WEBVTT - Bloomberg Daybreak: September 15, 2022 - Hour 2 (Radio) 0:00:02.360 --> 0:00:05.720 By from the Bloomberg Interacted Brooker's Studios. This is Bloomberg 0:00:05.800 --> 0:00:09.480 day Break for Thursday, September fifteen two. Coming up, the 0:00:09.480 --> 0:00:12.639 shower rail and union negotiators reach a deal to a 0:00:12.760 --> 0:00:16.959 vertic strike stabilized as investors await another key can under report. 0:00:17.120 --> 0:00:19.640 Vladimir Putin and Shi Jin ping me for the first 0:00:19.640 --> 0:00:22.160 time since the invasion of Ukraine. And we'll tell you 0:00:22.160 --> 0:00:25.000 which business school is ranked tops in the country. One 0:00:25.000 --> 0:00:27.520 of the women who accused former New York Governor Cuomo 0:00:27.600 --> 0:00:31.000 of sexual harassment is suing him. Plus Ukraine, the senses 0:00:31.080 --> 0:00:35.240 damage liberated cities from Russia's occupation on Michael larn bore 0:00:35.320 --> 0:00:39.240 ahead and corns went for the Yankees and Boston another 0:00:39.320 --> 0:00:42.159 loss for the meth that comes whinis the city fields lea. 0:00:42.640 --> 0:00:46.440 That's all straight ahead on Bloomberg day Break on Bloomberg 0:00:46.520 --> 0:00:51.440 Eleving Trio, New York, Bloomberg one, Washington, d C, Bloomberg 0:00:51.440 --> 0:00:55.200 one oh six one, Boston, Bloomberg nine sixties, San Francisco, 0:00:55.560 --> 0:00:58.840 Syrius x M one nine and around the world on 0:00:58.960 --> 0:01:02.360 Bloomberg Radio. To come and via the Bloomberg Business apt 0:01:07.600 --> 0:01:10.600 And good morning. I'm Karen Moscow I'm Nathan Hagar Bloomberg 0:01:10.640 --> 0:01:12.400 Dave Right, brought to you by B and Y Melon's 0:01:12.400 --> 0:01:15.280 Pershing learned why the world's most sophisticated wealth management and 0:01:15.360 --> 0:01:19.040 institutional firms rely on Pershing to help them improve profitability, 0:01:19.080 --> 0:01:23.200 create efficiency, attract talent, and manage risk at Pershing dot Com. 0:01:23.240 --> 0:01:27.360 And futures this morning are moving higher. We're coming up 0:01:27.360 --> 0:01:28.880 to six o one on Wall Street, and we check 0:01:28.880 --> 0:01:31.120 the markets every fifteen minutes throughout the trading day. On 0:01:31.160 --> 0:01:33.720 bloomberg S and p Future is up six points right now, 0:01:34.000 --> 0:01:36.680 dal Future is of fifty five and nastagg futures they're 0:01:36.720 --> 0:01:39.080 little change. The decks in Germany's up three tenths of 0:01:39.120 --> 0:01:42.200 a percent. Ten year Treasury down nine thirty seconds here 0:01:42.280 --> 0:01:45.200 three point for three percent. Nathan and Karen, we begin 0:01:45.280 --> 0:01:47.400 with breaking news this morning. It looks like a freight 0:01:47.480 --> 0:01:50.960 rail strike will not happen tomorrow. The Labor Department says 0:01:51.080 --> 0:01:54.000 US rail companies and union negotiators have reached a tentative 0:01:54.080 --> 0:01:56.960 deal that could avert a strike that threatened to disrupt 0:01:57.040 --> 0:02:01.160 rail service nationwide. Bloomberg's Amy Morris has the latest developments 0:02:01.160 --> 0:02:05.680 from newsroom in Washington. After more than twenty consecutive hours 0:02:05.680 --> 0:02:08.720 of negotiations. The Department of Labor says they've helped him 0:02:08.720 --> 0:02:11.400 are out in agreement that, in their words, balances the 0:02:11.440 --> 0:02:15.040 needs of workers, businesses, and the economy. President Biden released 0:02:15.040 --> 0:02:17.760 a statement thanking the parties for negotiating in good faith 0:02:17.919 --> 0:02:20.359 and reaching a deal to keep the rail system working 0:02:20.360 --> 0:02:22.880 and avoiding a disruption of the economy that would have 0:02:22.919 --> 0:02:26.640 cost the US two billion dollars a day. Rail workers 0:02:26.639 --> 0:02:29.800 will get better pay and improved working conditions. The companies 0:02:29.840 --> 0:02:32.760 will be able to recruit and retain more rail workers. 