Bloomberg Daybreak: January 21, 2022 - Hour 1 (Radio)

Plus high stakes meeting between the US and Russia in Geneva. I'm Michael Bloger. More ahead, I'm John Stash Aaron Sports. Another home loss for the Knicks beaten soundly by the Pelican. Is the third round underway at the Australian Opening. That's all straight ahead on Bloomberg day Break on Bloomberg eleven, TREEO, New York, Bloomberg one, Washington, d C, Bloomberg one oh six one, Boston, Bloomberg nine sixties, San Francisco, Sirius x M one nineteen and around the world on Bloomberg Radio

dot com and via the Bloomberg Business Set. And good Morning. I'm Karen Moscow. I'm Nathan Hagar Bloomberg Daybreak brought to you by SEI Crises emphasized character and partnership, one mission, one community, Sei go to se I C dot Com slash I M s N SMP Future is little changed on this Friday morning at is five oh one on Wall Street. We checked the markets every fifteen minutes throughout the trading day. On Bloomberg SMP futures again little change down,

Future is up thirty six and nasday futures down. Sixties seven ten year Treasury up four thirty seconds. YELD one point seven eight percent yield on the two year one one percent, Nathan Well Karen. The late day sell off we saw on Wall Street yesterday spilled over to Asia overnight. Let's get the recap from Bloomberg's Juliette Sally in Singapore.

Good morning, Juliette, Good morning, Nathan and carn. The m s c I Asia Pacific Index fell close to two percent over the course of the week, notching up its worst week since November. During Friday session, the tech sel off from Wall Street flowed through into Asia, with Japan's Topics index flirting with correction. TSMC and Samsung shares were dumped, weighing on the taie X in Cosby, along with Ali

Baba in Hong Kong. Alibaba shares also hurt by a Financial Times report saying China State broadcaster has implicated Jack Mars and Group in a corruption scandal. Australian Stokes plunged to the lowest in seven months, while yields on the tenure fell as much as nine basis points in Singapore. Juliette Sally Bloomberg Daybreak, Juliette, thank you. We are seeing weakness in NASDAK futures once again this morning, after yesterday's

plunge sent the Tech Heavy index into a correction. We get the latest live with the Bloomberg's John Tucker, John gole Boarding and Karen After yesterday is one point three percent slide for the nastac TO Tech Heavy index is now down close to twelve percent since it's November high. Adding to the correction that's started this week, investors have been fretting over higher interest rates from the Fed, and

now add another concern, company earnings have been shaky. Sarah Hunt of Alpine Woods Capital Investors says this is a time when stocks need to stand on fundamentals. Valuations are finally, after quite a long period of time, going to start to matter, and cash generation and balance sheets are going to be very important as we navigate what is no

longer a very easy FED policy going forward. The earnings reporting season so far has been uneven, highlighting the risk that it may fail to enliven animal spirits in the stock markets, and the Master's face a one two punch of FED rate hikes and the possible reduction of its eight point eight trillion dollar balance sheet in New York on John Tucker, Bluebirk Radio and John One market veteran says this selling is not over. Jeremy Grantham has been

calling market bubbles for decades now. The co founder of Boston based GMO says the historic stock collapse he predicted a year ago is underway. Grantham says even intervention by the FED can't prevent an eventual plunge of almost fifty this time. Trend is at most and I would expect even if the Federal Reserve tries to do the same, it will be hard to prevent the market from declining

to that level. Jeremy Grantham made those comments at a Bloomberg Front Row interview Well Nathan, the prospect of higher interest rates has been putting stocks under pressure, and now the Fed is preparing for its next policy meeting next week. Economy is surveyed by Bloomberg say the Central Bank will use it to signal a March rate hike than a

balance sheet unwind soon after. Most of the forty five economists polled said the Fed will telegraph at twenty five basis point increase, though two of them are looking out for a surprise fifty basis point hike. Let's turn to corporate news Karen and a big earning surprise from Netflix. The stock is down twenty two in early trading after the streaming service that it expects to add just two and a half million subscribers this quarter. Bloomberg's Charlie Pellet

reports that is well short of Wall Street estimates. It suggests the streaming giant is entering a new phase of slow growth. In twenty two, Netflix signed up eight point two million customers in the fourth quarter of one, beating Wall Street estimates, but lee into the slowest annual growth since twenty fifteen. The company says sign ups have not re accelerated at the pre COVID levels, blaming a tough

economy as well as lingering fallout from the pandemic. In addition, Netflix says it's biggest shows of the current quarter don't come out until March. In New York, Charlie Pellet Bloomberg Daybreak, Charlie, thank you. While another stock, Darling during the lockdown era, is also taking a hit. Pelloton lost almost a quarter of its value yesterday after a CNBC report said that the company is temporarily halting production of its bikes and treadmills.

