WEBVTT - Bloomberg Daybreak: December 9, 2022 - Hour 2 (Radio) 0:00:00.720 --> 0:00:05.480 By from the Bloomberg Interactive Brokers Studios. This is Bloomberg 0:00:05.559 --> 0:00:09.160 day Break for Friday, December nine two. Coming up this hour, 0:00:09.440 --> 0:00:12.479 Wall Street graces for the first of two inflation reports 0:00:12.520 --> 0:00:15.680 before next week's FED meeting. Janet Yellen holds fast to 0:00:15.760 --> 0:00:18.760 her ball that the US will avoid recession of vocal 0:00:18.880 --> 0:00:22.040 Bear doubles down on his parish call for stops and 0:00:22.239 --> 0:00:25.000 Sam Bankman freed miss is a key deadline set by 0:00:25.120 --> 0:00:28.280 US lawmakers. Advocates urge a judge to stop New York 0:00:28.320 --> 0:00:31.600 mayor Adams from forcing homeless people into mental health treatment, 0:00:31.640 --> 0:00:34.400 plus a call for new sanctions on Russia and China. 0:00:34.720 --> 0:00:37.519 Michael bar More, I'm John stash Our. In sports, the 0:00:37.600 --> 0:00:40.120 Mets have resigned Brand and Nemo, and they'll play two 0:00:40.200 --> 0:00:45.360 quarterfinal matches today at the World Come that's all strained 0:00:45.360 --> 0:00:48.479 ahead on Bloomberg day Break on Bloomberg he Live in 0:00:48.520 --> 0:00:52.960 three on New York, Bloomberg one, Washington, d C, Bloomberg 0:00:53.040 --> 0:00:56.760 one oh six one, Boston, Bloomberg nine sixties and Francisco 0:00:57.200 --> 0:01:00.200 Syrius Exam one nine Team and around the world Old 0:01:00.200 --> 0:01:03.840 on Bloomberg Radio dot Com and via the Bloomberg Business. 0:01:07.600 --> 0:01:10.840 Good Friday morning. I'm Amy Morris and Nathan Hagar. Futures 0:01:10.840 --> 0:01:12.840 are picking up some steam this morning at six oh 0:01:12.880 --> 0:01:15.119 one on Wall Street. We checked the markets all day long. 0:01:15.160 --> 0:01:18.399 At Bloomberg SMP futures right now of fifteen points now 0:01:18.520 --> 0:01:22.840 futures up eighty NASTAC futures are higher by sixty one points. 0:01:23.080 --> 0:01:25.920 Tenure Treasury is little changed now. The yield three point 0:01:25.959 --> 0:01:28.560 for eight percent yield on the two year four point 0:01:28.600 --> 0:01:31.600 to seven percent. Nime X screwed is up one percent, 0:01:31.680 --> 0:01:34.320 up seventy one cents at seventy two dollar sixteen cents 0:01:34.319 --> 0:01:36.959 a barrel. Komes Gold is up three tenths per cent 0:01:37.040 --> 0:01:39.360 or five dollar seventy cents at eighteen o seven twenty 0:01:39.360 --> 0:01:42.319 and ounce. The euro one point zero five six two 0:01:42.360 --> 0:01:44.680 against the dollar, and the yen is at one thirty 0:01:44.720 --> 0:01:47.760 six point zero five. Amy, Nathan, we begin with the 0:01:47.840 --> 0:01:51.160 latest on Britney Grinder. A plane carrying the w NBA 0:01:51.280 --> 0:01:54.960 Star has now landed in San Antonio, hours after the 0:01:54.960 --> 0:01:58.200 White House traded a notorious arms dealer for her release. 0:01:58.560 --> 0:02:01.840 Grinder is back on US soil, nearly ten months after 0:02:01.880 --> 0:02:05.640 she was detained in Russia for carrying cannabis oil. Republicans 0:02:05.640 --> 0:02:09.400 are criticizing the prisoner swap, calling Grinder a geopolitical pawn. 0:02:09.760 --> 0:02:14.840 Democratic Congresswoman Sheila Jackson Lee represents Grinder's hometown of Houston, Texas. 0:02:15.320 --> 0:02:18.440 No American should be left without knowing that the full 0:02:18.440 --> 0:02:20.800 power of the United States will be behind them to 0:02:20.880 --> 0:02:25.359 bring them home. Texas Congresswoman Sheila Jackson Li says Grinder's 0:02:25.360 --> 0:02:28.040 release sends a message and puts a renewed spot lot 0:02:28.080 --> 0:02:31.200 on x Marine Paul Whalen, he's still being held in Russia. 0:02:31.280 --> 0:02:33.960 All right, we'll continue following that throughout the morning, Amy, 0:02:34.000 --> 0:02:37.120 But let's turn now to the economy. Wall Street is 0:02:37.160 --> 0:02:40.119 closing out this week with a pair of key economic reports, 0:02:40.120 --> 0:02:44.079 November's Producer Price Index and the University of Michigan Consumer 0:02:44.160 --> 0:02:48.080 Sentiment Index. Bloomberg's Michael McKee has a preview. We're into 0:02:48.080 --> 0:02:51.200 a world of base effects with the November Producer Price Index. 