0:02:32.800 --> 0:02:35.360 So far, no word from the company's nor the labor 0:02:35.440 --> 0:02:38.480 unions about this deal in Washington. I maybe more as 0:02:38.520 --> 0:02:40.799 Bloomberg Daybreak. All right, Amy, thank you. We'll keep you 0:02:40.880 --> 0:02:43.040 up to date on those details throughout the morning here 0:02:43.080 --> 0:02:45.320 on Bloomberg Radio. But first let's get you a caught 0:02:45.400 --> 0:02:48.040 up on the markets. Equities are stabilizing in the wake 0:02:48.120 --> 0:02:51.000 of Tuesday's sell off. Yesterday's late day rallies on the 0:02:51.120 --> 0:02:53.040 SNP five hundred, it flows up a third of up 0:02:53.080 --> 0:02:55.560 per cent. As for bonds, the US two to thirty 0:02:55.600 --> 0:02:58.440 year curve has reached the most inverted level this century. 0:02:58.800 --> 0:03:02.440 Megan Hornman, as chief investment officer at Verden's Capital. You're 0:03:02.440 --> 0:03:04.040 going to see a lot of this chopping is It's 0:03:04.040 --> 0:03:07.360 just going to be an ugly market over the next week. 0:03:07.400 --> 0:03:10.240 The markets just waiting for that FED report, and then 0:03:10.280 --> 0:03:12.560 even between now and then, we have quite a bit 0:03:12.600 --> 0:03:15.360 of economic data to digests. So I think you're just 0:03:15.360 --> 0:03:17.800 going to see a very sideways choppy market until we 0:03:17.880 --> 0:03:19.800 get a little bit more clarity on exactly what the 0:03:19.840 --> 0:03:22.840 Fed's going to do. And Verden's Capitals Megan Horman says, 0:03:22.919 --> 0:03:26.000 we're all waiting for Wednesday's FED decision. Markets are pricing 0:03:26.040 --> 0:03:29.000 in a seventy five basis point rate hike. Now there's 0:03:29.000 --> 0:03:32.080 a gloomy prediction for requities this morning from Ray Dalio. Karen, 0:03:32.120 --> 0:03:35.480 the billionaire founder of Bridgewater Associate, says stocks could fall 0:03:35.520 --> 0:03:38.960 about that's if the Fed's target rate reaches four and 0:03:39.000 --> 0:03:41.680 a half percent. The comments in a LinkedIn article follow 0:03:41.760 --> 0:03:44.880 this week's hotter than expected inflation data. Nathan. A busy 0:03:44.880 --> 0:03:47.320 week on the economic front continues this morning with the 0:03:47.360 --> 0:03:50.480 release of US retail sales for August. We get a 0:03:50.480 --> 0:03:53.440 preview from Bloomberg's Muscle McKee, as it did with the 0:03:53.440 --> 0:03:56.320 CPI Report. Gasoline will have a major impact on the 0:03:56.320 --> 0:03:59.880 August retail report. Retail sales are reported in dollars, and 0:04:00.000 --> 0:04:02.200 the drop in gas prices will mean a big drop 0:04:02.240 --> 0:04:06.040 in service station sales. The question is whether consumers redirected 0:04:06.080 --> 0:04:09.000 any of their savings to spending on other things. It 0:04:09.160 --> 0:04:12.760 is back to school season, retailers expect a jump in sales. 0:04:12.880 --> 0:04:15.800 Beyond that, the issue is whether Americans continued their switch 0:04:15.880 --> 0:04:19.360 to spending on services, which, with the exception of bars 0:04:19.360 --> 0:04:22.840 and restaurants, aren't included in this number. The retail figures 0:04:22.839 --> 0:04:26.480 aren't adjusted for inflation, so sales will look stronger than 0:04:26.520 --> 0:04:30.279 they actually were. Michael McKee Bloomberg Daybreak. Okay, Mike, thanks, 0:04:30.320 --> 0:04:33.320 let's turn overseason at at geopolitics. Who are Chinese President 0:04:33.360 --> 0:04:36.880 Shi Jinping and Russian President Vladimir Putin our center stage? 0:04:37.040 --> 0:04:39.080 The leaders are taking a new step today in their 0:04:39.120 --> 0:04:43.000 no limits friendship. Bloomberg Daybreak Asia anchor Brian Curtis has 0:04:43.040 --> 0:04:46.279 more from Hong Kong. Putin probably shouldn't expect too much 0:04:46.320 --> 0:04:48.800 at his first meeting with she since the Winter Olympics. 0:04:49.080 --> 0:04:52.200 China was caught off guard when Russia invaded Ukraine, a 0:04:52.200 --> 0:04:56.200 few weeks later, making struggles to offer support while avoiding 0:04:56.279 --> 0:05:00.200 endorsing a clear violation of sovereignty, but China in the 0:05:00.200 --> 0:05:03.479 grips worth it, especially after an empty Polos He visited Taiwan. 