WEBVTT - Bloomberg Daybreak: September 14, 2022 - Hour 2 (Radio) 0:00:02.759 --> 0:00:05.920 Live from the Bloomberg Interactive Brooker Studios. This is Bloomberg 0:00:05.960 --> 0:00:09.760 Day Bright for Wednesday, September four two. Coming up this hour, 0:00:10.119 --> 0:00:13.720 futures rise following the worst day for stocks in two years, 0:00:14.080 --> 0:00:17.320 positive inflation data in the UK as prices slipped from 0:00:17.360 --> 0:00:20.640 forty year highs in London, Queen Elizabeth's coffin makes its 0:00:20.640 --> 0:00:23.200 way to Buckingham Palace, and a rail strike in the 0:00:23.320 --> 0:00:26.440 US threatens to halt shipments of farm products and autos. 0:00:26.680 --> 0:00:29.800 Former New York Governor Cuomo files and ethics complain against 0:00:29.840 --> 0:00:32.760 the a G BLUs Ukrainian troops keep up the pressure 0:00:32.760 --> 0:00:36.199 on fleeing Russian forces. I'm Michael blarn More and I'm 0:00:36.240 --> 0:00:38.880 John Steward's fourth Another big night for Aaron Judge. Two 0:00:38.920 --> 0:00:40.640 arm runs in the Yankee win over the Red Sox. 0:00:40.680 --> 0:00:43.840 The Mets lost again to the cold. That's all straight 0:00:43.880 --> 0:00:48.080 ahead on Bloomberg Day Break on Bloomberg Eliven Frio, New York, 0:00:48.200 --> 0:00:52.960 Bloomberg one, Washington, d C, Bloomberg one, O six one, Boston, 0:00:53.120 --> 0:00:58.080 Bloomberg nine sixty, Francisco, Syrius x M one nineteen and 0:00:58.120 --> 0:01:01.240 around the world on Bloomberg Radio dot Com and via 0:01:01.320 --> 0:01:09.320 the Bloomberg Business Act and Good morning. I'm Karen Moscow, 0:01:09.520 --> 0:01:11.960 I'm Nathan Hagar. Bloomberg Daybreak is brought to you by 0:01:12.040 --> 0:01:14.200 B and Y Melon's Pershing learned why the world's most 0:01:14.200 --> 0:01:17.760 sophisticated wealth management and institutional firms rely on Pershing to 0:01:17.800 --> 0:01:21.520 help them improve profitability, create efficiency, attract talent and manager 0:01:21.600 --> 0:01:25.360 risk at Pershing, dot Com and US futures are higher 0:01:25.360 --> 0:01:27.560 this morning six oh one on Wall Street. We checked 0:01:27.560 --> 0:01:30.600 the markets every fifteen minutes throughout the trading day on Bloomberg, 0:01:30.760 --> 0:01:33.400 SNP futures up nineteen points and down, futures of A 0:01:33.480 --> 0:01:36.840 hundred twelve NASDACK futures up sixties seven and the ten 0:01:36.920 --> 0:01:39.520 year treasury down seven thirty seconds. You have three point 0:01:39.600 --> 0:01:41.760 four or three percent, and they yield on the two 0:01:41.880 --> 0:01:45.640 year three point seven seven percent. Nathan Karen's stocks are 0:01:45.680 --> 0:01:48.440 coming off their worst day since twenty twenty. The SNP 0:01:48.560 --> 0:01:51.560 five hundred dropped four point three percent, while the NASTAC 0:01:51.680 --> 0:01:54.360 plunged more than five percent. It was all fueled by 0:01:54.400 --> 0:01:58.360 hotter than expected inflation data, increasing bets for bigger rate 0:01:58.440 --> 0:02:01.280 hikes from the Fed. Carol Schleiche, his Deputy Chief Investment 0:02:01.280 --> 0:02:04.960 officer at Beimo Family Office. The market desperately wants to 0:02:05.000 --> 0:02:07.440 figure out a bullish tone, and they've been fighting the 0:02:07.480 --> 0:02:11.600 FED all year, and the FED has been unequivocal saying 0:02:11.639 --> 0:02:14.720 we're gonna you know, they communicated pretty clearly that it's 0:02:14.760 --> 0:02:17.360 the three quarters of basis point rise. And I think 0:02:17.760 --> 0:02:20.560 this number took everybody by surprise, but the data has 0:02:20.600 --> 0:02:23.640 been really sloppy month to month. Carol Schlife at Bimo 0:02:23.680 --> 0:02:26.560 Family Office, says next week's FED meeting will be crucial 0:02:26.600 --> 0:02:30.440 for markets. Well. Nathan Masseloff spread to Asia overnight, but 0:02:30.480 --> 0:02:33.000 the price action was more muted than what we saw 0:02:33.040 --> 0:02:35.640 in the US. Japan's NK dropped two point eight percent, 0:02:35.760 --> 0:02:38.480 while Hong Kong's Hang Sang fell two and a half percent. 0:02:38.760 --> 0:02:41.680 They get the recap from Bloomberg's Juliette Sally and Sydney. 