Stock hit an all time high last January at a hundred sixty six dollars a share is trading around twenty six dollars in pre market and Karen. Bitcoin's moving lower as well this morning. In fact, it's trading at its lowest level in more than five months. Bitcoin hit a high of almost sixty nine thou dollars in November. This morning, it's around thirty nine thousand on Wall Street. Nathan JP Morgan Chase is coming off its most profitable year on record.

As a result, it's rewarding CEO Jamie Amen and we get the latest live from Bloomberg's Reneed, A young good Morning, Rena, Good Morning Care, and regulatory filings show that Jamie Diamond got a ten percent pay raise to thirty four point five million dollars for his work last year. JP Morgan

earned forty eight point three billion in one Now. The move is the latest time that, after compensation pressures emerged last year from the junior ranks up through the banking and trading hierarchy, banks are now paying their most senior leaders more as well. Live in New York, I'm rened a Young Bloomberg, Daybreak and Reneda. Jamie Diamonds counterpart of Bank of America, says his bank expects growth and loan

balances in the single digits this year. Brian moynihan says it depends on the trajectory of the U S economy. Well rates go up, yes, four times this year is a prediction. The reality is does that help our earnings? Yes? But the real reality is is that's to bring the economy, you know, to take the inflation out of the system. And if they get it right, because the economy is growing very fast and inflation is growing very fast, as that slows down, we should get back to normal economy.

Bank of America CEO Brian moynihan made the comments in an interview with Bloomberg's David west End. Right now, SMP futures are down four points. Staff futures are up thirty three. NASAC futures down fifty seven points. The tenure treasury is up six thirty seconds, the yield one point seven. Straight ahead, your latest local headlines and the check of sports. This is Bloomberg. The South five oh seven on Wall Street. Very cold this morning, just fifteen degrees in Central Park.

We've got an accident investigation already southbound Root one by Route eighteen and Edison. Details coming up in traffic. First. Michael barrs here with more on what's going on in New York and around the world. Good morning, Michael, Good morning Nathan. New York City Mayor Eric Adams called for better coordination between federal and local authorities to fight urban crime. Mayor Adams has phase high proth lyle violent crimes in

New York during his first week's in office. Adam says law enforcement agencies should coordinate against gun violence the way they did against terrorism after the September eleventh attacks. The same quote nation that stopped planes from flying in our builders must be used to stop bullets from cobbon highways of depth in our country, particularly in black and brown and poorer communities there. Adams spoke at the National Conference

of Mayors in Washington yesterday. Secretary of State Anthony Lincoln will meet Russia's foreign minister in Geneva today. On Ukraine, yesterday, President Joe Biden said Russia will pay a heavy prize of any of its forces move across the border into Ukraine. We met with severe and coordinated economic response that I've discussed in detail with our allies, as well as laid

out very clearly for President Putin. President Biden earlier suggested Western allies might struggle to react to a small scale attack. The largest anti abortion rally in the US will take place today in Washington. The March for Life begins as the Supreme Court appears lankly in the coming months to rule on states imposing tighter restrictions on abortion. The Court is considering a Mississippi case and could returned the landmark

Roe v. Wade ruling. A jury of eighteen people who appeared mostly white, was picked for the federal trial of three Minneapolis police officers charged in George Floyd's killing. The judge told potential jurors twelve and six alternates, the case has absolutely nothing to do with race. The court declined to provide demographic information. Michael Lee a Day, better known as meat Loaf, has died. The singer was known for her hits including bat Out of Hell and This One

Paradise by the Dashboard Light. Meat Loaf was seventy four Global news twenty four hours a day on air and on Bloomberg Quick Take, powered by more than twenty seven hundred journalists and analysts more than a hundred twenty countries. I'm Michael bar This is Bloomberg, Nathan, So long meat Loaf. Thanks Michael five O nine on Wall Street. Time for the Bloomberg Sports Update. Now, Good morning, John stash out morning.

