Bloomberg Daybreak: January 18, 2023

Congressman Santos has been assigned to House committee seats, whilst the man accused of a deadly truck attack in Manhattan is on trial. I'm Michael Vaughn More, I'm John Stasharon Sports the de fleeted nets lost in San Antonio. The next place tonight in the big upset at the Australian Open.

That's all's trendy ahead on Bloomberg Daybreak on Bloomberg eleven three, on New York, Bloomberg one, Washington, d C, Bloomberg one oh six one, Boston, Bloomberg nine sixties and Francisco Sirius x M one nine team, and around the world on Bloomberg Radio dot Com and via the Bloomberg Business. Good morning, I'm Nathan Hagar and I'm kerin Moscow. Here are the stories we're following today. Let's get to the latest from Davos.

It is day three of the World Economic Forum GIT to Gopinath, the International Monetary Funds number two official, is there. She tells us the global economy is showing signs of resilience and China is a key. We expect to see China's growth recover later this year, and also it has that has positive spiller was for the rest of the world. We've certainly seen more engagement between the U S and China.

I think one important meeting was what happened at the Leader Summit in Bali in November between Prison Biden prison Ugene Pink. That was a positive assigned. The idea was to put the floor on their relationship. To Gopinath with the i m F made those comments in an interview with Bloomberg's Francine la Qua. Meantime, Nathan, we're watching for

more signs of improvement in US China relations. Treasury Secretary Janet Yellen has held her first face to face meeting, which Chinese Vice Premier Leo ha and Zurich and Bloomberg Washington correspondent Joe Matthew has more. It's at the beginning of a trip that she is making to Africa, which is important. It's part of the strategy to try to find elements around the world that that that can align with the United States policy here and not China for

that matter. They've met three times by video conference, and he's gonna be leaving his post when President she unveils his new government in March, so this could be a bit of a farewell conversation. Bloomberg's Joe Matthew reports that during today's meeting, Secretary Yellen said the US and China need to manage their differences and prevent competition from turning into conflict. Turning back to markets, now, Karen, we're seeing the yen get weaker this morning, trading at one twenty

nine point four four against the dollar. The move comes after the Bank of Japan made no changes to its yield curve control program. Bloomberg Daybreak Asia anchor Brian Curtis has more. This was the b o J pushing back against market speculation of change. The b o J double down on its stimulus program, leading to huge swings in bond yields and the end the b o J made no key changes. That was more or less expected by economists, but traders were betting that the yield curve control policy

would be altered or scrapped. The b o J said no, and in effect we're content to stay at odds with other central banks. Brian Curtis, Bloomberg debris greay, Brian, thank you. In the UK this morning, data show inflation coming in lower for the second month in a row. And let's go live to London and get the details of a Bloomberg's you win, pass you and good morning, Good morning, Karen and Nathan. Consumer prices in the UK rose ten

point five percent in December from a year ago. That's the second time that inflation has eased from its peak above eleven percent back in October. But prices in Britain are still increasing at five times the official two percent targets, and that means another tough call for the Bank of England at they're meeting on February first in London. I'mu

and pot Spoinberg debreak you and thank you. Interest rates are also in focus at the European Central Bank their speculation the e c B could slow its pace of hikes, but Governing Council member Francois v Roy de Gallo is pushing back at that idea. We caught up with him at the World Economic Forum. Let me remind you of the words of President Leaguard. It's her last press conference in December. We should expect to raise weights at the

pace of fifty basis points for a period of time. Well, the words are still valid today, but again we are pragmatic. ECB Governing Council member Francois vi Roy de Gallo says it's too soon to talk about the size of an infrastrate hike in March. Well, back here in the US, Nathan investors are waiting for two key readings on the economy before the opening bell and Bloomberg's Michael McKee has a preview of retail sales and PPI data for December.

Earlier holiday spending and inflation are expected to take a bite out of December retail sales sales were up a lot in October and if cooled since and are even lower on an inflation adjusted basis. There may be some good news on inflation, however, producer prices are FO asked to have fallen on both a month over month and annual basis. That likely would reinforce investor perceptions the feds cumulative rate hikes are affecting inflation. Michael McKey Bloomberg Daybreak,

