WEBVTT - Investors Brace for Key Inflation Data; Google Breakup?

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Good morning, I'm Nathan Hager and and I'm John Tucker.

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<v Speaker 2>Here are these stories we're following today.

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<v Speaker 3>Well, John, the S and P five hundred is coming

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<v Speaker 3>off its biggest four day rally of the year. It's

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<v Speaker 3>gained four and a half percent during that stretch. Yesterday,

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<v Speaker 3>the Nasdaq one hundred climb two and a half percent.

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<v Speaker 3>In Wall Street's favorite volatility gauge, the VIS, tumbled to

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<v Speaker 3>around eighteen. Sema Shaw, Chief Global strategistic Principal Asset Management,

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<v Speaker 3>is still bullish on the markets even if there.

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<v Speaker 4>Is a genuine economic slowdown coming through. Given the resilience

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<v Speaker 4>and the balance sheet strength of households and corporates, is

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<v Speaker 4>it likely that EFFED can't come to save the US

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<v Speaker 4>economy with various red cuts. So I put the chance

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<v Speaker 4>of recession fairly low, which means an after a bit

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<v Speaker 4>of volatility and pullback, I think the actually market can

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<v Speaker 4>still ecout some positive gains.

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<v Speaker 3>Principal Asset Management Sema Shaw notes that swaps trade is

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<v Speaker 3>a priced in about forty basis points in FED cuts

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<v Speaker 3>in September and a total rate reduction of more than

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<v Speaker 3>one hundred and five basis points for twenty twenty four.

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<v Speaker 2>Well, yesterday's rally was fueled in part by producer prices

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<v Speaker 2>rising less than expected, and later this morning we're gonna

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<v Speaker 2>get the latest reading on consumer prices. Sarah House is

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<v Speaker 2>in your ACOUNTABIS at Wells Fargo Corporate and Investment Banking.

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<v Speaker 5>We're looking for a zero point two percent increase on booth,

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<v Speaker 5>the headline and the core. So that's in line with

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<v Speaker 5>the consensus, but I think the details are going to

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<v Speaker 5>be really important. So to what extent are we still

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<v Speaker 5>seeing outright goods deflation and are we seeing more progress

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<v Speaker 5>on the services side, both in housing but also the

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<v Speaker 5>non housing services that have been such a such a

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<v Speaker 5>concern for the Fed.

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<v Speaker 2>Wells Fargo's Sarah House. Now, if the consensus holds, it

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<v Speaker 2>would mark the smallest three month increase for core inflation

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<v Speaker 2>since early twenty twenty one.

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<v Speaker 3>And inflation is also in focus in Europe this morning.

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<v Speaker 3>Let's get the latest on that with Bloomberg's w and

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<v Speaker 3>Potts in London.

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<v Speaker 6>You and Nathan and John. The headline rates of UK

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<v Speaker 6>inflation ticked up in July, but by less than expected,

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<v Speaker 6>with consumer prices two point two percent higher. Than a

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<v Speaker 6>year ago, But it was a sharp drop in services

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<v Speaker 6>inflation that really got the attention of traders. That measure

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<v Speaker 6>fell from five point seven percent to five point two percent.

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<v Speaker 6>Core inflation also fell to its lowest since September twenty

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<v Speaker 6>twenty one. The better than expected data saw investors fully

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<v Speaker 6>price two more quarter point cuts in UK interst rates

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<v Speaker 6>this year. In London, I'm une parts Bloomberg Radio.

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<v Speaker 2>All right, thanks to you and staying in Europe. Shares

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<v Speaker 2>of UBS up almost two percent. The Swiss Bank posting

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<v Speaker 2>higher than expended profit in the second quarter as strong

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<v Speaker 2>client inflows in investment banking revenue help bolster chief executive

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<v Speaker 2>officers Sergio or Mahdi's efforts to return capital to shareholders.

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<v Speaker 2>A year after completing the takeover of Credit Squeeze, the

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<v Speaker 2>bank says it's on track for pre merger levels of profitability,

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<v Speaker 2>something Sergio or Madi tails Bloomberg he can deliver.

