Speaker 1: Good morning.
Speaker 2: I'm Nathan Hager and I'm Karen Moscow. Here are the
Speaker 2: stories we're following today.
Speaker 3: We begin with day four of the autoworkers' strike, with
Speaker 3: no progress to report. This morning, the president of the
Speaker 3: United Autoworkers Union says he is unmoved by a twenty
Speaker 3: one percent pay raise offer from Stallantis. Sean Fain spoke
Speaker 3: with CBS's Margaret Brennan.
Speaker 4: You know, our demands are just We're asking for our
Speaker 4: fair share in this economy and the fruits of our labor.
Speaker 5: So twenty one percent is a no go for you.
Speaker 6: It's definitely a no go, and we've made that very
Speaker 6: clear of the companies.
Speaker 3: Sean Fain made the comments on CBS's Face the Nation,
Speaker 3: which you can hear every Sunday on Bloomberg Radio.
Speaker 2: Well Nathan, former Vice president and Republican presidential candidate Mike Pence,
Speaker 2: is laying the blame for the United auto Workers' strike
Speaker 2: on President Joe Biden's economic policies. He says a transition
Speaker 2: to electric vehicles is threatening jobs.
Speaker 4: What I'm hearing around the country is that that auto
Speaker 4: workers are very concerned about Joe Biden's Green Nude deal.
Speaker 4: Heavy handed effort to use taxpayer dollars to drive these
Speaker 4: automotive companies into electric vehicle production.
Speaker 2: Mike Pence made the comments in an interview with The
Speaker 2: Bloomberg's Joe matthew And and Marie hord Dern. Find the full
Speaker 2: conversation on the Bloombergs Talks podcast, available wherever you download podcasts.
Speaker 3: Turning to markets, Karen, this is a big week for
Speaker 3: central bank decisions. The Fed, Bank of England and Bank
Speaker 3: of Japan all make decisions this week, and we get
Speaker 3: a Fed preview from Bloomberg's Michael McKay.
Speaker 6: The Fed has made its meetings more interesting by not
Speaker 6: telegraphing exactly what it will do this week. Policymakers are
Speaker 6: forecast to hold the nation's benchmark interest rate in a
Speaker 6: range between five and a quarter and five and a
Speaker 6: half percent. They still have one more rate move to
Speaker 6: go this year, at least according to their own outlook
Speaker 6: published in June. Does that remain in the so called
Speaker 6: dot plot and do they adjust their forecasts for growth, inflation,
Speaker 6: and unemployment. The jobless rate is still well below where
Speaker 6: they had predicted it would be. While it's unlikely this,
Speaker 6: central bankers would surprise with the rate move, the adjustments
Speaker 6: they make to their economic outlook, and what Chairman j
Speaker 6: poul says about that will matter a lot to investors.
Speaker 6: Michael McKee, Bloomberg Radio.
Speaker 2: All right, Mike, thanks, so as we await those policy decisions.
Speaker 2: Morgan Stanley investors see a tough twenty twenty four on
Speaker 2: the horizon, the firm's equity strategist Mike Wilson says, after
Speaker 2: a sharp stock rally this year on the back of
Speaker 2: resilient economic growth, investors now have a more negative outlook
Speaker 2: for risk assets in twenty twenty four. Wilson says there's
Speaker 2: a growing debate among clients about whether a recession has
Speaker 2: been avoided altogether or if it's just been delayed until
Speaker 2: next year.
Speaker 3: In Europe, this morning, shares of Associate General are down
Speaker 3: seven and a half percent. The French bank strategic plan
Speaker 3: is disappointing investors. The company's new CEO cut revenue and
Speaker 3: profitability targets, surprising investors who'd hoped for a boost to
Speaker 3: the underperforming stock.
