Stocks Soft Open and More Flying Objects

An unidentified object has reportedly been shot down over Lake Huron, China is reportedly getting ready to take down an unidentified object flying over Changdao. Turkey broadens its investigation into contractors I America HRST wits with Global News. We'll keep you up today on Super Bowl fifty seven and the latest from the Pitch. I'm Pete Fox. Those stories and more

coming up in Bloomberg Sports. That's all straight Ahead on Bloomberg Daybreak Asia on Bloomberg eleven and three on New York, Bloomberg Washington, d See Bloomberg one six one, Boston, Bloomberg nine sixties, San Francisco, Syrius x M one nineteen and around the World on Bloomberg Radio dot Com and via the Bloomberg Business app. Good morning, I'm Dud Prisoner and I'm Brian Curtis Hero. The stories were following today, Japanese Prime Minister Fumio Kishida seems to have chosen an outsider

as the next governor at the Bank of Japan. We're told economist and former BOJ board member Casual Ueda is sent to be nominated tomorrow our time, Earlier than Nick had reported that the leading candidate, Deputy Governor Masayoshi Alma Mia, had refused to take the post house Bloomberg's Kathleen Hayes right now, you kind of have to guess, is he going to be more hawkish as that why they he's taking over instead of someone else, or is he going

to be dubbish. When he was approached by reporters just in the last couple of days, he said the current policy is appropriate, I read it too down on monetary easy needs to be can teeded at this point. He has also said policy review should be done at some point. He also has said recently in an article that the d o J is far from achieving two percent inflation that sustainable and rate height to avoid a week again

would just lead the econom deterioration. The end initially rose to the strong side of one thirty against the dollar on media reports of Uwaita's selection, markets viewed him as more hawkish than Almo Mia, but those gains were trimmed after Huwaita said that the b o J stimulus should stay in place. We've got a lot more for markets to digest in the coming week, including the latest readings on US inflation. We have more from Bloomberg, sas Anna Palmer.

The Consumer Prize Index comes out on Tuesday, with economists predicting the prices of goods and services likely rose last month, a development that would point to Federal Reserve policymakers needing to do more to lower inflation. Economists surveyed by Bloomberg are forecasting the CPI will have increased by a half percent month over month in Jail Nuary, and the core CPI excluding food and energy rose four tenths of one percent.

While the monthly cp I figure likely rose in January, the annual headline number is projected to have come down to six point two from six and a half percent the prior month. Susanna Palmer Bloomberg Daybreak Asia. And beyond the inflation data, there'll be an abundance of earnings to sift through. We have a preview from Bloomberg's Charlie Pellett. We'll be hearing from companies over a wide range of industries amid anxiety over rising interest rates and inflation. Emily

Rowland is co chief investment strategist at JGE Investments. We think this is going to be a top environment for companies going forward. Costs or elevated, especially the cost of capital having risen, a lot that is yet to be absorbed, and top line growth slowing meaningfully. Is consumers start to retrench companies have too much stuff. We think there's going

to be a major war on margins. Among the company's reporting this week Airbnb, Analog Devices, a i G, Applied Material, Cisco Systems, Coca Cola, and Zillo in New York, Charlie Pellett, Bloomberg Daybreak Asia. Senate lawmakers have revived legislation to band TikTok in the US. The concern is over data collected by this app ending up in the hands of the Chinese Communist Party. Now a similar measure failed in the

last Congress. This latest move is likely to prompt opposition not only from the tech lobby, but millions of mostly young users on this platform. Here is Senate Majority Leader Chuck Schumer. It's something that should be looked at. We do know there's Chinese ownership of the company that owns TikTok, and so there are some people in the Commerce Committee that are looking into that right now. We'll see, We'll see where they come out. Senate Majority Leader Chuck Schumer

on ABC's This Week. Heard earlier here on Bloomberg Radio. By the way, the CEO of TikTok, Shall Ze Chew, is especially or he is due to appear, I should say, before the House Energy and Commerce Committee on March. Bill Ackman's Pershing Square Holdings is said to be considering a possible listing in New York. Currently, the company trades in London and Amsterdam. By listening in the United States, it would allow Pershing to market shares directly to American investors.