0:02:41.680 --> 0:02:44.840 Good morning, Juliette, Good morning, Karen. The yan rallied further 0:02:44.880 --> 0:02:47.120 away from the closely watched a hundred and forty five 0:02:47.160 --> 0:02:49.320 per dollar level after the NICK reported the Bank of 0:02:49.400 --> 0:02:52.280 Japan conducted a so called RT check in the currency market, 0:02:52.520 --> 0:02:56.160 a move considered a precursor for intervention. Officials in South 0:02:56.240 --> 0:02:59.359 Korea also ramped up verbal intervention. Well, China Central Bank 0:02:59.440 --> 0:03:01.639 said the day the reference rate on the one at 0:03:01.639 --> 0:03:05.120 the strongest bias on record. Asian stocks had their biggest 0:03:05.160 --> 0:03:08.519 drop since June Intra Day, with Australian, Chinese, tex Stalks, 0:03:08.600 --> 0:03:12.400 and Japanese es the lagged's in Sydney Juliette Sally Bloomber 0:03:12.520 --> 0:03:15.840 daybreak Our Juliet thanks his inflation and higher rates continued 0:03:15.840 --> 0:03:18.000 away on markets. The FEDS still has a long way 0:03:18.000 --> 0:03:21.400 to go. That's according to legendary investor Mark Mobius, who 0:03:21.480 --> 0:03:25.040 says the FEDS benchmark interest rate could hit nine. Their 0:03:25.120 --> 0:03:29.000 game plan is to make sure that the interest rate 0:03:29.080 --> 0:03:32.720 is higher than inflation. That's the way they believe the 0:03:32.760 --> 0:03:36.840 way to kill inflation. So you have eight percent CPI, 0:03:37.480 --> 0:03:41.600 that means you have to have nine interest rates. If 0:03:41.640 --> 0:03:44.240 that forecast from Mark Mobius is right, rates would climb 0:03:44.280 --> 0:03:46.880 significantly higher than the current two and a half percent 0:03:46.920 --> 0:03:49.600 target rate. Well, Nathan, the broad based sell off is 0:03:49.600 --> 0:03:52.480 putting more pressure on the FED to keep up aggressive policy. 0:03:52.520 --> 0:03:55.240 But when it comes to politics, President Biden says he's 0:03:55.360 --> 0:03:58.400 not worried about the threat of inflation. The stock market 0:03:58.440 --> 0:04:00.560 doesn't necessarily reflect the state of the economy, as you 0:04:00.600 --> 0:04:05.480 well know, and the comedy is still strong. Unemployment slow, 0:04:05.800 --> 0:04:09.440 jobs are up, Manufacturing is good. So I think it's uh. 0:04:09.720 --> 0:04:12.080 I think we're gonna be fine. Worried about the inflation number. 0:04:12.120 --> 0:04:15.320 Those are no, I'm not. The President spoke after hosting 0:04:15.360 --> 0:04:18.400 a celebration at the White House for the Inflation Reduction Act. 0:04:18.480 --> 0:04:21.880 After those are marks, Bloomberg political contributor Rick Davis says 0:04:22.120 --> 0:04:25.520 Democrats are starting to look out of touch on the economy. 0:04:25.720 --> 0:04:28.000 It's just they cannot get out of their own way. 0:04:28.040 --> 0:04:31.919 This is a ad ready to be made. Every Republican 0:04:31.960 --> 0:04:33.600 is going to have this near quiver and frankly, they 0:04:33.600 --> 0:04:37.040 give back Republicans a message that was starting to dwindle, 0:04:37.080 --> 0:04:40.200 which is, oh my god, we gotta quit talking about inflation. 0:04:40.279 --> 0:04:43.440 Well not now. Rick Davis spoke at their Washington correspondent 0:04:43.520 --> 0:04:46.240 Joe Matthew on Bloomberg Sound on Catch the program week 0:04:46.320 --> 0:04:49.360 days at five pm Eastern on Bloomberg Radio. In the UK, 0:04:49.440 --> 0:04:52.640 there's some slightly positive news on inflation. Karen prices went 0:04:52.680 --> 0:04:55.520 down a bit, easing off the highest rate in four decades. 0:04:55.600 --> 0:04:58.040 Today's consumer price index in the UK rose at an 0:04:58.040 --> 0:05:00.680 annual rate of nine point nine percent, up from ten 0:05:00.760 --> 0:05:03.960 point one in July. The Bank of England meets next week. 0:05:04.000 --> 0:05:06.480 It is expected to raise interest rates either fifty or 0:05:06.600 --> 0:05:09.880 seventy five basis points. But the bigger story in England 0:05:09.960 --> 0:05:13.000 right now, Nathan centers on Queen Elizabeth the Second. Her 0:05:13.040 --> 0:05:16.480 coffin is now at Buckingham Palace as people queue up 0:05:16.480 --> 0:05:18.240 to pay their respect to the Queen, and we go 0:05:18.279 --> 0:05:20.679 