but I will tell you that 0:18:35.359 --> 0:18:38.600 when you think about markets themselves and how they may react, 0:18:38.680 --> 0:18:41.400 we have historically seeing that small caps tend to outperform 0:18:41.520 --> 0:18:44.080 large caps UM in the middle of recessions once the 0:18:44.160 --> 0:18:46.440 unemployment rate starts to pick up. And that's just based 0:18:46.480 --> 0:18:47.840 on the idea that a lot of pain in the 0:18:47.920 --> 0:18:50.119 labor market is pre vaked into that part of the 0:18:50.160 --> 0:18:53.640 market UM, and then when one sort of the deterioration 0:18:53.840 --> 0:18:56.080 is seen, UM, we can get some relief in the 0:18:56.119 --> 0:18:58.000 small cap stocks. So we'll be looking for a start 0:18:58.040 --> 0:19:00.719 of the market reactions to whatever moves comes out on Friday. 0:19:01.000 --> 0:19:03.119 Just about thirty seconds left here, Laurie, But are you 0:19:03.280 --> 0:19:06.080 looking for a pivot from the FED to slower interest 0:19:06.160 --> 0:19:09.800 rate hikes? If so, what would spark it? So? I 0:19:09.920 --> 0:19:12.200 think that for any said pivot to come through, and 0:19:12.240 --> 0:19:14.800 they seem determined to convince the market that there isn't 0:19:14.840 --> 0:19:16.639 one coming um, I think you'd have to see some 0:19:16.800 --> 0:19:21.359 clear deterioration or moderation in the inflation data, and I 0:19:21.400 --> 0:19:23.760 think that's what everyone's waited for. We continue to hear 0:19:23.800 --> 0:19:25.520 clients talk about that, and I would tell you if 0:19:25.560 --> 0:19:27.520 I talked to investors, I don't think they've given us 0:19:27.520 --> 0:19:30.760 hope on that, Fido either, So great to speak with you, Lori, 0:19:30.880 --> 0:19:33.720 Thanks again for doing this. Lori Calvacina, head of US 0:19:33.760 --> 0:19:37.520 equity strategy at RBC Capital Markets. Looking at the market 0:19:37.600 --> 0:19:39.720 this morning, you sort of looking for direction here, with 0:19:39.880 --> 0:19:44.399 Nasdaq futures leading declines after the disappointing results from Tesla 0:19:44.480 --> 0:19:47.600 in terms of third quarter deliveries. NASDAC futures are down 0:19:47.640 --> 0:19:50.359 a half percent right now, down fifty two points. S 0:19:50.440 --> 0:19:53.479 ANDP future is a little changed and DAL futures are 0:19:53.600 --> 0:19:57.160 higher by eighty two points. The tenure treasuries up eleven 0:19:57.240 --> 0:20:01.160 thirty seconds, yield three point seven eight percent. You're listening 0:20:01.160 --> 0:20:09.320 to Bloomberg Daybreak Bloomberg eleven three oh weather mostly cloudy 0:20:09.400 --> 0:20:11.199 for the most part. Today we'll get up to your 0:20:11.200 --> 0:20:16.320 sixty degrees occasional rain. Tomorrow breezy, pioneer sixty showers and Wednesday. 0:20:16.840 --> 0:20:22.960 Right now, we're at fifty degrees in Central Park. Broadcasting 0:20:23.080 --> 0:20:26.760 live from the Bloomberg Interactive Broker's studio in New York. 0:20:26.920 --> 0:20:31.520 Bloomberg E living free to Washington, d C. Bloomberg to Boston, 0:20:31.680 --> 0:20:35.080 Bloomberg one O six one to San Francisco, Bloomberg nine 0:20:35.160 --> 0:20:38.399 six to the country, Sirius XM Chado one ninet and 0:20:38.480 --> 0:20:42.400 around the globe the Bloomberg Business and Bloomberg Radio dot Com. 0:20:42.840 --> 0:20:51.840 This is Bloomberg Daybreak. It's five thirty on Wall Street. 0:20:51.880 --> 0:20:54.680 Good morning. I'm Nathan Hagar and I'm Karen Moscow. We 0:20:54.760 --> 0:20:57.080 are just about four hours away from the open of 0:20:57.160 --> 0:20:58.760 you West Trading. Let's get you up to date on 0:20:58.760 --> 0:21:00.480 the news. You need to know what this shower. We 0:21:00.560 --> 0:21:03.200 begin with an about face out of the UK Prime 0:21:03.240 --> 0:21:06.720 Minister Liz Trust and her administration are dropping a controversial 0:21:06.840 --> 0:21:10.720 tax cut. Chancellor Quasi Quartan had come under fire for 0:21:10.840 --> 0:21:14.520 cutting taxes on the UK's highest earners. Bloomberg's Lizzie Burden 0:21:14.600 --> 0:21:18.000 has details from the Tory party's conference in Birmingham. He 0:21:18.200 --> 0:21:22.520 said that the rate cut was becoming a huge distraction 0:21:22.760 --> 0:21:25.480 from a set of strong policies. Of course, the government 0:21:25.560 --> 0:21:28.480