Speaker 2: Well, we turned to politics now, Nathan and House Speaker
Speaker 2: Kevin McCarthy is proposing a deal to temporarily avert a
Speaker 2: government shut down. His demands include an eight percent spending
Speaker 2: cut for domestic agencies and a resumption of border wall construction,
Speaker 2: as Bloomberg said, Baxter reports, McCarthy says a government shutdown
Speaker 2: would be a self defeat for Republicans.
Speaker 7: McCarthy says it would undermine his party's leverage and negotiations
Speaker 7: over spending cuts sought by his party itself, because.
Speaker 5: When you shut down, you give all your power to
Speaker 5: the administration. But how are you going to win your
Speaker 5: arguments to secure the border if the border agents don't
Speaker 5: get paid. How are you going to win the arguments
Speaker 5: to get wokeism out of the Department of Defense if
Speaker 5: even our own troops won't be being paid.
Speaker 7: McCarthy on Fox says this week he hopes to get
Speaker 7: a short term funding bill out of the House the
Speaker 7: Senate another issue. I'm at Baxter Bloomberg Radio, Okay, ed,
Speaker 7: thank you.
Speaker 3: Some scathing words from House Minority Leader Hakim Jeffries. He's
Speaker 3: blaming Republicans for a possible shutdown and impeachment inquiry against
Speaker 3: President Joe Biden.
Speaker 8: House Republicans are in the middle of a civil war.
Speaker 8: Civil war has the following attributes chaos, dysfunction and extremism.
Speaker 8: The House Republican civil war is hurting hard working American
Speaker 8: tax payers.
Speaker 3: How Democratic leader Hakim Jeffries made those comments on ABC's
Speaker 3: This Week. You can also catch that program Sundays on
Speaker 3: Bloomberg Radio.
Speaker 2: Well Nathan, former President Donald Trump, has given his first
Speaker 2: interview to a major TV network since leaving office. The
Speaker 2: runaway front runner for the Republican nomination in twenty twenty four,
Speaker 2: had a wide ranging conversation with a new moderator of
Speaker 2: NBC's Meet the Press, Kristin Welker.
Speaker 9: If you were reelected, would you pardon yourself?
Speaker 10: I could have pardoned myself.
Speaker 2: Do you know what?
Speaker 11: I was given an option to pardon myself.
Speaker 10: I could have pardoned myself when I left.
Speaker 2: And the former president also continued to insist that twenty
Speaker 2: twenty election was rigged and it was his decision to
Speaker 2: try to overturn it.
Speaker 3: I watched that election, and I thought the election was
Speaker 3: over at ten o'clock in the evening.
Speaker 11: You were listening to your instincts.
Speaker 10: My instincts are a big part of it. That's been
Speaker 10: the thing that's gotten me to where I am. Int thanks,
Speaker 10: but I also listen to people.
Speaker 2: And you can hear Meet the Press every Sunday at
Speaker 2: eleven a m. Wall Street Time right here on Bloomberg Radio.
Speaker 3: Turning to geopolitics, Karen, we may have some progress on
Speaker 3: US China relations. National Security Advisor Jake Sullivan and Chinese
Speaker 3: Feign Minister Wangyie have met in Malta. A US official
Speaker 3: says they discussed a potential leaders meeting and other issues
Speaker 3: in the relationship. The talks come at a critical time
Speaker 3: in US China relations. Wang is scheduled to visit Moscow
Speaker 3: for talks with Russian Foreign Minister Sergei Lavrov this week.
Speaker 3: Other world leaders are headed to New York for the
Speaker 3: United Nations General Assembly.
Speaker 2: Ray Nathan, thank you. It's time now for a look
Speaker 2: at some of the other stories making news around the world.
Speaker 2: For that, we're joined by Bloomberg's John Tucker.
Speaker 1: John, good morning, and good morning to you, Karen.
Speaker 6: Time and action.
Speaker 12: World leaders gathering this week in New York for the
Speaker 12: United Nations General Assembly, and on the streets have been
Speaker 12: happened before the meeting, seventy five thousand protesters calling for
Speaker 12: an end to fonsil fuels. They want President Biden to
Speaker 12: stop approving new oil and gas projects and to declare
Speaker 12: a climate emergency. Emma Bretta was among the organizers.