All right, Mike, thanks. The SMP five hundred's coming off, its first loss in five days. Is disappointing earnings from Goldman Sachs Way on stocks. Wells Fargo Securities head of equity strategy Chris Harvey says there is room to go lower from here. We think there's downside the DRED, but ultimately do recover, right. We we do think that we end up higher for DRED is the high for this year,

and we do think we get there. We think that again, what you're facing is more of an economic malaise, not a sharp sell off, not something that that's going to be horrific, and as a result, we can muddle through that. Wells fargoes. Chris Harvey, like so many other strategists, says FED policy will be key for the path of equities

this year. Well. Returning to corporate News now, Nathan, and we're seeing more job cuts in the tech industry, Let's get the latest Live with the Bloomberg Steve Rappaport's Steve good Good morning, Karen and Nathan. Add Microsoft to the list of tech companies tightening the belt. The software giant plans to slash jobs in various engineering divisions today. The number of cuts is not clear, but a person familiar with the matter tells Bloomberg the reduction will be significantly

larger than previous rounds of layoffs. The company stock closed up yesterday by nearly half of a percent. Shares are down slightly in pre market trading. Live in New York. I'm Steve Rappaport, Bloomberg Daybreak. Thank you, Karen. It's forty four degrees in Central Park. We're looking for sunshine today and highs in the low fifties. It will turn cloudy tonight. We'll get down to the up for thirties. Time not to take a look at some of the other stories

making news in New York and around the world. Good morning, Michael barn Good morning, Nathan. Despite being accused of violating campaign finance laws and falsifying his resume, newly elected New York Congressman George Santos is taking up his duties in Washington. He's been assigned on two committees. It comes as calls for the Long Island representative to resign are growing from

his District three and among lawmakers. Another New York congressman, Democrat Richie Torres, says he has asked the Federal Elections Commission to look into the campaign finance allegations tours. Speaking to the adversary group Concerned Citizens of n Y three, how to message for Santos, This will not end well for you. You should resign in order to put to rest the national nightmare you're creating, not only for yourself, but for the people of New York three who are

being denied the representation that they deserve. Santos has sense refused to step down. The Biden administration remains under pressure to talk about the discovery of classified documents in the President's home and think tank office. White House attorneys say they turned in those documents voluntarily. White House Press Secretary Kurin Jean Pierre, We're going to continue to uh as we have said, fully cooperate with the Department of Justice.

We're going to fully cooperate with the President's team is going to fully put with the special counsel. Republicans are demanding investigations. However, the Biden administration is accusing the GOP of hypocrisy, saying they showed little interest in investigating Donald Trump took hundreds of classified documents to his Mara Lago home. Ci Fulo Sipov is on trial this week on terror, rism and murder charges in New York City. Thirty say he is responsible for the deadly terror attack on Halloween

in seventeen in Manhattan. He is accused of driving a rented truck down a bike path along the West Side Highway, mowing down pedestrians and writers, killing eight and injuring many more. Prosecutors say he wanted to join ISIS. The chief of Ukraine's National Police says a helicopter crash and a Kiev suburb has killed sixteen people. Those killed include Ukraine's Interior

minister and two children. Global News twenty four hours a day on air and on Bloomberg Quittake, powered by more than seven hundred journalists and analysts more than a hundred, twenty countries. Michael Barrn, this is Bloomberg, Nathan Michael, thank

you time for a Bloomberg sports update. Brought to you by Tri State OUTI good morning, John stanshawer morning, and Nathan upset at the Australian Open, or I fail at out the top seed in defending champion, the winner of a record twenty two Grand slams out in the second round and it was not closed, beating straight sets by twenty seven year old American Mackenzie McDaniel, former n C Double A champion u C l A. He's ranked sixty five the dall seam Bothered by a hip injury, American

Francis Tiafo one straight sets, so to Jess Pagoula. She's the third seed on the women's side, already without Kevin Durant, Kyrie irving the late scratch for the Nets in San Antonio like injured calf, and sure enough the Spurs one one oh six to ninety eight. Keldon Johnson scored thirty six no one for Brooklyn, hit for even twenty and the Nets were three of twenty three on three pointers. Nixon wizards. Tonight at the Garden, the Islanders host the

NHL leading Bruins. Brian dave Ball has already taken the Giants to a place no one figured they'd be at the division play else but not satisfied. Next stop Philadelphia. Good to move on, but you gotta put that in the past really quick and get to the preparation on this week's opponent, which um number one seed going to the East, that beat us twice. You got eight pro bowlers, six all pros, and they can get your attention real quick, so we'll get a lot of work to do. Saturday night,

fifth ever playoff game between the two teams. They both won twice. The Giants have not won in Philly since two thousand thirteen. Has forty five year old Tom Brady weighs his NFL future, So does thirty nine year old Aaron Rodgers. He said he's not ready to make a decision, but says that the Packers want to go young and he wants to keep playing. It have to be with

a different team. Rob Gronkowski says he considered coming out of retirement again, decided against it, but if he did, it was gonna be for Buffalo, the team he grew up looking for. Live from coast to coast, from New York to San Francisco, Boston to Washington, d C. Nationwide on sirius X amp, the Bloomberg Business app, and bloom

