Bloomberg Daybreak: April 20, 2022 - Hour 1 (Radio)

has been arrested. Plus Shanghai continues to ease COVID rules. I'm Michael Barr. More ahead, I'm Don Stairs. Showered sports. The Mets of the best record in baseball. They swept the double letter from the Giants. They Yankees one of Detroit.

The Rangers shut out Whinnipeg. That's all straight ahead on Bloomberg day Break on Bloomberg You live in three on New York Bloomberg one, Washington, d C, Bloomberg one oh six one in Boston, Bloomberg nine, Francisco, Syrius XM one nineteen and around the world on Bloomberg Radio dot com and via the Bloomberg business Side and Good morning. I'm Karen Moscow. I'm Nathan Hager. Bloomberg day Break brought to you by hc Wainwright. Register now for the HCW Global

Investment Conference, a hybrid event one to twenty six. Go to h c W Events dot com. HCW reserves the writing discretion to accept or reject registration or admission. And US futures are lower this morning five oh one on Wall Street, and we checked the markets every fifteen minutes

throughout the trading day. On Bloomberg SMP future is down about eleven points down, futures down forty three, nasdack futures down sixty ten year treasury up ten thirty seconds, The l two point nine percent, and the yield on the two year is at two point five six percent. Nathan, Karen, we begin this morning with the plunge in Netflix shares. They are down more than twenty five percent following the company's disappointing earnings report. Let's get the latest life from

Bloomberg's Rnita Young. Good morning, Granita, Good morning Nathan. The streaming giant unexpectedly lost the scribers for the first time in a decade, and it sees another drop of two million users this quarter amid heavy competition, so in an effort to improve results, co CEO Read Hastings says Netflix will introduce a cheaper advertising supported option for subscribers in

the next couple of years. I'm a bigger fan of consumer choice and allowing consumers who would like to have a lower price and are advertising tolerant um get what they want makes a lot of sense. Netflix co CEO Read Hastings says the company will also start to crack down on people sharing their passwords. Live in New York, I'm ren need a young Bloomberg day break, all right, grined to thank you. While we are seeing the Netflix

results impact other streaming services. Shares A Disney are down more than four percent, while Roku is off by six percent, and one of their stock of note moving this morning is IBM. Shares her up one and a half percent after the company's sales topped analysts estimates and the earnings continue to roll in Karen. With sixteen companies in the

SMP five reporting today, they include Tesla. We get a preview from Bloomberg's Tom busby one big focus for first quarter earnings at the world's biggest electric auto maker how much the COVID nineteen shutdown to the company's Shanghai plant have impacted production. There also of concerned the impact of the global computer chip shortage and the ongoing supply chain

issues that have affected all automakers. But Bloomberg and Census calls for adjusted earnings of two dollars twenty seven cents of share and revenues of seventeen point nine two billion dollars. Tom Busby, Bloomberg Daybreak, All right, Tom, thank you. Atturning to the economy, US tenure yields are really yields briefly

turned positive this morning for the first time since March. Meanwhile, Chicago FED President Charles Evans says interest rates will probably rise above the neutral level, but how much higher will hange on whether inflation cools has expected. Probably we are going beyond neutral. I mean that's my expectation. When I see that, taking out special factors, I'm still left with three to three and a half percent inflation. That's not we want. And Chicago Fed President Charles Evans made the

comments yesterday at the Economic Club of New York. We may get a clear picture behind the Fed's thinking, Karen, when it's regional economic survey, known as the Beige Book, comes out this afternoon. Bloomberg's Michael McKee has a preview. Americans say they are discouraged by inflation, but are they pulling back on spending an investment. The Beige Book will offer FED officials anecdotal evidence on the impact of rising

prices and the outlook for the next few months. Activity has been mixed, showing some cooling and goods demand that could ease price pressures, although there's been a greater appetite for services recently. First quarter growth is forecast to slow considerably from the fourth quarters sizzling six point nine per cent annual rate. It's not definitive by any means, but the Baige Book will offer some color and whether that's slow down is going to be temporary or longer lasting.

Michael McKee, Bloomberg Daybreak. All right, Michael, thank you, and we now want to update you on the latest developments in the war. The poor city of Mario pol in Ukraine is on the brink. Ukrainian defenders say they are surround it and they are appealing to world leaders for help.

Bloomberg's Amy Morris reports Ukrainian President Voladimir's Alinsky posted a video to social media saying that the Russian Army is righting itself into world history as the most barbaric and in humane army in the world, in part because they're blocking efforts to create humanitarian corridors, especially in Mariopol, where the commander of one Ukrainian brigade is pleading for help from other countries to evacuate civilians from the ports city.