0:02:51.480 --> 0:02:54.520 Because inflation was higher a year ago. The annual rate 0:02:54.520 --> 0:02:58.000 of wholesale inflation can fall even if the monthly rate increases, 0:02:58.480 --> 0:03:01.959 and that's the expectation arise in both headline and core 0:03:02.040 --> 0:03:04.680 inflation for the month, but had dropped to the lowest 0:03:04.680 --> 0:03:07.800 annual headline inflation since May of last year, and had 0:03:07.880 --> 0:03:10.840 dropping the core to the lowest since June. That might 0:03:10.840 --> 0:03:13.680 contribute to an expected rise in the University of Michigan's 0:03:13.680 --> 0:03:17.680 per Literary Consumer Sentiment Index, a small rise but still 0:03:17.760 --> 0:03:20.880 at a depressed level. Investors will be more interested in 0:03:20.919 --> 0:03:25.280 the surveys inflation expectations indexes. Neither one year or five 0:03:25.360 --> 0:03:28.800 year expectations are expected to change as Americans wait for 0:03:28.800 --> 0:03:33.640 proof prices are slowing rather than forecasts. Michael McKee, Bloomberg Daybreak, 0:03:33.960 --> 0:03:36.480 All right, thank you, Mike. Calls for a recession, though, 0:03:36.520 --> 0:03:40.320 are growing. Treasury Secretary Janet Yellen, however, says she still 0:03:40.360 --> 0:03:43.600 anticipates the US economy will avoid one. We get that 0:03:43.680 --> 0:03:47.560 story from Bloomberg's Charlie Pellett. During a visit to Fort Worth, Texas. 0:03:47.640 --> 0:03:50.640 Yellen said, quote, whether or not we can avoid a recession, 0:03:50.960 --> 0:03:54.520 I believe the answer is yes. She highlighted the US 0:03:54.560 --> 0:03:58.720 pay rolls so far have avoided declines. On inflation, she said, 0:03:58.760 --> 0:04:02.120 supply chain bottle knight are clearly beginning to ease, and 0:04:02.200 --> 0:04:06.680 that's helpful. In New York. Charlie Pellett, Bloomberg Daybreak, Okay, Charlie, 0:04:06.680 --> 0:04:10.280 thank you. Still much of Wall Street disagrees with Secretary Yellen, 0:04:10.480 --> 0:04:12.920 including the man who manages one of the biggest pension 0:04:12.960 --> 0:04:15.560 funds in the country. We caught up with Chris Ailman, 0:04:15.640 --> 0:04:19.800 chief investment officer of the California State Teachers Retirement System. 0:04:19.839 --> 0:04:22.400 I feel like a recession has to happen because in 0:04:22.480 --> 0:04:27.160 my lifetime, when the fed raiveses rates this aggressively seventy 0:04:27.200 --> 0:04:31.159 five time and time after again, the economy slows down. 0:04:31.440 --> 0:04:34.920 The inflation is from the supply chain disruptions and the war. 0:04:35.800 --> 0:04:39.200 Maybe inflation slows down on its own. I'd be surprised 0:04:39.240 --> 0:04:41.560 that I think we've got to have a recession. Chris 0:04:41.600 --> 0:04:44.359 Alman oversees about three hundred billion dollars at the California 0:04:44.400 --> 0:04:47.760 State Teachers Retirement System. Despite calls for a recession, some 0:04:47.800 --> 0:04:50.880 of the world's biggest investors predicted stocks will see low 0:04:50.960 --> 0:04:54.600 double digit gains next year. Seventy respondents in a Bloomberg 0:04:54.640 --> 0:04:57.720 survey expect to equities to rise. That compares with n 0:04:58.400 --> 0:05:01.800 forecasting declines. For those seeing gains, the average prediction was 0:05:01.839 --> 0:05:04.240 a ten percent return. As it happens, Amy the SMP 0:05:04.360 --> 0:05:06.919 five hundreds of about ten percent from its October lows, 0:05:07.000 --> 0:05:09.360 but one of the market's most vocal skeptics sees more 0:05:09.520 --> 0:05:12.800 losses ahead. We spoke with Morgan Stanley chief US equity 0:05:12.839 --> 0:05:15.960 strategist Mike Wilson. We don't think that this bear market 0:05:16.080 --> 0:05:20.280 is over yet, mainly because our forecast for next year 0:05:20.320 --> 0:05:23.320 on earnings is materially below the street. Now, I know 0:05:23.360 --> 0:05:25.919 that's becoming a bit of a consensus view, but I 0:05:25.960 --> 0:05:29.640 think our forecasts are even below, uh, you know, kind 0:05:29.640 --> 0:05:32.040 of this new level that people are talking about. Morgan 0:05:32.080 --> 0:05:34.640 Stanley's Mike Wilson says there's still a case for positioning 0:05:34.640 --> 0:05:37.719 in defensive value stocks like utilities, staples, and healthcare, but 0:05:37.839 --> 0:05:40.880 not in industrials, financials, or energy. Let's look at some 0:05:40.960 --> 0:05:42.800 of the stocks on the move this morning. Shares of 0:05:42.880 --> 0:05:46.160 Lulu Lemon down almost seven percent gross margins at the Yogo, 0:05:46.200 --> 0:05:48.760 where a maker came in below estimates. Shares a broad 0:05:48.800 --> 0:05:51.080 Coom up more than three percent. The ship maker gave 0:05:51.120 --> 0:05:54.680 an upbeat sales forecast, indicating that demand remains strong. Shares 0:05:54.720 --> 0:05:57.360 of Docu signed up twelve percent the company boosted its 0:05:57.400 --> 0:05:59.479 revenue guidance for the full year. I think there's some 0:05:59.480 --> 0:06:01.960 new development this morning in the collapse of Crypto Exchange 0:06:02.040 --> 0:06:04.560 f t X, Sam Bankman Freed, the founders missed a 0:06:04.640 --> 0:06:07.720 key Senate deadline. Let's get the latest lie from Bloomberg. 0:06:07.720 --> 0:06:10.440 Steve Rappaport, Good morning, Snoon, Good morning, Nathan, and Amy. 0:06:10.480 --> 0:06:13.440 Bankman Freed had until five pm yesterday to respond to 0:06:13.480 --> 0:06:16.320 a letter requesting he appeared before a Senate Banking committee 0:06:16.320 --> 0:06:19.159 next week. Chairman Shared Brown warning he and ranking member 0:06:19.160 --> 0:06:21.800 Pat Toomey are prepared to issue with subpoena if Bankman 0:06:21.839 --> 0:06:24.920 Freed does not comply. Bankman Freed recently indicated he would 0:06:24.920 --> 0:06:27.799 testify before a House committee. It's unclear why he didn't 0:06:27.800 --> 0:06:30.440 respond to the Senate panel's request. Those spokesman for the 0:06:30.440 --> 0:06:33.880 disgraced FTX founder confirms he hired a defense attorney live 0:06:33.920 --> 0:06:36.880 in New York. I'm Steve Rappaport, Bloomberg Day Break. All right, Steve, 0:06:36.920 --> 0:06:40.240 thank you. Right now. SMP futures are of sixteen points. 0:06:40.240 --> 0:06:42.880 That's again, of four tenths percent down. Futures are hired 0:06:42.880 --> 0:06:46.000 by eighty two NASDAK futures of fifty seven points ten. 0:06:46.080 --> 0:06:48.680 Your treasury is now down to thirty seconds YELD three 0:06:48.680 --> 0:06:50.480 point four nine percent, the yield on the two year 0:06:50.560 --> 0:06:54.119 four point to eight percent. Bitcoins trading two tenths percent. 0:06:54.200 --> 0:06:57.400 Hired around seventeen thousand, two hundred local headlines in the 0:06:57.440 --> 0:07:04.280 Check of Sports. Next to this is Bloomberg six o 0:07:04.400 --> 0:07:07.200 seven on Wall Street, thirty eight degrees in New York. 0:07:07.240 --> 0:07:09.240 A sunny start for your weekend. We're going up to 0:07:09.279 --> 0:07:11.960 forty five today. Let's bring in Michael bar with more 0:07:12.000 --> 0:07:13.840 on what else is going on in New York and 0:07:14.000 --> 0:07:17.440 around the world. Good morning, Michael, Good morning Amy. Advocates 0:07:17.440 --> 0:07:20.880 for people with mental illnesses are urging a federal judge 0:07:20.960 --> 0:07:24.000 to stop New York City Mayor Eric adams plan to 0:07:24.080 --> 0:07:27.200 force people from the streets and into mental health treatment. 0:07:27.600 --> 0:07:30.960 Several organizations, including the New York Lawyers for the Public 0:07:31.000 --> 0:07:35.040 Interest and the National Alliance on Mental Illness of New 0:07:35.120 --> 0:07:38.520 York City, said action was needed to stop large scale 0:07:38.600 --> 0:07:44.400 involuntarily hospitalizations. The lawsuits seeks to remove police officers as 0:07:44.400 --> 0:07:48.760 first responders for those requiring healthcare. When announcing the plan 0:07:48.840 --> 0:07:52.040 on November twenty nine, Adams called it a moral obligation 0:07:52.120 --> 0:07:55.640 to act. The US is preparing new sanctions on Russia 0:07:55.680 --> 0:07:58.640 and China for what it describes as human rights abuses 0:07:58.680 --> 0:08:01.960 by both countries. According to official familiar with the matter, 0:08:02.080 --> 0:08:05.200 the European Union is set to boost the size of 0:08:05.240 --> 0:08:09.160 a fund finance weapons for Ukraine by at least two 0:08:09.200 --> 