Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2: Good morning.
Speaker 1: I'm Nathan Hager and I'm Karen Moscow. Here are the
Speaker 1: stories we're following today.
Speaker 3: Karen, let's get more on this global market route. We
Speaker 3: are joined by Bloomberg's Kritty, Goopta and Kritty. We saw
Speaker 3: a historic sell off in Asia overnight.
Speaker 4: We certainly did, and the selloff is one of historic proportions.
Speaker 4: The topics down twelve percent, the Nike also down another
Speaker 4: twelve percent. But it's not just Japan. You're also seeing
Speaker 4: the stock really spread off. Stock self spread off in
Speaker 4: the chip sector across Asia. COSPI, the KAUSDAK, basically the
Speaker 4: South Korean indexes that have that major Samsung havevyweight, both
Speaker 4: down somewhere between eight and nine percent. You even have
Speaker 4: the KOSAK in particular, which is of course at the
Speaker 4: South Korean version of the Nasdaq, basically down a whopping
Speaker 4: eleven percent. That's just in the equity space, Nathan, you
Speaker 4: also have a similar story over in the currency space,
Speaker 4: where dollar yen now at a one forty two handle,
Speaker 4: really shaking things up in the effect space.
Speaker 3: Yeah, we're seeing this sell off spread into Europe where
Speaker 3: you are, though it doesn't look quite as bad there, Critty.
Speaker 4: It doesn't, but it is still read on the screen
Speaker 4: in line with the moves that you are seeing globally.
Speaker 4: About a two percent decline in the eurostocks fifty. The
Speaker 4: Footy one hundred is your underperformer as well, down about
Speaker 4: two point two percent. Ironically, France isn't selling off as much.
Speaker 4: It's only down one point eight percent. But the reason
Speaker 4: for that is simply that these markets aren't as deep
Speaker 4: as the ones in Asia. They're not as liquid as
Speaker 4: the ones in the States either.
Speaker 1: All right, Creatie goopto will be checking in with you
Speaker 1: all morning. Thank you. Treasuries do continue to rally this morning.
Speaker 1: Bets increasing there will be an emergency FED rate cut.
Speaker 1: In fact, traders now see roughly sixty percent chance of
Speaker 1: an emergency quarter point cut within one week. JP Morgan
Speaker 1: and Citigroup are revamping their forecast to predict a half
Speaker 1: point cut in the US in September. It all follows
Speaker 1: Friday's weaker than expected JOMPS report and believes that the
Speaker 1: Fed is too slow to support a slowing economy. Former
Speaker 1: Offen economist Claudia sum to a Bloomberg Radio that data
Speaker 1: triggers her famous recession indicator.
Speaker 5: This summ rule way too much momentum in the unemployment
Speaker 5: rate in recent months, I mean four point three percent.
Speaker 5: So whether we are at that moment of a recession
Speaker 5: or not, this is your build into substantial weakening in
Speaker 5: the labor market.
Speaker 1: Claudia sam with some consulting, made the comments Friday on
Speaker 1: Bloomberg Surveillance right after the job's report, And.
Speaker 3: Karen, as you mentioned, we're seeing Nasdaq futures plunge now
Speaker 3: nearly four percent this morning. Several big names are in
Speaker 3: the red. Let's get the latest from Bloomberg's Lisa Matteo.
Speaker 6: Lisa, good morning. Yeah, we're seeing the tech sell off extending.
Speaker 6: We have Nvidia down more than eight percent. We have
Speaker 6: Microsoft metap plunging more than four percent, Alphabet down more
Speaker 6: than four percent, Amazon falling more than two percent. We
Speaker 6: have in Tesla taking a hit, down more than five percent.
Speaker 6: But this comes after the Naszac entered into that technical
Speaker 6: correction on Friday, and this was amid that drawback from
Speaker 6: the overheated artificial intelligence rally. Now that gate page actually
Speaker 6: touched a record high less than a month ago, but
Speaker 6: it's not just AI. Investors also concerned about over elevated
Speaker 6: valuations on the impact of also the presidential election on
Speaker 6: geopolitical tensions in New York. Lisa Mateo, Bloomberg Radio.
Speaker 1: Right, Lisa, thank you. Apple shares they're down about eight
Speaker 1: percent over the weekend. Berkshire Hathaway revealed it's still nearly
Speaker 1: half of its position in Apple during the second quarter,
Speaker 1: and we get more from Bloomberg's Doug Prisner.
Speaker 7: The move could be interpreted as a lack of conviction
Speaker 7: in the Apple growth story. At the end of March,
Speaker 7: Berkshire's position was worth roughly one hundred and forty billion dollars. Then,
Speaker 7: as of the end of June, it was worth eighty
Speaker 7: four billion. Since twenty sixteen, when Berkshire first has closed
Speaker 7: its stake, Apple shares have sored nearly nine hundred percent.
Speaker 7: Even with the sale, Apple does remain Berkshire's largest single position.
Speaker 7: If you're wondering about valuation, Apple's multiple is thirty three
Speaker 7: times future profits. That's eleven points higher than the s
Speaker 7: and P five hundred our Cime, Derek Prisoner, Bloomberg Radio.
Speaker 3: Thanks Doug. Tech stocks aren't the only assets selling off
Speaker 3: this morning. We're also watching cryptocurrencies. Bitcoin is down nearly
Speaker 3: eleven percent, adding to a thirteen point one percent drop
Speaker 3: last week, the worst then since the period when the
Speaker 3: FTX exchange imploded. US exchange traded funds for bitcoin suffer
Speaker 3: their largest outflows in about three months last Friday.
Speaker 1: Well, Nathan, we'll have much more on the market selloff
Speaker 1: in five minutes when we speak with RBC Capital Markets
Speaker 1: Head of US equity Strategy, Lori Calvesina. But now we
Speaker 1: want to get the latest on the Middle East tensions
Speaker 1: there maybe piling on to negative market sentiment. Israel is
Speaker 1: racing for possible attacks from Iran and regional militias after
Speaker 1: the high profile assassinations of Hamas and hes Beila leaders
Speaker 1: last week. Prime Minister Benjamin Ettnyah, who says his country
Speaker 1: is in a quote multi front war against Iran's Axis
Speaker 1: of Evil. But the White House is urging NETANYAHUO to
Speaker 1: redouble ceasefire negotiations with Hamas, even as the US moves
Speaker 1: in a fighter jets Squander and keeps an aircraft carrier
Speaker 1: in the area. Here's Deputy National Security Advisor Jonathan Finer.
Speaker 8: What we're trying to do is prepare for any eventuality,
Speaker 8: any possibility that's only responsible for the United States. Obviously,
Speaker 8: we've been quite clear that we'll work with our ally, Israel,
Speaker 8: to defend itself against any threats that it faces, and
Speaker 8: we are in a moment that appears to be of
Speaker 8: heightened threat.
Speaker 1: White House Deputy National Security Advisor John Finer made those
Speaker 1: comments on CBS's Face the Nation heard Sundays on Bloomberg Radio.
Speaker 3: Think Karen Well, the White House focuses on geopolitical tensions.
Speaker 3: Vice President Kamala Harris is reportedly focusing on the final
Speaker 3: stretch of choosing a running mate in her presidential campaign.
Speaker 3: We get that story from Bloomberg's Ed Baxter.
Speaker 9: Three people on our shortlist met with her over the weekend.
Speaker 9: Arizona Senator Mark Kelly, Pennsylvania Governor Josh Shapiro, and Minnesota
Speaker 9: Governor Tim Walls. Kentucky Governor Andy Basher, Transportation Secretary Pete Buddhachic,
Speaker 9: and Illinois Governor JB. Pritzker also names that are still
Speaker 9: being floated now. The Democratic Party is planning a virtually
Speaker 9: nominated ticket by August seventh, and Harris has said the
Speaker 9: shop plans day at the campaign trail weather running mate tomorrow,
Speaker 9: Ed Baxter Bloomberg Radio.
Speaker 10: All right, ed, thanks.
Speaker 1: Time now for a look at some of the other
Speaker 1: stories making news in New York and around the world.
Speaker 1: For that, we're joined by Bloomberg's John Tucker.
Speaker 11: John, Good Morning, Good morning, Karen. Debbie strengthened into a hurricane.
Speaker 11: Has the system neared landflow in Florida's Big Bend region,
Speaker 11: where residents have fled ahead of a potential week long
Speaker 11: disaster across the South. Bloomberg mediorologist Rob Carolyn is tracking
Speaker 11: the storm now.
Speaker 10: The very big concern with Debbie is as it moves
Speaker 10: inlet over in North Florida over the next day or so,
Speaker 10: the steering currents are going to collapse, and that means
Speaker 10: there's going to be nothing pushing the storm along, So
Speaker 10: it's just going to conder meander over portions of southeastern Georgia,
Speaker 10: maybe eventually off the coast of southeastern South Carolina. This
Speaker 10: means some very heavy localized rain are going to fall
Speaker 10: over North Florida, Eastern Georgia, and South Carolina.
Speaker 11: Through the first part of the workweek, top wins intensified
Speaker 11: to eighty miles per hour, making Debbie a Category one.
Speaker 11: System Defense Secretary Lloyd Austin has revoked a plea agreement
Speaker 11: reached last week with the accused mastermind of the September
Speaker 11: eleventh terror attacks and two alleged accomplices. That story this
Speaker 11: morning from Bloomberg's Denise Penegreni Secretary.
Speaker 12: Austin has now assumed direct oversight of the case and
Speaker 12: canceled the plea agreement with Khaleage Sheik Mohammed and his
Speaker 12: lodged accomplices for the attacks that killed nearly three thousand
Speaker 12: people in New York City, at the Pentagon and in
Speaker 12: a Pennsylvania field. This effectively reinstates it as a death
Speaker 12: penalty case. Austin also relieved the senior Defense Department official
Speaker 12: responsible for oversight of this case. His decision brought relief
Speaker 12: to some family members of victims who had expressed anger
Speaker 12: over the deal, but it also left uncertain the next
Speaker 12: steps of the prosecution. Denise Pelgrinny Bloomberg Radio, and.
Speaker 11: After ten days in theaters, Deadpool and Wolverine ready the
Speaker 11: highest grossing R rated movie ever. In a second weekend,
Speaker 11: the Marvel Studios Blockboster, starring Ryan Reynolds and Hugh Jackman,
Speaker 11: continued to steamroll through movie theaters collecting ninety seven million
Speaker 11: dollars according to Studio estimates. Global News twenty four hours
Speaker 11: a day and whatever you wanted with Bloomberg News Now.
Speaker 11: I'm John Tucker. This is Bloomberg Nathan and Karen.
Speaker 1: John, thank you time now for the Bloomberg Sports Update
Speaker 1: with John stash Hour.
Speaker 7: John, Good morning, Good morning.
Speaker 13: Care of the Yankees and Blue Jays. Rubbert game at
Speaker 13: the stadium and won Soto Homemwerd seventh, thenning Yanks had
Speaker 13: their first lead, Toronto tie the game. Then there was
Speaker 13: a rain delay, and then there was a DJ Lemy
Speaker 13: who walk off hit the tenth innning. The Yanks won
Speaker 13: four to three. They've won seven of their last eight.
Speaker 13: Mets held the five Hits lost three to two. They
Speaker 13: lost two of three to the Angels in Anaheim. The
Speaker 13: Chicago White Sox swept by the Twins. The White Sox
Speaker 13: have lost twenty games in a row. They have been
Speaker 13: only two longer losing streaks since nineteen hundred. The sixty
Speaker 13: one Phillies dropped twenty three straight. The nineteen eighty eight
Speaker 13: Orioles began their season oh and twenty one. The White
Speaker 13: Sox will try again tonight in Oakland Noah Isles one
Speaker 13: to one hundred meters in Paris by five one thousands
Speaker 13: of a second. There's a belief that it was the
Speaker 13: closest race in Olympic history, not official because they didn't
Speaker 13: used to carry the times out that many decimal points.
