1
00:00:02,480 --> 00:00:11,160
Speaker 1: Bloomberg Audio, Studios, Podcasts, radio news. Good morning, I'm Nathan

2
00:00:11,200 --> 00:00:14,160
Speaker 1: Hager and I'm Karen Moscow. Here are the stories we're

3
00:00:14,200 --> 00:00:15,480
Speaker 1: following today, Garin.

4
00:00:15,560 --> 00:00:19,200
Speaker 2: The selloff in Nvidia shares continues this morning. That stock

5
00:00:19,280 --> 00:00:22,120
Speaker 2: is down one and a third percent in early trading,

6
00:00:22,120 --> 00:00:24,960
Speaker 2: adding to a nine and a half percent dropped yesterday

7
00:00:24,960 --> 00:00:28,080
Speaker 2: that wipe two hundred and seventy nine billion dollars off

8
00:00:28,080 --> 00:00:31,520
Speaker 2: in Vidia's value. That was a record one day loss

9
00:00:31,600 --> 00:00:34,640
Speaker 2: for a US stock. The latest catalyst for the selloff

10
00:00:34,720 --> 00:00:38,680
Speaker 2: is a Bloomberg News exclusive. Sources say the Justice Department

11
00:00:38,720 --> 00:00:42,080
Speaker 2: has sent subpoenis to Nvidia and other companies as it

12
00:00:42,159 --> 00:00:46,680
Speaker 2: seeks evidence the chip maker violated competition laws. Officials are

13
00:00:46,720 --> 00:00:49,279
Speaker 2: concerned in videos making it harder to switch to other

14
00:00:49,320 --> 00:00:54,280
Speaker 2: suppliers and penalizes buyers that don't exclusively use its AI chips.

15
00:00:54,520 --> 00:00:57,800
Speaker 2: Bloomberg Technology reporter Ian King broke the story.

16
00:00:58,160 --> 00:01:01,200
Speaker 3: We reported a while ago that those question as going out,

17
00:01:01,240 --> 00:01:05,400
Speaker 3: that they were just sort of asking customers, asking competitors,

18
00:01:05,440 --> 00:01:07,560
Speaker 3: you know, what was going on in the market. The

19
00:01:07,600 --> 00:01:10,240
Speaker 3: fact that this has gone to the subpoena stage, the

20
00:01:10,959 --> 00:01:15,560
Speaker 3: legally enforceable request for information is usually a sign of

21
00:01:15,880 --> 00:01:17,119
Speaker 3: an escalation.

22
00:01:17,400 --> 00:01:20,120
Speaker 2: And response to questions about the pro Bloomberg zee in

23
00:01:20,200 --> 00:01:23,039
Speaker 2: King Reports, Nvidia says its market dominance stems from the

24
00:01:23,120 --> 00:01:26,120
Speaker 2: quality of its products, which deliver faster performance.

25
00:01:26,720 --> 00:01:30,160
Speaker 1: Well, Nathan, it is risk off this morning around the world.

26
00:01:30,240 --> 00:01:33,360
Speaker 1: Japan's and EKE fell four point two percent and stocks

27
00:01:33,360 --> 00:01:36,440
Speaker 1: in Europe are down more than one percent. This follows

28
00:01:36,600 --> 00:01:39,399
Speaker 1: yesterday's Wall Street selloff, which the S and P five

29
00:01:39,480 --> 00:01:42,240
Speaker 1: hundred drop more than two percent. Well, the Nasdaq plunged

30
00:01:42,240 --> 00:01:45,640
Speaker 1: almost three point three percent. The start of historically tough

31
00:01:45,680 --> 00:01:48,480
Speaker 1: month for markets came as a closely watched a US

32
00:01:48,480 --> 00:01:53,640
Speaker 1: manufacturer Engage again missed forecasts. Bloomer Smark Cranfield says investors

33
00:01:53,640 --> 00:01:55,800
Speaker 1: are concerned that FED is not doing enough.