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<v Speaker 7>Of course, is going to take a lot of time,

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<v Speaker 7>i am but to restore the profitability because the amount

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<v Speaker 7>of task to be done is huge. But I'm confident

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<v Speaker 7>that we are on a good way to deliver.

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<v Speaker 2>But despite Sergio Armandi's optimism, ubsays it's also expects to

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<v Speaker 2>book another one point one billion dollars in integration related

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<v Speaker 2>expenses in the third quarter.

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<v Speaker 3>In Asia, John Japan is going to be looking for

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<v Speaker 3>a new leader once again. Fumio Kashida is withdrawing from

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<v Speaker 3>his ruling LDP parties leadership race in September. That paves

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<v Speaker 3>the way for someone else to become Japan's premier. The

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<v Speaker 3>successor would be the third prime minister for the country

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<v Speaker 3>since Shinzo Abe stepped down in twenty twenty.

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<v Speaker 2>Now to the latest from the Middle East, the United

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<v Speaker 2>Nations Security Council held a meeting of the tensions in

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<v Speaker 2>the region as Israel waits for a potential reprisal attack

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<v Speaker 2>from Iran. US Ambassador Linda Thomas Greenfield repeating calls for

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<v Speaker 2>a cease fire deal in Gaza.

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<v Speaker 8>We've called on both sides to resume urgent discussion on Thursday,

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<v Speaker 8>August fifteenth in Doha for Cairo to close all remaining

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<v Speaker 8>gaps and commence implementation of the deal without further delay.

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<v Speaker 2>Ambassador Linda Thomas Greenfield says a ceasefire is the best

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<v Speaker 2>way to bring immediate rely to the people in Gaza. Meantime,

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<v Speaker 2>the Biden administration has approved a more than twenty billion

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<v Speaker 2>dollar weapons sale to Israel. We get more of that

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<v Speaker 2>from Bloomberg's Roz Matheson, Well, this.

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<v Speaker 9>Is the approval of a big event still that we

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<v Speaker 9>knew was in the works, and it's involves up to

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<v Speaker 9>fifty fighter jets and fifteen fighter jets, upgrades for existing

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<v Speaker 9>fighter jets, everything from vehicles, ammunition, radar equipment.

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<v Speaker 10>It's a big deal.

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<v Speaker 9>It's got a lot in it, but the reality is

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<v Speaker 9>that these planes are not going to come at least

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<v Speaker 9>until twenty twenty nine, so there's some years away.

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<v Speaker 2>Bloomberg's Rhons Mathison reports the US paused weapons shipments to

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<v Speaker 2>Israel and May over concerns that could be used against

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<v Speaker 2>civilians in Gaza. Two key Democrats drop their opposition to

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<v Speaker 2>this weapon sale in June.

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<v Speaker 3>Well John, a progressive member of Congress who has been

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<v Speaker 3>outspoken against Israel's conduct in Gaza, has won her primary

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<v Speaker 3>in Minnesota with ninety nine percent of the votes counted.

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<v Speaker 3>Democrat Illin Omar defeated former Minneapolis council member Don Samuels

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<v Speaker 3>fifty six point two percent to forty two point nine percent.

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<v Speaker 3>Omar told her supporters her campaign was about joy.

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<v Speaker 11>We know it is joyful to want to live in

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<v Speaker 11>a peaceful and equitable world.

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<v Speaker 1>So I am.

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<v Speaker 2>Incredibly, incredibly honored by this victory.

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<v Speaker 12>Tonight.

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<v Speaker 3>Congresswoman Ellan Omar's victory buck's a trend for progressives in

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<v Speaker 3>Congress to other members of the so called squad. New

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<v Speaker 3>York's Jamal Bowman and Corey Bush of Missouri lost their primaries.

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<v Speaker 3>Unlike those races, Pro Israel groups decided not to get

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<v Speaker 3>seriously involved in the Minnesota race and.

