Bloomberg Audio Studios, Podcasts, Radio News. Good morning, I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
Karen, we kick off with earning season. We hear from the first of the big banks today, JP Morgan, Chase, Citygroup, and Wells Fargo All report. Bloomberg Wall Street correspondent Shanalie Basic says inflation will affect the results.
On one hand, it's kept interest rates higher for longer, and it's meant that potentially net interest income could come in higher this year than initially expected. Investors will be watching out for whether JP Morgan in particular will raise
or keep their guidance for net interest income. On the other hand, inflation keeps costs high for these banks, and the likes of Citygroup, Wells Fargo, and Bank of America will be watched closely on how they're keeping a handle on those costs and what it means for their head count in New York. Shanali Basic Bloomberg.
Rat All right, chan Ellie, thank you. One other note on the banking industry, Morgan Stanley dropped more than five percent in a report. US regulators are scrutinizing the firm's efforts to prevent potential money laundering by wealthy clients. The Wall Street Journal says the security is in Exchange Commission, the Office of the Controller of the Currency and other Treasury Department of fishes are all looking into the issue.
Bloomberg Intelligences Elliott Stein says the investigation has been in the works for some time.
We already knew from November that the Federal Reserve was investigating Morgan Stanley on this very issue. This story suggests that the probe is a little broader and other agencies are looking to including the SEC, the ROCC and Sert's you know it's more than just the Fed right now.
And Bloomberg's elliott Stein says. A Morgan Stanley spokesperson declined to comment on the story.
Well Karen.
Economists at Deutsche Bank and Bank of America are commenting, joining the growing crowd of forecasters dialing back expectations on interest rate cuts in the US. Details on that from Bloomberg's Charlie Pellett.
The move came after the consumer price index rows at a faster than expected pace for a third straight month. Strategists at Deutsche Bank and Bank of America now predict that the Federal Reserve will ease policy just once this year, in December. That is a sharp reduction in previous forecast from both firms, which each previously saw the Federal Reserve beginning to ease policy starting in June. In New York, Charlie Pellett Bloomberg Radio.
All right, Charlie, thanks, We'll be head to Europe now. After a mild recession, the UK economy grew for a second month, and we get the latest from Bloomberg's Ewen Pots in London ew.
Karenon Nathan UK GDP grew zero point one percent in February, with January's figure revised up to an increase of zero point three percent. Both manufacturing and services came in stronger than expected. The construction was weaker, blamed on very wet weather. The figures add to evidence the British economy is gathering momentum after sliding into a shallow technical recession in the second half.
Of last year.
In London, I'm you and pot Splinberg Radio, okay you.
And thank you.
Moving to the commodity sector, the mad rush into gold continues Earlier this morning for the first time ever. Spot gold rose above twenty four hundred dollars an ounce, heightened Middle East tensions and the outlook from auditary policy of fueled these gains. Other commodities are also on the move. This morning, silver hit its highest level in more than three years. Copper is at its best since June of twenty twenty two.
Well, we're also keeping an eye on oil on Nathan After a bearish new report on creude demand, the International Energy Agency is cutting its forecast for this year and next, predicting demand growth of just one point one million barrels a day in twenty twenty five. That's about a million less than the increased scene by opek. IA is also warning that persistent Ukrainian drone attacks on Russian oil refineries could disrupt the global market. Checking nimex crewede oil, it's
up one and a quarter percent. It's at eighty six dollars eight cents a barrel, while Brent is it ninety dollars sixty seven and sense well, this.
Can affect the oil market care and the Biden administration's planning a sweeping effort to block Arctic drilling. More on that from Bloomberg said Baxter.
A century ago, the US set aside twenty three million acres of Alaska's North Slope to serve as an emergency oil supply. Now, President Biden is moving to block any oil and gas development across roughly half of it. The administration says the effort will boost land conservation and fight climate change. The oil industry says the plan is more expansive than initially thought and will make it almost impossible
to build another megaproject in the region. The companies say they have recently made large discoveries which would yield supplies for decades to come. At Baxter Bloomberg Radio, All right.
Ed, thanks so. President Biden is also making another move to tackle student debt. He's forgiving loans for about two hundred and seventy seven thousand Americans, most of them enrolled in the government's Safe program, which promises to cancel dead after at least ten years of her payments. This move will type away about seven point four billion dollars in federal student debt. Earlier this week, President Biden announced a plan B to forgive loans for more than twenty five
million borrowers. That move is likely to face court challenges.