They're just a nightmare of a week. But the Knicks, they had won five straight home games, were at the Garden for three games in four days, all against beatable teams. They lost all three. New Orleans led all the way, pull the way third quarter, outscore the next thirty five to fifteen. The final a little more respectable, but a one oh two to ninety one lost. The Knicks coach is Don Thibodeaux. We played hard, but we didn't play, you know, with the toughness that we needed to in

terms of being able to fight through things. Show they always say to being mentally tough when you face it VERSI is not going our way. Just keep battling. You know, your hustle can get you back into the game and oftentimes that's what changes that very currens Wan Mitchell Robinson was the next leading score. He and r. J. Barrett both in the seventeen points. Clearly a big reason the Knicks not where they were last year. The play of Julius Randall. Last night, Randall store only four points at

one for nine. Warriors lost over time to Indiana. Another win for league leading Phoenix in Dallas. The Sons are thirty five and nine nets. In San Antonio. Tonight, Rangers visit Carolina. Top two teams in the Metropolitan Division. Australian Open Rafteryelmdal just now starting his third round match. American Riley Opelka lost four sets to the Canadian Dennis Shop of all of Matteo Barrettini came from two sets down to win. Naomi Osaka is right now in the third

set of her match. Yankees will not be making any trips to Montreal. That's the other Bay Rays who always struggle with the track. Fans made a proposal to play their half their home games north of the border. MLB rejected the idea. The raised lease and Tampa runs through seven. They could be on the move after that. John Stash Atward Bloomberg Sports Nathan Okay, John, thanks right now. S and P futures are down five points. Staff futures are

higher right now modestly, Sell up twenty five points. Nastack futures still on the decline after heading into correction. Territory down. Nastack futures are lower by almost fifty eight points. The tenure treasury is up six thirty seconds. The yield one point seven eight percent. Patrick Palfrey of Credit Suite joins us next. The outlook for markets this is Bloomberg Bloomberg eleven three oh weather sunny but cold today, HIGs only

in the low twenties, upper twenties. Tomorrow under partly mostly Sunday skies, more clouds moving Sunday highs in the low thirties. Right now fifteen degrees. Markets headlines and breaking news twenty four hours a day at Bloomberg dot com. The Bloomberg Business Atland at Bloomberg Quick tape is a Bloomberg business flash, and I'm fair at Moscow. US Dock Index futures are

mixed this morning. European shares are falling and we checked the markets every fifteen minutes throughout the trading day on Bloomberg U S and P future is it'll change this morning. Down futures up fifty one, nasdack features down thirty eight. The decks in Germanys down one point four percent, the ten year treasury up four thirty seconds. You had one eight percent yield on the two year one point two percent. Nimex scrude oil is down one percent on a dollar

fifty five at eighty four dollars a barrel. Comex school is down four tenth per cent or eight dollars at eighteen thirty six ninety an ounce. The Euro one point one three four one against the dollar, British bound one point three five six nine. The yuns at one thirteen point nine three Bitcoin this morning also lower at thirty eight thousand, nine hundred dollars. That's a Bloomberg business flash. Now here's muchel Barr with Moore on what's going on

around the world. Muckle, good morning, Good morning, Karen Rock. Superstar meat Loaf has died. He's been known for such hits as Bad Out of l and Paradise by the Dashboard Light. Family. Statement provided by his longtime agent says the singer born Marvin Lee a Day died last night. Meat Loaf was seventy four. The US plans of the raise the federal employee minimum wage to fifteen dollars an hour. That's according to a report from Axios. In the NBA,

the Nixon Warriors lost in the NHL. The Bruins beat the Capital's for three Global News twenty four hours of on a or end on Bloomberg Quick Today Power by more than twenty seven hundred journalists and analysts more than a d twenty countries. Michael Barr and this is Bloomberg. Nathan alright, Michael, Thanks, It's five nineteen on Wall Street line from the Bloomberg Interactive Broker Studios. This is Bloomberg Daybreak. Want to turn right back to this market action this morning.

Patrick Palfrey is with US senior equity strategist and co head of Quantitative Research over at Credit Sweez Patrick. It's great to have you back with us on Bloomberg Daybreak because we're watching sort of a stabilization now in futures contracts, though the NASDAC is still moving lower after the UH move into a correction. Now for the Tech Heavy index, where is this going from here? Does this sell off have further to go? Well, thank you for having me.