to London and get the latest from Bloombergy's un pass. 0:05:20.720 --> 0:05:23.960 Good morning, un Good morning, Karen and Nathan. Queen Elizabeth 0:05:24.040 --> 0:05:26.360 is set to leave bucking Palace today for the very 0:05:26.440 --> 0:05:29.960 last time, departing at two twenty two pm. Her Majesty's 0:05:29.960 --> 0:05:33.159 coffee will be transported by horse drawn gun carriage through 0:05:33.200 --> 0:05:36.880 St James's Park and onto Westminster. Walking behind his mother's 0:05:36.880 --> 0:05:39.160 coffin will be the new King, King Charles the Third, 0:05:39.520 --> 0:05:42.360 followed by other scenior members of the royal family. The 0:05:42.440 --> 0:05:45.480 Queen's coffin will line states in Westminster Hall, the ancient 0:05:45.520 --> 0:05:48.160 heart of the British Parliament, for four days until her 0:05:48.200 --> 0:05:51.360 funeral on Monday. As many as a million people are 0:05:51.360 --> 0:05:53.960 expected to join the line to walk past her caskets 0:05:54.200 --> 0:05:56.440 in London. I'm yourn part Splin by daybreak, thanks you, 0:05:56.600 --> 0:05:59.719 and geo politics is also in focus this morning. President 0:05:59.800 --> 0:06:02.479 she Jin Ping is making his first trip outside China 0:06:02.520 --> 0:06:04.479 in more than two years. It gives him a chance 0:06:04.520 --> 0:06:06.800 to beat Vladimir Putin in person for the first time 0:06:06.839 --> 0:06:09.280 since Russia began its invasion of Ukraine. We get more 0:06:09.320 --> 0:06:12.440 from Bloomberg Stephen Angle in Hong Kong. Obviously, for Putin 0:06:12.680 --> 0:06:17.039 he needs China's support. Perhaps the war, according to many calculations, 0:06:17.120 --> 0:06:20.000 is not going as planned. And for you know, she 0:06:20.120 --> 0:06:23.559 didn Ping he is again steadfastly sticking to this plan 0:06:23.800 --> 0:06:29.120 of decentralizing Western institutions and creating a narrative from a 0:06:29.240 --> 0:06:32.640 Chinese perspective. Bloomberg Stephen Angle reports she and Putin meet 0:06:32.680 --> 0:06:35.599 tomorrow in Uzbekistan on the sidelines of a security forum. 0:06:35.720 --> 0:06:39.479 First President She is in Kazakhstan today and Nathan back 0:06:39.480 --> 0:06:41.320 here in the U s a big labor fight is 0:06:41.360 --> 0:06:45.080 making headlines. A threatened strike could prevent American railroads from 0:06:45.080 --> 0:06:48.320 transporting farm products and other key goods as soon as 0:06:48.360 --> 0:06:51.599 tomorrow and could cost the US economy two billion dollars 0:06:51.640 --> 0:06:54.599 a day. President Inviting is personally trying to break the 0:06:54.640 --> 0:06:58.359 long jam between railroads and labor unions. Labor Secretary Murty 0:06:58.400 --> 0:07:01.280 Walsh will meet with Railroad and you and representatives today. 0:07:01.680 --> 0:07:03.880 Futures are moving higher. Care and S and P futures 0:07:03.920 --> 0:07:06.360 up nineteen points, STOW futures up a hundred ten, NASTEC 0:07:06.440 --> 0:07:09.520 futures up sixty five points. The tenure treasuries down seven 0:07:09.560 --> 0:07:12.640 thirty seconds, the yield three point for three, nim X 0:07:12.640 --> 0:07:15.280 screwed up four ten percent. At eighty seven sixty seven 0:07:15.280 --> 0:07:18.200 of Barrel. Local headlines in the check of Sports. Next, 0:07:18.800 --> 0:07:24.720 this is Bloomberg. It is uh six oh seven on 0:07:24.760 --> 0:07:27.240 Wall Street, sixty four degrees in Central Park. Got an 0:07:27.280 --> 0:07:30.000 accident at westbound l I E at Maurice Avenue. We're 0:07:30.040 --> 0:07:32.360 coming up in traffic. First, Michael Barr with what else 0:07:32.440 --> 0:07:33.920 is going on in New York and around the world. 