0:08:13.040 point one billion dollars as early as next week. Congress 0:08:13.080 --> 0:08:16.480 took a historic step to protect marriage equality. The House 0:08:16.520 --> 0:08:20.800 passed by partisan legislation semending federal protections for same sex 0:08:20.840 --> 0:08:25.080 and interracial couples. Senate Majority leader Chuck Schumer says this 0:08:25.120 --> 0:08:28.200 bill is personal for him, as his daughter and her 0:08:28.280 --> 0:08:31.800 wife are expecting their first child. Thanks to the tireless 0:08:31.880 --> 0:08:35.600 advocacy of many many in this room and the dogged 0:08:35.679 --> 0:08:40.680 work by many of my colleagues, my grandchild will live 0:08:40.760 --> 0:08:45.959 in a world that will respect and honor their mother's marriage. 0:08:46.160 --> 0:08:49.120 Republicans against the bill have claimed that it goes against 0:08:49.200 --> 0:08:53.160 religious freedom and this just in there's word that Kristen 0:08:53.280 --> 0:08:57.040 Cinema plans to leave the Democratic Party and will become 0:08:57.160 --> 0:09:00.920 an independent. NASA's artemous Moon mission is headed toward a 0:09:01.000 --> 0:09:04.760 Sunday splashdown in the Pacific, But first the Orion spacecraft 0:09:04.880 --> 0:09:08.480 has to survive at twenty five thousand mile per hour 0:09:08.880 --> 0:09:13.480 five thousand degree re entry Mission Manager Mike Seraphint. On 0:09:13.840 --> 0:09:17.720 entry day, we will realize our Priority one objective, which 0:09:17.760 --> 0:09:22.000 is to um demonstrate the vehicle lunary entry conditions, as 0:09:22.040 --> 0:09:24.680 well as our Priority three objective, which is to retrieve 0:09:24.720 --> 0:09:29.240 the spacecraft NASAs Mike Seraphin and again the breaking news 0:09:29.640 --> 0:09:34.520 Kirsten's Cinema plans to change her party affiliation from Democratic 0:09:34.920 --> 0:09:38.520 too independent. Global news twenty four hours a day on 0:09:38.720 --> 0:09:42.120 air and on Bloomberg Quicktake, powered by more than twenty 0:09:42.200 --> 0:09:45.920 seven undred journalist and analysts more than twenty countries. Michael Barren, 0:09:46.040 --> 0:09:52.160 this is Bloomberg Gaming, all right, Thank you, Michael six 0:09:52.200 --> 0:09:54.760 ten on Wall Street. John now for the sports report, 0:09:54.800 --> 0:09:57.760 brought to you by Charles try State. Audie. Here's John 0:09:57.800 --> 0:10:00.320 sash Our, all right, Amy. The Mets drafted Brandon Nimo 0:10:00.400 --> 0:10:02.400 in the first round back in two thousand and eleven. 0:10:02.440 --> 0:10:04.800 He's developed into a solid center fielder for them, both 0:10:04.840 --> 0:10:06.439 at the play and in the field, and the Mets 0:10:06.720 --> 0:10:09.400 are keeping Nimo an eight year deal for a hundred 0:10:09.400 --> 0:10:11.840 and sixty two million dollars, which means the Mets bay 0:10:11.920 --> 0:10:15.960 rolee likely to be around three hundred and twenty million, 0:10:16.040 --> 0:10:18.880 far and away the most in baseball history. Mets have 0:10:18.920 --> 0:10:22.160 also signed veteran reliever David robertson what a few days 0:10:22.160 --> 0:10:24.160 for Baker Mayfield, once the first pick of the draft. 0:10:24.200 --> 0:10:28.360 The week once started for Carolina, released Monday by the Panthers, 0:10:28.400 --> 0:10:32.240 claimed on waivers Tuesday by the Rams. Mayfield had one 0:10:32.360 --> 0:10:35.040 practice with his new team and then played the entire 0:10:35.120 --> 0:10:37.160 game last night and through a game when he touchdown, 0:10:37.160 --> 0:10:40.000 passed went ten seconds left. The Rams ended a six 0:10:40.040 --> 0:10:43.720 game losing streak seventeen sixteen over the Raiders. The Giants 0:10:43.760 --> 0:10:46.920 are winless in their last three games, and Sunday incomes 0:10:46.920 --> 0:10:49.280 Philadelphia had eleven and one, five and oh on the 0:10:49.360 --> 0:10:52.360 road and led by quarterback Jalen Hurts. Five years ago, 0:10:52.440 --> 0:10:56.080 Hurts led Alabama to the National Championship. Giants coach Brian 0:10:56.200 --> 0:11:00.200 Dable that year was the Obama offensive coordinator. A lot 0:11:00.240 --> 0:11:04.199 of respect for Jalen um tremendous person first and foremost, 0:11:04.679 --> 0:11:11.440 holly competitive, extremely smart, great leader. Was the reason why 0:11:11.440 --> 0:11:13.319 he's probably at the top of the list for m 0:11:13.360 --> 0:11:15.880 v P right now. Jets Sunday visit Buffalo looking for 0:11:15.920 --> 0:11:19.240 a season sweep of the Bills. World Cup quarterfinals, beginning 0:11:19.280 --> 0:11:22.400 this morning with Brazil against Croatia. Later the Netherlands off 0:11:22.400 --> 0:11:24.400 that went over, the U S taking on Argentina. Nix 0:11:24.520 --> 0:11:26.800 Er in Charlotte Tonight will be without Obie Top, but 0:11:26.800 --> 0:11:28.559 he's gonna miss two the three weeks of the knee injury. 