Bloomberg Daybreak: February 01, 2023

the dead limit. Vice President Harris will attend today's funeral to Tyree Nichols plus and battled Congressman Santos recuses himself from two House committees. Michael Barr more Ahead, I'm John Stash Aaron sports Lebron James and the Lakers beat the

Knicks in overtime. Two NFL teams named new coaches. That's all's trendy Ahead on Bloomberg Daybreak on Bloomberg eleven three on New York, Bloomberg Washington, d C, Bloomberg one oh six one, Boston, Bloomberg nine sixties and Francisco Sirius Exam one nine team and around the world. Old on Bloomberg Radio dot Com and via the Bloomberg Business App. Good Morning, I'm Nathan Hagar. And I'm Cameron Moscow. Here are the stories we're following today. We begin with today's highly anticipated

decision from the Federal Reserve. A twenty five point basis rate hike is expected, but what will the messaging sound like from Fed chair J Powell. We get a preview from Bloomberg Economics correspondent Michael McKee. Investors generally think the Central Bank will raise rates a quarter percentage point now and again in March, but then stop. By November. Futures markets say they'll be cutting rates. That's not a good look for Powell and company, who worry inflation isn't beaten

yet and with China reopening could flare again. So expect the Fed statement and Powell in his news conference to recognize the outlook has improved, but pushed back on any thought that means a change in policy yet. Michael McKee Bloomberg Daybreak. All right, Mike, thanks and joined us for live coverage of that FED decision starting at one thirty p m. Eastern with a special edition of Bloomberg Surveillance.

Well ahead of that decision, Nathan, as we said, stock futures are lower, and that's after a month that saw the s and P five huttered game six percent. Katerina Semonetti, Senior vice president and Morgan Stanley Private Wealth, says the ft is not the most important thing for the markets right now. We think that there is a lot more volatility ahead and in our view, the story for twenty three is not the story of the fat or instlation.

This is the story about the earning Since specifically earnings revision, Katerina Semonetti had Morgan's Stanley Wealth used last month stock rally as premature optimism. Well, earnings are disappointing. This morning, Karen Snapp has forecast its first ever quarterly revenue decline, and we get the story from Bloomberg's Charlie Pellett. The company sites a florry of changes to snapchats advertising products that may be disruptive to the social media apps business.

Snap is making changes focus on its direct response business, adds the prompt users to take an immediate action like buying a product or signing up for an email list. Snap, along with competitors like metal platforms, Facebook and alphabets, Google, are also still grappling with a change to iPhone privacy policies from Apple that made it more difficult to personalize and track the success of ads on their apps in New York. Charlie Pellett Bloomberg Daybreak, All right, Charlie, thank you.

Snap shares down more than fourteen percent in early trading, and there's some other stocks in the move this morning, including Advanced micro Devices up more than three percent. The chipmaker gave it better than feared sales forecast for the first quarter, and shares of electronic arts down more than ten percent. The video GameMaker gave a disappointing outlook thanks to a six week delay releasing a highly anticipated Star Wars game, and the earnings continue to roll in today, Karen.

With more than two dozen companies in the sporting meta platforms headlines today's list, we get a preview from Bloomberg's Tom Busby. Well. The big focus for investors today not so much plans for and costs related to its ambitious metaverse initiative, but on advertising revenue on Facebook and Instagram. Analysts predict a sales decline of six percent that would be the third decrease in as many quarters, for earnings per share of two dollars twenty six cents revenues of

thirty one point six five billion dollars. Tom Busby, Bloomberg Daybreak, All right, Tom, thanks So the phone out continues from last month's malfunction at the New York Stock Exchange. Investors are trying to recoup their losses, but it might not be easy. Let's get the details Live with the Bloomberg Steve Rappaport, Steve, good morning, Good morning, Karen and Nathan. Losses from that Wall Street snap who could amount to

millions of dollars. With thousands of claims piling up, the Stock Exchange sets aside half a mill each month to cover unexpected disruptions. People familiar with the matters say the claims will likely exceed that amount under NYSC rules. Yesterday was the deadline to evaluate the claims and decide how much to pay. The Exchange blames human error for the malfunction that canceled thousands of train transactions, affecting hundreds of securities.

