Bloomberg Daybreak: January 20, 2023 (Updated w/Google News)

higher rates even as inflation. I'm Maybe Morris of federal court orders Donald Trump to pay a million dollars for a bogus lawsuit, and New York state revenue tops estimates by billions of dollars. I'm John Stashower and Swards. The net slump continued with the laws in Phoenix. The Rangers lost to the Bruins. The Devils and Islanders both lost

in overtime. That's all trading ahead on Bloomberg Daybreak on Bloomberg e Living Free on New York, Bloomberg on 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 and Dog Carmen via The Bloomberg Business Good morning. I'm Nathan Hagar and I'm Karen Moscow. Here are the stories we're following today. Karen,

let's begin with breaking news out of Silicon Valley. One of the most notable names in tech is announcing big job cuts. Bloomberg Steve Rappaport joins US Live with the latest. Good morning, Steve, Good morning, Nathan and Karen. Google is the latest player caught in the wave of pink slips crashing down on the tech industry, parent company Alphabet announcing it will cut twelve thousand jobs, about six percent of

the global workforce. CEO Sundar Pucae and and Email two employees took full responsibility for the decision, adding these are important moments to sharp and focus. Rivals Amazon, Meta and Microsoft recently cut thousands of jobs as big tech players brace for a prolonged trop in demand. Until now, Google was one of the few to avoid implementing major layoffs. Live in New York. I'm Steve Rappaport, Bloomberg Daybreak. We turned to the markets now in US futures are little change.

This Friday morning, were closing out a week that saw the S and P five hundred fall for three straight sessions thanks to week economic data. Hank Smith, as chief investment officer at Haverford Trust, I think there is a chance that the s gets lower low than the October two low. But our view is it's likely that we're going to have a recession, but equally as likely that it's going to be mild and brief. Trust Hank Smith says a key thing to watch today is the mass

expiration of options. It's said to be the biggest January event in a decade. Well one bright spot in stocks this morning, Karen is Netflix. That company reported earnings late yesterday that outperformed estimates, and we get the latest live with Bloomberg's John Tucker. Good morning, John, Good morning. Ninth of the streaming giant, adding seven point seven million new subscribers in the fourth quarter that beat forecast. New content

brought in more viewers. The series Wednesday in Adam's Family spent Off was the company's third most popular series ever. Well, the documentary Harry and Meghan was also we hit. Netflix also had its own drama in the boardroom. The co founder Read Hastings a stepping aside, the CEO post now being filled by his two longtime associates Ted Surrandos and Greg Peters shares her up over five percent pre market.

Last year, the company saw more than a third of its value wiped out after poor showing in the first quarter. Live in New York. I'm John Tucker, Bloomberg Daybreak. All right, John, thank you well. On the economic front, we are seeing more Fed officials called for high interest rates. That's despite signs inflation is cooling. Here's Federal Reserve Bank of New

York President John Williams, some signs the inflations moderating. It remains far too high and it is my number one concern going into twin And that sentiment from John Williams was also echoed by the Vice chair of the Federal Reserve, Lyle Brainerd. Inflation has declined in recent months, but inflation was very high and it's going to take time and resolve to get it back. And Vice chair Lyle Inner did not explicitly state a preference for the size of

the Fed's next rate. HIG traders are currently pricing in a quarter point increase the low s c D in the Central banks current hiking cycle. No, we're wrapping up the final day of the World Economic Forum today Karen, and one message is becoming clear. At Davos, finance executives say they now see reasons to be upbeat. We caught up with Bank of America's CEO Brian moynihan in the U s UM research team, which is the best in the business, as a mild recession predicted sort of mid

this year. In the next year, they pushed that out, And so why they keep pushing out It's the strength of the US consumer. They have the FED getting over you know, five five, five and a quarter. Just this week they moved at the three bases point rate rise as opposed to fifty. Bank of America's CEO Brian moynihan spoke with Bloomberg's David Weston in Davos. He joins Morgan Stanley's James Gorman, and City Groups Jane Frasier with signs

of conscious optimism. Well, speaking of Wall Street's CEO s Nathan JP, Morgan, Chase is out with fresh details on Jamie Diamond's pay. The bank is keeping the CEOs total compensation and unchanged. He'll get thirty four and a half million for his work in two It's a year where the firm's profit fell by almost a quarter, and JPMorgan Stock notched its worst annual performance in more than a decade.