0:05:03.960 --> 0:05:07.320 Now China says it fully understands all measures by Russia 0:05:07.360 --> 0:05:11.200 to protect his interest. Beijing has stopped short of military 0:05:11.320 --> 0:05:14.239 support for Russia, but the alliance will continue to serve 0:05:14.320 --> 0:05:16.920 as a check on the West in Hong Kong, Brain, 0:05:17.000 --> 0:05:20.159 Curtis Bloomberg, Debreak, Brian, thank you in the UK today 0:05:20.200 --> 0:05:22.600 and are we really it's all about the Queen. Queen 0:05:22.600 --> 0:05:25.280 Elizabeth's caffin is now in Westminster as she lies in 0:05:25.480 --> 0:05:27.800 state for four days, and we get the latest from 0:05:27.839 --> 0:05:30.200 Bloomberg's You and Parts in London. Good morning You, and 0:05:30.360 --> 0:05:32.919 good morning Nathan and Karen. The British are famous for 0:05:33.000 --> 0:05:36.000 waiting in line, and that is exactly what thousands are 0:05:36.040 --> 0:05:38.520 doing right now as they wait patiently to pay their 0:05:38.560 --> 0:05:41.400 respects to the late Queen Elizabeth, the country's longest ever 0:05:41.520 --> 0:05:44.520 serving monarch, and Majesty's coffin is now lying in state 0:05:44.560 --> 0:05:46.920 at the heart of the Palace of Westminster, where it 0:05:46.960 --> 0:05:50.720 will remain until Monday morning ahead of the funeral. Monas 0:05:50.720 --> 0:05:53.040 are big omitted twenty four hours a day, but with 0:05:53.160 --> 0:05:56.719 hundreds of thousands of people expected, the line currently stretching 0:05:56.839 --> 0:06:00.120 three miles could grow very much longer. In London, an 0:06:00.120 --> 0:06:02.520 Anu spoin Bay Day breaking. All right you and thank you. 0:06:02.520 --> 0:06:04.440 We have some corporate news out of Europe this morning. 0:06:04.440 --> 0:06:06.479 The CEO of Shell will step down at the end 0:06:06.520 --> 0:06:08.360 of the year. Ben van Borden has been at the 0:06:08.440 --> 0:06:10.760 energy giant for almost forty years. He's been CEO for 0:06:10.800 --> 0:06:13.040 the past date. He'll now be replaced by Shell's head 0:06:13.040 --> 0:06:16.680 of Gas and Renewables while Swan. The annual list of 0:06:16.760 --> 0:06:19.560 top business schools in the country by Bloomberg Business Week 0:06:19.600 --> 0:06:22.480 is out, Nathan, and this year Stanford is again number one. 0:06:22.800 --> 0:06:26.120 Its results remain consistent with past years, as its scored 0:06:26.200 --> 0:06:30.440 highest in compensation, networking in entrepreneurship. The University of Chicago's 0:06:30.440 --> 0:06:33.359 Booth School and Harvard Business School time for second place. 0:06:33.560 --> 0:06:35.880 And speaking of Chicago, careen. When it comes to housing, 0:06:35.960 --> 0:06:38.760 that city, along with New York, are the most vulnerable 0:06:38.800 --> 0:06:42.159 to price declines in a potential economic downturn. That's according 0:06:42.200 --> 0:06:45.040 to a report by Real Estate Data Analytics from Adam. 0:06:45.080 --> 0:06:47.479 Of the fifty counties most at risk, nine are in 0:06:47.600 --> 0:06:50.719 and around New York, six are in the Chicago metropolitan area, 0:06:51.080 --> 0:06:54.840 thirteen are spread throughout California. These counties all have high 0:06:54.920 --> 0:07:00.640 levels of unaffordable housing, underwater mortgages, foreclosures, and unemployment. Futures 0:07:00.680 --> 0:07:03.120 of moving a touch higher now with SMP futures up 0:07:03.120 --> 0:07:06.000 six points, staff futures of fifty three, NASTAC futures higher 0:07:06.040 --> 0:07:09.039 by nine points. The tenure treasury is down nine thirty seconds. 0:07:09.240 --> 0:07:11.440 Yield three point four three percent, yield on the two 0:07:11.480 --> 0:07:15.240 year three point eight one percent. Straight ahead, your latest 0:07:15.280 --> 0:07:19.080 local headlines and a check of sports. This is Bloomberg 0:07:23.200 --> 0:07:25.160 and it sounds six o seven on Wall Street where 0:07:25.200 --> 0:07:27.520 it's sixties seven degrees in Central Park. Still doing with 0:07:27.560 --> 0:07:29.640 issues on the North Bend New Jersey Turnpike. Will fill 0:07:29.680 --> 0:07:32.160 you in traffic shortly. First, Michael Bark with what else 0:07:32.240 --> 0:07:34.000 is going on in New York and around the world. 0:07:34.040 --> 0:07:36.480 Good morning, Michael, Good morning. Nathan, a one time any 0:07:36.560 --> 0:07:39.480 to former New York Governor Andrew Cuomo, sued him, saying 0:07:39.760 --> 0:07:43.720 he sexually harassed her and then smeared her reputation after 0:07:43.800 --> 0:07:47.680 she became the second woman to publicly accuse him of misconduct. 