The Sunday Times reports the move could help Pershing close the discount at which it shares trade compared to its net assets. Ackman had also floated this idea last summer

of Pershing listening. In the United States, we have Walter Todd coming up in a few moments, president and chief investment officer and managing director at Greenwood Capital, and among the things we might be talking about, Doug is interesting here to see UH an outsider possibly taking the helm at the Bank of Japan, and if not really hawkish,

maybe a hawkish tilt is still in the guards. Clearly an academic, former Treasury Secretary Larry Summers was telling our David Western on a Bloomberg Wall Street week that he is very much Japan's ben Burnanke. So as the b o J looks for a way to unwind this ultra easy monetary policy that it has had now for decades, maybe he's the guy to do it. Yeah, And looking at inflation in the United States, because everybody in the world over is really thinking about inflation these days, even

there in in Tokyo. But I was amazed to see that black Rock sees the pace of inflation hovering around three and a half percent for the next five years. And you remember how I responded or reacted to John Williams comment last week that that the Fed needed to get about five percent and keep it up there for years maybe he said a few years I thought he would be scolded by the Chair of the Fed, and

he may well have, but we don't know. Well. Pat Harker was saying on Friday that the key rate, the Fed funds rate, needs to get above five percent and stay there, stay there. So I think they realize that it's going to take a lot to get price pressures under control. And to this point, Alliance Burnt Bernstein makes this point that although inflation is moderating, that investors shouldn't

be betting on that. They are underestimating the structural changes that we have seen to higher levels inflation that are sticky changes brought by deglobalization and labor shortages. And black Rock and Pimco also say it's no time to ditch inflation linked debt, particularly in the services sector of the economy. And look, I'm before I let you go. H New Zealand's permanent UH Services Index, I'm sorry, that's performance Services Index was up in the month of January to a

reading of fifty four five, much hotter than forecast. So it just underscores the strength of the services economy. Alright, it's nine minute minutes past the hour. It's time for Global news. Another unidentified object shot down today, we get to the Bloomberg New News room in Erica. Perskuitz, Erica, Brian. It was shot down under over Lake Huron, I should

say in Michigan. This time. The Pentagon used an F sixteen Fighter but took down the object with a sidewinder air to air missile, the same missile used on the other three objects that were also shot down this month. The f A a closed airspace over parts of Lake Michigan Sunday, sighting National Defense. It's the third object to be shot down over North America this weekend. The first was down over Alaska Friday, the second taken down over Canada Sunday, and the White House says it is too

early to say what the latest objects shot down were. However, Senate Majority Leader Chuck Schumer says they are believed to have also been high altitude balloons appearing on CBS's face the Nation. Montana's Senator John Tester says there's even a possibility of another object flying over Montana's airspace. There was an anomaly and they've investigated. I think it got dark so they couldn't fully check it out. Tester said, it

could be a false alarm. Airspace over the central part of the state was temporarily Saturday, while Norad sent military aircraft to investigate. However, they were unable to find anything. Meanwhile, according to reports, China is getting ready to take down an unidentified object flying over waters near the port city of ching Dao, which is home to a major naval base for the People's Liberation Army. This according to Chinese news outlet. The paper no word on what the object is.

The naval base hosts both ballistic and nuclear attack submarines and is the command headquarter of the country's North Sea Fleet. Turkey is widening its investigation into contractors as the earthquake death toll rises. So far, more than thirty three thousand people have died in Turkey and Syria as a result

of last week's devastating quake. At Turkish President Air Duan is being accused of pushing through allowing property owners to have construction violations forgiven without bringing their buildings up to code, a move that seemed to have appealed to voters on his two thousand nineteen campaign trail. The Turkish government has has responded by arresting building contractors and others with ties to collapse buildings, and the Justice Ministry has set up

investigation bureaus for earthquake crimes across the affected area. G seven foreign ministers are preparing to meet in Munich as Russia's military actions against eastern Ukraine appeared to be intensifying. Top Us and Ukrainian military leaders spoke ahead of Tuesday's meeting of the Allied Nations in Brussels, where foreign ministers from the Group of Seven will reportedly also meet during

the Munich event. Russia on Friday launched its biggest barrage of missile attacks so far this year, as President Zelinsky seeks more weapons to fend off Putin's invasion. Global News powered by more than journalists and analysts and more than a hundred twenty countries. I America Hrstwaitz, this is Bloomberg,

and this is Bloomberg. Gaybreak Gasia in Hong Kong. I'm Brian Curtis, along with Rashad Slam and our guest is Walter Todd, President, Chief Investment Officer, Managing director at Greenwood Capital. Walter a tough week last week, tough week for for the stock market and the and the bond market. Is the worst week for the bond market since back in September. Is fair to say that all of a sudden, now the inflation hawks have the upper hand, are they right? Yeah, well,