And in terms of what we're seeing for the NAZAC, I think we're going to continue to see a little bit of pressure for technology stocks and for high pe stocks, and those stocks are primarily found in the NASTACK. But I think there's plenty areas of the market where the backdrop remains quite healthy, and there I'm talking about cyclical groups, energy, materials, industrials and financials areas where you have valuation support in

the growth prospects still remain quite strong. So I think it's going to be a bifurcation and performance for the for the next several months given that backdrop. Of course, you've probably heard the comments by now from Jeremy Grantham over a GMO saying that we're in a super bubble and not even the FED can stop what he sees

as a near fifty percent plunge for the SNP. What's your reaction to that, Well, we we don't really see the data the same way, And I think what it comes down to is how you look at valuations for the benchmark, and I think a lot of investors are really focused on valuations. Evaluations look expensive when you put into consideration, you have a lot of very expensive companies in certain portions of the market, and that's where a

lot of the concern is. When you take a step back and you look with a more broad brush, the fundamentals remain quite strong. We have a GDP that's going to grow with long term average, with a backshop with inflation, which is pricing power to companies that to benefit. And we have an inflation and we have an interest rate backstop that remains very low, which is providing little alternative

for investors to move into equities. So I don't necessarily see it broadly as problematic, but there are certain portions that that it will be an issue though. There is a lot of concern I think in the market about what the FED is going to do, what it could signal at its meeting coming up next week, a lot of speculation that we could see a first rate hike as soon as March. What's your view on what the

FED could come out with at its January meeting. Well, I think ultimately what we're looking for is the pace of which they're going to begin to raise rates and putting that in the context of the current geel curve.

I think at the end of the day, that's our main focus because we want to make sure that the FED has the ability to move into ultimately stem inflation, but we don't want to see them actually push rates too high ward, curtails financial conditions and pushes into recessions, so they have a delicate balancing act ahead of us. Putting it in the conscious, the yield curve is really what we're focused on and kind of judging their commentary

and how fast that they're willing to move. What's your view on where the yield curve could go from here, Well, ultimately I expect the yel curb to continue to flatten, and it's really just a function of the fact that if that is going to be in raising rights, it's not problematic, although many often view it as a recessionary signal. Um I think Ultimately, what it just depends on is how they can you know, really balance um. You know, the calming inflation, but yet at the same time allowing

the economy to continue to run. And a lot of the factors which are driving in place room right now, such as labor we would an incredibly tie labor market and the fact that an interest rates are really low, which is driving housing, some of those are gonna be difficult for them to contain credit. Suez is one of the most bullish firms on Wall Street. Patrick, what would it take for you and your team to change your

mind on the bullish outlook for stocks? Well, ultimately, what is leading us to be as bullish as we are is how positive the underlying backgroup is. That includes real economic growth, like I said earlier, growing double the long term average, and the fact that inflation um is a benefit to a lot of companies. You know, should inflation remain high and that begins to erode demand, so we see real economic estimates begin to slide, that would cause us a level of concern and I think it would

be problematic. And then I think the second area where we would see an issue is if is if interesting to actually um you know materially fall from here and and it's not an issue that we see this on the table at the moment, but it would signal an unhealthy backdrop, and I think that would be somewhat problematic for stocks. In our last minute here, Patrick, I think you mentioned UH move toward more cyclical stocks as as a strategy. What are some surprise moves that you're that

investors could make to whether the outlook going forward? Well, I think right now we have a um some of a commodity boom that's taking place in light of just the robust demand that we've seen in the bathroup. So I think UH, energy prices, I think a lot of

materials prices. I think we have a lot of upside left in those areas, and I think that is underpinning the success that we're seeing those companies driving pricing power and really helping gain operational leverage for a lot of these companies, something that wasn't there three and five years ago, and I think oftentimes left those sectors for dead. Really appreciate this, Patrick, thanks again for coming on with us early.

That's Patrick Palfrey's senior equity strategist CO had of Quantitative Research over at Credit Suez and right now SMP futures are little changed to the upside. Doubt futures up fifty five points. Danstack future is still lower. They're down by almost thirty five points. The tenure Treasury is up four thirty seconds, the yield one point seven percent, and the yield on the two year right now one point zero two percent. Stay with us. You're listening to Boomberg Daybreak

Bloomberg eleven three oh cold weather partly Sunday Today. Hi is only in the low twenties, will be in the upper twenties by tomorrow. Sunday war clouds than sun. High in the low thirties. Right now fifteen degrees in Central Park. Broadcasting live from the Bloomberg Interactive Broker Studio in New York.

Bloomberg E Living Freedom to Washington, d C, Bloomberg to Boston, Bloomberg one O six one to San Francisco, Bloomberg NAM sixteen to the country, Sirius XM CHADO one nineteen and around the globe, the Bloomberg Business at and Bloomberg Radio dot Com. This is Bloomberg Daybreak. It's five thirty on Wall Street. Good morning. I'm Nathan Hagert and I'm Karen Moscow, and we're just about four hours away from the open of US trading. Let's get you up to date in

the news you need to know. At this hour. We're seeing more tech weakness following yesterday's a late day sell off. We get the very latest live, but the Bloomberg's John Tucker, John Karen that has that correction let's started this week

has gotten worse after yesterday slide. The Tech heavy index now down close to twelve percent since it's November high, and the list of investor concerns is growing markets face of one two punch of FED rate hikes and the possible reduction of its eight point eight trillion dollar balance sheet, and earning season so far has been uneven, highlighting the risk that may fail to do the heavy lifting for stocks when the Federal Reserve ends it's stimulus You New York.