0:11:28.559 --> 0:11:31.400 The Nets host at Lanta, the Rangers visit Colorado, and 0:11:31.520 --> 0:11:34.840 the Islanders played the Devils. John stash Award Bloomberg Sports 0:11:34.840 --> 0:11:38.720 Isn't he? I'm dee. Bloomberg Sports Report was brought to 0:11:38.720 --> 0:11:41.120 you by Audie. Don't let someone else drive off in 0:11:41.160 --> 0:11:44.240 the Audi model you've always wanted. Visit your local try 0:11:44.240 --> 0:11:47.080 state Audie dealer to get behind the wheel of yours today, 0:11:47.400 --> 0:11:51.160 or visit Autie Offers dot com for more information. At 0:11:51.160 --> 0:11:54.960 six eleven on Wall Street. Next on Blueberak Bloomberg Daybreak, 0:11:55.040 --> 0:11:57.960 we speak with chief market strategist Macmyliott and Miller tay Back. 0:11:58.320 --> 0:12:04.720 This is Bloomberg six twelve on Wall Street. This is Daybreak. 0:12:04.760 --> 0:12:08.280 Stock throws yesterday as traders shifted their focus to inflation data. 0:12:08.320 --> 0:12:10.600 We are waiting for PPI data this morning. We're gonna 0:12:10.640 --> 0:12:13.480 talk about that and much more. Teeth Market strategist Mac 0:12:13.520 --> 0:12:16.240 Mailie at Miller ta Back Matt, thank you for taking 0:12:16.240 --> 0:12:18.640 the time with us this morning. We're looking for the 0:12:18.640 --> 0:12:21.840 PPI data today, the CPI data next week. What are 0:12:21.880 --> 0:12:25.520 you looking for? Well, it's gonna be very very interesting 0:12:25.520 --> 0:12:27.400 to see how how the market reacts to it. I mean, 0:12:27.520 --> 0:12:30.800 obviously that the PPI number has been less important to 0:12:30.800 --> 0:12:33.000 the market, but that doesn't mean if it's way out 0:12:33.000 --> 0:12:35.760 of whack with expectations that it will be a market 0:12:35.760 --> 0:12:38.280 mover today. But then of course next week with the 0:12:38.320 --> 0:12:40.680 CPI is going to be more important than the following day. 0:12:40.720 --> 0:12:43.959 Of course, we have the FED uh rate announcement and 0:12:44.040 --> 0:12:48.440 more importantly uh Chairman Pal's press conference. But it's interesting 0:12:48.480 --> 0:12:51.040 because this week we've been we've seen a change. You know, 0:12:51.080 --> 0:12:53.240 whether it's something that lasts for a while or not, 0:12:53.280 --> 0:12:55.360 it is going to be very very important. But you know, 0:12:55.520 --> 0:12:58.240 interest rates going down has been a good thing for 0:12:58.320 --> 0:13:01.480 the stock market, but not this week. We saw it 0:13:01.480 --> 0:13:03.840 earlier this week when the people are starting to suddenly 0:13:03.840 --> 0:13:06.440 worry about less concerned about what the FED is gonna 0:13:06.480 --> 0:13:09.040 do and more concerned about what the Fed has done 0:13:09.080 --> 0:13:11.480 and the impact that's had on the economy and if 0:13:11.480 --> 0:13:14.240 the economy is going to fall into recession. Interest rates 0:13:14.280 --> 0:13:17.400 and stocks can fall together, and we saw even yesterday 0:13:17.400 --> 0:13:19.800 just the opposite happened. They actually the bombom bob, you 0:13:19.960 --> 0:13:22.160 reels one up and the stock market one up. So 0:13:22.360 --> 0:13:26.040 we're seeing this this change in the correlation between the two. 0:13:26.280 --> 0:13:28.960 If that becomes, uh, something that's more prevallem, it's gonna 0:13:28.960 --> 0:13:30.959 be very very uh it's gonna be a big, big 0:13:31.040 --> 0:13:33.520 change for the marketplace. So let me ask you. You 0:13:33.520 --> 0:13:35.640 said it's been very important if that would last. What 0:13:35.679 --> 0:13:37.880 are some of the flag posts that you'll be watching 0:13:37.960 --> 