Speaker 2: We're targeting Wyatt because he needs a completely reverse course.
Speaker 2: He's not even showing up to the Climate official summit,
Speaker 2: which is completely unacceptable.
Speaker 12: Ukraine's President Zelenski will be there at the General Assembly
Speaker 12: meeting Thursday and will address Congress and meet with President Biden.
Speaker 12: On Friday. Ahead of the meeting of the UN General Assembly,
Speaker 12: Elon Musk visited the Turkish President Ertawan in New York,
Speaker 12: spending about forty five minutes discussing artificial intelligence at a
Speaker 12: potential factory. According to Erduwan's office, he invited Musk to
Speaker 12: open a Tesla factory in Turkey. A deal broker by
Speaker 12: the Biden administration the Free Americans and Iran's custody includes
Speaker 12: unfreezing six billion dollars in Iranian oil revenue and the
Speaker 12: release of five Iranian nationals in US custody. The exchange
Speaker 12: has drawn criticism from both parties. On Capitol Hill, the
Speaker 12: head of the Senate Intelligence Committee, Mark Werner, is expressing
Speaker 12: concern about what Iran may do with that six billion dollars.
Speaker 12: He wants more details and the constraints being placed on
Speaker 12: the money. China's military sent one hundred three warplanes toward
Speaker 12: Taiwan in a twenty four hour period and what the
Speaker 12: island's defense ministry calls a recent new high. China, which
Speaker 12: claims Taiwan as part of its territory, has conducted increasingly
Speaker 12: large military drills in air and waters around Taiwan. They
Speaker 12: turned back at the last minute. A two hundred and
Speaker 12: fifty thousand dollars reward has been offered for the capture
Speaker 12: the suspects responsible for the deadly ambush of an La
Speaker 12: County Deputy sheriff of the weekend. He was shot and
Speaker 12: killed in an apparent ambush at a red light. The
Speaker 12: La County Sheriff, Robert Lunaz, asking the public for its help.
Speaker 9: And we need you now more than ever. We come
Speaker 9: out and help everybody twenty four to seven, and we
Speaker 9: need you now to help us. We need you to
Speaker 9: help us capture the coward that committed this murder.
Speaker 12: Global News twenty four hours, Power Bludd, more than twenty
Speaker 12: seven other journalist and analysts, and more than one hundred
Speaker 12: twenty countries. I'm John Tucker. They see is Bloomberg.
Speaker 2: Karen All right, John, Thank you, and now get the
Speaker 2: latest news whenever you wanted with the Bloomberg News Now.
Speaker 2: It's the top stories from our global team of reporters
Speaker 2: at the click of a button. Get Bloomberg News Now
Speaker 2: on the Bloomberg Business App, Bloomberg dot com, and anywhere
Speaker 2: you get your podcasts. Time now for the Bloomberg Sports Update,
Speaker 2: and here's John stash Hour John Karen's.
Speaker 10: Some teams off to surprising two and oh starts in
Speaker 10: the NFL, like the Tampa Bay Buccaneers, who needs Tom
Speaker 10: Brady Baker Mayfield and the Box Beach Chicago twenty seven
Speaker 10: to seventeen. Atlanta is two and oh down twelve in
Speaker 10: the fourth quarter. The Falcons rally the top Green Bay
Speaker 10: twenty five to twenty four. Even bigger comeback by the Giants,
Speaker 10: who killed by three touchdowns third quarter at Arizona and
Speaker 10: one thirty one to twenty eight. They lost last week
Speaker 10: to Dallas forty to nothing, and the Cowboys beat the
Speaker 10: Jets thirty to so two wins over the New York
Speaker 10: teams by combined score of seventy to ten. Last night
Speaker 10: in New England, Miami won twenty four to seventeen. The
Speaker 10: Dolphins are two and oh. The Patriots are row and two.