I'm John Tucker, Boonberg Radio and John. Adding weakness to the tech sector this morning is Netflix. The shares are down twenty one percent this morning on disappointing subscriber growth. We get more from Bloomberg Intelligence, Tech and media analysty to run and nothing. The sheet was kind of looking more at a first quarter editions of about six point to six point three million, which would kind of then

set the tone for the whole of two. We're looking more at like a two two and a half million, which really now kind of I think actually a lot of nervousness amongst investors. Detronga Nathan of Bloomberg Intelligence says the subscriber forecast or result in Netflix's slowest start to a new year in at least a decade. Well, Nathan, Bitcoin is also lower today. In fact, it's trading at its lowest level and more than five months. Bitcoin hit

a high of almost sixty nine thousand in November. This morning, it's at thirty nine thousand dollars and on Wall Street Care and JP Morgan Chase is coming off its most profitable year on record, and as a result, the bank is rewarding CEO Jamie Diamond. Let's get the latest life from Bloomberg's Rnita Young Ronita Nathan. Regulatory filing show that Jamie Diamond got a ten percent pay raise to thirty four point five million dollars for his work last year.

JP Morgan earned forty eight point three billion in one and The move is the latest in a sign that after compensation pressures emerged last year from the junior ranks up through the banking and trading hierarchy, banks are now paying their most senior leaders more as well. Live in New York. I'm gonna need a young Bloomberg day break all right, need to thank you. And China is quietly urging banks to increase lending after a slow start of

the year. Bloomberg News has learned that the People's Bank of China has given so called window guidance to large state owned lenders and regional banks. It urged them to extend more credit to companies and households. SNP futures little change this morning. Dal future is up forty seven NASDAG futures down forty ten. Year Treasury up five thirty seconds yield one point seven eight percent. Straight to head your latest local headlines, plus a check of sports. This is Bloomberg,

Thanks Scaring. It's five thirty three on Wall Street, just fifteen degrees one five in Central Park. We're still dealing with the accident investigation in Edison. It's on southbound Route one at Root eighteen. Details coming up in traffic first Michael Barr is back with more on what's going on in New York and around the world. Michael, thank you

very much, Nathan. Secretary of State Anthony B. Lincoln is scheduled to sit down in a high stage meeting, but his Russian counterpart in Geneva right now Moscow is still insisting Ukraine will not be admitted into NATO. President Biden said yesterday Russia will pay a heavy price if they invade Ukraine. One military official, General Robert Abrams, says a major conflict good result in a level of violence Europe

hasn't scene since World War Two. The sheer destruction of infrastructure, home cities, loss of life both military and civilian, as well as displaced civilians will directly impact not only Ukraine in Russia, but economically will certainly affect Europe. General Robert Abrams was a former commander of US forces in Korea. New York City Mayor Eric Adams is calling for better coordination between federal and local authorities to fight urban crime.

Adams says law enforcement agencies should coordinate against gun violence the way they did against terrorism after the September eleventh attacks, the same coordination that stopped plays from fly and our build his must be used to stop bullets from cobbon highways of death in our country, particularly in black and brown and poorer communities. They are, Adams spoke at the National Conference of Mayors in Washington yesterday. Singer meat Loaf

has died at age seventy four. He was known for hits like that Out of l meat Loaf, whose real name was Marvin Lee a day, sold over one hundred million albums worldwide. Abortion opponents are gathering today in Washington for the largest anti abortion rally in the US. The March for Life arrives as the Supreme Court will decide in the coming months on whether to let states impose

tighter restrictions on abortion. Remembers say that they are not finished fighting for abortion restrictions, even if the courts conservative majority rules in their favor later this year. Global News twenty four hours a day on air and on Bloomberg Quick Take, powered by more than twenty seven hundred journalist and analysts more than a hundred twenty countries. Michael Barr, this is Bloomberg. Nathan, Okay, Michael, thank you, And it's

now five thirty five on Wall Street. Time for the Bloomberg Sports Update us john Shaw act Nathan not surprisingly plenty of booze at the Garden. Nicks, for the third time in four days, lost at home to a team you've figured they could be. This time New Orleans Nicks again fell behind early and then the Pelicans really put the game away, winning the third quarter thirty five to fifteen. The final was one oh two to ninety one. What

has happened to Julius Randall? The NBA's most improved player last season, second team All NBA, He got a big contract, not playing anywhere near that level. Randall last night four points. He shot one for nine. Among those advanced to the fourth round of the Australian Open, meal mere catch Monovich, who was supposed to play fellows Serb Novak Djokovic in the first round. Djokovic's course was sent home. Two thousand fourteen,