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<v Speaker 2>Turning back to the markets now, Dathan shares of Alphabet

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<v Speaker 2>down almost one percent in early trading. The Justice Department

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<v Speaker 2>is considering whether to force alphabets Google to break up.

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<v Speaker 2>More from Bloomberg's Amy Morrison Washington.

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<v Speaker 12>Officials with the DOJ are considering what would be a

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<v Speaker 12>rare bid to break up a big tech company after

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<v Speaker 12>a landmark court ruling found that company monopolized the online

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<v Speaker 12>search market. Sources tell Bloomberg that less severe options include

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<v Speaker 12>forcing Google to share more data with competitors and measures

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<v Speaker 12>to prevent it from gaining an unfair advantage in AI products. Now,

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<v Speaker 12>even if it does not pursue a breakup, the government

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<v Speaker 12>will likely seek a ban on the type of exclusive

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<v Speaker 12>contracts that were at the center of its case against

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<v Speaker 12>Google in Washington, Amy Morris Bloomberg Radio.

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<v Speaker 3>All right, Amy, thank you. Meantime, a merger is getting closer.

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<v Speaker 3>Perhaps in the grocery ole. We're watching shares of Kelenova.

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<v Speaker 3>They're up about seven percent. The Wall Street Journals reporting

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<v Speaker 3>Mars is expected to unveil a nearly thirty billion dollar

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<v Speaker 3>deal for the food maker today. Keleanova was spun off

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<v Speaker 3>from Kellogg last year. Its brands include pop Tarts, Springles

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<v Speaker 3>and Cheese Its.

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<v Speaker 2>And activist investors pushing for sweeping changes at Southwest Airlines,

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<v Speaker 2>Elliott Investment Management has nominated ten of its own candidates

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<v Speaker 2>to the board of the struggling carrier. They include the

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<v Speaker 2>former hands of Virgin West Jet and Eric Canada. Elliott

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<v Speaker 2>has previously demanded the oulster of Southwest Airline CEO Bob Jordan,

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<v Speaker 2>and that brings us to five the wait on Wall

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<v Speaker 2>Street Time down for a look at some of the

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<v Speaker 2>other stories making news in New York and around the world.

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<v Speaker 2>For that, we're joined by Bloomberg's Michael Barr. Michael, Good Morning,

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<v Speaker 2>Good morning John. The United Autoworkers Union has filed federal

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<v Speaker 2>labor charges against both Donald Trump and Elon Musk. The

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<v Speaker 2>charges are tied to particular comments made during Trump's ex

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<v Speaker 2>interview with Musk on Monday, UAW President Sean Fain, the rich.

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<v Speaker 13>Keep getting richer at the expense of the working class,

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<v Speaker 13>and people like Donald Trump and Elon Musk, they sneer

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<v Speaker 13>at labor law, but they don't care about labor law

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<v Speaker 13>because they don't care about working class people.

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<v Speaker 14>The senior advisor for the Trump campaign released a statement saying,

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<v Speaker 14>in part, the lawsuit is a shameless political stunt to

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<v Speaker 14>eroad President Trump's overwhelming support among America's workers. Hunter Biden

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<v Speaker 14>is facing new criticism this morning. The New York Times

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<v Speaker 14>reports that the president's son wrote a letter to the

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<v Speaker 14>US ambassador to Italy in twenty sixteen to seek help

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<v Speaker 14>for a foreign business venture. Hunter Biden's lawyer called the

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<v Speaker 14>letter to the ambassador a proper request and insisted no

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<v Speaker 14>project materialized. Tropical Storm Ernesto is expected to grow to

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<v Speaker 14>a hurricane as it turns in the Caribbean. Officials in

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<v Speaker 14>Puerto Rico closed schools and open shelters. Ernesto is on

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<v Speaker 14>a path toward Bermuda deryl ingestion with the Virgin Islands

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<v Speaker 14>Territorial Emergency Management Agency.