Google's parent company, Alphabet announced it will slash twelve thousand jobs, more than six percent of its global workforce, become the latest tech giant to rain things in after years of abundant growth and hiring. Let's bring an Alex web for more on this. Bloomberg Quick Take correspondent Alex Good morning. A number like six percent when it comes to the workforce certainly gets your attention. Though, put this into context

for us, what does this come after? It comes off a lot of job carts across the rest of the industry, And actually twelve thousand at Google seems like it's less than the eighteen thousand Amazon, but six percent is a far higher proportion of the workforce being cut. Done is happening at Amazon? Of course? Google, you know, it is

based in advertising technology business. As we know, during economic turbulence, the first thing that companies tend to cut is their marketing budget, and Google is feeling that the pain of that that you know, there's massive slow down in growth anticipated,

so h the job cuts. They did not expand as quickly as some of their competitors, and the revenue per employee, which is a pretty good gauge of whether they have grown headcount more quickly than they could grow revenue has continued to trend upwards, which you can't say certainly for Amazon. But there is a certain course correction going on here for sure. Is this the course correction that comes after overspending during the pandemic? Um? I think probably it's anticipating

too much growth coming forward going forward right that. There was a lot of spending actually that got kind of front loaded during the pandemic, both in terms of cloud and in terms of consumer spending. You know, the people, um, you know, as they got bail out checks, there are a lot of peop or not everyone, a lot of people who had more disposable income. That is absolutely not the case right now for the vast majority of people.

And so as they're spending goes down, so does the so does the advertising spend, and Google gets the knock on effect of that. So this adds on to the spending cuts that we're seeing across the big tech industry. We've heard from a number of analysts some contrarian views, thinking that the traditional thing stocks might be something of a buy at this point. But what does this say when we see these kinds of cuts coming about the

overall trajectory for the tech space. I think, you know, there is a question of whether they are still growth stocks. But as ever with growth stocks in the anticipation has long been that at a certain point they wanted to they could pivot to becoming more value. And maybe maybe that is what this pivot is. You know, they're still generating huge amounts of cash that the likes of Google.

You know, it's still it is now trading um at far less of a premium to the to the to the market than it was, you know, certainly even a year ago. I think it's not training a discount to the broader market. Um. That may provide an opportunity that some people may see an opportunity there, but it's by no means a short thing. Thanks Alex, great to have you on with us, particularly on the breaking news. Alex Web of Bloomberg quick take on Google cutting twelve thousand

jobs across its global workforce. Looking at the shares this morning, they're moving higher off the back of that headline, up nearly one point six percent in early trading. It is forty degrees in Central Park. Clouds breeze today, maybe a lingering shower. We'll get into the upper forties. It'll turn partly cloudy tonight with a lowe near thirty five. Time now to take a look at some of the other stories making news in New York and around the world.

Good morning, Amy Morris, Good morning Nathan Hagar. A federal judge has ruled Donald Trump has to pay nearly a billion dollars for filing a bogus lawsuit. The judge says the suit against Hillary Clinton and dozens of the former presidents person chieved political enemies was quote brought in bad

faith for an improper purpose. The New York Times reports the ruling was the latest setback for Trump, who also faces a broad range of legal problems and criminal investigations, and his lawyers are increasingly under scrutiny themselves for their actions in those cases. New York State has collected seven point seven billion dollars more in taxes and the first

nine months of the fiscal year than forecast. State Comptroller Thomas Dinnapoli says much of that was from personal income tax collections, and that the tax collections are exceeding expectations, but that concerns of an economic downturn create uncertainty. A slowdown on Wall Street, lower banker bonuses, and a potential recession could up end the state's finances. New York Governor Kathy Hokele wants to bring one Buffalo Bills player to New York City. The governor was at an event in