Kevin Ollie coach you'vecott of the National Championship. He was fired four years later in the school said it was for n C double a violation, so they didn't know him what was left in his contract? Ali Soon an arbitrator agreed Yukon now owes Ali eleven million dollars. The MLB lockout continues. The two sides of had one brief bargaining session last month. Players quickly dismissed an owner's proposal. The union now set to make a counter offer next week.

If there's no deal soon, they will like to make official that spring training will not begin on time. NFL playoffs resumed Tomorrow's running, with Cincinnati coming off its first postseason wining thirty one years. Now at Tennessee, the Titans get start running back Derrick Henry back from a broken foot. Forty Niners off the upset win in Dallas now go to Green Bay Tomorrow night might snow will definitely be cold. Sunday, Rams and Bucks and Tampa matter. Stafford just got his

first playoff when Tom Brady is thirty five. The weekend wraps up with Buffalo at Kansas season tost Actually where Bloomberg Sports Nathan and John we have breaking news from the Australian Open. Defending champion Naomi Osaka has lost in the third round to Amanda an A Samova. Seven on Wall Street Time Now for the Tri State Business Report. Here's Bloomberg's ed Corey talent war means higher starting pay for some new York lawyers. Millbank increased starting associate salaries

to two hundred fifteen thousand dollars. I made a hyper competitive market. That bump ads ten thousand dollars to the salary for first year associates that Millbank announced last summer. Greenwich home listings plunged to a record low in the fourth quarter. That with the Breggs in a buying frenzy in the posh Connecticut town, there were just one hundred sixty seven single family houses available at the end of

the quarter. That was down nearly sixty percent from before the pandemic and the fewest in data going back eight years. With the Gateway commuter rail tunnel project in New York and New Jersey is receiving a priority boost that makes it eligible for federal funding. The Federal Transit Administration is raising the project a medium high from Medium low. The rating needs to be at least medium to qualify for money. That's your Bloomberg tried State Business report. I did, Corey, alright, ed,

thank you. It's five eight on Wall Street. Bloomberg Radio is on the air from San Francisco to New York, London to Hong Kong. Let's check in with our global news team for some of the top stories heard on our three hundred affiliate radio stations around the world. Um Courtney Donahoe on KJR H in Houston. Mortgage rates climbing for a fourth consecutive week, highest since the start of the pandemic. I'm Caroline had Gone Bloomberg. Davey Digital Radio in London were re quoting on the slump in UK

consumer confidence and December retail sells. I made Corey on w w J in Detroit. I'm reporting Michigan plans to become carbon neutral by two thousands fifty. And those are some of the stories our hundred Bloomberg journalist and analysts are working on this morning around the world. It's nine on Wall Street. The following is an editorial from Bloomberg Opinion. The walls are closing in on UK Prime Minister Boris Johnson.

His critics, including fellow Torris, are furious us over the party Gate scandal involving lockdown defining gatherings held at ten Downing Street. If Conservative members of Parliament were to trigger a leadership contest, Johnson could very well lose. The Prime Minister is planning for time, apparently hoping that passions were cool. But the political environment has shifted since Johnson's election victory

in twenty nineteen, and not to his advantage. Brexits promised benefits are invisible and its mounting burdens impossible to ignore. The pandemic is once more threatening to overwhelm the National Health Service. Energy costs are surging, tax increases are on the horizon, and the labor opposition is no longer led by a socialist. Strange things happen in politics, especially British politics. But if Johnson prevails against these forces, it will be

a miracle. This editorial was written by the Bloomberg Opinion Editorial Board. I'm David Shipley. For more Bloomberg opinion, please go to Bloomberg dot com, slash opinion or OPA and go on the Bloomberg terminal. These has been Bloomberg Opinion. Listen for Bloomberg Opinion editorials every weekday. At this time, terminal customers can read more at O, P, I, N go right now. SMP futures are little changed now futures up sixty three points, NASTAC futures down two. Netflix shares

down twenty one percent. Analysis of the earnings next with Tuna Amobi of c f R a Bloomberg eleven three oh weather sunny, low twenties for highs today will be in the upper twenties Tomorrow, clouds roll in Sunday, with highs by then in the low thirties currently just fifteen degrees. Markets headlines and breaking news twenty four hours a day at Bloomberg dot com, the Bloomberg Business attend at Bloomberg Quick Tape, He's a Bloomberg Business Flash and I'm Karen Moscow.