Russia has given the fighters until two pm in Moscow, that's seven am Eastern, to lay down their arms and surrender. In Washington, I'm any Morris Bloomberg Daybreak, Alright, Amy, Thanks. Turning to the pandemic, the Department of Justice says it is prepared to appeal the mask mandate ruling if necessary. Bloomberg said, Baxter has that story. The d o J says it will appeal if the CDC decides that the mandate should remain in place after May three, when the

current one expires. Currently, the recommendations remain place but not mandated. Under the ruling. The White House is keeping its mandate in forest and spokeswoman Jen Psaki says the administration says it is a smart thing to do. We're continuing to encourage people to wear masks in public transit. They'll make that decision because it's obviously not being implemented at this moment time, but will continue to abide by CDC guidance

for now. It is a personal decision. In San Francisco, I'm at Baxter Bloomberg daybreak, all right, and thank you well on Wall Street to days of free lunch at Goldman sacks are over marking the end of a pandemic office perk, and we get a story from Bloomberg's Charlie Pellett. The investment bank says it will transition back to paid for meal service for breakfast and lunch on April twenty five.

Goldman also says it will boost the stipend for meals out of hours to thirty dollars from twenty five dollars. Wall Street firms have been using free food as part of the push to bring employees back to their desks during a pandemic that has fueled the rise of hybrid schedules and remote work. Goldman has been one of the most aggressive financial firms in pushing for a return to the office. In New York, Charlie Pellette Bloomberg Day Break.

Thanks Charlie joined us later today. We'll speak live with Bank of America CEO Brian moynihan at noon Wall Street Time on both Bloomberg Radio and Bloomberg Television. This is Bloomberg South five oh seven on Wall Street where forty two degrees in Central Parker dealing with an accident on the Van Wick northbound past College Point Boulevard. Details coming up in traffic. First Michael Barr with what else is going on in New York and around the world. Good morning, Michael,

Good morning Nathan. The New Jersey Catholic Diocese of Camden has agreed to pay eighties seven point five million dollars to subtle claims involving clergy sex abuse, with about three hundred alleged victims. It's one of the largest cash settlements involving the Catholic Church in the US. Mark Crawford is with the State Chapter of the Survivors Network of Those

Abused by priests. I'm glad it's come to fruition. Um. I hope and believe that it will lead to some small level of closure and hopefully some validation for the victims of qudge abuse within the Diocese of Camden, New Jersey. Mark Crawford with the Survivors Network says the subtlement carries

a unique agreement, including turning over documents. Connecticut State Police say a trooper who fired seven gunshots into a car and killed a man in twenty twenty after a high speed chase has been arrested in connection with the shooting. Authorities say trooper Brian North turned himself into the State Inspector General last evening. North fatally shot Mubarick Solomine in January of as Solomine sat in the driver's seat of a car in West Haven where the chase ended and

police boxed in the car. The State Police union says North risked his life and is defending his actions. It looks like New York City doorman won't go on strike after all. Yesterday, at tentative deal was reached to a vert of potential walkout one day ahead of the deadline. The agreement reached the union and the Realty Advisory Board. It averts what would have been the first strike of the residential building service workers in New York in thirty

one years. New Jersey's governor has some thoughts as the state prepares to legalize recreational pot sales. Governor Phil Murphy won't be partaking in pot, but he does have a preference. It's never been an animating thing for me. If we were legalizing Scotch, I would show up with a shopping cart.

Governor Murphy says. Recreational pots sales begin tomorrow. A Chinese health official says four million more people in Shanghai have been allowed to leave their homes as coronavirus quarantine rules ease. That brings to a total of almost twelve million people who have been allowed to leave their homes as China's largest city tries to contain the virus outbreaks. Global News twenty four hours a day on air and on Bloomberg Quicktake Power by more than twenty seven hundred journalists and

analysts more than a hundred twenty countries. U. Michael barn This is Bloomberg. Okay, Michael, thank you. Almost five ten on Wall Street. Time for the Bloomberg Sports Update. Good morning, John Stanhower, Good morning, Nathan Shure. It's early, but don't look now. The Mets at night and three of the best record the Major leagues. Doubleheader sway for the Giants at City Field. If began with a big comeback Mets trailed four to one, tie the game, and then won

it in the tenth inning. On the door, Garcia's pitch swing a lock rot toarts center field. That's gonna get down that they sent it rolls toward the wall and right center stores that Francisco Indoor comes through, Mets winning ten five for the final CBS to call Francisco into a rough first season in New York, but off to