0:07:48.080 --> 0:07:50.800 Charlett Bennett's lawsuit, filed in the federal court in New 0:07:50.880 --> 0:07:54.040 York City, repeats many of the allegations she has talked 0:07:54.040 --> 0:07:58.400 about publicly. She said the governor subjected her to unwanted advances, 0:07:58.440 --> 0:08:01.480 including telling her he was lonely and on the hunt 0:08:01.720 --> 0:08:05.720 for a girlfriend. The New York City Commissioner of Immigration 0:08:05.760 --> 0:08:08.480 Affairs says that many of the migrants who are being 0:08:08.600 --> 0:08:11.640 bussed from Texas did not want to go to New York. 0:08:11.880 --> 0:08:15.000 Commissioner Manuel Castro says the city is helping them get 0:08:15.040 --> 0:08:18.680 to other states. Castro to at Fox five, many want 0:08:18.720 --> 0:08:21.640 to go to places like Florida, where the largest community 0:08:21.680 --> 0:08:26.160 of Venezuelans live. A turner flight with about fifty Venezuelan migrants, 0:08:26.200 --> 0:08:30.680 including children, landed on Martha's Vineyard. Yesterday's turner flight was 0:08:30.800 --> 0:08:34.360 arranged by Florida Governor Around de Santence's office, saying they 0:08:34.400 --> 0:08:38.680 sent the immigrants from Texas to sanctuary states as part 0:08:38.679 --> 0:08:42.160 of their relocation program. Officials on the islands say they 0:08:42.160 --> 0:08:44.920 had no prior notice, but as soon as they learned 0:08:44.960 --> 0:08:48.800 what was happening, they rallied. Barbara Rushes with St. Andrew's parents. 0:08:49.120 --> 0:08:53.280 We've received calls from restaurants offering food, stores offering food, 0:08:53.440 --> 0:08:57.200 people offering space, you know, private people showing up saying 0:08:57.200 --> 0:08:59.800 what can I do to help. It's been amazing, Barbara 0:09:00.040 --> 0:09:03.439 rush with St. Andrew's parish. Some state officials in Massachusetts 0:09:03.520 --> 0:09:06.760 have blasted the Santis, calling it a political stunt. A 0:09:06.800 --> 0:09:11.360 Brooklyn mother has been officially charged with drowning her three children, 0:09:11.480 --> 0:09:14.000 who were later found on the beach in Coney Island. 0:09:14.240 --> 0:09:17.840 Aaron Murdy faces several charges, including three accounts of murder. 0:09:18.280 --> 0:09:21.480 President Voladimir Zolensky went outside the capitol of Kiev to 0:09:21.559 --> 0:09:25.199 assess the damage in cities once again in Ukrainian control. 0:09:25.720 --> 0:09:29.920 He says Isiam was left largely devastated, with apartment buildings 0:09:29.960 --> 0:09:34.360 blackened by fire and pock marked by artillery strikes. The 0:09:34.440 --> 0:09:38.000 main thing did not mean here our soldiers here. That 0:09:38.200 --> 0:09:43.640 is very important thing that its supports supports people. I 0:09:43.679 --> 0:09:50.400 see how people meet them, that is, you know who 0:09:50.400 --> 0:09:54.840 are a sensitive moment. Meanwhile, President Zelenski says Russian cruise 0:09:54.840 --> 0:09:57.480 missiles hit a reservoir in his hometown in an apparent 0:09:57.480 --> 0:10:00.240 attempt to flood the City Global News twenty four was 0:10:00.280 --> 0:10:03.280 a day on air and on Bloomberg Quicktake powered by 0:10:03.280 --> 0:10:05.560 more than twenty seven hundred journalist and analysts more than 0:10:05.559 --> 0:10:08.280 a hundred twenty countries. Michael Barr, this is Bloomberg, Nathan, 0:10:08.360 --> 0:10:14.920 Thanks Michael almost six ten on Wall Street Time for 0:10:14.960 --> 0:10:17.880 the Bloomberg Sports Update with John Stashaw. Nathan. So much 0:10:17.880 --> 0:10:19.880 for the Mets being able to take advantage of playing 0:10:19.920 --> 0:10:23.520 inferior opponents. Last eleven games have been against Washington, Pittsburgh 0:10:23.559 --> 0:10:25.880 in Miami the Cubs four, the worst teams in the league. 