0:07:33.960 --> 0:07:36.600 Good morning, Michael, Good morning Nathan. Former New York Governor 0:07:36.640 --> 0:07:39.960 Andrew Cuomo filed an ethics complain against State Attorney General 0:07:40.000 --> 0:07:43.640 Letitia James about the way she handled a sexual harassment 0:07:43.640 --> 0:07:47.880 investigation that led to his resignation last year. Cuomo questioned 0:07:47.920 --> 0:07:52.560 the accuracy and credibility of the investigations findings allegend James, 0:07:52.560 --> 0:07:56.000 the fellow Democrat, used the probe to turnish him. Cuomo 0:07:56.040 --> 0:07:59.160 says James, who briefly ran for governor, had her own 0:07:59.160 --> 0:08:03.240 politically mode ofvate it and self interest driven agenda. Rhode 0:08:03.280 --> 0:08:07.720 Island Governor Dan McKee won Tuesday's Democratic gubernatorial primary. He 0:08:07.840 --> 0:08:12.880 thanks supporters to stand here before you tonight, not just 0:08:12.960 --> 0:08:17.560 as your governor, but as the Democratic nomination nominee for 0:08:17.760 --> 0:08:21.280 governor of Rhode Island. Governor McKee at the most with 0:08:21.320 --> 0:08:24.400 thirty three percent. In the fall, McKee will face Republican 0:08:24.440 --> 0:08:28.920 Ashley Kellis, who got eight In New Hampshire. The Republican 0:08:29.000 --> 0:08:32.520 contest for Senate remains a tight race between conservative Donald 0:08:32.600 --> 0:08:37.199 Buldock and the more moderate Chuck Morrise. Republicans see Democratic 0:08:37.240 --> 0:08:40.760 incumbent Senator Maggie Hassan as beatable in the general election. 0:08:41.160 --> 0:08:45.280 The final primaries two were also held in Delaware. The 0:08:45.360 --> 0:08:48.240 Mayor of Boston this thanking law enforcement for a speedy 0:08:48.280 --> 0:08:52.320 response last night after a package exploded on the campus 0:08:52.320 --> 0:08:56.240 of Northeastern University, injuring a staff member. The forty five 0:08:56.320 --> 0:08:59.000 year old man suffered minor injuries to his hand and 0:08:59.080 --> 0:09:01.920 was taken to a local hospital their Michelle Woo, I 0:09:02.040 --> 0:09:05.200 just want to thank all of our first responders for 0:09:06.160 --> 0:09:10.319 very very swift, coordinated and effective response within minutes, our 0:09:10.760 --> 0:09:14.080 police department and E M S and Fire department. We're here. 0:09:14.720 --> 0:09:17.559 Mayor wo says. A search revealed a second similar package 0:09:17.640 --> 0:09:21.440 that was ultimately rendered safe by the bomb squad. Ukrainian 0:09:21.480 --> 0:09:25.680 troops continue to pressure retreating Russian forces, pressing deeper into 0:09:25.679 --> 0:09:29.880 occupied territory and sending more Kremlin troops fleeing, depending on spokesman, 0:09:29.880 --> 0:09:34.320 Brigadier General Pat Writer on Russia, Clearly they've demonstrated their 0:09:34.320 --> 0:09:38.199 intent to keep fighting uh IN in Ukraine and to 0:09:38.480 --> 0:09:43.840 prolong their illegal occupation. General Writer says the progress by 0:09:43.880 --> 0:09:47.000 the Ukrainians in the field came as no surprise. Global 0:09:47.000 --> 0:09:49.440 News twenty four hours a day on air and on 0:09:49.480 --> 0:09:53.000 Bloomberg Quick Tank, powered by more than seven hundred journalists 0:09:53.000 --> 0:09:55.680 and analysts more than a hundred twenty countries. Michael Barr, 0:09:55.760 --> 0:10:02.679 this is Bloomberg, Nathan, Thank you. Michael six O nine 0:10:02.679 --> 0:10:04.520 on Wall Street Time for the Bloomberg Sports Update with 0:10:04.600 --> 0:10:07.440 John stashwar Pathan. Aaron Boone was asked last night to 0:10:07.480 --> 0:10:11.200 describe Aaron Judge's performance in this remarkable season, he said, 0:10:11.240 --> 0:10:14.320 I have run out of adjectives. In Boston, Judge hit 0:10:14.360 --> 0:10:16.319 a solo home run six sitting and tied the game 0:10:16.360 --> 0:10:18.800 at three, and then came up two innings later, one 0:10:18.920 --> 0:10:21.920 long swung on there it goes. Keep the field. It 0:10:22.000 --> 0:10:26.040 is hot. Yous far head has got out of the building. 0:10:27.080 --> 0:10:31.319 Over the high green monster. Over the monster seats out 0:10:31.360 --> 0:10:36.640 on Sir Landsbane. He is phenomenal. The second home run 0:10:36.960 --> 0:10:40.760 of the night for Judge, his fifty seventh of the year, 0:10:41.120 --> 0:10:43.839 and we're all tied at four an the game is 0:10:43.880 --> 0:10:46.839 still four four tenth inning when Glabor Torres delivered a 0:10:46.880 --> 0:10:49.240 three run double. The Red Sox got two back bottle 0:10:49.320 --> 0:10:52.719 the tenth, but Wandy Peralta struck at Raphael Devers and 0:10:52.720 --> 0:10:55.440 the Yanks won seven six. It's the tenth multi home 0:10:55.520 --> 0:10:57.959 run game of the season for Judge. The record is 0:10:58.000 --> 0:11:01.800 eleven Hank Greenberg n thirty eight and with fifty seven homers, 0:11:02.200 --> 0:11:05.560 Judges inching closer to Roger Merris is sixty one at 0:11:05.559 --> 0:11:07.640 City Field. Second straight Mets loss of the low Ley 0:11:07.760 --> 0:11:10.240 Cubs four to one. Rare loss for Jacob de Graham. 