a hot start this year. He had two more hits of the nightcap won by the Mets three to one thanks to Max scherz Or his first met home starting serves Are flirted with a no hit or lost it in the sixth inning, but gave up just the one hit struck at ten and seven in inh sers are already three and oh in Detroit. That Garrett cole struggles continue this supposed Yankee Ace had to be taken out in the second inning, got only five outs. He issued

five walks, but Clark Schmidt followed Cole with three. The third scoreless relief six strikeouts and the Yankees beat the Tigers four to two, fifty win for the Rangers. Three nothing over Winnipeg at the Garden. Ryan Strom sport twice and Igor says Sirkin with thirty one saves. The Rangers have won their last three games by a combined eleven

and nothing. First time the Rangers have had three straight shutouts since the Eddie Jackoman days inten seventy three NBA Playoff wins from Miami, Memphis and New Orleans Nets and Celtics Tonight Game two in Boston, Kyrie Irvine find fifty thousand dollars for his middle finger salutes to the Celtic fans. On Sunday, John Stashward, Bloomberg Sports, Nathan all Right, John, thanks SMP futures down ten point, Staff futures down thirty eight,

NASTAC futures down sixty one points. Shares of Netflix down twenty six percent points to lose forty billion dollars in value after the subscribe promiss We'll talk about it next with Alex Webb of Bloomberg Quicktake. This is Bloomberg, Bloomberg eleven three oh weather. Sunshine today hides in the upper fifties, more clouds than sun. Tomorrow with the high near sixty

will be near seventy partly Sunday by Friday. Right now clouds forty two degrees in Central Park markets, headlines and breaking news twenty four hours a day at Bloomberg dot Com, the Bloomberg Business out and at Bloomberg Quick Take, This is a Bloomberg Business Flash and I'm kared. Moscow US Dock Index futures are lower as investors way the impact of rising real yields on the appeal of riskier assets, and Netflix puts a damper on the earning season outlook.

We checked the markets every fifteen minutes throughout the trading day. On Bloomberg s and p Future is down twelve points this morning. At down Future is down forty seven nasdag Future is down sixty five and the in Your Treasuries up eight thirty seconds. The l two point nine zero percent yield on the two year two point five six percent nine Max Screwed oils at one point one percent of a dollar ten and a hundred three dollars sixty six cents of Barrel Comic schooled down half percent or

ten dollars thirty cents at nine seventy announced. The euro one point o three three against the dollar. British found one point three zero to six, the n at one eight point three too, and Bitcoin this morning is up half percent at forty one tho five hundred dollars. Today we're watching for report on existing home sales at a ten o'clock Wall Street time than at to the Federal Reserve at least at its fige book and Tesla's among

companies scheduled to report earnings today. That's a Bloomberg business flash. Now here's Muchael Barrow with more on what's going on around the world. Muchael, Good morning, Good morning, Karen. Russia is pouring more troops into Ukrainian cities and towns. The fighting in the East seeks slides the country in two in a potentially pivotal battle for control of Ukraine's industrial

heartland of coal mines and actories. Winds kicked up a towering wall of flames in rural northern Arizona, tearing through two dozen structures and forcing the evacuation of more than seven hundred homes. In MLB, the Yankees one the Mets. Mets swept a doubleheader against the Giants. The Nationals swept a doubleheader against the Diamondbacks. The Red Sox won the A's beat the Orioles to one. The game was played before the smallest Oakland crowd in forty two years, almost

thirty seven hundred fifty fans at the Colosseum. In the NHL, the Rangers and Bruins one. The Islanders lost in O G to the Panthers three too. Yeah. Yeah. It's global news twenty four hours a day on air and on Bloomberg Quicktake, powered by more than twenty journalists antalyists more than a hundred twenty countries. On Michael bar This is Bloomberg Nathan by Michael Thanks five nineteen. On Wall Street Life from the Bloomberg Interactive Brooker Studios, This is Bloomberg Daybreak.

And speaking of losing fans, how about Netflix? The shares are getting pummeled once again in the pre market after the streaming giant reported its first s describer loss in more than a decade. Alex Webb follows this company very closely, and Alex is with Us now anchor on Bloomberg Quick Take and tech columnist for Bloomberg Opinion. Alex, what happened? Well?