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<v Speaker 7>The hurricane washing is being issued for US Virgin Islands

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<v Speaker 7>to Burgess, Virgia Islands vehicles and Calebra to anticipate a

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<v Speaker 7>rapid intensification.

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<v Speaker 14>Just days ago, Debbie passed through the area, leaving storm damage.

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<v Speaker 14>Opening statements are expected to begin today in the murder

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<v Speaker 14>trial of a Las Vegas area politician accused of killing

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<v Speaker 14>an investigative reporter. Prosecutors accused former Clark County Public administrator

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<v Speaker 14>Robert Tellis of killing Las Vegas Review Journal reporter Jeff

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<v Speaker 14>Jerman in September of twenty twenty two Loyola Law School

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<v Speaker 14>professor and former federal prosecutor Lori Levinson.

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<v Speaker 10>The allegations are at the politician. The defendant here, Robert Tellis,

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<v Speaker 10>was upset at a reporter who had said negative things

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<v Speaker 10>about him, and in fact, that seems to have been

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<v Speaker 10>the motive alleged for this crime.

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<v Speaker 14>Former federal prosecutor Lori Levinson. Former Houston Mayor Sylvester Turner

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<v Speaker 14>was picked as the Democrat's nominee to succeed the late

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<v Speaker 14>US Representative Sheila Jackson Lee, who died last month of

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<v Speaker 14>pancreatic cancer. Turner will be appearing on the November ballot

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<v Speaker 14>after securing the most support from local Democratic precinct chairs.

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<v Speaker 14>Global News twenty four hours a day and whenever you

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<v Speaker 14>want it with Bloomberg News. Now. I'm Michael Barr, and

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<v Speaker 14>this is Bloomberg.

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<v Speaker 2>John, Michael. Yeah, it's tigned out for the Bloomberg Sports Update.

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<v Speaker 2>An for that, we said, good warning, John stash Ewer,

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<v Speaker 2>All right, John.

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<v Speaker 15>Had the White Sox one last night. That would have

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<v Speaker 15>been two wins and two nights after one win the

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<v Speaker 15>previous month.

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<v Speaker 14>Didn't happen.

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<v Speaker 15>Yankees won four to one in Chicago thanks to Nester Cortez,

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<v Speaker 15>who through seven scoreless hittings and Juan Soto, who provided

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<v Speaker 15>the entire Yankee offense. He was the only Yank to

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<v Speaker 15>have an extra base hit. Soto had the best home

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<v Speaker 15>run hitting game of his career, two run shot to

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<v Speaker 15>left field thirty night solo blast also the opposite way

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<v Speaker 15>of the Fens solo home run to right in the seventh,

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<v Speaker 15>actually had a chance in the ninth for a four

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<v Speaker 15>home run game. He now has thirty three home runs

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<v Speaker 15>and his teammate Aaron.

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<v Speaker 14>Judge has forty two. Here's Soto on the two of.

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<v Speaker 16>Them were just coming here and tried to do large

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<v Speaker 16>jobs down with the day. You know, it's it's really

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<v Speaker 16>impressive what we've been doing. But at the end of

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<v Speaker 16>the day, we forget about what we've done.

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<v Speaker 14>In the past.

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<v Speaker 16>We tried to come every day, tried to focus in

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<v Speaker 16>that day, and tried to win games.

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<v Speaker 14>So for us is.

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<v Speaker 16>Really it's really good that you guys appreciate everything.

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<v Speaker 2>That we do.

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<v Speaker 16>But definitely we come in here every day hungry for.

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<v Speaker 15>More Yankee win. Coming after news of Jazz Chisholm's elbow

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<v Speaker 15>injury suffered Monday night on the head first slide home.

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<v Speaker 15>He is gonna have further test but the MRI is

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<v Speaker 15>gonna land Chisham on the injured list with surgery and option.

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<v Speaker 15>Chism has been a nice addition since the trade was Miami.

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<v Speaker 15>The Orioles lost to Washington nine to three. The anksor

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<v Speaker 15>back ahead of ball the More by a half game.