0:11:10.559 --> 0:11:13.240 Mets didn't help gaining only four hits in Atlanta won 0:11:13.320 --> 0:11:15.720 five one at San Francisco. The Braids are only a 0:11:15.720 --> 0:11:19.200 half game behind. Mike Trout did not homer for the Angels. 0:11:19.200 --> 0:11:21.240 He was trying to tie the record for the homer 0:11:21.240 --> 0:11:23.520 in eighth straight games. The Twins came up two out 0:11:23.559 --> 0:11:26.880 short of a combined no hitter against Kansas City w 0:11:27.080 --> 0:11:30.480 NBA Playoffs Las Vegas eighty five, Connecticut seventy one. So 0:11:30.559 --> 0:11:32.839 the Aces are up two games to none. They can 0:11:32.920 --> 0:11:36.160 win the w NBA Championship tomorrow night at the Mahigan Sun. 0:11:36.320 --> 0:11:40.280 John stash Award, Bloomberg Sports Okay, John, thank you. SMP 0:11:40.400 --> 0:11:43.520 futures moving higher by twenty one point, staff futures up 0:11:43.559 --> 0:11:47.160 a hundred twenty seven. Nastack futures are higher by seventy 0:11:47.160 --> 0:11:51.040 two points now. The tenure treasury is down seven thirty seconds. 0:11:51.200 --> 0:11:53.960 The yield three point for three percent yield on the 0:11:53.960 --> 0:11:58.320 two year three point seven seven percent. Context on this 0:11:58.480 --> 0:12:03.199 market after yesterday's hotter than expected inflation, Sam stoveall of 0:12:03.280 --> 0:12:08.560 cfr A with US next Bloomberg eleven three oh Weather 0:12:08.640 --> 0:12:10.719 mostly sunny, turning less humid today with highs in the 0:12:10.760 --> 0:12:16.079 low eighties. Abundant sunshine tomorrow upper seventies, sunny upper seventies 0:12:16.120 --> 0:12:18.240 for Friday as well. Right now sixty four under a 0:12:18.240 --> 0:12:24.760 clear sky in Central Park. Markets. Headlines and breaking news 0:12:24.840 --> 0:12:27.400 twenty four hours a day at Bloomberg dot Com and 0:12:27.480 --> 0:12:30.920 Bloomberg Business at and at Bloomberg Quick Tape. This is 0:12:30.960 --> 0:12:39.720 a Bloomberg Business Flash and I'm Cameron Moscow. US stock 0:12:39.760 --> 0:12:42.320 index futures set to recoup some of the losses brought 0:12:42.320 --> 0:12:44.719 on by a hotter than expected inflation or fourth that 0:12:44.840 --> 0:12:47.120 wiped out more than one and a half trillion dollars 0:12:47.120 --> 0:12:49.760 from the SNP five hundred nearly are racing a four 0:12:49.840 --> 0:12:52.600 day rally. We checked the markets every fifteen minutes throughout 0:12:52.600 --> 0:12:55.680 the trading day. On Bloomberg, SNP future is up twenty 0:12:55.720 --> 0:12:58.120 two points this morning. Dal futures of a hundred thirty two, 0:12:58.240 --> 0:13:01.400 Nashtack futures up seventy six, and the jacks in Germany's 0:13:01.400 --> 0:13:04.360 down three tenths of uppercent ten. Your treasury down six 0:13:04.400 --> 0:13:06.760 thirty seconds. You have three point four three percent they 0:13:06.840 --> 0:13:09.400 yield on the two year three point seven seven percent. 0:13:09.920 --> 0:13:12.160 NIMEX Scrude oil is up a third of percent, or 0:13:12.160 --> 0:13:14.480 twenty nine cents at eighty seven dollar sixty cents in 0:13:14.520 --> 0:13:16.880 barrel Comic School, down a tenth of a percent on 0:13:16.960 --> 0:13:20.560 a dollar eighty at seventeen fifteen sixty announced the euro 0:13:20.679 --> 0:13:23.040 one point zero zero one eight against the dollar, British 0:13:23.080 --> 0:13:25.400 found one point one five six three and again one 0:13:25.480 --> 0:13:28.679 forty three point one three and Bitcoin this morning is 0:13:28.760 --> 0:13:31.360 up seven tenths percent at twenty thousand and three hundred 0:13:31.440 --> 0:13:34.600 seventy dollars. As a Bloomberg Business flash, Now here's Michael 0:13:34.600 --> 0:13:36.840 Barr with Moore on what's going on around the world. 