East Harlem when she talked with Damar Hamlin. She says he wants to use the gift of his story to inspire and I said, you can be a great voice to join with me and letting you know people know that through sports or music and culture and dance at places like this, they can have a better outcome. So so I'm going to get them up here. Don't know when Hamlin suffered cardiac arrest on the field during a

primetime game between the Bills and the Cincinnati Bengals. He tweeted later that he is excited to see how their future collaborations will help. Nasau County officials are pinpointing the source of an increase in overdoses over the past week. Police and health officials say many of the recent overdoses are linked to counterfeit prescription pills or presses. The pills that are being circulated may contain fentonil and could be deadly.

Global News twenty four hours a day on air and on Bloomberg Quicktake, powered by more than twenty seven hundred journalists and analysts and more than one twenty countries. I maybe Morris, this is Bloomberg. Nathan. Alright, Amy, thank you time now for our Bloomberg Sports they brought to you by Try stay out here for that and bring in Jon stash Our. All right, Nathan. Thanks. The Giants later today hit the Turnpike heading South playoff game tomorrow night

with their division Riyals. Giants have lost their last nine games that they have played in Philadelphia. The Giants quarterback is Daniel Jones. Game is different, you know, I think UH will approach this UM like we would any other game, but that they're good, good team. It's a good environment. Uh. They bring a lot of energy. Fans are passionate, UM, but like any road game, will prepare for that and be able to uh, you know, handle that UM as part of the game. The Eagles, top seeds in the NFC,

beat the Giants twice this year. They had a by last week's fifth ever playoff game between the two teams, and they both won twice. Sunday in the NFC, it's Dallas at San Francisco. We'll see how Brett Maher kicks for the Cowboys coming off four missed extra points. The Cowboys did sign another kicker, but they say Maher made all his kicks yesterday in practice. A blow to the next center Mitchell Robinson, key player with his d fence and rebound. He's got a broken thumb, likely to miss

a month. Nick's played tonight in Atlanta. The networ in Phoenix. The Soun's led by twenty and the third quarter then held on one seventeen to one twelve, and the Nets are owing four since the Kevin Duran injury at the Garden, Rangers didn't score until late. They lost to the Bruins, of the best record in the NHL, three to one. Devil's lost in overtime at Seattle for three in The Islanders are three two overtime lost in Buffalo as the

Sabers scored twelve seconds into ot College hoops. The Rutgers lost at Michigan State seventy to fifty seven. The x Yankee closed our oldest. Chapman signed with Kansas City Coco Golf into the third round, our fourth round at the Australian Open, as Jabber, second seed on the women's side, lost her match. John Stashward Bloomberg Sports 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 Bloomberg dot Com. This is Bloomberg Day Break. Good morning. I'm Nathan Hagar, and we want to take you back to Davos now to bring you our interview with Senator Joe Manchin, the Democrat from West Virginia. He spoke with Bloomberg David Weston about his call for a bipartisan solution to avert a government default that threatens to jolt global markets. Man Should also addressed questions about his plans for re election next year. Let's listen in to that conversation. Now,

we will pay our debts. We always have, We always will.