Lockdowns basically lockdowns ended, and Netflix said a Lockflix And of course inflation, so Netflix had enjoyed massive growth during the lockdowns, and perhaps optimistically, there had been expectation that at least some of that growth would continue. It didn't, and they lost two undred subscribers. At the same time, people's household bills are getting, you know, expanding because of Netflix,

and ultimately, streaming video is discretionary spending. So when people are looking at their bills and they say, well, you know, what can I fall to cut that twelve bucks a month for Netflix is something that people are getting rid of. So is that part of the reason. Do you think why we're seeing declines across the board for a lot of these companies with streaming exposure, This idea that people might be cutting back because of inflation, Shin is that

is that part of the story? Absolutely, And of course people are realizing that it may not necessarily be more economical than the cable they might have had previously. That you know, in our household, we have an embarrassing number of streaming services. I think by the time you take it acout, Netflix plus, Discovery, Discovery Plus plus, Amazon Prime plus, Apple TV Plus and all these other things, HBO Max, you're getting close to that six dollars a month, depending

what your cable contract looks like quite quickly. And it is of course not a space that everybody can win. So what does this mean for the streaming business going forward? Here? What does it have to do to a keep subscribers and be just turn things around entirely. Well, one of the big problems is that the differences between streaming video and the classic cable contract was is churn i e. The number of subscribers you lose in any given month.

And when you had a cable contract, or you have a cable contract, it might be an eighteen month, two year contract, so you spend that money on customer acquisition upfront and then you're guarantee you know, perhaps a thousand dollars worth of revenue over the subsequent two years for the duration of the contract. Now that is not the case with streaming video, and they're all fighting month in, month out for those subscribers. That is a high marketing cost.

They have been valued as growth stocks because they are adding subscribers, and Disney pivoted really from being a value to a growth stock because of Disney Plus. But when that growth starts to slow down, you have to wonder where you can find the value. Are they as valuable as an A T and T for instance, when you look at the long duration when of their earnings profile. Does that fight for subscribers become more difficult with the

idea of opening up to advertising. We heard from read Hastings saying, you know, something that he had resisted for so long, the idea of putting ads on Netflix He's open to now. Yeah, it really was a sacred cow for a long time. But if they're looking at the fact that you know, customers may not want to be spending twelve dollars a month, well five dollars a month or wherever they end up pricing, an ad supported model

is clearly more affordable. And one of the reasons that in relative terms television wasn't that expensive for us to watch is because it was all subsidized by advertising, say with most media, and so pivoting to like actually kind of tried and trusted model is clearly something they're willing to try. They think there are hundred million households out there sharing Netflix passport passwords. If they can convince those guys to go to a an ad supported approach, then

they clearly see some upside. Yeah, I'm glad you mentioned the password sharing crackdown. How does Netflix actually get those subscribers back? Is that enough to turn things around on the bottom line for them? It's a tough one. I mean, I think basically the places they need to look for growth are outside the US. Probably in the US, anyone who wants Netflix has got Netflix already at this stage.

You need to look to other markets. That's why they're massively expanding things like rein language content, because you know, Korean soaps are huge across Asia. If they can eat into some of those markets, and that they did add a million subscribers in Asia in the in the courts,

that is possibly the best opportunity for growth. In the US, it's a question of stasis and trying to be sure they didn't lose the subscribers they have, and certainly we did see the popularity of squid Game last year, but apparently not enough to dampen the bleeding that we saw on subscribers in that earnings report. Alex web great to have you on with us this morning. Thanks for this.

Alex Webb, Bloomberg Quick Take anchor and tech columnist for Bloomberg Opinion, and again checking Netflix shares in the pre market after that subscriber loss. Their down almost twenty six percent in early trading. Right now, SMP futures are down four points, Staff futures down six, Dance that futures down thirty three points. Just ahead, more U S weapons heading to Ukraine and the Biden administration punts on appealing the

travel mask rule top store in the morning. Just ahead, you're listening to Bloomberg Daybreak Bloomberg eleven three oh weather in the early clouds will give way to sunshine today with a high near sixty degrees. Will be back near sixty with more clouds than sunshine tomorrow, partly sunny near seventy by Friday. Right now forty two degrees in Central Park. Broadcasting live from the Bloomberg Interactive Broker Studio in New York.