US stock index futures are mixed, while European stocks are following as investors assess shape key company earnings in that prospect of higher US borrowing costs. NASDAK futures are underperforming after the tech heavy gage entered a correction yesterday. But check the markets every fifteen minutes throughout the trading day on Bloomberg s ANDP futures that will change. DAL futures

up sixty two, NASDAG futures down forty one. The decks in Germany's down one point three per cent, the ten year treasury up four thirty seconds, YELD one point seven nine percent, The yield on the two year one point two percent nine max Scrude oil is down one point six percent on a dollar thirty five at eighty four dollars nineteen cents of barrel. Comic school is down four ten per cent or eight dollars twenty cents at eighteen

thirty six seventy announced. The euro one point one three three seven against the dollar, British found one point three five six nine. The yunis at one thirteen point nine zero. Bitcoin this morning is at thirty eight thousand, nine hundred dollars. And that's a Bloomberg business flash. Now here's Michael Barr with more on what's going on around the world. Michael Karen,

thank you very much. US Secretary of State Anthony Lincoln and Russian foreign ministers Sergei lab Rolph began security talks today. It comes after President Joe Biden warned Russia would pay a heavy price for any intervention in Ukraine. Lavrov says Russia is grateful to the US for participating in the security talks and expects to receive a response to its security demands. The US plans the raise the federal employee minimum wage to fifteen dollars an hour. That's according to

a report from Axios. Meat Loaf, born as Marvin Lea Day, has died. The singer known for such hits as Bat Out of Hell was seventy four breaking news out of the Australian Open. Defending champion Naomi Osaka has been knocked out of the women's third round in the NBA the next and Warriors lost in the NHL. The Bruins beat the Capital's for three Global News twenty four hours a day on air and on Bloomberg Quicktake, powered by more than twenty seven under a journalist and analysts more than

a d twenty countries. Michael Barn this is Bloomberg. Nathan all right, Michael, thank you. It's five forty nine on Wall Street Live from the Bloomberg Interactive Brokers Studios. This is Bloomberg Daybreak. And when you want to talk about shaky earning so far, take a look at Netflix. The shares of the streaming giant are down twenty one percent

in the pre market. Streaming Giant reported a slow down and subscriber growth in the fourth quarter, and it says it is likely to continue at least into the early part of this year. Let's bring in Tuna Amobi for more on this. Tech media and telecom analyst at c f R A Tuna, Good morning. Not so good for Netflix. So with that guidance for just two and a half million new subscribers in the current quarter really seeming to spook investors, does it have you rethinking the stock? A

lot of analysts are starting to downgrade. Now. Good morning, Nathan, and it's always great to be with you. Um. Absolutely, I think the guidance for a Q one, as you alluded to, kind of spooked spooked us as well, right, Um, but we did maintain our target prize. Um, sorry, we did. We maintain our by recommendation and then reduced our target price. UM. I think what this report had done this and is that it calls into question, um, you know, the the

pace of growth, whether that might be sustainable. Um. You know, we were. We came into the last quarter actually with relatively temperate expectations, but no one, um, you know, was anticipating that the Q one guidance was going to be as low as two point five million, which was at

least four million lower than our expectations. With that being said, you wouldn't know the way they share the trading that they actually beat Q from the top and bottom line, even though the subscriber numbers eight point three million came in a touched below the guidance of eight point five

million last quarter UM. At this point UM, it's pretty clear to us that the next hundred million UH subscribe audition is going to be incrementally harder than UM than the last two hundred that Netflix has added globally, UH. You know, granted that we still think that there's a lot of low hanging fruit in men the international markets across EMA and also Asia Pacific, that we think that

there's a lot of room for for growth. But what investors are doing right now is to somewhat recalibrate UM, you know, the expectation and begin to perhaps depression the secular growth thesis as to whether this huge breaming valuation is warranted. But you know, right now, we're still kind of watching. We think that there's still some elements of