Live in New York. I'm Steve, rep Report, Bloomberg day Break, Thank you. Step in India today, the sell off in a Donnie stock continues as a Donnie Enterprises plunges by thirty percent. All ten of the stocks tied to billionaire Gatama Donnie are slumping today. The sell off has now reached more than eighty billion dollars across the group's equities. That's after short seller Hindenburg issue to report accusing a Donny of inflating revenue. We'll back here in the US

Nathan Politics f in focus. President Biden and House Speaker Kevin McCarthy are set to meet at the White House to discuss raising the dead limit. We get a preview from Amy Morris and our Bloomberg newsroom in Washington. A White House memos as the President will pose two questions to McCarthy, including quote will the Speaker commit to the Bedrock principle that the United States will never default on

its financial obligations. The President will also ask when will House Republicans release their budget with details on what budget cuts the GOP wants in exchange for raising the dead ceiling. McCarthy dismissed the memo as political games. President Biden has repeatedly said he would not negotiate over raising the death limit. In Washington, I'm Amy Morris, Bloomberg Daybreak. Thank you, Amy. Let's turn to the presidential race now and more signs

of a slow start for Donald Trump. The latest filing show the former president has raised less than ten million dollars since he announced his third presidential run in November. Well at the same time, Nathan, the Republican presidential field is about to get bigger. A source towns Bloomberg News that former South Carolina Governor Nikki Hayley plans to announce she's running for president two weeks from today. Hayley served

as former President Trump's ambassador to the United Nations. Straight Ahead, your latest local headlines, plus a check of sports, and this is Bloomberg. It is twenty six degrees in Central Park. These early morning flurries will give away to sunshine today and hid the upper thirties. We get down to the upper twenties tonight under a partley cloudy sky. Time not to take a look at some of the other stories making news in New York and around the world with

Bloomberg's Michael Barr, Good Money, Michael, Good Morning. Nathan. Vice President Harris plans to speak at Tyree Nichols funeral today in Memphis. Nichols died three days after he was beaten by police. Also attending today's funeral will be Reverend Al Sharpton. People from around the world watch the video tape of a man on all unprovote being beat to death by offices of the law. Reverend Sharpton, along with Nichols family, say the nation needs to make sure laws are changed

to prevent this from happening again. The House is set to vote as early as today on the resolution to remove Democrat Ilhan Omar from the Foreign Affairs Committee. Speaker Kevin McCarthy has persuaded at least two Republican holdouts to support the move. The Rules Panel advanced to the House floor resolution saying that the accusations that Omar, who is Muslim, had used anti Semitic tropes in past comments, for which

she has since uponlogized. Embattled New York Congressman George Santos said that he will temporarily step away from his House committee assignments. The Long Island Republican says that he is facing investigations over his personal and campaign finances, as well as calls for his resignation. Speaking to reporters, Santos said he will be cleared. I have nothing at hide. Santos was assigned to the Committee on Small Business and the

Committee on Science space and technology. Travel conditions remain a mess today because of a monster storm stretching from Texas to West Virginia. It is expected to dump more snow, ice, and rain. Texas Governor Greg Abbott defending the state's grid, local outages are not a reason to say that there is a problem with a power grid. The power grid is functioning just fine as we speak. Air travel also has impacted, with hundreds of flights nationwide canceled today. Yesterday

more than nine hundred were canceled. The Administration will supply Ukraine with longer range artillery and ammunition as part of a new two billion dollar package of military assistance. That's according to a person familiar with the matter. Ukraine's biggest allies have so far said though they won't send Finder jets to Kiev. Global News powered by more than hundred journalists and analysts and over one twenty countries. Michael bar

This is Bloomberg. Nathan Michael, thank you time now for the Bloomberg Sports update, brought to you by Tri stayed Out. Good morning, John stash Our, Good morning, Nathan Lebron. James says he loves playing at the garden. Hadn't done it in three years, injured two years ago when the Lakers came to town. Suspended last year. Also didn't play Monday night in Brooklyn due to a sore foot, but he

played last night. He played forty three minutes, scored twenty eight points with eleven rebounds, and tennisis led the Lakers to a one overtime win over the Knicks. Much has been made of Lebron about to break Kareem Abdul Jabbar's career scoring record. It's gonna happen soon. He only needs eighty nine more points. But last night, James moved past Mark Jackson and Steve Nash and into fourth all time

in assists. It's amazing because, um, that's just you know, what I love to do and getting my guys involved, and you know, um, I'm trying to put the ball on time and on target with my guys, um out the course of my career. And you know, I I would have been another grade group that allows me to um, um see the space, I see the floor, and I'm able to get it to him and try to get it to him. Um. You know, with the right type

of past nets plates to night in Boston College. It was big win for much improved Fordham Rams now eighteen and four at rose Hill and opted off St. Louis, who came in the top the Atlantic ten. Two NFL teams have new coaches. Sean Payton spoke with several teams. He's going to Denver. Peyton was still under contract with the Scene, so the Broncos had to ship three draft picks to New Orleans as compensation. First round pick this year,

second and third rounders next year. Also, Houston, in a move that was expected, named Damiko Ryan's he was stand out linebacker for the Texans. He had been coaching the forty Niners defense. Texans have had now four coaches in the last four years. John Stashward Bloomberg Sports Live from coast to coast, from New York to San Francisco, Boston to Washington, d C. Nationwide on Sirius XAMP, the Bloomberg Business app, and Bloomberg dot Com. This is Bloomberg Daybreak.