0:13:36.880 --> 0:13:39.640 Michael Karen, thank you very much. Queen Elizabeth, the seconds 0:13:39.640 --> 0:13:43.120 Coffin has arrived at Buckingham Palace ahead of today's procession 0:13:43.360 --> 0:13:46.880 through London to Westminster Hall. She reily in state for 0:13:46.880 --> 0:13:50.679 four days until her funeral. The final primaries for this 0:13:50.800 --> 0:13:54.440 year are over. Rhode Island Democrat Dan McKee now has 0:13:54.480 --> 0:13:57.280 the chance to be elected to his first full term 0:13:57.400 --> 0:14:00.960 as governor. McKee assumed the states top office a year 0:14:00.960 --> 0:14:04.360 and a half ago after Gina Romando joined the Biden 0:14:04.360 --> 0:14:07.960 administration as Commerce Secretary. McKy got the most with thirty 0:14:07.960 --> 0:14:10.840 three percent. The key is the favorite as he faces 0:14:10.880 --> 0:14:14.680 off against Republican Ashley Kellis. In November. Primaries were also 0:14:14.760 --> 0:14:18.040 held in Delaware and New Hampshire. In baseball, the Yankees 0:14:18.080 --> 0:14:20.320 beat the Red Sox seven, six and ten innings. New 0:14:20.400 --> 0:14:23.040 York's Serin judge at two homers to reach fifty seven. 0:14:23.480 --> 0:14:26.240 The Mets lost, The Orioles beat the Nationals for three. 0:14:26.560 --> 0:14:30.080 The A's and Giants lost. Global Needs twenty four hours 0:14:30.080 --> 0:14:33.040 a day on air and on Bloomberg Quicktake, powered by 0:14:33.080 --> 0:14:35.520 more than twenty seven hundred journalists and analysts more than 0:14:35.520 --> 0:14:39.440 a hundred twenty countries. Michael lar This is Bloomberg. Nathan Okay, Michael, 0:14:39.440 --> 0:14:41.520 thank you. At his six nineteen on Wall Street Live 0:14:41.600 --> 0:14:45.400 from the Bloomberg Interactive Brokers studios. This is Bloomberg Daybreak. 0:14:45.440 --> 0:14:48.520 As we continue to assess the market reaction to yesterday's 0:14:48.720 --> 0:14:51.960 hotter than expected Consumer Price Index. Were joined live this 0:14:52.000 --> 0:14:55.880 morning by Sam Stovall, chief investment strategist at c f 0:14:55.960 --> 0:14:58.200 R A. It's great to speak with you. Sam. Was 0:14:58.240 --> 0:15:02.320 at the right reaction for market to drop four the 0:15:02.400 --> 0:15:05.880 SNP or was it an overreaction? Good morning, Nathan, No, 0:15:06.040 --> 0:15:09.480 I think it was an overreaction. Um. Interesting how when 0:15:09.560 --> 0:15:12.880 you compare the eight point three percent for August with 0:15:13.040 --> 0:15:16.440 the eight five in July and nine one. In a sense, 0:15:16.480 --> 0:15:19.680 the direction is correct, but when you do look at 0:15:19.680 --> 0:15:23.120 the monthly numbers, there were surprises. Um. So I think 0:15:23.200 --> 0:15:27.320 just too many people were leaning to an optimistic print 0:15:27.560 --> 0:15:29.800 from c p I, and as a result, they just 0:15:29.920 --> 0:15:33.640 bailed all at once. So what does this mean for 0:15:33.760 --> 0:15:36.960 the Federal Reserve? We're getting into this debate now about 0:15:37.080 --> 0:15:40.520 whether we're gonna see seventy five basis points again next week, 0:15:40.560 --> 0:15:42.640 whether the Fed could go as high as a hundred. 0:15:42.680 --> 0:15:45.560 What do you think the Fed's gonna do, sam? Um? 0:15:45.600 --> 0:15:49.000 I think they're gonna go seventy basis points in September, 0:15:49.320 --> 0:15:52.040 follow it up with fifty in November, and then right 0:15:52.080 --> 0:15:57.359 now the estimate is in December. Uh. Since Alan Greenspan 0:15:57.520 --> 0:16:02.040 started to offer transparency to FED rate moves, we've never 0:16:02.120 --> 0:16:05.760 had anything higher than seventy five basis points. You have 0:16:05.840 --> 0:16:09.560 to go back to the late nineties, seventies, early eighties. Uh, 0:16:09.600 --> 0:16:13.040 and then we actually had seven times in which the 0:16:13.160 --> 0:16:16.440 FED raised rates by a hundred basis points, but that 0:16:16.480 --> 0:16:20.160 was with the discount rate. What's the precedent for the 0:16:20.240 --> 0:16:24.120 kind of market reaction that we could see to this 0:16:24.320 --> 0:16:29.640 kind of aggressive tightening we're seeing from this Federal Reserve 0:16:29.760 --> 0:16:32.840 and to the persistent inflation that we've been seeing over 0:16:32.840 --> 0:16:36.480 the last several months. Well, first, I think, you know, 0:16:36.600 --> 