Bloomberg E living free on to Washington, d C, Bloomberg nine one to Boston, Bloomberg one of six, one to San Francisco, Bloomberg sixty to the country, Sirius XM to A one nineteen and around the globe, the Bloomberg Business at and Bloomberg Radio dot Com. This is Bloomberg Daybreak. It's five thirty on Wall Street. Good morning. I'm Nathan Hager and I'm Karen Moscow, and we are just about four hours away from the open of US trading. Let's

get you up to date in the news. You need to know what the sour and we begin with streaming a giant Netflix, which is slumping after Tuesday's shocking earnings. You report and shares are currently down twenty six percent. We get the latest live from Bloomberg's Renna need a

young good morning, Ready to Good morning, Karen. Netflix unexpectedly lost subscribers for the first time in a decade, and the streaming giant sees another drop of two million users this quarter as competition continues to heat up, so in an effort to improve results, co CEO Read Hastings says Netflix will introduce a cheaper, advertising supported option for subscribers in the next couple of years. He also says the company will start to crack down on people sharing their passwords.

Live in New York. I'm gonna need a young Bloomberg daybreak, all right, we need to thank you. Sixteen more companies in the SMP report earnings today, including Tesla, Bloomberg Intelligence is watching how competition and global supply chain disruptions are testing the electric vehicle giants ambitious annual delivery goals well overseas, Nathan, The key Ukrainian port city of Mariopol is in jeopardy

as defenders say they are outnumbered by Russia. Ukraine is appealing to world leaders for help amid Russia is offensive in the country's southern and eastern region. Democratic Congressman Reuben Diego of Arizona tells Bloomberg's Joe Matthew the US is continuing to supply Ukraine with military aid, which should help in their fight in the Don Boss region. By US to trying them Jeff and and their own artillery as well as radars to actually counter the artillery is got

into contracts to know where it's coming from. Ukraine is going to be able to have some levels of the evening of the playing field and Democratic Congressman Reuben Diego speaking with Joe Matthew on Bloomberg Sound on Catch the program weekdays at five pm Eastern on Bloomberg Radio. Turning to the economy Now. For the first time since March of US tenure, real yields briefly turned positive this morning.

It comes as Chicago FED President Charles Evans says interest rates will probably rise above the neutral level, but it will hinge on weather inflation cools as expected. And in the nation's capital, Nathan, the Justice Department says it's ready to appeal a ruling by a Florida to struck down the Biden administrations and nationwide mask mandate on planes, trains,

and other public transport. The department said it will appeal if the CDC to Science Mass should remain in place pass the current assessment period that's due to expire May three. Future is this morning are moving lower. SNP Future is down about five points and down. Futures down five nasdack futures down thirty. The ten year treasury up twelve thirties. Seconds held two point eight nine percent, and they yield

on the two year two point five percent. Straight to head your latest local headlines plus a check of sports, and this is Bloomberg. Thank you, Caring five thirty three on Wall Street, forty two degrees in Central Park. They've cleared the accident on the northbound Van Waken College Point. We'll update you on the delays in traffic. First, Michael Bars here with more on what's going on in New York and around the world. Michael, thank you very much, Nathan.

It's one of the largest cash settlements involving the Catholic Church in the US. The Catholic Diocese of New Jersey has agreed to pay eighty seven point five million dollars to settle claims involving clergy sex abuse with about three hundred alleged victims. The agreement between the Diocese of Camden, which encompasses six counties in the southern New Jersey on the outskirts of Philadelphia, and the plaintiffs, was filed with

the US Bankruptcy Court in Camden. Mark Crawford, with a state chapter of the Survivor's Network of Those abused by priests, says. This settlement also includes the diocese releasing documents detailing the alleged abus, with allegations dating back in some instances to the nineteen fifties, says victims, you know who in the sixties, seventies and eighties has come forward, So these allegations, I know,

the fifties, sixties, seventies, you know, throughout several decades. Crawford says he's glad it has come to fruition Connecticut State police say a trooper who fired seven gunshots into a car and killed a man in twenty twenty after a high speed chase has been arrested in connection with the shooting. Authorities say Trooper Bryan North turned himself in into the

state Inspector General. The Chinese health officials has four million more people in Shanghai have been allowed to leave their homes. Ask your ownA virus quarantine rules ease that brings to almost twelve million people now who have been allowed to leave their homes. The tunnel fire areas ravaging parts of the flag Staff. Arizona area officials say it has consume more than six thousand acres. Patrese Horsemen, chairman of the Board of Supervisors for Coconino County, said the fire's rapid

advancement is caused by a dangerous combination of factors. The tunnel fire has been fueled by high winds and derived conditions in the county has deployed all available resources. We have requested assistance from the state of Arizona and the federal government. Patrese Horsemen with Coconino Counties as thousands have had to flee their homes. Global News twenty four hours a day on air and on Bloomberg Quick Take, powered by more than journalists and analysts more than a d

twenty countries. Michael barn Is, Bloomberg. Nathan thanks Michael on Wall Street time for the Bloomberg Sports that Day with John Session Nathan. Nineteen innings of baseball played at City Field and two wins for the Mets, who are a major league best nine and three. A double editor swep of the Giants, Mets won the opener five to four in ten innings. They had trailed four to one. Francisco Lindor had the game tying and winning hits. They finished

the sweep winning three to one. Max Scherzer has been as advertised, he's already three and oh. His first met started home was a near no hitter, lost it in a sixth inname, but Scherzer gave up just the one hit struck at ten and seven, and it's as for Garrett Call, his struggles continue. That the Yankees one in Detroit four to two. It was due to their bullpen,

especially Clark Schmidt. Cole couldn't get out of the second in and he had five walks and three starts, Call making thirty six million dollars as yet to win as e r A is over six. His manager is Aaron Boom. I really believe he's collis for a big ear for us, and uh you know he's gonna you know, carry us for a long stretch. Uh, you know, just hasn't gone his way so far. But um, I do feel like he's close. He's just got a you know, get locked in with his rhythm and and he'll take it from there.

And though the Yanks one, the hitting woes continued. Kyle hey Gasaoka's batting one oh three. Joey Gallo, who went over four with streak at fourth breakouts, is batting one. Another shutout win with the Rangers. That's three in a row first time since nineteen seventy three at the Garden thirty one stays for egors Histerician. Rangers got their fiftieth win three nothing over Winnipeg NBA Playhouse. Miami got forty five points from Jimmy Butler and went up to nothing

on Atlanta. Memphis beat Minnesota, New Orleans upset Phoenix. Both series are tied a one net Celtics game to tonight in Boston. John Stash Edward Bloomberg Sports. Thanks John seven on Wall Street time for the tri State Business Report with Bloomberg z Corey. New York City residents at more than three thousand buildings canna breathe a sigh of relief now that workers have struck a labor deal, ending the

possibility of a strike. More than thirty thou dorman superintendents and other building employees have negotiated a new contract with the Realty Advisory Board on Labor Relations. A union bidding to represent Amazon workers at a New Jersey facility has withdrawn its request. Local seven thirteen of the International Brotherhood of Trade Unions filed the petition last week, seeking to represent two hundred workers in an Amazon delivery station in Bayonne.

Two environmental bills are about to take effect in New Jersey, causing major changes in the way restaurants operate. A ban on plastic bags and foam containers and new regulations for takeout containers so forced restaurant owners to I'm more expensive environmentally friendly products that yourew Bloomberg Trying State Business Report, I'm ed Corey. Thanks on Wall Street. Bloomberg Radio is on the air from San Francisco to New York, London

to Hong Kong. Let's check in with our global news team for some of the top stories heard on our three hundred affiliate radio stations around the world. I'm Steve Potos, Kan ten Jen Winds in New York. We're talking about a union seeking to represent Amazon workers out of New Jersey facility withdrawing the petition for a vote. On Corny Donahoe, on kater h in Houston. Marathon Petroleum snaps up oil from Ecuador on Russian sanctions. I'm John Tucker for w

b d M in Chicago. I'm reporting that side and oil futures climbed to a record on global supply concern. I'm Joan Doniger telling Hey hy W listeners in Philadelphia about Mavis Discount Tires expansion. I'm Caroline had Comed Bloombag Dave Disiato and London. We're reporting on new diversity targets for UK listed companies being brought in by the Financial Conduct Authorities. I had Cory on w w J in Detroit. I'm reporting cars dled in Europe fell for a ninth

month in a row. Those are some of the stories our twenty hundred Bloomberg journalists and analysts are working on this morning around the world. It's five thirty nine on Wall Street. The following is an editorial from Bloomberg Opinion. By most measures, the U s economy is doing well, but not when it comes to inflation, and prices will keep rising as long as the economy faces an excessive demand over supply. So it's needed our steps to boost supply.

Policymakers should keep three broad approaches in mind. First, they should increase the rewards for work, especially for those with low incomes, for example by permanently expanding the earned income tax credit. Second, they should fight the trend toward excessive labor market regulation, such as absurdly strict occupational licensing requirements. And Third, they should reset immigration policy to welcome more workers,

especially those with skills in short supply. The current bout of inflation could be addressed solely by restraining demand, but that carries a risk of recession. Expanding the country's capacity to produce should be part of the solution. This editorial was written by the Bloomberg Opinion Editorial Board. I'm David Shipley. For more Bloomberg Opinion, please go to Bloomberg dot com. Slash opinion or op and go on the Bloomberg terminal.

This has been Bloomberg Opinion. Listen for Bloomberg opinion editorials every weekday. At this time, terminal customers can read more at O P I, n GO, SMP Futures down two points down, futures up one NASTACT futures down twenty. You're listening to Bloomberg Daybreak Bloomberg eleven three oh weather highs near sixty today with clouds giving away to sunshine. Will have more clouds than sun tomorrow. Be hind your sixty up to near seventy by Friday. Right now forty two

and cloudy in Central Park Markets. Headlines and breaking news twenty four hours a day at Bloomberg dot com. The Bloomberg Business Outland at Bloomberg Quicktape is a Bloomberg Business flash him good morning, I'm catering Moscow and US stock index future is a little change this morning. Investors weighing the impact of rising we yields on the appeal of riskier assets and Netflix putting a damper on the earning

season outlook following its earnings release. Those shares down almost twenty seven percent this morning, s and P futures again little change. Down futures are as well. Now's deck futures, you can count them into little change. The decks in Germany up one point two percent ten your treasury of eleven thirty seconds yell two point eight nine percent. The yield on the two year two point five six percent.

NIMEX screwed oil is at three quarters of a percent, or seventy eight cents and a hundred three dollars thirty four cents of barrel comics gold is down half percent or nine dollars thirty cents at nineteen forty nine sixty announce. The Euro one point eight five eight against the dollar British bound one point three zero three three, the yat at one twenty seven point nine five and Bitcoin this morning up seven tenths percent at forty one thousand, five

hundred eighty dollars. And that's a bloomberg business flash. Now here's Michael Barr with more on what's going on around the world. Michael Darren, thank you very much. Russia is launching an offensive in Ukraine in an attempt to slice the country into and I sellate part of the don Vis region. Russian forces assaulted cities and towns along hundreds of miles, and poured more troops into the country to

control Ukraine's eastern industrial heartland. The Justice Department says it may appeal a judge's ruling that's struck down the mask mandate on public transportation if the CDC the sides at the mandate is still needed. In MLB, the Yankees one, the Mets swept a double header against the Giants. The Nationals swept a double header against the Diamondbacks. The Red Sox one, the A's beat the Orioles to one. The game was just played before the smallest Oakland crowd of

just more than thirty seven hundred fans. And years. In the NHL, the Rangers and Bruins one. The Islanders lost in o t to the Panthers. Three. To Global News twenty four hours a day on air and on Bloomberg Quicktake, powered by more than twenty seven hundred journalists and analysts more than a hundred twenty countries. Michael Barr and this is Bloomberg, Nathan. Yeah, that attendants count is just crazy. Thank you, Michael. It is five nine on Wall Street

from the Bloomberg Interactive Broker Studios. This is Bloomberg Daybreak. We want to get more now and the disappointing first quarter results for Netflix. The shares are continuing to be punished in pre market trading, now down more than twenty six percent. Githa Wronganathan is back with US now, Senior

media analyst for Bloomberg Intelligence. Geitha, good morning. I know you've been positive on Netflix in the past, but after a subscriber loss of two hundred thousand and a projection for two million more, are you changing your case on Netflix? Good morning, Nathan, Yes, I think I am. Um, So, you know, obviously I'm going into the first quarter. You know, we knew it was going to be a fairly light quarter.

They had guided to some fairly tepid subscriber gains. But I think yesterday, you know, it was it really kind of came as a shock. I don't think anybody saw this even in their you know, kind of wildest imagination. But there seems to be now a fundamental question about the whole Netflix investment. Sis Um, you know they will first there's some questions about whether subscriber growth is going to be linear, whether it's kind of going to be

smooth or not. And I think, well, you have kind of gotten used to the fact that it might not be smooth, it might not be linear. But I think now we're we're kind of looking at more fundamental questions about what the total addressable market itself is and whether they kind of reached a maturation point in most markets.