How mess is going to get getting from point A to point B, we don't know yet, but I'd like to see really truly a coalition of a bipartisan By camera Democrats and Republicans putting a group together that says we're gonna look at all the trust funds to find out the deficiencies when they're going to be insolvent and what we can do to prevent that, and then basically have a piece of legislation that we're saying, Okay, we will make this deal or raise the debt setting if

you allow us to have give the American public a look at what we're dealing with and recommendations will make and have a vote on the floor whether it goes up or not. But at least it identifies it's serious. And the same thing with the thirty one plus trillion dollars of debt. So that sounds a little bit like some commissions we've seen in the past, like base closings and on Social Security. Where are you on that? Are you starting to put that together? The conspect, I'm just

throwing it out to make people. My dear friend Mitt Romney has been working on the Trust Act. I joined him on that. I think it's it's tremendous to identify that we've got social Security and Medicare, we got the Highway trust. He's been very good leading that and we talked about, remember the old uh the bowls Simpson, Let's look at a hybrid of something that we're gonna have to agree that we have a tremendous amount of debt

that we're writing checks our kids can't cash. So if you want to have concerns about should we or should we not? Absolutely we should. We should pay our debts. Should we allow him to grow disproportionately where we have more trouble every year? Coming to that conclusion to pay the debts when we could have done something Kevin McCarthy is a wonderful opportunity for him to say, listen, let's act like adults. We've got a at whose fault, We're all at fault. How do we fix it together and

move forward? Well, that sounds like eminently good sense to me. Do you have time because we've heard from Jennelly already she's taking extraordinary measures. There's a speculation about June July we're gonna actually run out of the money. Do you have time to get all that accomplisutions descried before. We're not talking about bills. We're talking about, basically a framework to bring a bill to the floor within a ninety

day period. If we agree, yes, we're gonna do target that we're talking to the trust, make sure that we know what we're dealing with. We're gonna target basically the debt and increasing of the debt to how we can basically prevent that from continue to increase as it does and started downward trend. And there has to be some discipline and there has to be some sacrifice. What about

strings attached to an increase in the debt? Selling along lines you're saying, say that we don't have time to get all the work done, get all the approvals through, but we want a commitment that we're going to go on the path you're describing right now. If you we're not gonna increased, If your compary says we're gonna cut military, we're gonna cut the social security and and all the

different safety things. You have to have your military for the defense we have and the geopolitical unrest, you're not going to leave senior citizens who have worked and paid into it stranded. So quit talking and scaring them. But Jesus out of people, find a path that works. And you can't do it, just okay, here's we gotta do. If you do this, then I'll vote for If you don't do this, I'm gonna vote against it. I'm not

going to hold hostage. I want to get a reasonable approach to find something that has long lasting and has results, long lasting results. What about the White House? What do the present? But we're not gonna even negotiate. I'm not sure how that works right now. What he's saying on negotiation, He don't he's not. I don't blame it. It. Don't be held hostage. They shouldn't be held hostage. You can't help.

You can't hold the good faith of the greatest economy in the world hostage by saying we're gonna destroy your credit ratings with the rest of the world and how they think about our country, how they investor buy our bonds and and and things of that sort. That that's something that can happen. It was done in two thousand eleven, two thousand thirteen, it didn't work out well. Why would it try to get But there's an awful lot of

leverage to do something very very constructive. It will be productive. There are others that are only to join. I think there is I think there's there's there's a growing amount of people that like to say, Okay, how do we fix this? I don't know until I get Democrats and Republicans who are like minded put the country before the party. But if you're just thinking, well, let me see if we don't fix this, I can blame you for that. And if you're a d or and are, you're blaming

one side or the other. So you're not looking for solutions. You're looking at basically to create more chaos within the political and that's not what we need right now. And I'm hoping that Kevin. I'm I didn't tell Kevin McCarthy right now. Whatever I can do to help you and work with you, I want you to succeed election. You can do wild one. Are you up as a Democrat?

I really haven't made that decision. I really haven't. I'm so engaged basically in trying to bring this country together, to unite the country to where people aren't afraid to say, hey day, that makes sense, I'm gonna work with you on that. It might be the opposite party. They're almost afraid to have a conversation. I used to be it used to be guilt by by association. Now it's guilt by conversation. That's awful. So we've got we've got to

bring this back. 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. Plus listen coast to coast on the Bloomberg Business app, serious 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. Are all the news you need to start your day right here on Bloomberg Daybreak