dot Com. This is Bloomberg Daybreak. Good morning. I'm Nathan Hagar taking you back to Davos now bringing you some of our conversations from day three of the World Economic Forum. Managing Director of the International Monetary Fund, Gita Gopinath is forecasting the year ahead for the global economy and the influence of US and China relations. In a conversation with Bloomberg's Francine la Quax, Gopinat says it is going to be a rocky first half of the year as several

countries battle inflation and manage geopolitical risks. At the same time, she thinks China's reopening is a key stimulus for the global economy and as a result US China relations as well. Let's listen in to part of that conversation. Now, you seem a bit more optimistic than maybe a couple of months ago. So overall, are you leading towards a better

forecast for the world economy this year? In terms of the overall foecust We will have the south at the end of January, but it will be in the ballpark of what we put out in October. So I think the positive way to think about it is, you know, after going through about three rounds of downgrades, at least we don't have a worse outcome that we're looking at this time around. The positive news is that we have

global growth for the bottoming out of this year. It improves towards the second half of this year and then into four and that's because that we've seeing signs of resilience. We have China that's ripped off with zero COVID policy, so we're going to see some improvement towards the end of the year. But again, this is still a tough here. It is a tough here. But do you think inflation has peaked? And if inflation speak doesn't make it again much easier from the from the second half, is that

the main thing that would make a difference. Our expectation is that headline inflation has peaked, But when it comes to the more sticky components of inflation, which is inflation services sector inflation, there are countries where that's still trending up.

In the US, we've seeing signs of its slowing, but we're gonna have to wait for a few more months of the kind of good data that we suffering come out of the US just to start thinking that, Okay, now we're truly on the part towards the two percent target. I think one three policy will have to stay the course through three git. How are you expecting the China reopening to go ahead? So today we also have Janet Yellen, Treasury Secretary, meeting with the Vice Primery of China in Zurich.

Are you expecting a rap prosh ball between the two and does that help with the world economy? I mean, firstly, we have a China reopening, which literally means that they're going to travel two different paths of the world after being shut out for a couple of years. So that with the increasing mobility, we expect to see China's growth recover later this year. And also it has that has positive spillers for the rest of the world. We've certainly

seen more engagement between the US and China. I think one important meeting was what happened at the Leader summit in Bali in November between prison by didn President Juan pink That was a positive signed. The idea was to put a floor on their relationship, and I think these meetings are critical. I mean, these are the two largest economies of the world. It's important for the rest of the world that they work closely together. How worried are you about the US sailing? It really should not be

something we are even second guessing at this point. Right the US has the highest investment grade rating in the world. There's already enough uncertainty, there are enough risks that we have to deal with. This should not be an additional risk that the US or the world should have to deal with. But is it. I feel like a lot of the charters here on Dables and elsewhere, is that, actually we could see that sailing. It could be difficult to get through it, and we could even see US

being downgraded. There was certainly a risk to it. I mean, there is certainly, given the dynamics that we have in the US Congress, there will certainly be some tensions around it. But I really hope they just get the job done and do the right thing. We just moved the death ceiling. Do what's needed to make sure that this is not in question. I know you focus a lot of your energy on talking about fragmentation, and actually I guess the pitfalls of that. Are we seeing a more fragmented world

than we did even last year. The world has been moving towards fragmentation, say over the last few years. They started with the U. S. China trade tensions before the pandemic. Now you've had the pandemic. In the war, everybody is very concerned about economic security and national security. You know, those are good things. It's important for countries to build resilience. But we're also seeing that as kind of ensuring, which

is bringing production back home. And that's if we move in that direction, I think it's just going to be costly for both households and for farms everywhere. We've seen quite a lot of vlatility in the market because the b A jayput or didn't put in place. Do you support to those kind of moves. So the Bank of Japan has a pretty complex decision to deal with unlikes the other major economies of the world. Yes, they have inflation going going up, but the risk of inflation sliding

back well below their target remains high. So they have to do this complex straight off keeping monetary policy accommodative while ensuring that it's consistent with the inflation data that's coming up. We have actually a mission in Japan Right now on the ground, We're gonna have a report coming out of Japan relatively suitor to their future. This is Bloomberg Daybreak Today, your morning brief on the stories 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 get your podcasts. You can also listen live each morning starting at five am Wall Street time on Bloomberg eleven three oh in New York, Bloomberg in Washington, Bloomberg one oh six one in Boston, and Bloomberg nine six in San Francisco. Our flagship New York station is also available on your Amazon

Alexa devices. Just say Alexa play Bloomberg eleven BLUs. Listen coast to coast on the Bloomberg Business app, Serius XM Channel one nine, the I Heart Radio app, and 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.