Speaker 13: With Lyles can now be called the fastest man in
Speaker 13: the world. He is the first American to win one
Speaker 13: hundred meters in twenty years. Novak Djokovic can now be
Speaker 13: called an Olympic gold medal winner. He beat Carlos Alcareza
Speaker 13: and the thirty seven year old winner of twenty four
Speaker 13: Grand Slams.
Speaker 14: Was asked where this ranks twenty twelve opening ceremony in London,
Speaker 14: carrying the flag for my country the opening ceremony opening
Speaker 14: in the Olympic Games is the best feeling that an
Speaker 14: athlete could have until today. This kind of supersedes everything
Speaker 14: that I imagined, that hoped that I could experience, and that
Speaker 14: I could feel.
Speaker 13: Scotti Schefler on Olympic go then golf for the furious
Speaker 13: finish final round sixty two. Had Bobby Finke not won
Speaker 13: the fifteen hundred meters in the last individual event of
Speaker 13: the Games, would have been the only time in Olympic
Speaker 13: history no US goals and individual men's swimming, but Fink one.
Speaker 13: He broke the world record. The US men did not
Speaker 13: win the medley. Really, they had won each of the
Speaker 13: fifteen previous ones. They were in Johns Dashedward Bloomberg Sports
Speaker 13: Karen daven.
Speaker 9: Coast to Coast on Bloomberg Radio, nationwide on Sirius XM,
Speaker 9: and around the world on Bloomberg dot Com and the
Speaker 9: Bloomberg Business app.
Speaker 3: This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. The
Speaker 3: global stock route that began last week is intensifying this morning,
Speaker 3: growing concerns about a weakening economy and a FED that
Speaker 3: may have been too late to act to stop it.
Speaker 3: To get some perspective on this market reaction, we are
Speaker 3: joined now by Lori Calvacina, head of US Equity Strategy
Speaker 3: at RBC Capital Markets. Luri, good morning. It is very
Speaker 3: tough to find some green on the screen this morning.
Speaker 3: Is it a pivot point for the market or our
Speaker 3: investors reacting?
Speaker 15: Hi, Nathan, Well, thanks for having me. Look. I think
Speaker 15: there was a lot of confusion on Friday with the
Speaker 15: jobs report. I think we also had some negative data
Speaker 15: points from ism last week, and to be honest, it
Speaker 15: really stands in contrast on both those reports with the
Speaker 15: tone we've been hearing from companies throughout this reporting season.
Speaker 15: So I think that there is a lot of sorting
Speaker 15: out to do right here. I do think that one
Speaker 15: of the reasons we've seen such a big reaction in
Speaker 15: markets has been sort of the sharp detour that we've seen.
Speaker 15: But I do think we need a little bit more
Speaker 15: information at this point as.
Speaker 3: That sorting out period continues. Lorie, We're seeing markets already
Speaker 3: pricing in something like sixty percent odds that the Fed's
Speaker 3: going to cut rates this week. I mean, how would
Speaker 3: stocks react if the Fed essentially makes up for last
Speaker 3: week's lost time.
Speaker 15: So I think that we always have to ask about
Speaker 15: the reason that these sorts of things happen. I remember,
Speaker 15: this is market pricing, this is an official action. We
Speaker 15: did sort of look at this phenomenon last year during
Speaker 15: the Regional Banking CIS, and what we found was that
Speaker 15: really you have to be careful what you wish for,
Speaker 15: you know, in this kind of regards. And I know
Speaker 15: there's been a lot of talk about, you know, sort
Speaker 15: of fifty basis point cuts that have come out. We
Speaker 15: did actually publish something on that this morning, looking at
Speaker 15: when we've seen fifty basis point cuts in just recent decades,
Speaker 15: and it's tended to be associated with periods like the GFC,
Speaker 15: periods like COVID. You know, at the moment, that doesn't
Speaker 15: seem to be the sort of environment that we are in.
Speaker 15: So again, I think we need to wait and see
Speaker 15: what we're going to get from the FED. But if
Speaker 15: you look at the history, the fifty basis point cuts,
Speaker 15: you know, just in recent decades have been associated with
Speaker 15: sort of major periods of distress and markets. You can
Speaker 15: go back farther and look at the nineties and earlier
Speaker 15: to find other examples where that was not the case.
Speaker 15: But I do think that's the kind of playbook a
Speaker 15: live investors have in their heads.
Speaker 3: So while we wait for the FED, and while we
Speaker 3: wait for further data, do you see this route going
Speaker 3: further or could this be a by opportunity.
Speaker 15: I think we're going to have to watch the data
Speaker 15: this week that comes in. But what I will tell
Speaker 15: you is that we came into the third quarter thinking
Speaker 15: that we were at risk of a pullback. Now, we
Speaker 15: did not have sudden concerns about a recession on our
Speaker 15: BINGO card. But the reality is that if you look
Speaker 15: at the CFTC data, and we looked at US equity
Speaker 15: futures positioning, this is something we track every week. If
Speaker 15: you look at where we've been throughout most of this year, frankly,
Speaker 15: it's been on US equity future positioning broadly, and S
Speaker 15: and P five hundred future positioning in particular above the
Speaker 15: January twenty eighteen highs and above the February twenty twenty highs,
Speaker 15: and so we had, you know, obviously a tough year
Speaker 15: in twenty eighteen, but we did have you know, sort
Speaker 15: of a milder draw down on the low ball and
Speaker 15: wined early that year twenty twenty. Obviously we all know
Speaker 15: what happened there. But from a positioning perspective, whether you're
Speaker 15: looking S and P naddak futures positioning as well, has
Speaker 15: looked extremely extended and we have looked vulnerable to bad
Speaker 15: news from that perspective.
Speaker 3: You know, I think this is just maybe the last
Speaker 3: time or two we spoke, you had cautiously raised your
Speaker 3: S and P five hundred price target for the end
Speaker 3: of this year. Now that we've seen this pretty significant
Speaker 3: dive this morning and the potential for more. Are you
Speaker 3: rethinking that?
Speaker 15: So what we had baked into our outlook was the
Speaker 15: idea that we would see a five to ten percent
Speaker 15: type draw down, and that's a garden variety type drawdown.
Speaker 15: But if you go beyond ten percent, what the history
Speaker 15: tends to tell us is that it's associated with a
Speaker 15: pretty intense growth scare. So obviously those risks have risen
Speaker 15: in here. We don't know that it's certain we're going
Speaker 15: to get that time of twenty percent draw down, but
Speaker 15: if you look at those periods, especially in recent history,
Speaker 15: we've seen those kinds of draw downs fifteen percent back
Speaker 15: in twenty ten, twenty percent, and twenty eleven. Obviously, if
Speaker 15: you go back to the twenty fifteen twenty sixteen growth scare,
Speaker 15: I think we fell about fourteen percent. So those are
Speaker 15: the kinds of periods. We have not baked in that
Speaker 15: kind of scenario into our modeling.
Speaker 3: As of now, about thirty seconds left, Laurie, what's it
Speaker 3: going to take to bring confidence back into this market?
Speaker 15: So I think let's watch the sentiment positioning indicators. Remember
Speaker 15: AAII has also looked stretch. When we get down to
Speaker 15: the one standard deviation mark below the long term average
Speaker 15: that has typically, you know, in recent years, given us
Speaker 15: a buy signal. Also, watch valuations. They've been very extended
Speaker 15: for the broad market. They've been very extended for the
Speaker 15: top ten megacat names. Let's watch what happens when those
Speaker 15: numbers get back down to average. We can often see
Speaker 15: markets try to make a stand around those kinds of
Speaker 15: levels and the source of environment.
Speaker 2: This is Bloomberg day Break Today, your morning brief on
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