0:10:25.880 --> 0:10:28.920 In those games, the Mets just four and seven, swept 0:10:28.960 --> 0:10:30.760 at home by the low lea Cubs, and last night 0:10:30.800 --> 0:10:33.120 Chicago led six to nothing in the first didn't David 0:10:33.160 --> 0:10:36.000 Peterson phase six batters got only one out. Cubs went 0:10:36.040 --> 0:10:37.959 on to win six three. Mets still in first place 0:10:37.960 --> 0:10:40.600 only because Atlanta has suddenly lost four out of five. 0:10:40.640 --> 0:10:43.000 Mets lead by a half game. Host the Pirates tonight 0:10:43.080 --> 0:10:45.600 Yankees for the sweep for the mini two games series 0:10:45.600 --> 0:10:48.280 in Boston. No Aeron Judge home runs, but another big 0:10:48.400 --> 0:10:50.680 night for Labor. Torre has had the winning hit Tuesday, 0:10:50.720 --> 0:10:53.160 had three more hits last night, the one in the 0:10:53.200 --> 0:10:55.640 fifth that Ain't snapped the scoreless tie, and when Boston 0:10:55.760 --> 0:10:59.920 capture Connor Wong through the ball wildly three runs scoring, 0:11:00.000 --> 0:11:02.599 including Torres circling the basis the yanksllentce buy at the 0:11:02.679 --> 0:11:06.880 three Donovan Mitchell introduced in Cleveland, traded by Utah. The 0:11:06.960 --> 0:11:09.320 New York native was asked about a trade to the NIXT. 0:11:09.520 --> 0:11:11.360 I thought for sure I was going back home. I'm 0:11:11.360 --> 0:11:12.959 not gonna lie about that. But you know, when I 0:11:13.080 --> 0:11:15.480 found out where I was headed, who I was playing with, 0:11:15.559 --> 0:11:17.679 the group, the team, the coaching staff, I couldn't be 0:11:17.760 --> 0:11:19.800 more happier to be here, to be a part of 0:11:19.840 --> 0:11:21.280 this organization, to be a part of this group, to 0:11:21.400 --> 0:11:23.920 join these phenomenal guysman and add to it, you know. 0:11:24.000 --> 0:11:25.680 And I think that for me is what I'm truly 0:11:25.760 --> 0:11:29.160 excited to. Meanwhile, controversy in the NBA Lebron James critical 0:11:29.280 --> 0:11:32.600 of Commissioner Adam Silver's decisions to suspend Phoenix Suns owner 0:11:32.800 --> 0:11:35.719 Robert Sarver for only one year. Starver was found to 0:11:35.760 --> 0:11:39.440 have conducted racist and misogynistic behavior. Tom Brady, of course, 0:11:39.520 --> 0:11:42.800 changed his mind about retirement. Serena Williams on ABC said 0:11:43.360 --> 0:11:46.200 maybe Brady started a cool trend. Asked if she might 0:11:46.240 --> 0:11:49.880 do likewise. Serena said, you never know. John Stashward Bloomberg 0:11:49.920 --> 0:11:52.040 sports Nathan and does seem to be the trend, just 0:11:52.120 --> 0:11:54.720 saying you never know, Thank you, John S andp Futures 0:11:54.760 --> 0:11:57.520 moving a higher up six point, Staff futures up fifty five. 0:11:57.559 --> 0:11:59.760 Dancetat futures higher by nine points. So take a look 0:11:59.800 --> 0:12:03.480 at the market. Next with Liz Anne Saunders of Charles Schwab. 0:12:03.679 --> 0:12:09.200 This is Bloomberg Bloomberg eleven three oh weather, mostly sunny, 0:12:09.240 --> 0:12:11.439 mid seventies today. We'll get into the upper seventies tomorrow 0:12:11.520 --> 0:12:14.720 at the sunshine probably the mostly sunny low eighties Saturday, 0:12:14.960 --> 0:12:17.000 mid eighties under a mix of sun and clouds on 0:12:17.200 --> 0:12:23.280 Sunday right now sixty seven in Central Park Markets. Headlines 0:12:23.360 --> 0:12:26.319 and breaking news twenty four hours a day at Bloomberg 0:12:26.400 --> 0:12:29.720 dot Com, The Bloomberg Business Attend at Bloomberg Quick Take. 0:12:30.000 --> 0:12:39.000 This is a Bloomberg Business lash and I'm Karen Moscow 0:12:39.080 --> 0:12:42.480 and futures are well, they're higher, They've been showing more 0:12:42.600 --> 0:12:45.400 strength as investor sentiment we have been wavering just a 0:12:45.480 --> 0:12:48.000 bit between hopes and inflation is peak and concern that 0:12:48.320 --> 0:12:51.640 large interest rate hused by the feder reservell hamper economic growth. 0:12:52.000 --> 0:12:55.360 Treasury yields are on the rise, the dollar is steady, 0:12:55.440 --> 0:12:57.599 and we checked the markets every fifteen minutes throughout the 0:12:57.640 --> 0:13:00.720 trading day. From Bloomberges and peef you churers up about 0:13:00.760 --> 0:13:03.640 seven points down, Future is up fifty five. Nasday features 0:13:03.720 --> 0:13:06.120 up twelve the decks in Germany's up three tenths of 0:13:06.160 --> 0:13:08.959 a per cent ten, Your treasury down nine thirty seconds. 0:13:09.040 --> 0:13:11.120 You'll three point four four percent. They yield on the 0:13:11.200 --> 0:13:14.320 two year three point eight one percent. NIAX Screwed oil 0:13:14.440 --> 0:13:16.520 is down seven tenths per cent or sixty cents at 0:13:16.520 --> 0:13:19.360 eighty seven dollars, eighty eight cents of barrel comic school 0:13:19.400 --> 0:13:21.640 down six tenths per center, ten dollars thirty cents at 0:13:21.679 --> 0:13:26.400 six eighty announce the euro point nine zero against the dollar, 0:13:26.440 --> 0:13:28.480 British pound one point one five oh eight and the 0:13:28.559 --> 0:13:31.599 yen one forty three point three eight and Bitcoin this 0:13:31.800 --> 0:13:34.320 morning of one point two percent at twenty thousand, one 0:13:34.840 --> 0:13:37.959 nine dollars as of Bloomberg Business Flow Show. Here's Michael 0:13:38.000 --> 0:13:40.160 Barr with more on what's going on around the world. 0:13:40.280 --> 0:13:42.280 Michael Parin, Thank you very much. It looks like a 0:13:42.400 --> 0:13:45.720 freight rail strike will be averted. The Labor Department says 0:13:45.880 --> 0:13:49.840 US rail companies and union negotiators have reached a tentative agreement. 0:13:50.440 --> 0:13:53.360 Stephens says they have an agreement that balances the needs 0:13:53.440 --> 0:13:57.600 of workers, businesses, and the economy. Strike had been looming 0:13:57.679 --> 0:14:00.319 as soon as tomorrow, which could have cost the U 0:14:00.480 --> 0:14:04.200 S economy as much as two billion dollars a day. 0:14:04.800 --> 0:14:07.760 Mourners continue to file fast casket of Queen Elizabeth at 0:14:07.800 --> 0:14:11.080 Westminster Hall in London. Some people have waited in long 0:14:11.200 --> 0:14:14.520 lines for up to thirty hours. In baseball, the Yankees 0:14:14.600 --> 0:14:17.520 beat the Red Sox five three, the Mets lost, The 0:14:17.679 --> 0:14:21.440 Orioles beat the Nationals six to the A's and Giants. 0:14:21.520 --> 0:14:24.440 One Global News twenty four hours a day on air 0:14:24.600 --> 0:14:27.840 and on Bloomberg Quicktake, powered by more than twenty seven 0:14:27.920 --> 0:14:30.600 hundred journalist and analysts more than a hundred twenty countries. 0:14:31.000 --> 0:14:34.000 Michael Barron, This is Bloomberg. Nathan Okay, Michael. Thanks at 0:14:34.040 --> 0:14:37.040 six nineteen on Wall Street Live from the Bloomberg Interactive 0:14:37.080 --> 0:14:40.280 Broker Studios. This is Bloomberg day Break. Let's get you 0:14:40.360 --> 0:14:42.920 set for the market. Open this morning, liz Anne Saunders 0:14:43.000 --> 0:14:46.760 joins US now chief investment strategist at Charles Schwab. Liz Anne, 0:14:46.760 --> 0:14:49.480 it's great as always to speak with you. We've been focusing, 0:14:49.520 --> 0:14:51.480 of course, this morning on the breaking news of this 0:14:51.600 --> 0:14:56.080 tentative agreement reached between the freight rail operators and the unions. 0:14:56.120 --> 0:14:59.240 Are you looking for any market reaction depending on whether 0:14:59.520 --> 0:15:04.120 this yield does go forward and become a done deal. Well, 0:15:04.200 --> 0:15:07.640 we we know we have a looks like a bit 0:15:07.680 --> 0:15:10.080 of a positive opening. How much that is tied to 0:15:10.360 --> 0:15:13.200 this news, It's hard to say. I think there was 0:15:13.200 --> 0:15:16.760 always hope that there would be some negotiated settlement. I 0:15:16.880 --> 0:15:19.280 think what would have been worse is the market reaction 0:15:20.240 --> 0:15:22.120 where they or not, or if there is not, just 0:15:22.320 --> 0:15:27.040 because of how many goods move over the rail lines, 0:15:27.760 --> 0:15:32.720 between energy and food, agriculture, retail goods. So I think 0:15:32.760 --> 0:15:35.320 this would have been a pretty significant economic hit. So 0:15:35.480 --> 0:15:39.160 fingers crossed, Yeah, certainly that is the case. Is this 0:15:39.280 --> 0:15:42.200 a market that's data dependent? As much as the FED 0:15:42.360 --> 0:15:44.480 says it's data dependent, Is it really all about the 0:15:44.520 --> 0:15:46.800 FED for this market right now? I think this is 0:15:46.880 --> 0:15:52.280 incredibly data driven, macro driven market right now. Uh, and 0:15:53.040 --> 0:15:57.120 very much about the FED. It is quite extraordinary. Given 0:15:57.200 --> 0:16:01.840 that just about every economic data point, even inflation data point, 0:16:02.040 --> 0:16:05.840 has enough leading indicators associate with them, you can get 0:16:05.880 --> 0:16:08.560 a sense whether you're going to see a significant upside 0:16:08.640 --> 0:16:12.360 or a significant downside move. And yes, we saw upside 0:16:12.440 --> 0:16:14.960 to c p I, but it wasn't as extreme I 0:16:15.040 --> 0:16:18.440 think is maybe the market reaction was so um. I 0:16:18.520 --> 0:16:21.160 also think it's the impact of some of the cohorts 0:16:21.200 --> 0:16:23.000 who are in the market on a day to day 0:16:23.040 --> 0:16:26.960 basis driven by algorithms, quant race strategies that are you know, 0:16:27.120 --> 0:16:30.280 keying off very very short term metrics, and I think 0:16:30.320 --> 0:16:32.160 that that can cause some of these day to day 0:16:32.200 --> 0:16:34.640 and even intradace swings to be a bit wilder than 0:16:34.720 --> 0:16:37.720 the data and or fundamentals would suggest. What do you 0:16:37.760 --> 0:16:39.520 think it's going to take to get the market to 0:16:39.640 --> 0:16:43.480 be more focused on fundamentals? What's it going to take 0:16:43.560 --> 0:16:47.280 to shake this focus from what the Fed does. I mean, 0:16:47.320 --> 0:16:50.400 it seems like it's been an overwhelming focus for this 0:16:50.560 --> 0:16:53.320 market for some time. Well near term, I think we 0:16:53.400 --> 0:16:55.400 probably have to get through the September f O m 0:16:55.480 --> 0:16:59.200 C meeting, and as is always the case, the press 0:16:59.240 --> 0:17:03.000 conference will at least as important as the announcement that 0:17:03.280 --> 0:17:06.960 is made to see what Powell might telegraph as we 0:17:07.160 --> 0:17:09.600 head to the November and December meetings. I think that 0:17:09.880 --> 0:17:14.240 was the more important outcome of the slightly hotter cp 0:17:14.359 --> 0:17:17.200 I report. You know, there's there's been a debate is 0:17:17.240 --> 0:17:19.000 it gonna be seventy is it gonna be a hundred? 0:17:19.000 --> 0:17:23.480 And I honestly don't know. However, I think the to me, 0:17:23.720 --> 0:17:25.960 the likely there is more on the seventy end, just 0:17:26.040 --> 0:17:27.880 because I'm not sure at this stage in the game 0:17:28.040 --> 0:17:31.159 Powell wants to be seen as putting forth shock and 0:17:31.240 --> 0:17:35.280 aw kind of policy. I think more likely is keeping 0:17:35.720 --> 0:17:38.440 both November and December firmly on the table and really 0:17:38.520 --> 0:17:41.720 pushing back on this notion that even existed a month 0:17:41.800 --> 0:17:44.800 ago that after a September hike, the Fed might have 0:17:44.880 --> 0:17:48.440 the green light to pause. And I think any any 0:17:48.480 --> 0:17:52.960 green light to pause is probably a story, not a story. 0:17:53.480 --> 0:17:56.080 And then earning season, you know, typically an earning season 0:17:56.119 --> 0:17:58.240 you get little more of a fundamental basis to what 0:17:58.400 --> 0:18:00.760 at least individual stocks are going will have a few 0:18:00.760 --> 0:18:03.040 weeks to wait before that starts. Are you looking for 0:18:03.160 --> 0:18:06.600 further earnings revisions given the hotter than expected inflation we 0:18:06.680 --> 0:18:09.680 saw this week. Now, I think you know, we've seen 0:18:09.760 --> 0:18:12.080 the trend in estimates for the second half of this 0:18:12.200 --> 0:18:14.640 year and into the first half the next year start 0:18:14.760 --> 0:18:16.720 to move down. But I think there's more to go. 0:18:16.920 --> 0:18:19.760 In dollar terms. You still have the consensus at about 0:18:19.760 --> 0:18:24.960 twenty five for US and pearentings in compared to two 0:18:25.000 --> 0:18:29.879 o eight. I wouldn't be surprised if the number drips 0:18:29.920 --> 0:18:32.680 down to something more in line with last year's, if 0:18:32.760 --> 0:18:35.920 not even a bit of a discount to last year. 0:18:36.040 --> 0:18:39.159 So that's still some more room to go on the downside, 0:18:39.240 --> 0:18:42.520 given that we're seeing the demand side weekend at the 0:18:42.560 --> 0:18:47.240 same time labor costs, which is a significant uh wait 0:18:47.520 --> 0:18:52.240 in terms of the