From the Bloomberg Interactive Burgers Studios. This is Bloomberg day Break for Tuesday, June twentieth.
Coming up today, Secretary of State Anthony B. Lincoln comes away from China with a promise to keep Talking Wall straight.
Awaits key congressional testimony from FED chair J.
Powell.
A surprise management shake up at Ali Baba.
And UBS Space is more fines tied to its takeover of Credit Suite.
Search continues for tourists sub at in keep the Titanic recorge site, plus of violence and deadly weather. Weekend in the South. I'm Michael Barr. More ahead, I'm.
John Stasharan Sports and eleven to one rump for the Mets in Houston, the slumping Yankees home tonight to play Seattle.
That's all straight Ahead on Bloomberg day Break, the business news you need to starn your day in just one fifteen minute podcast each morning on Apples, Spotify, the Bloomberg Business app and everywhere you get your podcasts.
Good morning, I'm Nathan.
Hager and I'm Karen Moscow. Here are the stories we're following today.
We begin with apparent improvement in relations between the US and China. Secretary of State Anthony blinkn has wrapped up his trip to Beijing in both sides or saying the talks were successful, but it's Bloomberg said, Baxter reports major differences still remain.
The dialogue went well enough that Blincoln did meet with President Shi Jimping, so communication lanes are more open, but there remain differences and friction. Blincoln saying, evening the economic playing field.
Defending against harmful trade practices, and protecting our critical technologies so that they aren't used against US.
And she through a translator, putting the onus on the US to improve things.
I hope that through this visit, mister Secretary, you will make more positive contributions to stabilizing China US relations.
She admonished Blnkin not to interfere with China's internal affairs. Regarding Taiwan, Blincoln said, the US reserves are right to defend Taiwan on the case of an attack. In San Francisco, I'm at Baxter Bloomberg day break, All.
Right, thank you well.
China's foreign ministry is describing President She's meeting with Blincoln as a courtesy. We get more from Bloomberg, Steven Engel and Hong Kong.
The meeting that She din Ping gave to Blincoln is a good sign. He didn't have to do it, and he wouldn't have done it on Chinese soil if the tone was bad. So that's how I lay out the assessment of it. No deliverables other than small agreements perhaps on visas and flights and the like, not any specifics, but the big issues still remain.
Still Bloomberg Steven Engeler reports both sides agreed to keep talking. Chinese Foreign Minister Chen Goong plans to visit Washington in the coming months.
In other political news this morning, Karen former President Donald Trump is speaking out again about the federal charges against him. In a wide ranging interview with Fox News, the former president said he did not return hundreds of classified documents to the National Archives because he was too busy. Morris has more from our Bloomberg ninety nine one newsroom in Washington.
Former President Donald Trump tells Fox that at the National Archives wanted the documents return, they only had to ask.
Please, please please, could we have it back?
And while the National Archives did request the return of the documents in the form of a subpoena, Trump says he's been too busy to remove personal items from boxes packed at the White House.
Before I send boxes over, I have to take all of my things out.
These boxes were interspersed with all sorts of things.
Trump also claimed he didn't know there were classified military plans among those documents, even though in an audio recording he can be heard describing a document that shows Joint chiefs of Staff Chairman Mark Milly want to do Invader Ron as being highly confidential, saying he can't declassify it now that he's out of office in Washington. I maymy Morris Bloomberg day break a.
Right amy, thank you well. Turning to the markets, The big event this week is coming up tomorrow and Thursday, when Fed Chairman j Powell gives his semi annual report to Congress, we get a preview with Bloomberg's Michael McKee.
Given his testimony comes just a week after his last news conference, Chairman Pole isn't expected to make a lot of headlines. What analysts and investors would like to hear is more guidance about when and under what conditions the Fed would raise rates again. Central bankers said last week they anticipate two more moves this year. There will also be questions about FED supervision of banks, particularly those which failed in March. Did the FED consider the impact of
its rapid series of rate increases on the banks? And lawmakers will want to know what additional regulation is coming for the financial system. Michael McKee Bloomberg Daybreak.
All right, Mike, thank you. Ahead of that testimony, the S and P five hundred heads into a holiday shortened training week coming off five straight weekly gains. Chris Marangi is co Chief Investment Officer at GAMCO.
The market reaction has been a little bit surprising, obviously, give him a hawkish tone from the Fed. Either the market doesn't believe the Fed, they think the Fed is bluffing, or they don't care about another twenty five fifty bases point increase in rates. I think it's more The.
Former GAMCOS Chris Maji notes the SMP five hundred is up more than two twenty three percent from its October low.
Well back to Asia, we have more big news overnight. Apart from the Secretary of State's visit, Ali Baba is replacing Daniel Zeng as chairman of the group, and Blueberry Daybreak Asia anchor Brian Curtis has more from Hong Kong.
