Bloomberg Daybreak: August 9, 2022 - Hour 1 (Radio)

It looks like temperatures are gonna cool off quite a bit as we head to the remainder of the week. Today we're up around ninety five Tomorrow, it's eighty five and eighty five again on Thursday, than only five on Friday, with much less humidity, so we're definitely gonna be breaking the heat wave, Michael. Thanks for Rob. Con Ed is asking residents and parts of Brooklyn and Queens to curb their energy use as high heats herees New York City.

The utility asked homes and businesses and the affected areas to refrain from using power hungry appliances, including washers, dryers, and microwaves until the crew completes repair airs, and also requested that presidents only use one air conditioner. President Biden extended help and the FEMA check book to flood soaked

eastern Kentucky as he visited storm damaged areas. The president toward water demolished neighborhoods, where he immediately issued federal disaster declarations so they could rebuild from last week's deadly storms. After meeting with families impacted by the flooding in the town of Lost Creek, President Biden says he will be back to help them rebuild from the flooding. All Americans, everybody has an obligation to help. We have the capacity to do this. It's not like it's beyond our control.

The President also preaching unity in the response to the disaster. The Pentagon says it believed that as many as eighty thousand Russian troops have been killed or wounded and under six months of fighting in Ukraine. Under Secretary of Defense from Policy Colin cull says, it's pretty remarkable considering that the Russians have achieved none of Vladimir Putin's objectives at the getting of the war. China has extended military drills near Taiwan's airspace and sees today Taiwan says China is

using war drills to plan a future invasion. Beloved actress and singer Olivia Newton John has died. She was famous for her hits like letting Me Be There, Physical and her breakout role in Greece. Olivia Newton John was seventy three 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 barn this is Bloomberg, John Michael, thank you, guys.

I'll find Tanda all wall Street. That's time for the Bloomberg Sports Update. And good morning, John Stash all Right, good morning, John Tucker. When the Yankees were flying high first half of the season, they were relatively healthy. That's no longer the case, John Carla Stanton on the injured list, those Luis sevareno, Michael King done for the year. And last night in Seattle, Matt kar Finger foul the ball off his foot. It's a fracture that might end what's

been a remarkable season for Carpenter. He had hit only seven home runs over his previous two seasons. He joined the Yankees in late May. His slugging percentage since then is the best of the major leagues. Yankee beat the Mariners nine to four to end a five game loving three. Josh Donaldson was his best game of the season. Two doubles, a home run. He drove in three, so did Andrew Benn and Tendie, who had struggled since his acquisition. Jamison

Tyn won seventens, allowed only three hits. He's now eleven and two. And City Field Mets beat the Reds. They made a thirteen of their last fifteen to run homer in the first anybody Darling Marte and the Mets put it away in the eighth. The pitch sw'ar gonna drive deep too, right back those at Kino under the track here the fence reaches up. If bounces off his glove. If the score from seconders tata here comes big deal around third to score take it for third. A stink.

He's in with a triple. And that's how a five to work play. And that was the final w CBS to call the Tyler nake from triple. Chris Bassett worked eight in did not allow an earned run. The Let's now lead the Braves by seven games. That key Jet has suffered an injury training game Tapla McKay Beckton heard his knee, same one that kept him out last season. He had an m R I now headed for further tests. An eventful day for the Giants. Several fights broke out

that does sometimes happen at training camp. Linebacker Take Crowder and center John Feliciano among those involved. Giants have their preseason opener Thursday at New England. John stashually went Bloomberg spots John, all right, thanks John, and just the cash open Wall Street. Down futures right now, they're up sixty seven points. He has to be evening futures up about eight points and an asset features twelve points higher. And as we look at the two year yield three twenty one,

the ten year to seventy eight, this is Bloomberg. Dame Brad just a Hand will speak with Wendy Schiller to enter the Talment Center for American Politics and Policy at Around University for analysis and perspective on the FBI raid At the former President's Maral longer was State Markets, headlines and breaking news twenty four hours a day at Bloomberg dot Com, The Bloomberg Business at and at Bloomberg Quicktake, She's a Bloomberg Business Flash, Nathan Hagar. Futures are holding