In company news, Karen, Apple is preparing to overhaul its entire Mac computer line with a new set of in house processors designed to highlight artificial intelligence. Sources say. The tech giants also nearing production of its next generation chip, the M four processor. Bloomberg's Mark German says this news is more to do with AI than the computers.
It's not necessarily the MAX themselves. Obviously, MAX are a small portion of the overall revenue base for Apple on an annual basis, something around ten percent, and I'm not sure that any investor believes that's going to skyrocket to doubling revenue or even going a third hire. I think it's the focus on AI. I think that investors are seeing that Apple's trying to push artificial intelligence to every nook and cranny. It could across the company.
And bloom Grgsmark German says Apples aiming to release the updated MAX beginning late this year and extending into early next well.
Nathan Samsung is preparing to take the wraps off of forty four billion dollar investment in US chip making as soon as next week. It's a signature project in Washington's broader effort to bring semiconductor production back to America. Sources say the world's biggest memory chip maker plans to outline the project in Texas alongside Commerce Secretary Gina Ramondo.
And welcome to the club. Amazon, the e commerce and cloud computing giant, is trading at a record Amazon is the last of the big five US tech firms to reach an all time high in the rebound from the post pandemic sell off. In a bid to win over investors, Amazon is slashed costs and restructured its business. Its efforts to streamline operations have helped to boost profits and win over shareholders.
And it's time now for a look at some of the other stories making news in New York and around the world. And from that we're joined by Bloomberg's Michael Barr. Michael, good morning, Good morning Karen.
Today the House will vote on reauthorizing the Foreign Intelligence Surveillance Act. Earlier this week, House Republicans blocked FISA from being renewed after former President Trump pressed them to kill it, claiming it was used to spy on his campaign. Yesterday, FBI Director Christopher Ray talked about ongoing threats the US faces and urged Congress to renew it.
Failure to reauthorize seven two, or gutting it with some new kind of warrant requirement would be dangerous and put Americans' lives at risk.
FBI Director Ray testified at a House subcommittee hearing on the fiscal year twenty twenty five budget requests for the bureau. The NYPD has ramped up security around the courthouse where jerry selection is set to start Monday in Manhattan. In former President Donald Trump's hush money trial, the presumpt of Republican presidential nominee as pleaded not guilty. The proceedings present his historic challenge for the court and the lawyers, including
finding prospective jurors who can be impartial. Police. A part of New York City will be frozen during the trial. The death of O. J. Simpson reminded America about the murder victims in the infamous case his ex wife, Nicole Brown Simpson and her friend Ronald Goldman. Kat o'kaalin, Simpson's former house guest, who served as a witness in the nineteen ninety five murder trial, issued a video statement to.
The family of the beautiful Nicole Brown Simpson, May we always cherish her memories. Nicole was a beacon of light that burned bright. May we never forget her.
Meanwhile, Simpson died without having paid the lion's share of thirty three point five million dollar judgment. The civil jury in nineteen ninety seven awarded it to the families of his ex wife and Goldman. The Goldman and Brown families could be at the front of the line to get paid whatever Simpson left behind. President Joe Biden has added more China these companies and individuals to an export blacklist
than any US administration. The Commerce Department added six Chinese companies to its entity list yesterday, bringing the tally of new targets during the Biden administration to three hundred and nineteen. Global News twenty four hours a day and whenever you want it with the Bloomberg News Now Michael Barr and this is Bloomberg Karen, all right.
Michael Barr, thank you, and it is time now for the Bloomberg Sports Update with John stash Hour.
John, thanks Garrets by the early rain, they got most of the Masters opening round in. There are some golfers, including Tiger Woods. You need to come back early this morning to finish it up before playing round two, Tiger was steady one under part through thirteen holes, the leader with a seven hundred and sixty five racing Deshambo.
It's always great getting off the hot start three under through first three holes, kind of get you settled. I knew it was going to be a tough day today with the wind and even tomorrow, so a lot of patient this is required around this golf course and making sure you're just stroking it on your line, putting a good hitting good iron shots and driving it well.
And he drives it farther than pretty much anyone. World number one. Scottie Scheffler never seems to have a bad round. He's one shot behind Rory McElroy, shot one under defending champ John Rahm one over the Knicks in Boston, meaningless game for the Celtics. They've clinched home court in the playoffs, but they did use all their guys and the next beat him easily, up by twenty nine going to the fourth quarter of the final was one eighteen to one
oh nine. Jalen Brunson continues his scoring taar thirty nine points. He scored thirty five or more and each to the last five at the Garden in Philadelphia beat the Rangers four to one.