COVID overhang. As the company alluded to, it's been extremely volatile too for forecast subscriber prediction to predict subscriber growth coming out of a bit COVID, and this is something we respect to UH to be a common theme as other streaming platforms report their results. Yeah, I wanted to ask you about the outlook for the streaming UH industry more broadly, are those tempered expectations for subscriber growth something

that you're expecting across the competitive space? Certainly there's uh you know, every sends to show that the next leg of the growth is not going to be as robust, and that's why you see a lot of the shares of the major companies that owned streaming platforms also down in sympathy with Netflix. UM you know. With that being said, I think that the one positive takeaway from Netflix results should not be lost that the US and Canada numbers

were actually way better than expected. I think there's been questions around whether the domestic market is saturated, but but I think this report answered that UM and kind of help to ease the concerns. The other question is whether the price increases that they've just announced in US and Canada,

how much that perhaps factored into their their guidance. We think that um, you know, given the huge content investments Netflix has made, UH, they still have a fair amount of pricing power left, So we would not rush to conclude that UM you know that there's any questions of audience retention or turn because most of the shows that they've reported view hours or significantly up. And there is no, um, no doubt that there's still tremendous appetite out there for

for streaming content. Only about a minute left here, Tuna, but you know, to Netflix has been spending a lot on content, putting out the sort of blockbuster movies and TV shows as well. Can they continue to spend that much on the product that they put out for consumers? They almost have to, especially with streaming wars now set to further escalated this year. Um we have them spending north of twenty billion dollars this year as well, after

almost seventeen billion last year. So this is really the name of the game, you know, with with all the you know, depocketed competitors out there, it's almost imperative that you have to spend and give consumers their reason to keep coming back. And that's why you think they've been able to sustain the viewership growth that they have. Content is going to always be the number one ingredients in

terms of being a formidable competitor. So it is not a game for this faint of heart nating Yeah, a lot of competition, not just in streaming, but maybe even in movie theaters as well as a lot of consumers movie goers think about at least getting back into those cinema seats. Tuna, a MOBI analyst at c FR a with us this morning on those Netflix earnings and taking a look at the shares in the pre market care and again they are down now twenty one and a

half percent. All right, Nathan, thank you. While staying with earnings, fourth quarter results from the major Wall Street banks are in the books, and Bank of America's coming off an end of the year that beat most expectations. Still it has not been completely smooth sailing for Chief executive Brian moynihan. He says compensation is the biggest expense for the bank.

And we came up with Bank of America's CEO Brian moynahan in a conversation with Bloomberg's David weston let's listen and now it's a tale of many cities in the sense that there are some businesses which, uh, you have not as much leverage in and as they called therefore

they compensation structure maintains constantly. There's some there's bonuses overall, we we have about thirty odd billion, thirty two thirty three billion dollars in compensation and related expenses, benefits, compensation, bonuses, et cetera for our team of our fifty nine billion expenses. So it is the biggest expense by a lot. And so the only way to really do you have to manage that is actually how many people you have going through it? Um. You have to be competitive, You have

to pay people. We don't want people want to work for less. Next year, Brian's we look forward in twenty two, we're looking at something we haven't seen in a good long time, and that is the tightening of monetary policy rather than the loosening monetary policy. Give us a sense

of what you're looking at. And just to be specific, as you make projections at back in America, how many rate hikes do you expect to have fed in two There are two parts that one of our research team led by Canvas Browning plat and the team is terrific and they have four rate hikes in next year. Uh. But internally we we model our future income off the curve. We don't full ourselves. Let anybody make a projection, but

look inflation is here. The economy you know it's gonna grow at six four two, so thinks six last six and four and twenty two and to get them to two pc growth rate and in twenty three, and think

of it. This year is making that adjustment that is based on the tightening first the Fiscal Committy official will uh stimulus you have stopped last year and now the monetary stimuls to be pulled out because the economy is as big as it was growing faster unemployments below for you know, the conditions are right to go ahead and actually reduce the accommodation with one big caveat does this virus go in some direction that caused some damage that

people don't understand. And the good news is, you know we're winning the war on the virus of vaccines and everything you know about. So, but remember the key is at six four two, the economy is slowing down and part of that is the engineering that goes on to bring it into more of a sustainable growth rate because it was growing faster than it usually grows. And so will rates go up? Yes, four times this year is a prediction. The reality is does that help our earnings? Yes?

But the real reality is is that's the bring the economy to take the inflation now the system and if they get it right, because the economy is growing very fast, in inflation is growing very fast. As that slows down, we should get back to normal economy. And that was Bank of America Chief Executive Brian moynihan speaking with the Bloomberg's David West, and you can catch their full interview

online at Bloomberg dot com. Again, futures this morning, S and P futures are little change down futures up fifty three and NASDAG futures lower down fifty four. The tenuere treasury at four third day seconds he had one point to seven nine per cent and the yield on the two year one point two per cent. Still ahead. On Bloomberg day Break and check on the business headlines and all the news you need to start your day. This is Bloomberg