steady this morning. The dollar is slipping as investors bet strong earnings can continue despite recent disappointments. We check the markets every fifteen minutes during the trading day on Bloomberg. SMP futures right now have seven points. Stout futures are hired by sixty nine NASDAC futures, a gain of eleven points. The tenure Treasury is down seven thirty seconds. The yield two point seven eight percent. Yield on the two year

is three point to one percent. Nimex Screwed is down one point two percent, down a dollar eleven at eighty nine dollar sixty five cents. A barrel. Comic Gold is up one tenth percent or two dollars fifty cents at eighteen o seven seventy an ounce. The euro one point zero two four five against the dollar. The en is at one thirty four point nine zero. That's a Bloomberg is this flash? Now? Here's Michael Barr with more on what's going on around the Girl Up the morning, Michael,

Good morning, Nathan. The FBI has searched former President Donald Trump's from Mamara Lago with State as part of an investigation into whether he took classified records from the White House to his Florida residents. Trump says agents opened up a safe at his home and describes their work as an unannounced raid that he likened to prosecutorial misconduct. Will have more on this straight Ahead. Teachers and staff returned

to work today at public schools in Yuvoldi, Texas. It follows the deadly mass shooting in May at rob Elementary School. In baseball, the Yankees beat the Mariners nine four, The Mets beat the Reds five one, the Nationals and A's lost. The Orioles and Giants won Global news twenty four hours a day on air and on Bloomberg Quick Take, powered by more than twenty seven hundred journalists and analysts and

more than a hundred twenty countries. Michael Barr and this is Bloomberg, John and Michael, thank you, five nineteen at Wall Street. We are in live from the Bloomberg into Anto Broker Studios. This is Bloomberg Daybreak. As Michael mentioned, stunning development and the ongoing legal battles involving former President Trump. For the first time in history, a search warrant executed at the home of a former president, and let's find out more this morning, joined by Joe Matthew, the host

of Bloomberg's Sound On. Joe, thanks for me with us. There are a couple of ways that the law enforcement can get stuff that they want, either through a subpoena or a search warrant, and the distinction is important here, Well it is, and this is you know, we want to be careful here in the way we're framing this. People are using the word raid because that's what Donald Trump called it in his statement to the media last night. This was a search warrant facilitated by the Secret Service,

So I just want to be clear. They weren't knocking down doors, there were no battering rams. People were not taken into custody. And this brings us back to January when the National Archives first went in to retrieve fifteen boxes at that point of documents and items from our a lago that should have been turned over when Trump

left the White House. At that time, they said they were continuing to search for additional records, and they have been asking the Trump former White House, the former administration to hand these over ever since. So what we saw yesterday, just to be clear, was was a very deliberate search facilitated by the Secret Service, approved by a judge. And you cannot get a search warrant like this unless you not only make the case of probable cause, but you

also have to be specific about what you are looking for. Now, granted they took a lot of boxes out of there, they got into the safe, they could be looking for as little as one document, as far as we know, if it is top secret, that's all it would take to trigger that search yesterday. Is it implicit that not going the root of a subpoena, they thought that they wouldn't get it. Otherwise that's possible. We don't know this.

We have to remember, of course, that there have been a lot of reports about Donald Trump disposing of documents, tearing them up, flushing them down the toilet, and in fact, some of the documents that were provided to the National Archives at the beginning of the year, as I mentioned in January uh in fact had been taped back together, they were torn up, thrown away, and they had to be reconstructed at the White House. All of that violates

the Presidential Records Act. Do we know what the documents they were looking for possibly relate to? We We really don't. And this is where it gets interesting here, Like, look, just about every administration people should also understand this have had some violation of the Presidential Records Act. The Washington Post reminds us this morning, Bill and Hillary Clinton had to return twenty eight thousand dollars in furnishings that they said we're gifts were actually property of the White House.