What do you think about what the CEO Read Hastings had to say after the earnings yesterday that cracking down on passwords sharing is something that can help turn things around, that they can move into advertising, potentially a lower priced price point for subscribers to try to get some of the nutrition back. I think those are both Nathan uh,

you know, double edged swords. So with with fastword sharing, Yes, they didn't mention that about a hundred million households across the world, So in addition to the two million members, they have a hundred million households who are possibly sharing Netflix account. But then again you have to wonder, yes, you can start to crack down in a very phased, in a very cautious way. Um, but again, is that really going to be a game changer? Is that going

to move the needle in terms of subscriptions? Is that going to move the needle in terms of revenue. Yes, it could have some effect on the margin, but again I don't think anything is really going to have a material effect on the model, at least for another one to one and a half years. UM. So, yes, they did talk about some you know, new ways of increasing monetization,

of improving engagement, of increasing the top line. But again, I think the fundamental thesis itself here is there's a big question mark on that in terms of that fundamental thesis. Does that play out for other companies with streaming services? Thinking of Amazon Prime, Disney Plus, Apple Plus, are they in trouble as well? I think so. I think most of the big legacy media companies are are definitely now have to look at this. This is a cautionary tale

for all of them. Uh Now, with the tech giants, I think it's a little bit different. With an Amazon Prime or with an Apple. They do have very very deep pockets. They can go after different types of content to attract a wider subscriber base. And while Street is not necessarily going to punish them for being a lost leader simply because media is not you know, their bread and butter, it's kind of more like a side project or a hobby for the media companies. However, this really

is where the future is. And I think what now is going to happen is it's kind of got a force media companies to take a look and see what that addressable market is. So we were talking about a billion a billion, you know, global internet households. We were talking about the Netflix subscription numbers going from that two hundred million level to to you know, to a four hundred to or six hundred to an eight hundred million level eventually by twenty But now that that's that is

what is really in question here. And so now when Disney looks at their model, when all these other incumbents look at their model, we'll have to see that, you know, they'll have to examine the model more closely. And I think now there is that ceiling on what their total market could potentially be. Only about a minute left here, Githa. What about content? You know, Netflix has spent a ton on putting as many different types of shows and movies

out there. Is that going to have to change? So I think one thing that we've got, of course, Netflix has done a fantastic job, Nathan, in terms of you know, originals in terms of bringing so many different pieces of content, local content to their subscribers, but I think not all of it is resonating. They did talk about, uh, you know, doing more there. Yes, they're spending eighteen billion dollars, but I think they're going to have to try and experiment

in different areas. They're they're going to have to do more to see that, you know, content resonates and brings in more subscriptions. Thank you, as always, Githa Ranganathan of Bloomberg Intelligence, Senior media Analysts on the very disappointed quarter for Netflix and again the shares now down more than

twenty six percent. Karen, I take it you expected the court to turn this suit away because you tweeted if this lawsuit succeeds, I will post a video of myself eating every single page of the Internal Revenue Code, one by one. That is true. I felt confident in making that promise that I would not be eating a gigantic

ream of paper. Why were you so confident, Well, the position of the States was that it was unconstitutional for Congress to limit the state and local tax deduction, and Congress has been limiting the deduction for quite some time now. And there was never a constitutional question. More generally, Congress can control the tax code and grant or removed deduction with quite a bit of leeway. So I just thought

the position of the states was rather ridiculous. Go over what the Second Circuit ruled about some of the arguments that New York and the three States put forward. So there's two aspects of the argument that of note one. Again, the states argued that Congress was mandated to provide this deduction. The court had little time dismissing that because they traced the history and showed various circumstances under which Congress had

previously limited the deduction. Second, the states were arguing that Congress was trying to come and deer the states. That is, they were saying that the federal government was forcing them to change their tax systems. Usually in the law we look askance if Congress tries to force a state to

do something. But the court dismissed that argument as well, saying that you can still have an income tax if you want, you can still have property taxes if you want, just at the federal level the deductions might be limited. The federal government is not forcing you to do anything, and would you say that the best chance the States had was at the Second Circuit, where the States has sort of had a home court advantage. I don't think they had a chance in the Second Circuit or on

Mars Uh, this wasn't in. It doesn't matter right. The Trump administration opposed, Biden administration opposed that. I don't say any judge would faithfully accept the argument. So why do you think they continued to sue and try to appeal it to the Supreme Court. Well, historically the salt deduction has been understood as something that benefits the rich over the port. But in connection with the Act, which was highly politicized, you did have some Republican legislators describing the

salt cap as a way to hurt Blue state. Given that political posture, I think perhaps they believed they could score some political points through this lawsuit. I don't think they expected to win. Andy gray wall, a professor at the University of Iowa College of Law, speaking with the Bloomberg,

Shore and Grasso. Catch more of that interview, plus analysis of the latest legal news, by listening to The Bloomberg Law Show at ten pm Eastern Time, or subscribing to the Bloomberg Law podcast, and attorneys can find exceptional legal research and business development tools at Bloomberg law dot com. Right now, futures are little change that Jackson, Germany is higher up one point one percent, cag in Paris at one point four percent, and the foot Sea one hundred

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