At Ubs.
The Islanders now on the verge of making the playoffs with a six win in a row, three two in overtime over Montreal. Kyle Palmery the game when You Go The Devil's won the Capitol's lost Day game for the Mets, and in Atlanta, they scored seven runs in the first three innings and nine more in the last three a sixteen to four ro out of the Braves. Metsri five and two. Since that zero to five started, Fenway the Orioles with a six ron tenth Denny and Fit used
a sweep with the Red Sox nine to four. College Hockey's frozen four semifinals saw BC shout out Michigan bu who's an overtime with Denver BYU basketball coach Mark Pope, who with a new coach at Kentucky who we played for in the mid nineteen nineties, replaces John Calipari who made the surprising move to Arkansas. John Stashedwer Bloomberg Sports, Karen.
Nathan all Right, John, thank you, and futures are mixed s and p futures down a tenth of up percent down futures up a tenth of up percent, Naw's day futures down three tenths of up percent, and the ten year treasury yield four point five four percent.
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This is Bloomberg Daybreak.
Good morning, I'm Nathan Hager, and we are getting ready for the kickoff of first quarter earning season. The biggest Wall Street banks start to open their books before the opening bell. JP Morgan, Chase, City Group and Wells Fargo will be first out the gate. Joining us now with a preview is Bloomberg's Charlie Wells. Charlie, good morning, thanks for being with us. Good morning, Thank you so much for having me. Big day, Yeah, absolutely, it's a big day.
So much focus on what these higher for longer interest rates, this prospect for them, is going to mean for these banks net interest income outlook.
Net interest income, which that you know is the biggest source of revenue for these banks, and what a lot of executives have been saying late last year was that they needed to kind of dampen expectations for the year going ahead. But if we enter this world where rates are higher for longer, what that could potentially mean is that this crucial source of income for these banks could
be bigger than expected. So what I'm really watching for is the potential guidance that some of these executives give. Something else that's so important is investment banking revenue. So we've heard so much about better news on M and A, We've heard so much, you know, about more IPOs. Does that translate into these earnings? I think those are two key areas to folkocus on today.
And we did get a little bit of a preview from Jamie Diamond, the CEO of JP Morgan Chase the annual shareholder letter. A lot of the focus on artificial intelligence makes you think about whether efficiencies are going to come into play for a lot of these banks. When you think about interest rates potentially adding to the costs that some of these firms are facing, that's exactly right.
I mean, they are under so much pressure to show that they've got expenses under control. They're under so much pressure, you know, to show profitability, and you know, look, a lot of the shares for these banks have been performing really well. The narrative around them has been really popular. Actually, the gains have been outperforming the broader s and P five hundred and so if they can keep up that story of you know, expenses under check, that could be
really positive for them. But also, you know, we've been hearing some commentary about how AI could kind of dramatically change the role of analysts about these banks, making it more efficient, but as you say, also potentially less expensive.
And I got to wonder how much attention is going to be later on this week on Morgan Stanley with this report that its wealth unit is under federal regulatory investigation.
This is not the sort of news that they wanted going into their earnings report. And so what we got yesterday from a report in the Wall Street Journal was that, you know, a broadening caudra of federal agencies are looking into controls to prevent money laundering at Morgan Stanley. And so we knew that the FED was looking into this, but we what we have been learning is that, you know,
it is enough. It is a larger group of organizations, including the SEC, the Office for the Comptroller, and several Treasury offices. And the key question is did Morgan Stanley do enough to investigate potentially risky clients. And you know, wealth management has become a really important unit for not just Morgan Stanley, but for all of these Wall Street banks. And one of the big risks is how are you looking after who you're letting in to do business with.
Got about thirty seconds left in terms of the banks that are going to be reporting this morning. What is the main focus that investors are looking at?
Yeah, so, you know, definitely net interest income, but also investment banking. So we've got JP Morgan coming up, and City Group and Wells Fargo, and I think another thing that we should really watch out for huge story has been commercial real estate. Now sixteen percent of Wells Fargo's loan book is commercial real estate, So it'll be really really telling to see how they report on that commercial real estate front, which has been under so much stress lately.
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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