We've just never seen anything on this scale. So it does imply that this is important. This is a top secret memo, It could be a series of documents, and it also John could be tied potentially to the Department of Justices January six investigation. That remains completely unclear to us. And we have to be honest about how little we know. Okay, so what is the former president and what are his supporters saying at this point? Well, it's know it's a

doom scroll. This morning on Twitter, Kevin McCarthy was quick to tweet, this is the Minority leader that he promises an investigation into this. He will be specifically investigating Merrick Garland. He tweeted to him, he said, put the date on your calendar, assuming that he becomes speaker after the mid terms. New oversight to the FBI Marjorie Taylor Green among others. Uh, in Trump's uh ecosphere, if you will, are calling for defunding the FBI, not unlike defund the police. Now this

is the new defund the FBI. Uh. Matt Gates, another Trump supporter congressman, refers to January six as the FED surrection. So this really reinforces this allergy that Trump supporters have to federal law enforcement. Well, can the former president metaphorically set fire to the Justice Department with his supporters to evade responsibility? Could I ask the question again, could he do what? Could he metaphorically set fire to the Justice

Department at this point? Well, if he got reelected, I suppose, but I'm not sure. If you mean Donald Trump, I'm not sure what's way he would have over the Justice Department right now. If Republicans take the majority in the House, you're gonna see a lot of hearings. But that does not necessarily do anything to change the case for Donald Trump. And what does it do to change the case, possibly

for the general election. That's a great question, and it's pretty difficult to roll out more than two years at the moment. Here. I would remind you, though, that Christopher Ray, the FBI director, was selected by President Trump after he fired Director Comey. And uh, although you would not necessarily expect, you know, such a bold move a hundred days before the midterm elections for violating the Presidential Records Act, never mind the elections. All right, Joe, thanks very much. Well,

before you go, what do we look for next? Well, gosh, that's a great question. Look, Donald Trump would also it strikes me have a copy of that warrant. I think that we will. We will have to learn at some point what it is they were looking for. But knowing that they have laptops, hard drives, documents, and so fourth, there's gonna be weeks, if not months of downloading and ingesting data, could be some time before we understand, unless, of course, the FBI is a little leaky, and then

we might know as soon as today. Joe, always a pleasure, appreciate it, Joe Matthew host a Bloomberg Sound Dot. As we look at markets right now ahead of the cash open on Wall Street. The futures indicate the higher open the dowl right now Dale futures of sixty one points, that's a rise of two tents of a percent. Smp E many futures there are up six points, that's up to tens of a percent. And the tech heavy nazac

E many futures right now four points higher. And as we look at treasuries, the two year you have three, twenty two, the ten year year to seventy eight. You are listening to Bloomberg Daybreak. Day Break brought to you by Pepack Private Wealth Management. Pepack Private Wealth Management knows that a portfoligo is more than a collection of assets.

It's a path to your future. Because the Pepack Private dot Com begin your financial legacy today, broadcasting live from the Bloomberg Interactive Broker Studio in New York, Bloomberg Loving to Washington, d C. Bloomberg to Boston, Bloomberg one O six one to San Francisco, Bloomberg No. Sixt to the Country, Sirius XM Chado one nine team and around the globe, the Bloomberg Business app and Bloomberg Radio dot Com. This is Bloomberg Daybreak. He has five thirty on Wall Street.

Good morning, I'm John Tucker and I'm Nathan Hagar. We are about four hours away from the open of US trading. Let's get you have the data on the news you need to know at this hour. Beginning with a stunning political development overnight, former President Donald Trump says federal agents rated his residence at Mara Lango. It's part of an investigation into whether the former president took classified documents from the White House. We get analysis from Robert Mints, partner

at mcarter and English. It's absolutely shocking and completely unprecedented. This to require approval from the highest levels of the Department of Justice. Merrick Garland, the Attorney General himself, would certainly have had to have been a part of this decision, and I've signed off on this before going to a federal judge. Attorney Robert Mint says the search warrant has

quote the nuclear bomb in the arsenal of prosecutors. The search stems from a National Archives request about the transfer of presidential documents tomorrow lago and we get more from Bloomberg political contributor former GOP strategist Rick Davis. There is

a penalty associated with violating this provision. It says that if you're convicted of violating this rule of holding these documents, especially top secret documents, you'll forfeit your office and be disqualified from holding any other office under the United States. Rick Davis sends this investigation adds to the former president's legal worries, which include a separate grand jury probb efforts

to overturn the twenty election. Donald Trump anytimes says he's being targeted to a rail another run for the White House. More on this developing story throughout the morning here on Bloomberg Radio. But first, let's turn to the markets for a moment. Right now, we have futures. They are mixed, amptery yesterday's session. What saw on the SMP five punder give up a one percent game to close little change. Treasury yields are higher, Stocks in Europe and Asia are mixed,

and the dollar weakening this morning. Shares of Novovas genre down about thirty percent in early trading. That's after the drugmaker slashed its revenue forecast. Bloomberg's Ornita Young joins its live with the details. Good morning, Grenita, Good morning, Nathan. Novavax expects sales this year to be between two billion and two point three billion dollars. That's about half of the earlier estimate of four billion to five billion dollars

for the year. And it's all because it's COVID nineteen vaccine, which already trailed competitors getting to market, failed to live up to expectations. Demand for its vaccine fell both in the US and globally. Novovax also reports second quarter losses wider than analyst xtations. Live in New York, I'm gonna need a young Bloomberg daybreak. We need to thank you. Futures are mixed this morning, SMP futures up three point, staff futures of forty seven, nastack futures down five points.

Local headlines in a check of sports. Next, this is Bloomberg, alright, Thanks on Wall Street. Time to bring in Michael Barr with Moore of what else is going on in New York and around the world, John, thank you very much. Sarah Khan ed as asking residents and parts of Brooklyn and Queens to curb their energy use as high heat

sears New York City. The utility reduced voltage by eight percent protect equipment while crews make unspecified repairs and several communities that are home to about a d nine thousand customers. A heat advisory is in place for the area until eight pm tonight. President Biden and First Lady Jill Biden toured the devastation in eastern Kentucky where these thirty seven people were killed during the flooding last week. After a meeting with families impacted by the flooding and the town

of Lost Creek. President Biden vows to support Kentucky however long it takes to recover from the flooding. I don't want any Kentucky and telling me you don't. You don't have to do this for me. Oh yeah, we do. You're an American citizen. We never give up. We never stopped, We never bow, we never bent. We just go forward. And that's what we're going to do here. The President is sending FEMA money for people to help rebuild. China

has extended a schedule of military drills around Taiwan. Bloomberg has had backs to reports the US is, saying Beijing needs to be careful. President Joe Biden says he is not worried, but is concerned, while spokesman Karine Jean Pierre says they can't continue the way they are. They are provocative and irresponsible and raise the risk of miscalculation, and Under Secretary of Defense for Policy Call and Calls says,

the US is not going to pull back. What's important for US right now um is to make sure that Beijing understands that our forces in the region will continue to operate. Also as China should be very careful to protect against any miscalculations. In San Francisco, I'm at Baxter, Bloomberg Gay Break, voters would choose a Republican nominee for Wisconsin governor today. Tim Michael's, backed by former President Trump, is up against former Lieutenant Governor Rebecca Cleefish, backed by

former Vice President Mike Pence. The winner faces Democratic Governor Tony Evers. Global News twenty four hours a day on air and on Bloomberg Quicktake, powered by more than twenty seven hundred journalist and analyst more than a hundred twenty countries. I'm Michael bar This is Bloomberg, John Michael, Thank you on Wall Street. That's time for the Bloomberg Sports Update.

Good morning, John Stann Show. All right, John, much needed win for the Yankees They've just gotten swept in St. Louis had lost five and a row only nine wins in twenty five games. They won in Seattle nine to four. Josh Donaldson had a big game for it, two doubles, a home run, drove in three, and Aaron Judge Homer to the ninth. That's number forty four. Jamison tyone went to eleven and two. But the win is costly. Matt Carpenter broke his left foot fouling a pitch off. It's

obviously not ideal. I mean, you know, treaty pretty disappointing, but uh, you know, I've my mindset is that this won't be the end for me here this year. I mean, I'm hopeful that I can come back and contribute, and you know I haven't don't have a timeline yet, but I'm hopeful for the best. Carpenter has been amazing since his debut in late May, batting over three hundred fifteen

home runs. Speaking of amazing, Mets minute thirteen oh last fifteen at City Field five one over Cincinnati before the Reds got him out. That's led to nothing on the Starley Marte Homer, Chris Bassett sharp and Eightian ings of the Mets now leave the NL East by seven. At Jets training camp, tackle McKay Beckton reinjrew the knee that

kept him that most of last season. Several reports that Kevin Durant met with Josiah and told the Nets owner either trade may or fire coach Steve Nash and general manager Shawn Marks, and SI has already said he's not firing them, so the trade talks continue. With Boston, Miami and Toronto scene is the most likely destinations for Durant, who has yet to start the four year, near two hundred million dollar contract he agreed to a year ago.