0:13:40.280 for in the next few weeks and months to see 0:13:40.320 --> 0:13:44.240 if this does last. Well. The big thing where we 0:13:44.280 --> 0:13:46.480 have to know is is that one of the missing 0:13:46.559 --> 0:13:48.960 I think misconceptions in the marketplace is that you know, 0:13:49.200 --> 0:13:51.679 is you know, if if if as long as it's 0:13:51.679 --> 0:13:54.360 a straights top out, everything's gonna be fine. Well, during 0:13:54.360 --> 0:13:56.839 a bowl market, that's that is the case. The interest rates, 0:13:56.880 --> 0:13:58.600 you know, go up for for a month or two, 0:13:58.679 --> 0:14:00.640 and then the stock market goes down. But as soon 0:14:00.679 --> 0:14:03.000 as interest rates roll over, the market goes right back up. 0:14:03.240 --> 0:14:06.319 That's great. However, in a bear market, especially a bear 0:14:06.400 --> 0:14:09.400 market which includes a recession. Not all bear markets do 0:14:09.480 --> 0:14:13.199 include recession, but most do. The problem is that at 0:14:13.240 --> 0:14:15.880 some point in the middle of that bear market, interest 0:14:15.960 --> 0:14:19.520 rates roll over and everybody changes their focus towards the recession, 0:14:19.640 --> 0:14:21.800 and of course that that means they start worrying about 0:14:21.800 --> 0:14:25.120 the lower earnings and we're starting to see that now. 0:14:25.200 --> 0:14:27.080 So the the you know, the flags will start to 0:14:27.120 --> 0:14:30.640 see is literally, uh, the biggest thing I think is 0:14:30.680 --> 0:14:33.920 gonna be the earnings estimates, of course for two thousand 0:14:34.000 --> 0:14:36.080 twenty three, which have already started to come down. We're 0:14:36.120 --> 0:14:38.760 also gonna watch very very closely to see what happens 0:14:38.760 --> 0:14:41.160 in China because everybody's looking for the you know, the 0:14:41.160 --> 0:14:44.600 reopening in China, but not a very very interesting article 0:14:44.640 --> 0:14:48.320 today on Bloomberg talking about the repercussions and that how 0:14:48.400 --> 0:14:50.720 China may not be able to handle the big rise 0:14:50.840 --> 0:14:53.680 in these COVID rates now that they're changing their restrictions. 0:14:53.960 --> 0:14:56.480 If that's the case, we may not get the big 0:14:56.520 --> 0:14:59.040 bounce back or the big reopening that people are hoping for. 0:14:59.200 --> 0:15:02.040 So I'm gonn going to change as well, and we'll 0:15:02.040 --> 0:15:04.680 be watching it with the chief market strategist, Mac Maylie 0:15:04.680 --> 0:15:08.040 at Miller Tayback. Thank you for your time, Nathan, all right, Amy, 0:15:08.080 --> 0:15:10.520 thank you. It is a six fifteen on Wall Street. Now, 0:15:10.520 --> 0:15:12.760 we want to turn to some breaking news, and we 0:15:12.840 --> 0:15:17.440 just got from Political Playbook. In an interview with that publication, 0:15:17.920 --> 0:15:22.360 Arizona Senator Kirston Cinema, the Democrat, the junior or the 0:15:22.560 --> 0:15:26.160 senior Democrat in Arizona now says that she is changing 0:15:26.200 --> 0:15:30.520 her party affiliation too independent. Let's bringing Gregg value Are 0:15:30.560 --> 0:15:33.440 for more on this breaking news, chief US policy strategist 0:15:33.800 --> 0:15:38.160 at a GF Investments, Greg As, you know Kirsten Cinema 0:15:38.200 --> 0:15:43.360 has an independent streak. Why change your official affiliation to independent? Well, 0:15:43.440 --> 0:15:45.480 she's got a tough primary Nathan coming up in T 0:15:46.160 --> 0:15:48.640 four and she may feel that she couldn't win the 0:15:48.720 --> 0:15:51.560 Democrats primary, so she wants to leave the party now. 0:15:52.000 --> 0:15:54.520 But I gotta tell you this is not a huge deal. 0:15:55.040 --> 0:15:59.120 Because the Democrats have a fifty one majority. It will 0:15:59.200 --> 0:16:02.800 now be tied, I guess, but even even tied Tamala 0:16:02.920 --> 0:16:05.640 Harris breaks all ties, So I don't see what kind 0:16:05.680 --> 0:16:08.600 of cloud she'll get. She'll get a little more cloud, 0:16:09.040 --> 0:16:13.360 but I don't think it's dominant. And it's an interesting move, 0:16:13.480 --> 0:16:18.000 I think, given that Arizona just elected a Democrat for 0:16:18.400 --> 0:16:22.320 governor over carry Lake, Katie Hobbs winning