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<v Speaker 15>In City Field, Oakland beat the Mets nine to four.

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<v Speaker 15>Paul Blackburn, facing his old team, gave up sixer and

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<v Speaker 15>runs met to their last four games have an outscored

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<v Speaker 15>thirty one to five. JJ McCarthy, the former Michigan quarterback

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<v Speaker 15>draft of the first round by Minnesota's gonna miss the

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<v Speaker 15>start of the season due to a knee injury. Vikings

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<v Speaker 15>had already planned to have the veteran Sam Donold be

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<v Speaker 15>the week one starting to be the forty nine Ers

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<v Speaker 15>appear closer to pulling the trigger on a trade of

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<v Speaker 15>white Out Brandon Ayuk to Pittsburgh. Terms have been agreed

0:11:51.280 --> 0:11:52.800
<v Speaker 15>to and now it's just the question of if the

0:11:52.880 --> 0:11:55.200
<v Speaker 15>Niners make the move. By you unhappy with his contract,

0:11:55.559 --> 0:11:58.839
<v Speaker 15>wants a trade. John Stashawa Bloomberg Sports, Johnny.

0:12:00.960 --> 0:12:05.080
<v Speaker 14>Coast to Coast on Bloomberg Radio, nationwide on Sirius XM,

0:12:05.160 --> 0:12:08.040
<v Speaker 14>and around the world on Bloomberg dot Com and the

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<v Speaker 14>Bloomberg Business app.

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<v Speaker 17>This is Bloomberg Daybreak.

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<v Speaker 3>Good morning, I'm Nathan Hager. On a morning of big

0:12:14.200 --> 0:12:17.960
<v Speaker 3>bank earnings. UBS posted higher than expected profit in the

0:12:17.960 --> 0:12:21.080
<v Speaker 3>second quarter as investment banking revenue and progress in the

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<v Speaker 3>integration of Credit Suite helped CEO Sergio or Mahdi's efforts

0:12:25.280 --> 0:12:29.560
<v Speaker 3>to return capital to shareholders. Sergio or Mahdi joined Bloomberg's

0:12:29.559 --> 0:12:31.440
<v Speaker 3>Fancy in Lanqua to talk about the results and how

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<v Speaker 3>higher volatility could be good for client portfolios. Let's listen

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<v Speaker 3>in for the.

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<v Speaker 17>Markets and for many investors.

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<v Speaker 7>You know, what happened early on this month has been

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<v Speaker 7>a week up cal away up cool right, So I

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<v Speaker 7>mean you look at the magnitude of the movements should

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<v Speaker 7>make people think carefully about.

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<v Speaker 17>Having a proper diversification and being very total about the

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<v Speaker 17>way you invest. More so, in that sense, the fact

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<v Speaker 17>that we have.

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<v Speaker 7>Basically made back everything within one week or two cannot

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<v Speaker 7>be taken as a you know, temporary issues. In my

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<v Speaker 7>point of view, one has to really think that probably

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<v Speaker 7>is a sign of some elements of fragility in the system.

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<v Speaker 11>Does it get easier as maybe we get a FED cut,

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<v Speaker 11>or does it get more complicated as we go to

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<v Speaker 11>the US election?

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<v Speaker 17>But look, you know.

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<v Speaker 7>When central bank cuts, it depends how they cut and

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<v Speaker 7>why they cut.

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<v Speaker 17>So if.

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<v Speaker 7>You know, of course there is now a capacity probably

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<v Speaker 7>to accommodate cuts based on lower.

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<v Speaker 17>Inflation, but it's also you know, we need to watch.

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<v Speaker 7>Exactly also what are the underlying economic drivers.

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<v Speaker 17>And to the extent that the FED is.

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<v Speaker 7>Forced to cut more aggressively because of economic downturns, that

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<v Speaker 7>would not really be good for the market, so we

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<v Speaker 7>need to really watch why rates would come down and

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<v Speaker 7>how quickly they come down. In general, we do expect

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<v Speaker 7>and we see room for a potential rate cuts in

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<v Speaker 7>the foreseable future, but I wouldn't really be in the

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<v Speaker 7>camp of predicting that the FED will go as far

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<v Speaker 7>as the market wants the.