It's not known why he wants Nash out. The feeling had always been that Katie was the one who wanted the Nets to hire him. John Stash a Bloomberg Sports John all right, John, thanks very less. He's five thirty seven old Wall Street. Time Now for the Dry and State Business Report. Here's Ed Corey. New York City's hotel industry is starting to come back from the dark days of the pandemic. Hotel occupancy tax revenue more than quadrupled to one forty million dollars from the second quarters of

twenty one. Second quarter of two total near levels seen in the second quarter of two thousand nineteen, riders are not returning to New York City subways and enough numbers to stop a worsening cash crisis. Officials from the mt A planned to sit down with lawmakers and labor groups to begin negotiations on new sources of funding and cost cutting. They say it's too early to talk about specific options.

In New Jersey, the governor has signed a law prohibiting tax preparers from engaging in certain practices involving refund anticipation checks and loans. It includes prohibiting preparers from requiring clients to enter into a refund anticipation check agreement to complete a tax return. At your Bloomberg Tri State Business Report, I'm Ed Corey, Thanks, said five thirty eight on Wall Street.

Bloomberg Radios on the year from San Francisco to New York, London to Hong Kong, and let's check in now with their global news team for some of the top stories heard on our three hundred affiliate of radio stations around the world. I'm Steve Potaskan on k X in Los Angeles. We're talking about the co founder of Whole Foods starting a chain of vegetarian restaurants and a wellness centers, first in southern California. Um corneys ho on ktr H in Houston.

Whole Foods co founder John Mackie is planning to open a chain of plant based restaurants and wellness centers and Gina Servetti and for Double Dum in Chicago. I'm reporting that new deliveries of Boeing seven Dreamliner are finally set to take off again. I'm Stephen Carol and Bloomberg d a BJ to the radio in London. We've been reporting on British retail sales rising in July, driven by higher prices. Hadds hot Weather. I'm at Corey on w T A

M in Cleveland. I'm reporting Amazon has opened its Brooklyn, Ohio delivery center. It's five thirty nine on Wall Street. The following is an editorial from Bloomberg Opinion. This editorial was written by the Bloomberg Editorial Board. The Bank of England as startled analysts last week with its unexpectedly bleak

assessment of the UK's medium term prospects. Its main projection shows a shallow but protracted recession with essentially no growth in output over the next three years and inflation peaking at more than thirteen percent before the end of twenty two. Officials rightly emph the size the uncertainty attached to such projections. Yet when all is said and done, one thing stands out. With Britain politically paralyzed and still awaiting the appointment of

its next prime minister. This could hardly have come at a worse time. In recent weeks, the Tories contenders to lead the country have been mostly debating their rival brands of conservatism. But the UK's looming economic challenges demand practical solutions. Whichever candidate prevails in September will need to start delivering them.

This editorial was written by the Bloomberg Editorial Board. For more Bloomberg opinion, please go to Bloomberg dot com, slash Opinion or O P I N go on the Bloomberg Terminal. This has been Bloomberg Opinion and Bloomberg Opinion editorials can be heard every week day at this time at terminal. Customers, he can read more at OP I n go. This is avery. They are futures. This morning turn mixed the down futures of SMP futures of three futures right now

down seven points just ahead. Dan Morris from the begin peint parrat Ball, Markets, headlines and breaking news twenty four hours a day at Bloomberg dot Com, the Bloomberg Business apt and at Bloomberg Quick Tape. This He's a Bloomberg Business Flash. I'm Nathan Hagar. Futures are holding steady this morning. The dollar is slipping. His investors at a strong earnings performance can continue despite recent disappointments. European stocks are falling

this morning. We check the markets every fifteen minutes during the trading day. On Bloomberg SMP futures are up five points down, futures up fifty nine. Nastack futures are lower by two points. The decks in Germany's down six tenths per cent. The cat in Paris is lower by two tenths of one per cent. The tenure Treasury is down eight thirty seconds. The yield two points set an eight percent yield on the two year three point to two percent. Nim X screwed is down eight tenths per cent, or

seventy seven cents. At barrel comex sold little changed that thirty cents eighteen o five forty announced the euro one point zero to three against the dollar, the pound one point two one two two. The end is at one thirty four point nine zero a bitcoin down two percent, tree thousand, six hundred dollars. That's a Bloomberg Business Flash. Now here's Michael Varr with on what's going on around the world. Michael Nathan, thank you very much, and explosive development.