Speaker 10: Forty nine ers off to a two and oh start.
Speaker 10: They beat the Rams thirty to twenty three, and the
Speaker 10: Ravens are two and oh a twenty seven to twenty
Speaker 10: four win at Cincinnati, Bengals a zero and two in
Speaker 10: their quarterback Joe Burrow tweaked the CAF injury that bothered
Speaker 10: him in the preseason baseball. The Orioles tied the game
Speaker 10: and the ninth and tenth innings and then beat the
Speaker 10: Rays five to four and eleven. They leaked Tampa by two.
Speaker 10: In the Al East, both teams of Clint's playoff bers.
Speaker 10: Nashvill's won and eleven innings in Milwaukee. Red sox fourth
Speaker 10: straight loss was three two at Toronto, the Giants won
Speaker 10: a wild win a Colorado eleven to ten. Alabama had
Speaker 10: a narrow win Saturday at South four after losing to Texas,
Speaker 10: and the Crimson Tide now out of the top ten
Speaker 10: in the rankings for the first time since twenty fifteen.
Speaker 10: They had been in the top ten one hundred and
Speaker 10: twenty eight.
Speaker 1: Poles in a row.
Speaker 10: John Stanshawerd Bloomberg's four.
Speaker 7: From Coast to Coast from New York to San.
Speaker 2: Francisco, Boston to Washington, DC.
Speaker 7: Nationwide on Syrias Exam, the Bloomberg Business app and Bloomberg
Speaker 7: dot Com. This is Bloomberg Daybreak.
Speaker 3: Good morning, I'm Nathan Hager. We are getting set for
Speaker 3: a trading week that will be dominated by central bank decisions,
Speaker 3: not the least of which is the Federal Reserve coming
Speaker 3: out with its latest policy decision on Wednesday, before the
Speaker 3: Bank of England and Bank of Japan follow What is
Speaker 3: the trajectory for the market before the Fed gives investors
Speaker 3: its latest signal on the path for interest rates. For more,
Speaker 3: we're joined by Lori Calvacina, head of US Equity Strategy
Speaker 3: at RBC Capital Markets. Laurie, great to speak with you,
Speaker 3: as always. What is going to drive the market reaction
Speaker 3: when we finally do hear from Jpollin Company on Wednesday?
Speaker 11: Well, well, thanks for having me as always, and obviously
Speaker 11: the central banks are the big story of the week,
Speaker 11: you know. Unfortunately, our race strategy team thinks that this
Speaker 11: is going to probably be another fairly boring said meeting.
Speaker 11: They see basically no risk that we're going to get
Speaker 11: a hike coming up. They don't expect anything particularly interesting
Speaker 11: coming out of the commentary. They think the FED really
Speaker 11: likes how the data has been progressing. You know, I
Speaker 11: think they have talked a little bit about how there
Speaker 11: might be some focus on the twenty twenty four PC
Speaker 11: numbers coming up, and that's something you know that markets
Speaker 11: on the equity side could definitely be paying attention to
Speaker 11: and digest. But in general, you know, we expect things
Speaker 11: to sort of soldier on after this meeting.
Speaker 3: Yeah, it's interesting how the market has managed to soldier
Speaker 3: on despite the elevated interest rates, the dramatic rise in
Speaker 3: interest rates we've seen for more than a year now.
Speaker 3: How do you explain the rally that we've seen despite
Speaker 3: elevated interest rates.
Speaker 11: Well, I think the simplest explanation, and I'll be honest
Speaker 11: with you, this has been coming up a lot in
Speaker 11: our conversations with client space in the US since June.
Speaker 11: I'm not sure quite why that it really started then,
Speaker 11: but in general, we think that companies in particular as
Speaker 11: well as consumers have really continued to benefit from the
Speaker 11: era of low interest rates this year. And what I
Speaker 11: mean by that is, if you look at the mortgage
Speaker 11: rate or the effective interest rate, on mortgage debt outstanding,
Speaker 11: so you know, not just where people are getting their
Speaker 11: rates today, but what they've got locked in based on
Speaker 11: all the activity of the last few years. It ended
Speaker 11: two Q about three point six percent. That's really a
Speaker 11: mind boggling statistic. Think about it from a public company perspective.