there and uh, 0:16:22.960 --> 0:16:26.680 Mark Kelly still a Democrat in Arizona, the other senator 0:16:26.720 --> 0:16:30.360 from Arizona. Well, you're absolutely right. I think an awful 0:16:30.400 --> 0:16:33.840 lot of Democrats in Arizona are still angry with her 0:16:34.520 --> 0:16:37.120 for her many of her votes that were viewed as 0:16:37.200 --> 0:16:40.520 disloyal to the White House. So she, I think saw 0:16:40.600 --> 0:16:43.440 the handwriting on the wall and decided let's make the 0:16:43.480 --> 0:16:47.240 move now and established myself as an independent. And in 0:16:47.480 --> 0:16:51.120 terms of her rationale behind this, in the interview with Politico, 0:16:51.240 --> 0:16:54.600 she said that she's not going to caucus with Republicans, 0:16:54.920 --> 0:16:57.920 suggesting that she intends to vote the same way, saying, quote, 0:16:57.960 --> 0:17:01.360 nothing will change about my values or my behavior end 0:17:01.480 --> 0:17:04.200 quotes in our last thirty seconds here, Greg, what really 0:17:04.440 --> 0:17:09.720 changes with Kirsten Cinema Uh, leaving the Democratic Party? Not 0:17:09.880 --> 0:17:12.520 a lot. And if she does, I haven't seen the article. 0:17:12.600 --> 0:17:15.560 But if she does caucus with the Democrats, well so 0:17:15.760 --> 0:17:19.520 does Bernie Sanders show does Uh, there's a main senator 0:17:20.119 --> 0:17:23.280 also who caucuses with the Democrats. So it doesn't affect 0:17:23.400 --> 0:17:27.440 what's going on inside the Bellway. It does affect Arizona politics, 0:17:28.080 --> 0:17:30.240 as you say, in the primary, coming up in twenty 0:17:30.320 --> 0:17:32.280 four is if we didn't have enough to think about 0:17:32.280 --> 0:17:35.879 with the presidential rays and Joe Manson the other independent 0:17:36.000 --> 0:17:40.680 streak Democrat facing potential primary challenge as well. But Greg 0:17:40.800 --> 0:17:43.840 as always great to get your thoughts, particularly on this 0:17:44.040 --> 0:17:48.720 breaking news from Political playbook, Arizona Senator Kirston Cinema telling 0:17:48.800 --> 0:17:52.760 Politico she is registering is an independent leaving the Democratic Party. 0:17:52.800 --> 0:17:55.800 Are thanks this morning to Greg Valier, chief US policy 0:17:55.840 --> 0:18:03.159 strategist at a GF Investments. This is Bloomberg Markets headlines 0:18:03.240 --> 0:18:06.200 and breaking news twenty four hours a day at Bloomberg 0:18:06.280 --> 0:18:09.640 dot Com, the Bloomberg Business at and at Bloomberg Quicktape. 0:18:09.800 --> 0:18:18.840 Greece's a Bloomberg Business Clash. I'm Nathan Haker. This updates 0:18:18.880 --> 0:18:20.880 brought to you by Jewish Communal Fund. For fifty years, 0:18:20.920 --> 0:18:23.800 philanthropists at all levels have turned to jcfs, don'tor advised 0:18:23.840 --> 0:18:26.600 funds to streamline their charitable giving. Visit j CF and 0:18:26.920 --> 0:18:30.520 y dot org. Futures are on the rise, Treasuries holding 0:18:30.560 --> 0:18:33.560 steady ahead of US producer prices, one of the key 0:18:33.760 --> 0:18:36.520 final pieces of data before next week's FED decision. We 0:18:36.640 --> 0:18:38.879 checked the markets all day long for you on Bloomberg 0:18:39.000 --> 0:18:42.080 SMP futures are up thirteen points, now futures up seventy 0:18:42.119 --> 0:18:44.959 one and Nastack futures are higher by fifty one points. Ten. 0:18:45.040 --> 0:18:47.640 Your treasuries down to thirty seconds. You're three point four 0:18:47.720 --> 0:18:51.280 eight percent. Diamax screws up six tenths per cent. Forty 0:18:51.359 --> 0:18:54.560 four cents one gets you a barrel of West Texas 0:18:54.600 --> 0:18:56.960 Intermediate comex gold is up three tenths per cent or 0:18:57.000 --> 0:19:00.040 five dollar sixty cents. Eighteen oh seven ten announced the 0:19:00.080 --> 0:19:02.480 euro one point zero five five four against the dollar. 0:19:02.840 --> 0:19:06.080 The end, one point nine eight Bitcoin is hired by 0:19:06.119 --> 0:19:09.320 two tenths percent, trading around seventeen thousand, two hundred. That's 0:19:09.320 --> 0:19:11.960 a Bloomberg business flash. Now here's Michael Barr with a 0:19:12.000 --> 0:19:13.560 look at what else is going on around the world. 0:19:13.640 --> 0:19:16.800 Michael Nathan, thank you very much. We have two breaking stories. 