Federal investigators searched the Florida residents of Donald Trump as part of an investigation and to whether he took classified documents from the White House when he left office. Trump was in New York City at the time at the search. More on this story straight ahead. The US announced four point five billion dollars in additional direct budgetary support to Ukraine. You will also add one billion dollars more in military

aid drawn from existing Pentagon inventory. In baseball, the Yankees beat the Mariners nine four, the Mets beat the Reds five one, The Nationals and A's lost. The Orioles and Giants won Global news twenty four hours a day on air and on Bloomberg Quicktake, powered by more than twenty seven hundred journalists antilists. More than a hundred twenty countries. Michael barn this is Bloomberg. Nathan. Okay, Michael, thank you. We're coming up to five forty nine on Wall Street

Line from the Bloomberg Interactive Burger Studios. This is Bloomberg Day Break time now for our daily Bloomberg Law Brief, exploring legal issues in the news, and today we are looking at the FBI search of former President Donald Trump's Marrow Lago residents. Agents come through his Florida home as part of an investigation into whether he took classified documents

from the White House. For more on the legal and political implications, Bloomberg's June Grosso speaks with Robert Mints, partner at McCarter in English, and Bloomberg political contributor Jeanie Schanzano. Let's listen in. People have criticized Merrick Garland, the Attorney General, for going too slow on this investigation. He keeps saying that no one is above the law. Is this a signal I think there's no turning back from this that

the gloves are off? Oh? Yes, this really raises the bar for federal prosecutors, which is about to suggest that every time a search warrant is executed that there will necessarily be federal charges brought down the road. Remember that this only means that there was probable cause of a

violation of federal law at a particular location. But probable cause is a long way from beyond a reasonable doubt, which is what prosecutors would have to satisfy in order to charge the former president or frankly, anybody else with a crime based upon this evidence. So it's a tool that prosecutors used to gather evidence. But on the other hand, it is the most intrusive and heavy handed tool that

prosecutors have in order to gather evidence. And again, it's not something that a judge will sign off on lightly. He or she would have to be satisfied that not only the evidence was there, but there was some basis to a too that a less intrusive means such as as Satina, would not give the prosecutors the evidence they are seeking. Jenny, I'm wondering, looking at the statement that Trump has written, does he see this as a political

opportunity He does? I mean, I think this is part of the sunny aspect of this is that this information was released by Donald Trump via his pack and much of what we're hearing, and we have heard for some time is that if he decided to announce early that he was going to run for the presidency in four it was likely going to be for legal reasons and

not necessarily for political reasons. And you know, another aspect of this, and again this is so early, we have to be very careful here, is that if there was a conviction as it pertained to what we think that they are looking into regarding these records, the person who was charged and if that was Donald Trump at the big if would not be able to run for office in the future. So that's another really really important aspect

of this story. And again I don't want to get too far afield because of course we're still very early and don't have a lot of information as to exactly what they were looking for, and even if it pertained to the president, if there was going to be, you know, anything pertaining to him. But that's another aspect of this

record sort of charging. And that was Bloomberg political contributor Jeanie Schanzano and McCarter and English partner Robert men speaking with Bloomberg's June Gross catch More plus analysis of the latest legal news by subscribing to the Bloomberg Law podcast or downloading the show at Bloomberg dot com, Slash podcasts, and attorneys can find exceptional legal research and business development tools at Bloomberg Law dot com and on the Bloomberg

terminal at b Law. Go John, all right, Nathan, thanks very much. It is five fifty two on Wall Street. Let's shift our focus now to the markets futures. They have turned mixed, too little change as traders to wait Wednesday's inflation report, trying to gauge the path of the federal reserve tightening ahead. Well, let's get you set up this morning for the trading day ahead with Daniel Morris, the chief market strategist at PMB Paraba. Good to talk