we'll see right on Tuesday. Um. Certainly the revisions that came out that didn't get a lot of coverage, honestly, But yeah, I think you did see some market reaction, as you alluded to with with bonds move higher, and of course we've seen commodities move up here recently, which is probably putting some additional upward pressure on yields as well. So I mean, it's it means it's safe to say three is Um. It feels a bit like an episode of the Twilight Zone. I don't know who had UFOs

on the bingo card, but I certainly did not. But anyway, we'll see on Tuesday with the CPR report. Markets. Do you think that risk has gone too far in some senses and what we may well be witnessing is a bit of a pullback taking place? Now? Yeah, absolutely agree

with that. I mean that what we saw that, I mean, it's not unusual to see kind of the losers become the winners in the first month of the year, but the extreme to which we saw this UH in the in January was really the most extreme that we've seen since I think of the early nineties UH in terms

of this reversion trade. So I do think there's some some money to come out of that and and have that settle back out a little bit as we moved through the rest of this month and get through earning season, which has also been a little bit unusual given some of the stock reactions both up and down UH and the extent to which those have happened. UM, I think, you know, we'll continue to see some We haven't seen

a huge uptick in inflation. We've just seen you know, the jobs were strong, and then the Fed policymakers have been out there just hammering the point. Let me have some fun with you, Walter, and you can kind of you can put me down a little bit. The Fed doesn't want you to buy bonds because well, that would bring yields down and that makes their job harder. They don't want you to buy stocks because you know, companies might buy equipment and hire people, and you know that

would make the Feds tom harder. You could put your money, I guess in the bank, but then the bank might just lend it out, So that's no good. Um, where where does the Fed want you to put your money? Hello, Mattress? Yeah, I was gonna say, dig a hole in the backyard, I guess, or yes, stick it under the bath? What sense does that make? Who's gonna do that? Now? It's listen, it's it's a tough it's a tough job that they

have right here. They're they're trying to kind of talk out of both sides of their mouth, you know, get growth down, obviously, get inflation under control. But we've what we've seen really since that hot CPI reading going back in October, if you remember, we've seen financial Condiesian conditions ease quite a bit. And honestly, I mean Powell's commentary coming out of the last meeting and when he spoke last week at that Economic Club, he hasn't really pushed

back too much. He keeps talking about disinflation has started. So I'm not sure what he wants us to do at this point. Good point, Well, that's just it, isn't it. Okay, So it's real conundrum out there. Uh and so what actually do you do then? Todd? Yeah, So what you know, what we've been doing this year so far is just trying to be very disciplined with you know, kind of

our our model weights and positions. So you know, we've we've taken advantage of some of these moves and and trim positions back, move some of that into cash, move some of it into some positions that are you know, underperformed so far this year. We sold out of position like Meta that jump on the earnings beat. We just thought that was too extreme. Um, So we've just try to be a little bit more nimble, a little bit more active, and take advantage of some of this early

strength in the year. I said I would I was, I was thinking about, you know, running a diet tribal on that, and I said I would do it with the sort of stentorian tones of of Doug Chrisner. But instead I put my edge on it. So I have to apologize for that. But it's nice to see you partially agree. Let's wish to China. So we had new China loans in January, setting a record almost have trillion.

You on you like China at this juncture, Well, I think you know it's China had It's kind of like these other kind of mean versions that we've seen coming into the new year, huge run off of the lows in the fall um so I think there's you know, some room for giveback. I think international in general, with the fall in the dollar, it looks more attractive. But we've again we've kind of seen a little bit of uptick in the dollar, a little bit of downtick and

international markets. So I think it's definitely makes sense to have exposure to international markets, including emerging markets like China, but I think, you know, they probably need to cool off a little bit before they may be re accelerated and the dollar kind of rolls over. This is Bloomberg Daybreak Asia, your morning brief on the story is making news from Hong Kong to Singapore and Wall Street. Look for us on your podcast feed every day, on Apple, Spotify,

and anywhere else you get your podcast. You can also listen live each day on Bloomberg eleven three oh in New York, Bloomberg in Washington, Bloomberg one oh six one in Boston, and Bloomberg nine sixty in San Francisco. Our flagship New York station is also available on your Amazon Alexa devices. Just say Alexa Play Bloomberg Elen Plus. Listen coast to coast on the Bloomberg Business app, Sirius XM Channel one nineteen, the I Heart Radio app, and on

Bloomberg dot Com. I'm Brian Curtis and I'm Doug Prisoner. Join us again tomorrow for all the news you need to start your day right here on Bloomberg day Break Asia