0:19:17.000 --> 0:19:21.360 According to several media sources, Arizona Senator Kursten Cinema plans 0:19:21.480 --> 0:19:26.479 to switch from the Democratic Party to be an independent. Also, 0:19:26.760 --> 0:19:29.240 a plane believed to be carrying w n B A 0:19:29.359 --> 0:19:32.800 Star Brittney Grinder has arrived in San Antonio, Texas after 0:19:32.880 --> 0:19:36.320 a prisoners swap with Russia. Grinder was arrested in February 0:19:36.400 --> 0:19:40.479 for illegally bringing hash oil in Vade cartridges into Russia. 0:19:40.880 --> 0:19:43.960 Thursday Night football, the Rams beat the Raiders. Seventeen sixteen 0:19:44.320 --> 0:19:48.080 FIFA World Cup action resumes today Croatia plays Brazil. The 0:19:48.160 --> 0:19:51.840 Netherlands faces Argentina. Global News twenty four hours a day 0:19:51.960 --> 0:19:55.199 on air and on Bloomberg Quicktake Power by more than 0:19:55.920 --> 0:19:58.560 hundred journalists and analysts more than a hundred twenty countries. 0:19:58.760 --> 0:20:02.560 I'm Michael Barr, and this Bloomberg. Amy all right, thank you, Michael. 0:20:02.640 --> 0:20:05.360 It is six three on Wall Street. I'm Amy Moore. 0:20:05.400 --> 0:20:07.520 As this is Bloomberg Daybreak, brought to you by the 0:20:07.640 --> 0:20:11.440 Donor's Fun Open your free giving accounted minutes and instantly 0:20:11.520 --> 0:20:14.440 qualify for a tax deduction and choose from one point 0:20:14.520 --> 0:20:17.919 four million charitable organizations at any time. Visit the Donor's 0:20:17.960 --> 0:20:21.400 Fund dot org today and get your two tax deduction. 0:20:21.800 --> 0:20:24.520 As we await a couple of key economic reports this morning, 0:20:24.600 --> 0:20:27.560 we want to get some insight from chief economic Economist 0:20:27.720 --> 0:20:31.960 rather chief economist Nila Richardson at an EP Research Institute. Neila, 0:20:32.000 --> 0:20:33.879 good morning, Thank you for taking the time with US 0:20:34.480 --> 0:20:37.240 inflation data. The last big piece of the puzzle we've 0:20:37.240 --> 0:20:40.720 been waiting for before the next FED meeting. How much 0:20:41.080 --> 0:20:45.800 is this going to matter today? It matters because any 0:20:45.880 --> 0:20:49.119 information that we see that points in the direction of 0:20:49.160 --> 0:20:52.159 the lower inflation makes the Fitch job easier and it 0:20:52.560 --> 0:20:56.440 does shape some of their communication strategy. But the important 0:20:56.600 --> 0:20:59.399 distinction with the p p I from the cp I 0:20:59.520 --> 0:21:01.960 that will get it later is that it doesn't include 0:21:02.119 --> 0:21:06.000 housing and shelter cart and as we point to Chip 0:21:06.040 --> 0:21:09.960 house Glass speech, housing is a big issue for inflation 0:21:10.480 --> 0:21:14.040 as our wages. So it's missing a key piece. It's helpful, 0:21:14.119 --> 0:21:16.840 but it's not the full picture. So what are you 0:21:16.880 --> 0:21:22.000 going to be watching for instead. Well, obviously I think 0:21:22.080 --> 0:21:24.320 housing is important, but we're not going to see that 0:21:25.000 --> 0:21:28.080 change in real time. It's a very lagged indicator. But 0:21:28.240 --> 0:21:32.920 it's to me about wages. In fact, I can again 0:21:33.000 --> 0:21:35.600 point to house Reach the speech where he said the 0:21:35.720 --> 0:21:38.880 labor market holds the key to inflation, and we saw 0:21:39.040 --> 0:21:42.359 that in the November jobs report. We're still hovering about 0:21:42.440 --> 0:21:46.199 five percent on earnings from year over year, and ADP 0:21:46.400 --> 0:21:51.000 s own data we've seen wages stay elevated and move 0:21:51.160 --> 0:21:54.919 sideways in terms of growth, So wage pressures are still present. 0:21:55.000 --> 0:21:58.480 The labor market is still tight, and wages really arguing 0:21:58.600 --> 0:22:01.640 to be the determined factor in my view of where 0:22:01.680 --> 0:22:04.720 inflation is heading. Nila, this is a hard question, I know, 0:22:04.880 --> 0:22:07.960 But why is this labor market so complex? Why is 0:22:08.000 --> 0:22:12.639 it so complicated? Well, we didn't, you know, mose twenty 0:22:12.680 --> 0:22:17.440 million workers, and we it's been difficult to get many 0:22:17.480 --> 0:22:20.639