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