Good morning. I'm Nathan Hagar at the start of what is likely to be a pivotal day in the nation's capital, not just because of the private policy decision coming up this afternoon from the Federal Reserve, but we're also waiting for the kickoff of debt talks between President Biden and how Speaker Kevin McCarthy, all aimed at trying to head off a market crippling default that could come as soon as this summer if something isn't done about the debt ceiling.

For more on this, we're pleased to be joined by John Raines, director of Market Intelligence at SMP Global. John, it's great to speak with you this morning ahead of this meeting this afternoon between these two leaders who really haven't had a whole lot of interaction up to this point. How much should we expect to come out of this meeting? Quick answer? Not much, not much. I think that they're coming out of from two different mantage points, and I

think both sides understand the contours of this debate. This is really more atmospherics, a good time from the go ahead and have a discussion to actually meet. As she said, they haven't met in this position with McCarthy speaker before, so this is a good opportunity for that. But aside from that, I don't expect much out of this meeting. A whole lot of the barbs have been traded ahead

of it. We heard President Biden yesterday, uh, sort of challenging Speaker McCarthy, show me your budget and I'll show you mine. I mean, how does that sort of set the tone for what's going to be coming this afternoon. I mean, I think we're gonna see quite a bit of this, not only in today's meeting, but I think you're gonna be seeing this over the next few months.

I mean, in Democrats are in a strong position here that they know that the Republicans have to coalesce around a budget and that's gonna be very difficult for them, considering the cuts that will have to be made to balance the budget within ten years, which is what a lot of their caucus wants. How do you do that in discretionary spending alone. It's not gonna be easy to do.

And that's the reason why the Democrats are doing this, and they're putting these Republicans in these positions because they realize every single program that they cut that's gonna cost him a political price. Do you expect that it's going to be a non discretionary spending alone. I mean, we've heard Speaker McCarthy of course, say that he thinks that social Security and medicare should be off the table. Well, we've heard from a number of Republicans who are saying

that things like defense should be on the table. Is that something that could really happen cuts to defense? I think I think there's there's a decent chance. I mean, obviously, if you're gonna wake substantial cuts to the budget, I think defense probably has to get on the table, just like you saw in two thousand and eleven. I just don't see how you can get there through social spending alone.

I mean, there's that one has to been out there to say to make these type of cuts to balance the budget, you'd have to cut eighty five cent of social spending. That's just not gonna happen. There's just not that much waste in the government. So if that's not a viable option, that I think defense comes into question. And potentially I don't think that you're going to see made it to respending on Medicare social Security come into

the freight here. But in the future, of course, both of those programs are gonna have to be on the table as well. Of Course, a President Biden, you would imagine, would be looking for a tax increases as part of any effort to sort of bring spending into balance. I mean, given how divided Congress is and all of Washington is, really, I mean, what's the likelihood that we could see something

like that. I think it's pretty unlikely. It's very difficult for me to envision a scenario where the Republicans can sign up for tax increases. It's just it's very difficult. They talked a little bit about in a sales tax that's gone nowhere. I mean, of course, Biden in the past I've talked about raising corporate taxes. Again, it's just hard for me to see the Republicans signing up to that. Obviously, especially with the new majority that they just achieved in

the House. Just a difficult pill for them to swallow. Well, what about the difficulty that Speaker McCarthy could face of bringing his Republican coalition together on anything related to getting spending under control. I mean, he's kind of really fractious cat because he's got to bring together and not much of a majority to to get anything done. Really, yeah, I mean, that's the problem here, is that he really

only has four votes to play with, doesn't he. So even in the advent that he goes and says Listen, we weren't able to get this accomplished. We definitely need to raise the death ceiling. Of course, there's a lot of conservative Republicans out there that are going to challenge his leadership, and so therefore does he risk his job in order to stay to principle? And that's gonna be an important question that the Republicans are going to have

going forward. I do think there is there are ways for them to kind of manage this, maybe with some type of cap on spending, maybe some slight percentage decrease in some social spending as well, but to really get to the area that they want to get to, and also be able to manage the difficulties politically, as you mentioned with with mandatory spending, it's gonna be very difficult to them to coalesce around a budget, and of course that means it's going to be difficult as we get

to March and April and going forward for them to actually enter in negotiations with the White House. So about thirty seconds left here, John, is a cap on spending enough for Republicans to agree to an increase to the debt ceiling? You know? I think that's the sixty four thousand all the question. I do think eventually it'll have to come to something like that. I think there'll be some modest decreases here and there, some caps here and there, but ultimately, at the end of the day, we know

one thing. The American people don't like tax increases, and they certainly don't like decreases of government's venue. This is Bloomberg day Break Today, your morning brief on the story is making news from Wall Street to Washington and beyond. Look for us on your podcast feed at six am Eastern each morning, on Apple, Spotify, and anywhere else you

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on Bloomberg dot Com. I'm Nathan Hager and I'm Karen Moscow. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak