Good morning.
I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
Karen, we have spent most of this week focused on inflation and the economy, but today the attention turns to earnings with the kickoff of second quarter reporting season. We get more from Bloomberg Global Finance correspond at Shanali Bassek.
The biggest US banks are set to report earning today. That's JP, Morgan, Wells Fargo, and City Group. We have Bank of America, Morgan Stanley and Goldmenzas next week. What we're going to start watching for, though, is credit quality. Are loans starting to go bad? Are the biggest banks provisioning for more loan losses? How bad do they expect
a recession to be? The banks also expect costs to rise, cost tied to net interest income, also severance packages, given that so many layoffs have hit Wall Street already this year.
Thanks Shanali, That's Bloomberg Global Finance correspondent Shanali Bassic. Look for those earnings from JP, Morgan, Chase, and Wells Fargo at seven am Wall Street Time, followed by City Group at eight.
Well Turning to the market, it's now Global stocks are on track for their best weekly gain since March. There's optimism that FED is close to ending its tightening cycle thanks to team or inflation reports this week. Still, FED Governor Christopher Waller says more action by the Central Bank is needed.
I see two more twenty five basis point pikes in the targar range over the four remaining meetings this year as necessary to keep inflation moving down towards our target. And I see no reason why the first of those two heights should not occur at our meet or his meetings later this month, and.
The next decision FED Governor Christopher Waller mentioned comes on July twenty sixth.
We have another FED note this morning. Karen Saint Louis. FED President James Bullard is resigning after fifteen years to become dean of the Business School at Purdue University. Bullard is among those who have called for aggressive interest rate hikes to fight inflation.
Well.
In Corporate News, Nathan, the legal battle over Microsoft's plan purchase of Activision lingers on the Federal Trade Commission is urging an appeal court to delay the sixty nine billion dollar takeover, while the agency's challenge to the largest ever gaming deal is pending. They get more from Bloomberg technology reporter At Ludlow from the Allen and Company conference in Sun Valley, Idaho.
Everyone is focused on the deal, and I think it's this idea that if you are a technology executive or a meet well, I know it's this idea a technology media executive, you're kind of looking at this as a case study. You know the FTC's willingness to carry on the fight, but also you know this is a precedent that would be set the biggest video games deal of all time. Sixty nine billion dollars is a lot of dollars, right,
So that's the context everyone's looking at. Will we see more m and A because the FDC decides to back down, or are we going to continue with this narrative that you know, global regulators are going to continue fighting and looking at the m and A.
And Bloomberg said love lower force. Microsoft and Activision are making moves overseas to try to keep the deal alive, and sources tell us they may give up control of some of their cloud gaming business in the UK to satisfy regulators there.
Well.
Karen and other legal battles brewing involving another tech company. A group of former top executives at Twitter say the social media platform ows them more than one point six million dollars for legal fees. The group, led by ex Twitter CEO Perogue Agrawah, wants a judge to force new owner Elon Musk to pay that tab now. They say the legal bills piled up in connection with lawsuits and government probes while they ran Twitter.
Well Nathan, a dispute in the entertainment world means the show will not go on. In Hollywood for the first time in six decades, writers and actors are on strike. At the same time, members of the Actors' union SAG after officially walked off the job. At midnight. Union president fran Dresher had a message for the Alliance of Motion Picture and Television Producers or AMPTP.
The jig is up.
AMPTP.
We stand tall. You have to wake up and smell the coffee.
We are labor and we stand tall, and we demand.
Respecture says the size or fur part. On compensation for streaming video, the Studio Alliance says it offered the actors higher salaries, residuals and pension and health benefits, along with protections against use of their digital images.
Let's turned from Hollywood to Washington. Care and House Republicans have voted to overturn a Pentagon policy on reproductive care for service members that it's putting the Annual Defense Policy Bill in jeopardy. Amy Morris has details from our Bloomberg ninety nine one newsroom in Washington.
The House sunned off on a provision putting an end to the Pentagon's policy that offers military members and their famili's time off and travel allowances to seek an abortion or other reproductive care, a policy that prompted Senator Tommy Turboville to put a hold on all military promotions. The amendment was tacked onto the Annual Defense Authorization Bill by Republican Representative Ronnie Jackson, putting passage of the eight hundred
eighty six billion dollar bill at risk. Even if the House passes it with the amendment, there's no chance it makes it past the Senate. In Washington, I may me Moore as Bloomberg Daybreak.
Amy, Thanks, and finally we have news for your health. The World Health Organization now says the artificial sweetener aspertame may cause cancer, Bloomberg said, Baxter has the.
Story aspertame can be found in a lot of products and a possibly carcinogenic label does not pose any immediate changes. But Who's Francisco Bronco says there needs to be more intense investigation now. The FDA disagrees. It says it should not be classified as a possible carcinogen and that even the WHO designation does not mean that it is actually linked to cancer in San Francisco. I'm at Baxter Bloomberg daybreak.
Time now for a look at some of the other stories making news in New York and around the world, with Bloomberg's Michael Barr. Good Friday morning, Michael.
Good morning to you, Nathan. President Joe Biden will finally reveal how much money he's raised for his re election bid. The Federal Election Commission. Reports due tomorrow will also show which Republicans are mounting a serious challenge to form President Donald Trump for the GOP nomination. Trump and Florida Governor
Rond Descantis have already announced their totals. Trump's campaign said he had raised thirty five million dollars, while Descantis brought in more than twenty million, but they did not break down the details or donors. The House overnight defeated an effort by foreign right Republicans to cut off security assistance to Ukraine its cements for now bipartisan support for Kiev's
fight against Russia's invasion. President Biden slam the actions of Senator Tommy Tuberville, who is currently refusing to confirm promotions to top military posts until the Pentagon agrees to end its policy of offering leave and travel compensation for reproductive health care, including abortion.
The idea that we're injecting into fundamental foreign policy decisions what in fact as a domestic social debate on social issues, is bizarre.
Speaking in Helsinki, Biden called it unacceptable. The brutal heat wave that's been baking Arizona for two weeks has been very hard on homeless people in Phoenix, where the temperature has reached one hundred and ten degrees. The homeless are seeking treatment from a local mobile medical van. Doctor Mark Bueno works in the Circle the city medical van.
I anticipate that next week is going to be a lot worse. We're climbing up. We're closer to one seventeen, closer to one twenty. That's going to lead to a lot of complications for our patients out here.
Much of the Southwest will remain under a heat dome for the next several days. The New York City Council voted to override Mayor Eric Adam's veto of several bills designed to expand access to housing vouchers for a homeless and New Yorkers who are facing eviction. The Council voted forty two to eight. The measure ends a rule that required homeless people to spend ninety days in a shelter before being able to obtain a voucher. It also expands
eligibility to city residents. Close to being a global news twenty four hours a day, powered by more than twenty seven hundred journalists and natalysts in over one hundred and twenty countries. I'm Michael barn This is Bloomberg, Nathan.
Thank you, Michael. Time now for our Bloomberg Sports up date. Good morning, John stash Hour.
Good morning Nathan. Year ago, the Mets and the Yankees began play after the All Star break, both in first place. They'd go on to combine for two hundred regular season wins. Different story twenty twenty three. Both returned from the break in fourth place. In fact, the Yankees only one game ahead of last place Boston. Yet the manager Aaron Broom ever the optimists.
We haven't dug ourselves a whole or brow anything like that. It's certainly not been exactly how we wanted the first half to go. But we're in position to go do something special and reach all our goals. So that's that's where the focus is.
Tonight in Colorado starts Carlos Verdona's second Yankee Star. Mets have Justin Verlander going at City Field versus the Dodgers. Big contract extension for maybe the Jets' top defensive player, lineman Quinn Williams off twelve sack all pro season cash is in four years ninety six million. Only Aaron Donald of the Rams makes more at that position. Northwestern never known for success in athletics, but they've never had a week as bad as this one. They fired longtime football
coach Pat Fitzgerald do the allegations of hazing. They just promoted defensive whatever David Braun to be interim head coach. The school has now fired the baseball coach, Jim Foster after allegations of bullying and having a toxic environment at Wimbledon. Today, Novak Djokovic plays a Grand Slam semifinal match for the forty sixth time, Tyane Roger Federer's record. He'll take you on the Twenty one year old Italian Janick Center. Twenty
year old Carlos Alcaraz faces Daniel Medvedez. The top three seeds are all in the final four, but in tomorrow's women's final and unseated player Marquete Andrewsova, first unseated player in a Wimbledon Women's final since a nineteen year old Billy Jean King sixty years ago. She'll face a Jabour. She had a comeback semi final wing yesterday. John Stash Edward Blomberg.
Sports coast to coast from New York to San Francisco, Boston to Washington, DC, nationwide on Syrias Exam, the Bloomberg Business Appen Bloomberg dot Com. This is Bloomberg Daybreak. Good morning, I'm Nathan Hager.
The market's been partying like it's nineteen ninety nine this week. That is what one strategist at Deutsche Bank is saying. At the end of a week that has seen gains across asset classes. There is a lot of optimism right now that central banks are winning the fight against inflation. Can this momentum last as the focus turns to earnings? What the big banks are going to tell us this
week into next? Bloomberg Markets reporter Valerie Titel is with us this morning to take a closer look at this market. It has been quite something to see here, Valerie, to see this kind of momentum get into the market after the downside surprise we got on inflation this week.
Exactly what about of optimism we've had this week? You know, even I've got a smile on my face that the door to this mythical soft landing is opening a bit further. You know, after these CPI and PPI came in cool, and most importantly, the sticky components of inflation, the ones that we were worried about, weren't that weren't going to budge lower without a rise in the unemployment rate, without some real weakness in the US economy. Those are showing
a disinflation trend. And you know, I want to say we might get to a point this year where you have to throw out that economic textbook that inflation can fall without real economic weakness. We'd have to relearn what we what we learned in high school economics one oh one. But about of optimism this week, and if we look at just the momentum to take this further, there's really not a lot of data we have on the calendar.
Next week we get retail sales. The week after we get the preliminary PMIS for July, and then the all important FED meeting where they know, we know they're going to hike twenty five basis points. But it's about their guidance further on what the market or whether this economy does need a further hike sometime in the fall.
Yeah, and I guess that guidance will tell us whether the Fed's thrown out its economic textbooks as well, because it's really interesting as well to hear continued commentary now from the likes of FED Governor Christopher Waller, adding to the hawkish voices here, despite the positivity we've seen on inflation, still talking about maybe two more rate hikes to fight the continued price pressures we're seeing.
In some ways, I don't think the market really found that surprising. Yesterday, the FED and other members who do speak vocally are going to keep this threat of an additional rate hike out past July on the table, right They We know that Powell maybe had to slip up in January where he used that word disinflation in the press conference one too many times, sounded too positive, that he was in some ways declaring victory on the inflation fight, and that came just a bit too early. They don't
want to be burned again by that miscommunication. They're going to continue to communicate this hiking bias up until almost the point where they are gonna cut. So you know, the market does take that with a grain AsSalt. You know, the market doesn't believe what Waller said yesterday about needing
another hike in the fall. The market's pricing in one and done, and that's what really led to this big repricing in the dollar this week, slumping over two percent, with two year yields falling nearly thirty basis points, and that equity market just on a roll up two and a half percent, and you know, we're just six percent shy of those all time highs in the S and P and that door for hitting those all time highs
just opens a bit farther. If the Fed does not have to keep hiking closer to six percent.
Can the momentum continue With earnings, We're going to hear from the first of the big six Wall Street banks later today.
It'll be interesting to see those earnings. That will be the key for the equity market in the next few days. Not only do we get a big three announcing today, we get some more next week, including regional banks. A lot of the attention is going to be on net interest margin. The big question for the second quarter is whether that squeeze on margin gets even tighter. Also, an I going to expenses. We know that there has been some redundancies going on in the banking sector at those
large investment banks as deal making pipeline decreases. Also an eye on just any more loan loss provisions. We had quite a few of them in the first quarter. Those banks just putting extra cash aside in case of defaults on loans outstanding. So keep an eye out for those three things later today.
In our last thirty seconds here, Valerie, the treasury market has seen yields start to move lower as well. What's the possibility that there we could see a return to looser financial conditions, putting attention back on the fad.
Well, just I think we're kanic past that point where the Fed is overly focused on financial conditions. When it comes to the indexes we follow that Bloomberg Financial Conditions Index, the Goldman Financial Index they've actually released. The FEDS actually released one of their own financial index that really goes down to showing that it's more about financing costs in the front end, which are still restrictive. Right the feds Federal funds rate, for one, is now in a real
positive territory. It's trading above core CPI for the first time since twenty nineteen, so conditions are restrictive when it comes to lending standards.
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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