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<v Speaker 17>FED to go.

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<v Speaker 11>There's been a lot of focus on private markets. How

0:14:26.600 --> 0:14:29.360
<v Speaker 11>does that interplay actually change and what does it mean

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<v Speaker 11>for ubs now?

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<v Speaker 17>The big change in client.

0:14:31.520 --> 0:14:33.760
<v Speaker 7>Behaviors we saw in the last twenty four months was

0:14:33.880 --> 0:14:40.720
<v Speaker 7>clearly more diversification towards fixed income and so on and

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<v Speaker 7>so forth.

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<v Speaker 17>When the rates comes down, of course, maybe part of

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<v Speaker 17>it will go to search for higher yield in maybe

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<v Speaker 17>in private credit, but not only.

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<v Speaker 7>But we do believe that as rates comes down, you

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<v Speaker 7>will see also potentially people moving back to more alternative assets.

0:14:58.480 --> 0:15:00.440
<v Speaker 17>And also, which is.

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<v Speaker 7>Important to understand the ed winds we face in the industry,

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<v Speaker 7>but also at US in NII in margins on interest

0:15:08.800 --> 0:15:13.239
<v Speaker 7>rates will be also upset by clients taking more leverage potentially,

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<v Speaker 7>So it depends how it plays out, It depends what

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<v Speaker 7>are the underlying economic dynamics.

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<v Speaker 11>Do you worry that there could be a systemic risk

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<v Speaker 11>for semi systemic risks.

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<v Speaker 17>I don't think so. No, I don't think I don't

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<v Speaker 17>see systemic risk. But volatility.

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<v Speaker 7>High volatility doesn't mean that you have systemic risks.

0:15:33.120 --> 0:15:35.880
<v Speaker 11>But what does it mean? High volatility means you need.

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<v Speaker 17>To be higher volatility? I mean, to be honest, I

0:15:38.560 --> 0:15:40.760
<v Speaker 17>think if you look at high.

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<v Speaker 7>Volatility can be an absolute or a relative concept. So

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<v Speaker 7>because we have seen solo volatility in the last few quarters,

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<v Speaker 7>you know, I do believe that we're going to see

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<v Speaker 7>higher volatility. If this is very high and permanently, it's

0:15:56.000 --> 0:15:58.160
<v Speaker 7>another matter, but I do believe we're going to see

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<v Speaker 7>more volatility.

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<v Speaker 12>So it can be quarterly results.

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<v Speaker 11>If I don't ask you about hiring or actually job losses,

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<v Speaker 11>can you give us an update on what the next

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<v Speaker 11>six and then twelve months will bring well you, so that.

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<v Speaker 17>You know the restructuring.

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<v Speaker 7>And fixing the elements of problems in the integration are

0:16:18.440 --> 0:16:23.920
<v Speaker 7>unfortunately driving job losses. We are We took down around

0:16:24.560 --> 0:16:28.880
<v Speaker 7>three thousand counties quarter, so I think that we will

0:16:28.920 --> 0:16:32.560
<v Speaker 7>continue to do that in order to restore the profitability

0:16:32.640 --> 0:16:34.520
<v Speaker 7>UBS had before the appuisition.

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<v Speaker 1>This is Bloomberg Day. Break Today, your morning brief on

0:16:37.920 --> 0:16:40.720
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0:16:41.720 --> 0:16:44.080
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0:16:52.000 --> 0:16:54.520
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0:17:17.720 --> 0:17:18.800
<v Speaker 17>I'm Nathan Hager and.

0:17:18.760 --> 0:17:21.120
<v Speaker 2>I'm John Tucker. Join us again tomorrow morning for all

0:17:21.119 --> 0:17:23.080
<v Speaker 2>the news you need to start your day right here

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<v Speaker 2>on Bloomberg day Break