0:16:40.400 let's talk about inflation. I mean, our expectation is, uh 0:16:40.440 --> 0:16:44.200 that inflation will be coming down. Our belief is will 0:16:44.240 --> 0:16:48.200 probably end up seeing inflation come in around six point 0:16:48.240 --> 0:16:51.800 three percent at the end of this year on headline 0:16:51.840 --> 0:16:54.760 cp I and then dropped to about two point four 0:16:54.840 --> 0:17:00.800 percent by December of three, So the trajectory is still 0:17:00.880 --> 0:17:04.680 favorable in our opinion. The Fed will be pushing rates 0:17:04.760 --> 0:17:08.760 up to about four in Fed funds. Uh. So certainly 0:17:08.800 --> 0:17:12.920 that is a target that has already been or will 0:17:12.960 --> 0:17:16.239 soon be built into share prices. The real question, I 0:17:16.280 --> 0:17:19.199 think will be what kind of erosion will occur in 0:17:19.359 --> 0:17:22.840 earnings estimates? Right now, for all of this year, growth 0:17:22.960 --> 0:17:26.400 is projected at six point nine, but it was eight 0:17:26.440 --> 0:17:29.840 point nine, and for next year up seven four, but 0:17:29.960 --> 0:17:32.879 it was eight point eight. So the real question I 0:17:32.920 --> 0:17:35.800 think is what kind of an effect will happen to 0:17:36.160 --> 0:17:39.920 forward earnings estimates? What is your call for forward earnings estimates? 0:17:39.920 --> 0:17:44.920 How much further erosion could we see this year? Well, Traditionally, 0:17:45.000 --> 0:17:48.320 we have seen an erosion of about one third in 0:17:48.440 --> 0:17:52.400 terms of PE ratios during bear markets. Since World War Two. 0:17:52.800 --> 0:17:56.320 We've pretty much already seen much of that when you 0:17:56.400 --> 0:18:01.480 look to what's happening in the sector area, the market itself. 0:18:01.520 --> 0:18:05.600 You know, we're still trading at a slight premium to 0:18:05.760 --> 0:18:08.960 the long term average for the SMP five hundred, about 0:18:08.960 --> 0:18:11.919 a four percent premium, you know, So we could end 0:18:12.000 --> 0:18:16.000 up seeing that UH seventeen point seven pe uh come 0:18:16.040 --> 0:18:19.439 down to the high fifteens, as we did back in 0:18:19.600 --> 0:18:22.919 June before. I think that the all clear might be 0:18:23.000 --> 0:18:27.280 sounded a last minute here, Sam, with the Fed potentially 0:18:27.680 --> 0:18:33.120 on the gas pressing the gas down on interest rate hikes, 0:18:33.600 --> 0:18:37.200 what's the possibility of recession? Can the Feds still pull 0:18:37.280 --> 0:18:40.480 off a soft landing? Do you think? I think that's 0:18:40.720 --> 0:18:44.000 a pretty big estimate. If if we were to say 0:18:44.040 --> 0:18:47.080 that every time since World War Two that we have 0:18:47.160 --> 0:18:51.240 had a six point six, six point five increase in 0:18:51.359 --> 0:18:54.840 headline cp I, and remember we peeked out at nine 0:18:54.840 --> 0:18:57.840 point one, we have had both a bear market and 0:18:57.960 --> 0:19:00.959 a recession. So the real question is not whether we 0:19:01.000 --> 0:19:03.600 will end up with the recession, but how deep or 0:19:03.760 --> 0:19:07.280 shallow will it become um Our economists right now are 0:19:07.320 --> 0:19:12.000 still pointing to a soft landing, but I still think 0:19:12.040 --> 0:19:16.680 that there is the possibility of at least a mild recession. Alright, Sam, 0:19:16.720 --> 0:19:19.159 as always great to get your thoughts. Looking forward to 0:19:19.400 --> 0:19:22.680 getting more perspective from you on Bloomberg surveillance as well. 0:19:22.760 --> 0:19:26.600 Sam Stovall, chief investment strategist at CFR a with us 0:19:26.760 --> 0:19:29.800 this morning looking ahead to the market open. We are 0:19:29.840 --> 0:19:33.520 seeing a bit of recovery after yesterday's slide. SMP futures 0:19:33.520 --> 0:19:35.240 are up twenty one points. It's a game of about 0:19:35.240 --> 0:19:37.880 a half percent right now. Deal futures are up six 0:19:38.320 --> 0:19:42.480 NASDAC futures higher by seventy five points. The tenure Treasury 0:19:42.560 --> 0:19:45.320 is down six thirty seconds. The three point for three 0:19:45.359 --> 0:19:48.600 percent yield on the two year three point seven seven percent. 