Executive vice chair Joseph Zi becomes chairman of the board. CI owns the Brooklyn Nets and is a confidant of Ali Baba co founder Jack Maw. Eddie Wu, now chairman of the TWBAW and Team Mall divisions, takes over his CEO, the outgoing jong Ren Ali Baba as it bled market share. His shock departure comes after Baba announced a six way restructuring the ree org is an effort to gin up
growth by creating standalone firms that are more nimble. Some analysts we spoke to said the changes show that Jack maw is still the spiritual leader of Ali Baba in Hong Kong. Brian Curtis Bloombergy Daybreak, Thank.
You, Brian. Staying in Asia, former Nissan CEO Carlos Goon is suing the Japanese automaker over his twenty eighteen ouster and arrest. Gon is seeking more than a billion dollars from Nissan and connected individuals for what he calls deep damage to his finances and reputation. The former auto exec filest claims in Lebanon, where he's lived since his escape from Japan in late twenty nineteen to flee trial.
Well in Europe, Nathan shares a UBS or down almost one percent. Bloomberg News has learned the Swiss bank is facing one hundreds of millions of dollars in fines. Time to credit sweeze dealings with Archie Ghost Capital, UBS has inherited a long list of unresolved cases following the completion of its emergency takeover of Credit Suisse.
Time now to take a look at some of the other stories making news in New York and around the world, including a dramatic situation in the Atlantic. Here's Michael bar Good morning, Michael.
Good morning, Nathan. A desperate search continues about four hundred and thirty five miles south of Saint John's, Newfoundland, as the Titanic wreckage site submarine that takes scientists and tourists to see the wreck went missing Sunday. Five people are on board the Titanic lies at the bottom of the thirteen thousand feet down. Coastguard Rear Admiral John Maugert.
The use of saunar, buies and sonar on the ship that's out there to listen for any sounds that we can detect in the water column.
Admiral John Magers says there is enough there to survive for just ninety six hours. Gun violence March Juneteenth celebrations in several cities. Sixteens were shot in Milwaukee. Police say it started as a fight between a group of females. Across Chicago, police say at least ten people were killed and sixty more injured in shootings. Mass shootings were also
reported in San Francisco, Baltimore, and Philadelphia. Several tornadoes touched down in Mississippi yesterday, leaving at least one person dead and more than two dozen herd Officials in Moss Point say hundreds of buildings were damaged or destroyed. Mayor Billy Knight.
Oh jim Nasium is at the high school is heavily damaged, and the administration Angy School District's destroyed. The church run across the street from given if the roof is off. The houses and other businesses in that ariial main street perim well damage as well.
The Mississippi Emergency Management Agency says more than forty nine hundred homes in the central part of the state are without power. Singer b. B. Rexa was injured after a cell phone was thrown from the audience and struck her in the face during a concert in Manhattan. It happened at the rooftop at Pier seventeen in Lower Manhattan over the long holiday weekend. During her last song in the set. The phone came in from the crowd, striking near her
left eye. Rexa dropped to her knees and helped buy security off the stage. She was taken to a hospital and is set to receive three stitches along with a black eye. Police in Manalapan, New Jersey, say twenty seven year old Nicholas Malvagna was arrested in charge with a salt Global News twenty four hours a day, powered by more been twenty seven hundred journalist natilists over one hundred and twenty countries. I'm Michael barn This is Bloomberg, Nathan.
Thanks Michael, time now for the Bloomberg Sports up Day. Good morning, John Stan Schewer.
Good morning, Nathan.
The Mets went to Houston having lost eleven of their last fourteen games and only three National League teams having a worst record, and they had to face the Astros, defending world champs. Although this season Houston's in just third place in the als. Then the Mets crushed them eleven to one a five run third inning with home runs by Daniel vogelback in Francisco Lindor, and the Mets for
good measure, tacked on five more in the ninth. Max Scherzer, in his previous two starts, had given up eleven runs and eighteen hits. This time he gave up one run only four hits. He went eight innings for the first time as a Met. It's Justin Verlander tonight against his old team. Verlander last night got his World Series ring
at the stadium. Tonight will be Garrett Cole against Seattle's George Kirby, the Westchester native who three weeks ago hurled eight scoreless innings against the Yanks, who are pretty much not scoring against anyone these days. Their manager is Aaron Boom.
The most part, we've been playing pretty well. We just haven't scored a lot, and we find ourselves on the losing side of things. So we got a you know, the biggest thing right now is just collectively offensively, we gotta you know, we got to find a way and and and kind of turn the page and know that, yeah, this is a little bit of a tough stretch, but can't all do it by yourself.
Thanks Just four and eight since the Aaron Judge toe injury. NBA news with the Draft approaching Thursday, the big trade Bradley Beale for Chris Paul Bild joining two other big scores Kevin Rant, Devin Booker and Phoenix. Paul for now is with Washington, but he could be moved again to be bought out. Said he found out about the trade in a text from his son, Draymond Green. Eleven seasons with the Golden State, winner of four championships, he opted out.
Have we an unrestricted free agent. The Warriors say they want to keep Green, He says he wants to stay.
John Stashing Bloomberg Sports.
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This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. Stocks are headed into this holiday shortened trading week on a five week winning streak for the S and P five hundred, but this second quarter rally could be running into some resistance from economic headwinds and signs the market is getting overbought.
But let's get some more analysis. Now we're joined by Dennis Gartman, the chairman of the University of Akron Endowment Investment Committee and the former publisher of the Gartman Letter. Dennis got to ask you, do you think this market's getting overbought?
Just a matter of how seriously overbought it that it has become an a is. I hate to bring up a another group, but then serin Greed index has risen to eighty two, which is as egregiously overbought as I have seen it in the past ten years. And when you get to anything over eighty on the CNN Fair and Greed indexes seriously extended market, You've got The market has what we commonly said in the last several months,
bad breadth. The number of stocks that are down for the year is substantively higher than the number of stocks that are up for the year, and only seven or ten of the stocks on the S and P five hundred have accounted for all of the gain thus far. So yes, the market is egregiously, preposterously, seriously, almost comically overbought, and do for correction. But I've said that for the past three weeks or four weeks or so. So I've been wrong for the past month, sadly wrong. But I'm
not going to buy the market up here. If anything, I'm going to be slightly not short, or certainly if you're egregiously long at this point, getting less long, I think is a reasonable and viable and proper course of action to take.
Well, what do you think has fueled the rally at this point and what would it take to get to that correction that you have been forecasting for the past few weeks.
Here, the FET has been less tight then they said it would be. They were supposed to be taking ninety five billion dollars worth of treasury securities out of the market out of its balance sheet over the course of the past several months, and it's only taking about sixty five billion out. That's I think the reason why we've had a stronger rally, plus the fact that the Fed has been less stringent as far as rate the level of the overnight Fed funds rate for the course of
the past several months. We're going to get another increase in the Fed funds rate again when the Fed meets in July, but that probably shall be the end of
it for the long period of time. But anybody who expects to see the THAD begin to ease monetary policy that, anybody who expects to see the THEAED begin to allow the overnight deed funds rate to decline in the next six months is probably wrong with The Fed is probably going to be less amenable to any cut in the overnight Fed funds rate until at least twenty twenty four, maybe till quite very late in twenty twenty four before
we see that. So you've had, I think a very small handful of stocks that are driven the stock market higher, and I think that's coming to an end. So the CNN there and greed indext at eighty two is as egregiously overbought as we have seen the market in several years.
It's interesting, Dennis, that you think that one more rate hike could be one and done for the FED. What makes you say that, given that we did hear from Chairman Powell last week the possibility that we could get another couple of rate hikes before they head into a long term pause mode.
Well, his comments and comments from mister Waller and comments from the President of the Federal Reserve Bank of Richmond would indicate that they could get two more rate increases before they're done. What's the difference between one or two? To be quite honest, the fact that we've gotten about five percent is from zero over the course of the past two years. If you miss it by one by one more, one more increase, you you've done a pretty
good job. And when they when the SAD began the process of raising the overnight Fed funds rate two years ago, I made the statement then that they were going to take rates far farther and for a far longer period of time than anybody had anticipated, and actually said that we probably get close to five percent before it was done. And I've been right for the past two years on that. So if we if we if I miss it by one more cut or one more increase, I think they'll
get one. If they get two. That my miss has been relatively minor at that point. So I'm not too certain that Powell will say much more this week when he appears before Congress. He's going to reiterate the fact that they're going to they're sticking to their two percent target as far as the inflation rate is concerned. So we'll let's just say that we've seen the vast majority of the rate increases. Whether we get one or two is really quite inconsequential as far as I'm concerned.
Just thirty seconds left, Dennis, what's your call for recession risk?
I thought we've been in recession for a while. It's going to be if we we had. The NBER has not made it statement yet. I think we'll look back and realize that in real terms, we were probably in recession for the past six months. I think we're going to be in a We'll have toway for the NBER to make it statement later later this year or early next year, and they always are six months to nine months later in making the announcements. So I think we're going to be in recession. And if here depends on
which industry you're in. If you're in real estate, there's no question you're in a very serious recession already.
This is Bloomberg Day Break Today, your morning brief on the story's making news from Wall Street to Washington and beyond.
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I'm Nathan Hager.
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