34
00:01:56,160 --> 00:01:58,520
Speaker 4: In some people's minds, the Federals already behind the cove

35
00:01:58,760 --> 00:02:01,400
Speaker 4: people may have come to the conclude that even cutting

36
00:02:01,480 --> 00:02:03,880
Speaker 4: rates by twenty five basis points data this month is

37
00:02:03,920 --> 00:02:05,360
Speaker 4: just not going to be enough. When they look at

38
00:02:05,400 --> 00:02:07,240
Speaker 4: some of the data which has come through recently, and

39
00:02:07,240 --> 00:02:09,160
Speaker 4: they look ahead to the employment report at the end

40
00:02:09,160 --> 00:02:11,919
Speaker 4: of this week, they're probably saying, well, we really need

41
00:02:12,280 --> 00:02:14,400
Speaker 4: fifty basis points to kick start this thing. We're not

42
00:02:14,440 --> 00:02:15,880
Speaker 4: going to get it, and so it's time to take

43
00:02:15,919 --> 00:02:18,320
Speaker 4: some risk off the table. There's just too much uncertainty

44
00:02:18,400 --> 00:02:20,480
Speaker 4: of head. And on top of that, you see the

45
00:02:20,480 --> 00:02:23,200
Speaker 4: most important stock in the world has a very very

46
00:02:23,240 --> 00:02:25,880
Speaker 4: bad start, and that would just trigger a lot of

47
00:02:26,160 --> 00:02:28,120
Speaker 4: defensive moves by people across the board.

48
00:02:28,400 --> 00:02:31,359
Speaker 1: And Bloomberg'smark Cranfield notes the S and P five hundred

49
00:02:31,440 --> 00:02:34,640
Speaker 1: so its worst start to September since twenty fifteen. For

50
00:02:34,639 --> 00:02:37,200
Speaker 1: the Nasdaq one hundred, it was the worst since two

51
00:02:37,280 --> 00:02:37,919
Speaker 1: thousand and two.

52
00:02:38,240 --> 00:02:40,760
Speaker 2: And Karen another chip maker besides in videos in the

53
00:02:40,800 --> 00:02:44,200
Speaker 2: spotlight this morning, the Biden Harris administration's big bet on

54
00:02:44,480 --> 00:02:48,080
Speaker 2: Intel to lead a US chip making renaissance is in

55
00:02:48,200 --> 00:02:52,280
Speaker 2: grave trouble. Bloomberg's John Tucker joins us with more John,

56
00:02:52,320 --> 00:02:52,720
Speaker 2: what's the.

57
00:02:52,680 --> 00:02:56,480
Speaker 5: Issue Intel's mounting financial struggles? To start with, Nathan, the

58
00:02:56,560 --> 00:02:58,959
Speaker 5: company's supposed to receive eight and a half billion dollars

59
00:02:58,960 --> 00:03:01,240
Speaker 5: in grants and eleven billion dollars in loans from the

60
00:03:01,360 --> 00:03:04,160
Speaker 5: twenty twenty two Chips and Science Act, but only if

61
00:03:04,160 --> 00:03:07,840
Speaker 5: the chip maker meets key milestones. And Intel is mired

62
00:03:07,880 --> 00:03:11,880
Speaker 5: and a sales slump worse than anticipated, it's also hambrhaging cash.

63
00:03:12,240 --> 00:03:16,119
Speaker 5: We reported last week they're considering drastic actions, including possibly

64
00:03:16,480 --> 00:03:20,120
Speaker 5: splitting off its manufacturing division or cutting back if global

65
00:03:20,320 --> 00:03:24,400
Speaker 5: factory plans. What's more, of the company has resisted sharing

66
00:03:24,440 --> 00:03:28,160
Speaker 5: certain information requested by US officials who're seeking to vent

67
00:03:28,200 --> 00:03:32,960
Speaker 5: the viability of Intel's manufacturing roadmap. It's pretty troubling development

68
00:03:33,000 --> 00:03:35,880
Speaker 5: for a company that's supposed to help boost the US

69
00:03:35,880 --> 00:03:39,360
Speaker 5: semiconductor workforce. John Tucker, Bloomberg Radio, All.

70
00:03:39,360 --> 00:03:41,320
Speaker 1: Right, John, thank you well. The reason sell off and

71
00:03:41,400 --> 00:03:45,440
Speaker 1: oil continues. Checking crude right now, Nimex screwed oils downs

72
00:03:45,480 --> 00:03:49,040
Speaker 1: extensive percent is its sixty nine dollars ninety two cents

73
00:03:49,080 --> 00:03:51,680
Speaker 1: a barrel, while brand is at seventy three dollars forty

74
00:03:51,720 --> 00:03:55,720
Speaker 1: two cents. The drop follows yesterday's more than four percent loss.

75
00:03:55,960 --> 00:03:58,320
Speaker 1: The Libyan Central banker, at the heart of a power

76
00:03:58,360 --> 00:04:01,400
Speaker 1: struggle between two rival government and said a deal appears

77
00:04:01,440 --> 00:04:04,960
Speaker 1: imminent to resolve the dispute and resume oil output. Bloomberg

78
00:04:05,040 --> 00:04:10,040
Speaker 1: Middle East Energy correspondent Anthony D. Paola says Libya's supply

79
00:04:10,360 --> 00:04:11,440
Speaker 1: is still uncertain.

80
00:04:11,680 --> 00:04:15,000
Speaker 6: According to reports that we've seen the Crewed available and

81
00:04:15,040 --> 00:04:17,760
Speaker 6: the Cruden storage is really diminishing there, so it is

82
00:04:17,839 --> 00:04:19,640
Speaker 6: kind of cycling up and down. But that's a real

83
00:04:19,720 --> 00:04:23,200
Speaker 6: question in Libya there, we're talking about a million barrels

84
00:04:23,279 --> 00:04:26,600
Speaker 6: or so of production that, according to some of our reporting,

85
00:04:26,640 --> 00:04:27,560
Speaker 6: was down by at least half.

86
00:04:27,920 --> 00:04:31,200
Speaker 1: Bloomberg's Anthony D. Paola says oil has now wiped out

87
00:04:31,320 --> 00:04:32,720
Speaker 1: all of this year's gains.

88
00:04:32,960 --> 00:04:36,520
Speaker 2: Turning to the presidential race now, Karen Goldman sachs economists

89
00:04:36,560 --> 00:04:39,160
Speaker 2: are gaming out the impact of a potential Trump or

90
00:04:39,240 --> 00:04:42,920
Speaker 2: Harris presidency. The Banks researchers are warning if Trump returns

91
00:04:42,960 --> 00:04:46,120
Speaker 2: to the White House, higher tariffs and tighter immigration policy

92
00:04:46,360 --> 00:04:49,680
Speaker 2: could lead to a hit to us GDP. Sha Kamala

93
00:04:49,720 --> 00:04:52,919
Speaker 2: Harris win and Democrats take control of both chambers of Congress.

94
00:04:52,920 --> 00:04:57,120
Speaker 2: Goldman says new spending and expanded middle income tax credits

95
00:04:57,360 --> 00:05:01,080
Speaker 2: would slightly more than offset lower investments due to higher

96
00:05:01,120 --> 00:05:02,400
Speaker 2: corporate tax rates.

97
00:05:03,080 --> 00:05:06,120
Speaker 1: Well, Nathan Kamala Harris plans to unveil another tax credit

98
00:05:06,120 --> 00:05:09,320
Speaker 1: as part of her economic policy rollout. A Harris campaign

99
00:05:09,360 --> 00:05:12,120
Speaker 1: official says the vice president will call for raising the

100
00:05:12,240 --> 00:05:16,120
Speaker 1: small business tax deduction for startup costs from five thousand

101
00:05:16,160 --> 00:05:19,600
Speaker 1: to fifty thousand dollars. Harris and former President Trump are

102
00:05:19,680 --> 00:05:22,719
Speaker 1: competing on tax policy, with a slate of tax cuts

103
00:05:22,839 --> 00:05:25,839
Speaker 1: due to expire next year. The Vice President will unveil

104
00:05:25,920 --> 00:05:29,120
Speaker 1: her latest proposals in his speech in New Hampshire later today.

105
00:05:29,400 --> 00:05:32,479
Speaker 2: Meantime, Karen, former President Trump has taken a legal set back.

106
00:05:32,520 --> 00:05:35,160
Speaker 2: A federal judge in Manhattan has turned down his bid

107
00:05:35,200 --> 00:05:37,800
Speaker 2: to transfer his New York hush money case to federal court.

108
00:05:38,160 --> 00:05:40,599
Speaker 2: The move could have delayed his sentencing on thirty four

109
00:05:40,640 --> 00:05:44,080
Speaker 2: felony counsels right now is set for September eighteenth. Trump

110
00:05:44,160 --> 00:05:47,360
Speaker 2: has argued the Supreme Court's ruling on presidential immunity means

111
00:05:47,400 --> 00:05:49,560
Speaker 2: the case should be dismissed, even though it relates to

112
00:05:49,560 --> 00:05:52,840
Speaker 2: actions he took before he was president. The trial judge,

113
00:05:52,880 --> 00:05:55,840
Speaker 2: Juan Mershan says he will consider the immunity argument and

114
00:05:55,920 --> 00:06:00,000
Speaker 2: decide on the motion to overturn Trump's conviction by September sixteenth.

115
00:06:00,480 --> 00:06:02,880
Speaker 1: Now, Nathan, let's get to the latest. In the Middle East,

116
00:06:02,960 --> 00:06:06,960
Speaker 1: the Justice Department has unsealed the terrorism and conspiracy charges

117
00:06:07,000 --> 00:06:11,920
Speaker 1: against six senior Hamas leaders, including Yahya Sinwar and Ishmael Haniya,

118
00:06:12,040 --> 00:06:14,840
Speaker 1: who was killed in Tehran in July Attorney General a

119
00:06:14,880 --> 00:06:18,240
Speaker 1: Meeric Garland says AMAS has run a decades long campaign

120
00:06:18,279 --> 00:06:22,040
Speaker 1: to murder Americans and endanger national security.

121
00:06:22,480 --> 00:06:25,920
Speaker 4: The charges unsealed today are just one part of our

122
00:06:25,960 --> 00:06:29,640
Speaker 4: effort to target every aspect of amasa's operations.

123
00:06:30,400 --> 00:06:33,400
Speaker 7: These actions will not be our last.

124
00:06:33,320 --> 00:06:36,120
Speaker 1: An Attorney General Merrick Garland waited for months to unseal

125
00:06:36,200 --> 00:06:39,560
Speaker 1: these charges. As we hear from Bloomberg's Paul Wallace.

126
00:06:39,400 --> 00:06:43,839
Speaker 8: They were filed in February, but only unsealed yesterday. It's

127
00:06:43,960 --> 00:06:48,400
Speaker 8: unclear why the Justice Department has done that, but it's

128
00:06:48,440 --> 00:06:54,560
Speaker 8: possible that last weekend's discovery of the six Israeli.

129
00:06:54,120 --> 00:06:56,040
Speaker 3: Hostages who were killed, including.

130
00:06:55,640 --> 00:06:59,880
Speaker 8: An Israeli American, might have had something to do with that.

131
00:07:00,279 --> 00:07:03,800
Speaker 1: And Bloomberg's Paul Wallace reports that Justice Department is investigating

132
00:07:03,839 --> 00:07:07,200
Speaker 1: the death of that American hostage, Hirsch Goldberg Poland, as

133
00:07:07,240 --> 00:07:13,400
Speaker 1: an act of terrorism. And it's time now for a

134
00:07:13,400 --> 00:07:15,240
Speaker 1: look at some of the other stories making news in

135
00:07:15,360 --> 00:07:17,360
Speaker 1: New York and around the world. And for that we're

136
00:07:17,400 --> 00:07:19,120
Speaker 1: joined by Bloomberg's Michael Barr.

137
00:07:19,160 --> 00:07:20,559
Speaker 7: Michael, good Morning, Good morning.

138
00:07:20,600 --> 00:07:24,160
Speaker 9: Karen Linda's son, a former aide to New York governors,

139
00:07:24,200 --> 00:07:28,320
Speaker 9: Kathy Hokul and Andrew Cuomo has been arrested son and

140
00:07:28,360 --> 00:07:31,480
Speaker 9: her husband Chris, who have been charged with spying for

141
00:07:31,560 --> 00:07:35,680
Speaker 9: the Chinese government. They were accused of allegedly receiving millions

142
00:07:35,720 --> 00:07:39,120
Speaker 9: of dollars and kickbacks from Beijing. Sun and her husband

143
00:07:39,200 --> 00:07:42,560
Speaker 9: both pleaded not guilty to the criminal charges and their

144
00:07:42,600 --> 00:07:46,160
Speaker 9: free you Own bond. An official says Ukrainian Foreign Minister

145
00:07:46,240 --> 00:07:50,760
Speaker 9: to Metro Koleba has resigned. The foreign Minister's resignation today

146
00:07:50,880 --> 00:07:53,800
Speaker 9: came as at least seven people were killed thirty five

147
00:07:53,880 --> 00:07:57,840
Speaker 9: injured in an overnight strike in Leviv. The mayor says

148
00:07:57,920 --> 00:08:00,480
Speaker 9: a child and a medical worker were ung. The dead

149
00:08:00,520 --> 00:08:03,640
Speaker 9: and others are in critical condition. Yesterday, at least fifty

150
00:08:03,640 --> 00:08:06,040
Speaker 9: one people were killed and at least two hundred heart

151
00:08:06,360 --> 00:08:09,280
Speaker 9: and a deadly air strike in eastern Ukraine. The strike

152
00:08:09,360 --> 00:08:12,040
Speaker 9: hitting a hospital and college in the city of Poltava,

153
00:08:12,520 --> 00:08:15,640
Speaker 9: and Ukrainian forces say it was the work of Russian

154
00:08:15,680 --> 00:08:20,200
Speaker 9: ballistic missiles. State Department spokesman Matthew Millers said that the

155
00:08:20,320 --> 00:08:24,440
Speaker 9: US military is constantly assessing Ukraine's need.

156
00:08:24,840 --> 00:08:28,200
Speaker 10: We have adapted our policy over time based on changes

157
00:08:28,280 --> 00:08:31,880
Speaker 10: in the battlefield. We continue to remain flexible and look

158
00:08:31,920 --> 00:08:35,240
Speaker 10: at changes in the battlefield and adapt and adjust our

159
00:08:35,240 --> 00:08:38,440
Speaker 10: policy when necessary. Something the Secretary has spoken to and

160
00:08:38,480 --> 00:08:39,480
Speaker 10: that's what we'll continue to do.

161
00:08:39,920 --> 00:08:42,920
Speaker 9: Ukrainian President Lensky has been urging the US to lift

162
00:08:42,920 --> 00:08:46,160
Speaker 9: its restrictions on using military aid inside Russia, but the

163
00:08:46,280 --> 00:08:49,560
Speaker 9: US says it's being cautious since it could lead to

164
00:08:49,600 --> 00:08:53,559
Speaker 9: retaliation from Moscow. The seventeen year old who allegedly shot

165
00:08:53,679 --> 00:08:57,200
Speaker 9: NFL player Ricky Piersoll over the weekend in San Francisco

166
00:08:57,240 --> 00:08:59,920
Speaker 9: will be charged with attempted murder. He'll be a rain

167
00:09:00,120 --> 00:09:03,080
Speaker 9: in juvenili court this afternoon at the Youth Center in

168
00:09:03,160 --> 00:09:07,240
Speaker 9: San Francisco. District Attorney Brooke Jenkins said whether he'll be

169
00:09:07,360 --> 00:09:10,280
Speaker 9: tried as an adult is not her decision at this time.

170
00:09:10,320 --> 00:09:13,880
Speaker 11: The charges will be filed in the juvenile court. No

171
00:09:13,960 --> 00:09:18,040
Speaker 11: longer under California law can a district attorney choose to

172
00:09:18,200 --> 00:09:20,920
Speaker 11: file those charges against a minor in adult court.

173
00:09:21,080 --> 00:09:24,640
Speaker 9: DA Brooke Jenkins says the team also faces firearms charges

174
00:09:24,679 --> 00:09:27,280
Speaker 9: and as for Pearsall, the rookie was back at the

175
00:09:27,360 --> 00:09:30,960
Speaker 9: Niners training facility working out. There's dangerous heat in the

176
00:09:30,960 --> 00:09:34,600
Speaker 9: western US this week from Spokane and Portland down to

177
00:09:34,679 --> 00:09:38,520
Speaker 9: Las Vegas and Palm Springs. It has been potentially record

178
00:09:38,559 --> 00:09:40,800
Speaker 9: breaking heat in Vegas. It will be around one hundred

179
00:09:40,800 --> 00:09:43,400
Speaker 9: and seven degrees for the next three days. Global News

180
00:09:43,440 --> 00:09:45,520
Speaker 9: twenty four hours a day and whenever you want it,

181
00:09:45,640 --> 00:09:48,760
Speaker 9: Bloomberg News Now. I'm Michael Barr. This is Bloomberg. Karen.

182
00:09:49,040 --> 00:09:55,800
Speaker 1: All right, Michael Barry, thank you time now for the

183
00:09:55,800 --> 00:09:59,640
Speaker 1: Bloomberg Sports update. Went Dan Schwartzman, Dan, good morning.

184
00:09:59,480 --> 00:10:02,280
Speaker 12: Good morning, Karen. Yankees drop out of first place in

185
00:10:02,400 --> 00:10:05,840
Speaker 12: the Al East in walk off fashion. The bases are

186
00:10:05,880 --> 00:10:09,240
Speaker 12: loaded for Wyatt Langford with the Rangers trailing four to three.

187
00:10:09,800 --> 00:10:12,360
Speaker 7: The set by homes and the payoff fips swing on

188
00:10:12,520 --> 00:10:13,720
Speaker 7: and a deep drive a left.

189
00:10:13,960 --> 00:10:15,600
Speaker 13: That bowl is way way back.

190
00:10:16,040 --> 00:10:17,520
Speaker 9: That ball is history.

191
00:10:18,200 --> 00:10:22,360
Speaker 12: Oh, walk off slam for Wyatt Langford. That's Curtsey the

192
00:10:22,400 --> 00:10:25,320
Speaker 12: Rangers TV Network. Rookie Wyatt Langford hitting the game winner

193
00:10:25,360 --> 00:10:28,160
Speaker 12: off closer Clay Holmes was now blown a major league

194
00:10:28,200 --> 00:10:31,439
Speaker 12: leading eleven saves with the loss, Yankees dropping a half

195
00:10:31,480 --> 00:10:34,040
Speaker 12: game behind the Oils in the Al East after Baltimore

196
00:10:34,120 --> 00:10:37,079
Speaker 12: knocks off the White Sox nine to nothing. Matt's meanwhile,

197
00:10:37,120 --> 00:10:39,280
Speaker 12: stay hot they win their six in a row seven

198
00:10:39,280 --> 00:10:41,600
Speaker 12: to two over the Red Sox. Matt's Day half game

199
00:10:41,640 --> 00:10:44,040
Speaker 12: back of the Braves the final wildcard slot in the

200
00:10:44,160 --> 00:10:47,280
Speaker 12: NL as Atlanta shuts out Colorado three to nothing. Elsewhere,

201
00:10:47,360 --> 00:10:49,719
Speaker 12: Nationals beat the Marlin six to two. Giants loose to

202
00:10:49,760 --> 00:10:52,880
Speaker 12: the Diamondbacks eight to seven. A slip past the Mariners

203
00:10:52,920 --> 00:10:55,800
Speaker 12: three to two, there will be an all American semifinal

204
00:10:55,840 --> 00:10:58,960
Speaker 12: at the US Open, Taylor Fritz knocking off Alexander Zaverev

205
00:10:58,960 --> 00:11:02,240
Speaker 12: in four sets. Well, Francis Tiafo beats Grigor Dimitrov as

206
00:11:02,240 --> 00:11:05,040
Speaker 12: a Bulgarian retires due to injury in the fifth set,

207
00:11:05,080 --> 00:11:07,880
Speaker 12: down two sets to one. The Americans will play each

208
00:11:07,880 --> 00:11:11,120
Speaker 12: other on Friday, and the women's draw. American Ema Navarro

209
00:11:11,240 --> 00:11:13,400
Speaker 12: moves on to the semis a straight sets win over

210
00:11:13,400 --> 00:11:16,920
Speaker 12: at Paula Badosa and the other quarterfinal match, Arena Sabulenka

211
00:11:17,040 --> 00:11:21,679
Speaker 12: dominates Zenkin when losing just three games total. Today, Topsyedonyx

212
00:11:21,720 --> 00:11:25,120
Speaker 12: Center battles Daniel Medvedev, Jack Draper faces Alex de Minar,

213
00:11:25,360 --> 00:11:28,840
Speaker 12: while top Siediga Shiatek plays American Jessica Pegoula and Beatrice

214
00:11:28,840 --> 00:11:31,480
Speaker 12: Hadad Maya takes on Carolina Muchova.

215
00:11:31,760 --> 00:11:32,080
Speaker 13: That's you.

216
00:11:32,120 --> 00:11:35,319
Speaker 12: Bloomberg Sports Update on Dan Schwartzman, Karen and Nathan.

217
00:11:37,440 --> 00:11:41,560
Speaker 7: Coast to Coast on Bloomberg Radio nationwide on Syrias XM,

218
00:11:41,640 --> 00:11:44,560
Speaker 7: and around the world on Bloomberg dot Com and the

219
00:11:44,600 --> 00:11:48,840
Speaker 7: Bloomberg Business app. This is Bloomberg Daybreak. Good morning, I'm

220
00:11:48,880 --> 00:11:52,199
Speaker 7: Nathan Hager. With oil sinking to its lowest level of

221
00:11:52,240 --> 00:11:54,680
Speaker 7: the year, investors are trying to gauge how far the

222
00:11:54,720 --> 00:11:58,880
Speaker 7: selloff could extend. Jeff Curry, chief Strategy Officer of Energy

223
00:11:58,920 --> 00:12:02,000
Speaker 7: Pathways at the Carlisle Grop, joined Bloomberg Television for a

224
00:12:02,040 --> 00:12:04,560
Speaker 7: discussion on the path forward for energy and commodities. He

225
00:12:04,640 --> 00:12:08,480
Speaker 7: talked about being short oil and how seventy dollars WTI

226
00:12:08,720 --> 00:12:10,720
Speaker 7: could impact global growth. Let's listen in.

227
00:12:11,240 --> 00:12:15,560
Speaker 14: We'll definitely stimulate it relative to eighty five ninety. But

228
00:12:16,120 --> 00:12:20,400
Speaker 14: I think yes, you're right, it's still sell off based.

229
00:12:20,160 --> 00:12:22,160
Speaker 13: Upon concerns around China.

230
00:12:23,120 --> 00:12:28,199
Speaker 14: But the data disappointment was a PMI that was expected

231
00:12:28,200 --> 00:12:31,240
Speaker 14: to be forty nine point five and came out at.

232
00:12:31,080 --> 00:12:32,480
Speaker 13: Forty nine point one.

233
00:12:33,120 --> 00:12:37,440
Speaker 14: Does that justify the oil market being at a record short?

234
00:12:38,080 --> 00:12:39,000
Speaker 13: Absolutely not.

235
00:12:39,160 --> 00:12:42,240
Speaker 14: No, I'm not going to argue Chinese demand growth is

236
00:12:42,400 --> 00:12:45,280
Speaker 14: robust in any shape or form, and yes they have

237
00:12:45,400 --> 00:12:50,880
Speaker 14: structural problems on the longer term outlook, but by all means,

238
00:12:50,960 --> 00:12:54,360
Speaker 14: it's not a collapse that would justify the market being

239
00:12:54,559 --> 00:12:58,400
Speaker 14: as short today as it was in the global financial

240
00:12:58,440 --> 00:13:02,440
Speaker 14: crisis of eight. So you've got to ask what's going

241
00:13:02,520 --> 00:13:06,320
Speaker 14: on here. It's something far deeper than a slow down

242
00:13:06,400 --> 00:13:09,880
Speaker 14: in China, because when you look at this market, fundamentally,

243
00:13:10,200 --> 00:13:14,280
Speaker 14: inventories are low, the forward curve today even after the selloff,

244
00:13:14,400 --> 00:13:18,040
Speaker 14: is backwardated, and a very high level of bagradation, which

245
00:13:18,080 --> 00:13:24,520
Speaker 14: is consistent with a very tight, fundamentally strong market. And

246
00:13:24,559 --> 00:13:29,440
Speaker 14: then the third issue is concerns around OPEK bringing on supply.

247
00:13:29,920 --> 00:13:33,200
Speaker 14: They're bringing on a small amount that is being completely

248
00:13:33,240 --> 00:13:38,400
Speaker 14: compensated for by decreases out of Cosic stand as well

249
00:13:38,440 --> 00:13:42,640
Speaker 14: as Iraq, and given the credibility of OPEC recently, it's

250
00:13:42,679 --> 00:13:45,160
Speaker 14: going to be important that that credibility is maintained.

251
00:13:45,559 --> 00:13:47,480
Speaker 13: So I think these fears.

252
00:13:47,360 --> 00:13:49,760
Speaker 14: Need to be put in the context of what the

253
00:13:49,800 --> 00:13:54,320
Speaker 14: physical market looks like, which is relatively robust. Oil is

254
00:13:54,320 --> 00:13:57,560
Speaker 14: more volatile than most of the other sectors, so it

255
00:13:57,600 --> 00:14:01,080
Speaker 14: has an extra cost of holding it estimate that to

256
00:14:01,360 --> 00:14:04,840
Speaker 14: hold oil with a risk free return of five point

257
00:14:04,920 --> 00:14:07,440
Speaker 14: twenty five percent, which is where the money markets are

258
00:14:07,440 --> 00:14:10,360
Speaker 14: paying you right now, you need a return in excess

259
00:14:10,520 --> 00:14:14,360
Speaker 14: of fourteen point twenty five percent, call it fifteen percent.

260
00:14:14,840 --> 00:14:18,600
Speaker 14: A fifteen percent price move at a seventy five dollars

261
00:14:18,600 --> 00:14:22,200
Speaker 14: price level means somewhere around you know, ten or eleven

262
00:14:22,240 --> 00:14:25,080
Speaker 14: dollars a barrow. And then so your expectations have to

263
00:14:25,120 --> 00:14:27,640
Speaker 14: be for a big upward move before you're going to

264
00:14:27,720 --> 00:14:28,040
Speaker 14: own it.

265
00:14:28,320 --> 00:14:28,880
Speaker 13: Now, with the.

266
00:14:28,920 --> 00:14:31,760
Speaker 14: Sell off down to seventy three on a print basis,

267
00:14:31,960 --> 00:14:35,680
Speaker 14: the probability of seeing that upside is now much more likely.

268
00:14:35,960 --> 00:14:38,160
Speaker 14: You're probably going to see investors pull money out of

269
00:14:38,200 --> 00:14:40,000
Speaker 14: the money markets and put it.

270
00:14:39,920 --> 00:14:40,800
Speaker 13: Back into oil.

271
00:14:40,840 --> 00:14:44,280
Speaker 14: But when I talk about the borrowing costs and being

272
00:14:44,400 --> 00:14:48,320
Speaker 14: short oil, essentially by drawing down your inventories to very

273
00:14:48,320 --> 00:14:53,240
Speaker 14: low levels, you're leaving yourself very exposed to being short.

274
00:14:53,320 --> 00:14:55,720
Speaker 14: If something were to happen, like a demand surprise to

275
00:14:55,760 --> 00:14:58,840
Speaker 14: the upside or some type of supply shock, then the

276
00:14:58,880 --> 00:15:01,600
Speaker 14: physical guys that have to come in cover that short,

277
00:15:01,680 --> 00:15:04,640
Speaker 14: which may increase the demand for the physical barrels.

278
00:15:04,840 --> 00:15:07,560
Speaker 13: And then you look at the paper inventories.

279
00:15:07,600 --> 00:15:10,080
Speaker 14: You know, I call it working capital of physical oil,

280
00:15:10,480 --> 00:15:12,640
Speaker 14: working capital of financial oil.

281
00:15:12,760 --> 00:15:15,760
Speaker 13: They're also short the financial oil. And so when we

282
00:15:15,800 --> 00:15:16,280
Speaker 13: look at the.

283
00:15:16,240 --> 00:15:19,880
Speaker 14: Market today, you have you know, record shorts against really

284
00:15:20,000 --> 00:15:23,120
Speaker 14: low inventories that historically doesn't happen.

285
00:15:23,440 --> 00:15:25,360
Speaker 13: The only explanation.

286
00:15:24,920 --> 00:15:28,400
Speaker 14: For that is people are taking money out of this market,

287
00:15:28,440 --> 00:15:31,880
Speaker 14: taking working capital out of this market and putting it

288
00:15:31,920 --> 00:15:33,720
Speaker 14: into higher returning endeavors.

289
00:15:34,040 --> 00:15:36,640
Speaker 13: Now, with the pullback, you're likely to see some of

290
00:15:36,640 --> 00:15:38,560
Speaker 13: that money come back in. You'll race back on.

291
00:15:38,960 --> 00:15:41,840
Speaker 2: This is Bloomberg day Break Today, your morning brief on

292
00:15:41,920 --> 00:15:45,600
Speaker 2: the stories making news from Wall Street to Washington and beyond.

293
00:15:45,760 --> 00:15:48,520
Speaker 1: Look for us on your podcast feed at six am

294
00:15:48,600 --> 00:15:52,240
Speaker 1: Eastern each morning, on Apple, Spotify, and anywhere else you

295
00:15:52,320 --> 00:15:53,360
Speaker 1: get your podcasts.

296
00:15:53,600 --> 00:15:56,280
Speaker 2: You can also listen live each morning starting at five

297
00:15:56,360 --> 00:15:58,920
Speaker 2: am Wall Street Time on Bloomberg eleven three to zero

298
00:15:59,000 --> 00:16:02,600
Speaker 2: in New York, ninety nine one in Washington, Bloomberg one

299
00:16:02,640 --> 00:16:05,680
Speaker 2: oh sixty one in Boston, and Bloomberg nine sixty in

300
00:16:05,760 --> 00:16:06,520
Speaker 2: San Francisco.

301
00:16:06,960 --> 00:16:10,120
Speaker 1: Our flagship New York station is also available on your

302
00:16:10,160 --> 00:16:15,240
Speaker 1: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.

303
00:16:15,280 --> 00:16:19,080
Speaker 2: Plus listen coast to coast on the Bloomberg Business app, SERIUSXM,

304
00:16:19,160 --> 00:16:22,760
Speaker 2: the iHeartRadio app, and on Bloomberg dot Com. I'm Nathan

305
00:16:22,760 --> 00:16:24,360
Speaker 2: Hager and I'm Karen Moscow.

306
00:16:24,560 --> 00:16:27,320
Speaker 1: Join us again tomorrow morning for all the news you

307
00:16:27,440 --> 00:16:30,680
Speaker 1: need to start your day, right here on Bloomberg Daybreak