0:19:48.720 --> 0:19:51.760 NIMEX crude is moving a bit higher, up four tents percent, 0:19:52.160 --> 0:19:55.760 eighty seven dollars sixty five cents of barrel. The euro 0:19:56.160 --> 0:19:59.080 just around parody at against the dollar at one point 0:19:59.160 --> 0:20:07.320 zero zero. To you, you're listening to Bloomberg daybreak Bloomberg 0:20:07.320 --> 0:20:10.359 eleven three oh weather mostly sunny, less humid today, glow 0:20:10.400 --> 0:20:14.200 eighties abundant sunshine tomorrow for seventies for highs. We'll keep 0:20:14.240 --> 0:20:17.360 it sunny upper seventies for Friday as well. Sixty four 0:20:17.400 --> 0:20:28.600 is the current temperature. Broadcasting live from the Bloomberg Interactive 0:20:28.640 --> 0:20:32.480 Broker Studio in New York, Bloomberg E Living Freedom to Washington, 0:20:32.560 --> 0:20:36.680 d C, Bloomberg to Boston, Bloomberg one O six one 0:20:36.760 --> 0:20:40.240 does San Francisco, Bloomberg nine sixty to the country, Sirius 0:20:40.359 --> 0:20:43.000 XM Cho one nine ten, and around the globe the 0:20:43.000 --> 0:20:46.879 Bloomberg Business at and Bloomberg Radio dot com. This is 0:20:46.920 --> 0:20:55.360 Bloomberg Daybreak. It is six thirty on Wall Street. Good morning. 0:20:55.359 --> 0:20:58.119 I'm Nathan Hager and I'm Karen Moscow. We are just 0:20:58.200 --> 0:21:00.920 about three hours away from the open to US trading. 0:21:00.920 --> 0:21:02.840 Time for the five things that you need to notice 0:21:02.880 --> 0:21:05.800 start your day. Brought to you by I b KR. 0:21:05.920 --> 0:21:09.719 Investment Advisers switched to Interactive Brokers for lowest cost global 0:21:09.760 --> 0:21:13.320 trading and turnkey custody solutions, no ticket charges and no 0:21:13.400 --> 0:21:15.600 conflicts of your interests at I b k R dot 0:21:15.640 --> 0:21:19.399 com slash r i a U First US futures higher 0:21:19.400 --> 0:21:21.240 in the wake of yesterday's sell off, which saw the 0:21:21.400 --> 0:21:23.760 s and P five hundred dropped more than four percent, 0:21:24.080 --> 0:21:28.000 and then ASDAC plunge over five Carol's schlife, Deputy Chief 0:21:28.040 --> 0:21:31.440 Investment Officer at BIMO Family Office says, it may be startling, 0:21:31.800 --> 0:21:34.000 but we should keep it in perspective. But I know 0:21:34.200 --> 0:21:37.280 that the down days are scary, but I watch seven 0:21:37.359 --> 0:21:39.840 happened that was pent in a day and the years 0:21:39.880 --> 0:21:43.240 still closed up. Carol's Life at BIMO Family Office says 0:21:43.320 --> 0:21:46.520 next week's FED meeting will be crucial for market sentiment. Well, 0:21:46.600 --> 0:21:49.920 yesterday sell off spread virtually no corner of equity markets. Karen. 0:21:49.960 --> 0:21:53.520 It also cost America's richest billionaires dearly. We get more 0:21:53.560 --> 0:21:56.840 on that from Bloomberg's stug. Prisoner Jeff Bezo suffered the 0:21:56.920 --> 0:21:59.919 biggest hit. Data from the Bloomberg Billionaire's Index show here 0:22:00.040 --> 0:22:03.280 is wealth plunged by nine point eight billion dollars. Elon 0:22:03.440 --> 0:22:06.639 Musk's net worth fell by eight point four billion, and 0:22:06.760 --> 0:22:10.080 the fortunes of Mark Zuckerberg, Larry Page, Sir Gay Brenn, 0:22:10.119 --> 0:22:13.520 and Steve Ballmer all declined by more than four billion dollars. 0:22:13.720 --> 0:22:17.560 In total, the fortunes of America's richest tumbled by ninety 0:22:17.640 --> 0:22:20.520 three billion dollars. You know, just last month the same 0:22:20.600 --> 0:22:23.520 group lost seventy eight billion dollars in a day after 0:22:23.640 --> 0:22:26.320 an eight minute speech from fit Share J Powell in 0:22:26.400 --> 0:22:29.000 New York. I'm Dick Chrisener, Bloomberg Daybreak. All right, Dick, 0:22:29.040 --> 0:22:31.400 thank you. In the UK, there's some slightly positive news 0:22:31.440 --> 0:22:34.399 on inflation. Prices have gone down slightly, easing off the 0:22:34.480 --> 0:22:37.600 highest rate in four decades. Today's Consumer price index rose 0:22:37.640 --> 0:22:40.440 at an annual rate of nine point nine percent. That's 0:22:40.480 --> 0:22:43.000 a drop from ten point one percent in July. The 0:22:43.000 --> 0:22:45.200 bigger story in England right now, Karen centers on Queen 0:22:45.240 --> 0:22:48.159