revenue um outlook of of SP five. 0:18:53.280 --> 0:18:55.880 If you just do the simple historical math of where 0:18:56.119 --> 0:18:59.919 labor costs are relative to revenues, that suggests profit margins 0:19:00.080 --> 0:19:03.040 more in the twelve to thirteen percent range versus the 0:19:03.080 --> 0:19:05.400 fifteen percent or so that we saw in the last 0:19:05.440 --> 0:19:07.800 couple of quarters. So I think it's both a weaker 0:19:07.880 --> 0:19:10.520 profit story to come as well as a weaker margins 0:19:10.880 --> 0:19:13.320 story to come. All right, As always, good to get 0:19:13.359 --> 0:19:15.840 your thoughts Lizianne, thanks again for being with us this morning. 0:19:15.920 --> 0:19:23.040 Lizzie Saunders, chief investment strategist at Charles Schwab. Futures slightly higher, 0:19:23.080 --> 0:19:25.639 we'll call it. SMP futures up five points right now. 0:19:25.760 --> 0:19:28.600 DAL futures up forty two. NASTAC futures little change to 0:19:28.640 --> 0:19:32.280 the upside, up eight points. The tenure Treasury is down 0:19:32.359 --> 0:19:34.840 nine thirty seconds for a yield of three point four 0:19:35.000 --> 0:19:38.000 four percent yield on the two year three point eight 0:19:38.080 --> 0:19:40.880 two percent. Nim X crew moving a bit lower, down 0:19:40.960 --> 0:19:44.080 seven tenths percent or sixty cents at eighty seven dollars 0:19:44.359 --> 0:19:47.560 eighty eight cents of barrel, and uh comex s Gold 0:19:47.760 --> 0:19:50.120 is down six tenths per center ten dollars twenty cents 0:19:50.200 --> 0:19:54.919 at sixteen ninety eight eighty announce still ahead. We'll get 0:19:54.960 --> 0:19:57.879 you the latest details on this tentative agreement reached that 0:19:58.000 --> 0:20:02.280 could avert a nationwide rail stri as Bloomberg daybreak continues. 0:20:02.440 --> 0:20:09.080 This is Bloomberg, Bloomberg eleven three oh weather, mostly sunny, 0:20:09.119 --> 0:20:12.000 mid seventies today, upper seventies, sunshine to end the week, 0:20:12.240 --> 0:20:15.000 probably the mostly sunny Saturday, low eighties. We'll get into 0:20:15.000 --> 0:20:18.159 the mid eighties. On Sunday right now sixty four in 0:20:18.280 --> 0:20:29.520 Central Park, broadcasting live from the Bloomberg Interactive Broker Studio 0:20:29.680 --> 0:20:32.840 in New York, Bloomberg Living Freedom to Washington, d C, 0:20:33.040 --> 0:20:36.879 Bloomberg On to Boston, Bloomberg one O six one to 0:20:37.000 --> 0:20:40.680 San Francisco, Bloomberg NUN sixteen to the Country Sirius XM 0:20:40.800 --> 0:20:44.000 CHO one nineteen and around the globe, the Bloomberg Business 0:20:44.080 --> 0:20:48.120 apt and Bloomberg Radio dot com. This is Bloomberg Daybreak 0:20:53.760 --> 0:20:56.200 six thirty on Wall Street. Good morning, I'm Nathan Hagar 0:20:56.600 --> 0:20:59.359 and I'm Karen Moscow. We're just about three hours away 0:20:59.400 --> 0:21:01.360 from the open of US trading. Time for the five 0:21:01.440 --> 0:21:03.520 things you need to notice start your day. Brought to 0:21:03.600 --> 0:21:07.880 you by Interactive Brokers. Interactive Brokers charges margin loan rates 0:21:07.920 --> 0:21:10.480 from two point three percent to three point three percent. 0:21:10.800 --> 0:21:13.040 Their clients can also ear an extra income by letting 0:21:13.080 --> 0:21:15.880 their fully paid shares of stock rates subject to change. 0:21:16.000 --> 0:21:19.600 Learn more at I d k R dot com slash compare. First, 0:21:19.640 --> 0:21:23.000 it looks like a freight rail strike will not happen tomorrow. 0:21:23.119 --> 0:21:26.240 The Libor Department says US rail companies and union negotiators 0:21:26.320 --> 0:21:28.639 have reached a tentative deal to avert a strike, and 0:21:28.640 --> 0:21:32.440 Bloomberg Government reporter Jack Fitzpatrick has the latest. The real 0:21:32.520 --> 0:21:36.160 officials had estimated this would cause about two billion dollars 0:21:36.320 --> 0:21:40.280 per day of economic damage that would probably be significantly 0:21:40.359 --> 0:21:42.480 worse than even if there were a government shut down. 0:21:42.800 --> 0:21:45.840 It's a big crisis averted, it seems as long as 0:21:45.880 --> 0:21:47.879 they're not putting the cart before the horse, and this 0:21:48.040 --> 0:21:52.440