to you. Thanks for me with US. Rate expectations have jumped, so why hasn't it resulted in the reversal inequities. Yeah, that's what's interesting about what occurred so far. Certainly in contrast to the pattern that we had at the beginning of the year. Then the story was higher than expected inflation, higher levels of FED fund raids, and then certainly a compression in the multiples, notably for gross stalks. That's not happening yet, but it seems to me still the clearest

risk out there. You know, it'd be great if we got a pleasant inflation surprise on Wednesday, that the numbers came in lower than expectations. That hasn't happened in a very long time. But barring that, even if they come in as expected, that number is still pretty high. It's going to be over six percent for core uh core inflation core CPI, which then suggests the Fed has got to do more, and they've been signaling that anyway, and

the markets generally just seemed to ignore that. But that's the key risk, and at the end of the day, it's how much companies are making. As far as the earnings analysis goes, it has not been a bad earning season. What is your take, Well, it wasn't certainly not a great season, but there were so many worries coming in. You know, certainly a lot of people anticipating bigger margin squeezes given how high inflation has been and all of

the problems. We know that you have still supply chains and labor, but earnings, you know, still being expectations just a parenthesis, though they were even better in Europe, and that doesn't happen very often. So when a highlight the fact that European corporates again even with the bigger head winds arguably that they face, also did much better than expected. And I think that's what supporting the markets now despite the rate rise. It's just we'll see how long that

after effect from a good earning season last. When we're gonna have otherwise what we think is going to be kind of persistently rising expectations for policy rates, and expectations for policy rate will also drive the dollar presumably higher because it is about rate differentials. And what does that do to the multinationals in the US. Does it mean

you favor more domestically oriented stocks. I mean that makes sense, and I think it is also part of the explanation for how well European companies did because with the week hero, you know, certainly being able to export at better prices. But then for US companies, it would argue for an orientation towards domestic oriented perhaps small cap stocks, uh that they're not going to be facing that currency headwind. Okay, the c P I tomorrow, what is that going to

signal as to where the FED has to go? Are we anywhere near peak inflation in the United States, Well, we should be, but we also need to be careful about focusing too much on the current monthly invation. I mean, don't forget that monetary policy works with the twelve eighteen month last. So what the head's already done, We're really not going to see the full effect of that for

probably a year. So if and we don't think the head is doing this, but we also don't want to think that, you know, depending on the number we get this month, that that should lead to a big change in the policy. They've got to calibrate what they're doing now and they affected that on inflation and a year from now, and you know, just to acknowledge the challenges that they face. That's not an easy thing to do.

Is there a pivot to head for starts that you see what You've got to mention at some point, given how far we think rates are going to continue to go up, you know, the whole point to that is to slow growth, because that's really the only way that they're going to be able to get inflation back down to target. You know, some of these transitory factors really should prove to be transitory, but there's still well, there

is now a lot of entrenched inflation. The only way to get that down, particularly wage growth, is through slower growth, and that's got to hit profits at some point. So it's just when is the market going to start paying attention to that is really going to be the heat question in terms of performance over arguably the next year. Are there alternatives first stocks at this point? Well, yeah, that's a good alternatives that worked well exactly. Yeah, alternatives,

whether they're going to go up or down? As the question, uh, you know, we're still we're actually more short duration than we were, so certainly don't see treasuries uh as as an opportunity. Uh you know, basically in terms of our

equity allocations are actually outside the US. On one hand, the opportunities outside the US that this is the market where you're going to have the biggest increase in rates, you probably want to live for markets where you don't have such big increases in rates are overweights, are U T. E. M A Your China specifically in Japan. We also like Eurozone investment grade credit where you've got pretty good valuations,

are high spreads relative to the risk. But you're right, it is selective at this point, perhaps having to wait for a better entry in the months ahead. Dan always a pleasure appreciated Daniel Moore's chief Market Strategies to be a be paraba with us this morning as we look ahead to the market open this morning. Futures Indicata mixed open down futures right now there are thirty eight points arisive about a tenth of a percent. The SMP Emitate futures up only a point, and the tech heavy NANCA

futures right now they are down nineteen points. That's down two tenths of a percent. Ten Ure yield to seventy eight or two year at one. You're listening to Boomberg Daybreak