Speaker 11: I've actually crunched the data three different ways for the
Speaker 11: S and P five hundred to make sure I was
Speaker 11: getting the right numbers. The lowest number I came up
Speaker 11: with for two Q was one point seven percent and
Speaker 11: the highest I came up with was three point one percent,
Speaker 11: which is looking at a median of the S and P.
Speaker 11: And we think that's really happened because companies, you know,
Speaker 11: they sort of listened to investors in recent years and
Speaker 11: went out and locked in long term debt at low
Speaker 11: rates and really you know, took down their variable rate
Speaker 11: dead and short term debt. So the plunchline here is
Speaker 11: they just really haven't felt the dight of these interest
Speaker 11: rates yet.
Speaker 3: That raises the question of whether we're going to start
Speaker 3: to feel that bite in twenty twenty four. What's your
Speaker 3: view on that?
Speaker 11: So you are starting to see both of those statistics
Speaker 11: I mentioned creep up. I will tell you I wasn't
Speaker 11: actually at our industrial conference last week, but the reports
Speaker 11: from the field that I heard were that one of
Speaker 11: the big topics was deleveraging. It seemed to come up
Speaker 11: in just about every conference company recap that I read
Speaker 11: from the team that was on the ground there, And
Speaker 11: we actually took a look at the statistics around de
Speaker 11: leveraging and how often companies are mentioning this across not
Speaker 11: just the S and P or the industrials, but across
Speaker 11: the whole Russell three thousand and we found it's been
Speaker 11: quite elevated over the last few years. So I think
Speaker 11: one of the ways that companies are preparing, you know,
Speaker 11: for potentially the need to free sentance at higher levels
Speaker 11: is simply to pay down debt. We know that most
Speaker 11: S and P companies have average weighted maturities of five
Speaker 11: years or more. There is a decent amount, you think
Speaker 11: about twenty five percent have average weighted maturities in the
Speaker 11: next two to five years. So if the FED does
Speaker 11: start cutting next year as anticipated, even the debt that
Speaker 11: does need refinancing is going to get a little bit
Speaker 11: of relief. So I do think this is you know,
Speaker 11: kind of a headwind for companies in future years. It's
Speaker 11: something that seems like it's been very well managed so far.
Speaker 11: I think companies have enough runway they can manage around it.
Speaker 11: That doesn't mean that we're not going to see some impacts,
Speaker 11: but it feels like a headwind as we're ascending a
Speaker 11: mountain as opposed to a cliff that we're about to
Speaker 11: fall off of.
Speaker 3: One thing that we have started to see more of
Speaker 3: in recent weeks is inflows into US stocks. As we
Speaker 3: think about where this market could go for the rest
Speaker 3: of this year, in our last minute, what impact could
Speaker 3: that have on valuations for the stock market. Is there
Speaker 3: a risk that the US market starts to get overbought
Speaker 3: with these inflows coming in.
Speaker 11: So we've started to see sentiment deteriorate. Whether you're looking
Speaker 11: at the CFTC data, it's come in just a little
Speaker 11: bit or the AAII data has come in quite a
Speaker 11: bit since hitting our peak over the summer. But the
Speaker 11: enflows are starting to come back, and there's starting to
Speaker 11: come back to the growth part of the market in
Speaker 11: a big way. A lot of this is passive driven
Speaker 11: based on the analysis that we've put together, so it
Speaker 11: does generate from upside risk heading into the end of
Speaker 11: the year.
Speaker 1: This is Bloomberg day Break Today, your morning brief on
Speaker 1: the stories making news from Wall Street to Washington and beyond.
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Speaker 2: here on Bloomberg Daybreak.