Bloomberg Daybreak: January 5, 2023 - Hour 1 (Radio)

former Pope Benedict Blost. President Biden says he intends to visit the US Mexico border. Michael Barr more ahead, I'm John stash Our. In sports, the Knicks pulled out a narrow home win over the Spurs. The Nets win streak

ended at Chicago. The Devil's one in Detroitano. That's all training ahead on Bloomberg Daybreak on Bloomberg eleven, Free on New York, Bloomberg one, Washington, d C, Bloomberg one oh six one, Boston, Bloomberg nine sixties and Francisco Sirius x M one nineteen and around the world on Bloomberg Radio dot Com and via the Bloomberg Business. Good morning. I'm Nathan Hager and I'm Karen Moscow. When US DOT index futures they are a little changed to lower this morning.

We check the markets all day long here on Bloomberg with S and P futures. That will change. Down futures also, that'll change now. And nasdeck features down about tenth of upper cent or about fifteen points. The decks in Germany's down two tenths of upper cent. Ten year treasury down seven thirty seconds. You have three point seven zero percent

yield on the two year four point three eight percent. Nathan, all right, Karen, We'll have more on the markets in a minute, but first, the latest on the political turmoil in Washington. The House has adjourned once again without electing a speaker. Let's get the latest from Amy Morris in our Bloomberg newsroom. In Washington, twenty hardline conservatives are blocking g o P leader Kevin McCarthy's ascension to howse speaker,

and Pennsylvania's Scott Perry is one of them. Because we all acknowledge and we all know that Washington is for oen. We must take a new path. Laurida's Cat Camot called on the GOP to support McCarthy. He has proven that he is willing to stand up in the face of critics and not only prove them wrong, but work with them. How's Republican leaders held a meeting late yesterday to hammer

out a deal, Still no resolution. Lawmakers reconvene at noon today to begin a seventh round of votes in Washington. I'm Amy Morris Bloomberg Daybreak. All right, Amy, thank you about the standoff on Capitol Hill. Is getting attention from the White House. President Biden says he hopes Congress can quote get their act together. Congress for caen function. It's just an embarrassing the greatest nation in the world. How

can that be? President Biden says, dysfunction within the GOP is not a good look to the rest of the world. Now we're getting reaction from former members of Congress as well, Karen Democrat. Tim Romer is a former representative from Indiana. He says Republicans voting against McCarthy seemed determined to take him down, and Democrats have little reason to come to his rescue. The Democrat so are in a very good

position right now. There is no incentive for them to help Kevin McCarthy out of this deep dark well at a hole that he has done for himself. Former Congressman Tim Rohmer was a guest on Bloomberg Sound On with Joe Matthew. You can catch the program weekdays at five pm Eastern on Bloomberg Radio and listen to the show on demand wherever you get your podcasts. Well, Nathan, Another major story we're following this morning brings us to Amazon.

We're learning job cuts at the company will be greater than initially anticipated, with Amazon planning to eliminate over eighteen thousand rules. Bloomberg's Dog Kristner has the details. The figure includes cuts announced back in November, when about ten thousand workers lost their jobs. Uncertainty over the outlook caused Amazon

to accelerate layoffs. CEO Andy Jesse told employees the company typically waits to communicate these outcomes until it speaks with those directly impacted, but the information was leaked to the Wall Street Journal, so the news was shared earlier and directly from Jesse. Most of the cuts are in Amazon's retail division and human resources. Jesse is already eliminated or curtailed experimental and unprofitable businesses in New York. I'm Doug Prisoner,

Bloomberg Daybreak. All right, Doug, thank you. In those Amazon cuts come as we await two key readings on the labor market today ahead of tomorrow's jobs report. We're got a preview from Bloomberg's Mike McKee. The Fed is focused on employment as they raise rates to slow the economy. Unemployment should rise, So far it hasn't. Jobless claims have remained low and steady, although econdists say it's difficult to get a clear read on layoffs during the holidays, so

don't expect a big change in claims yet. ADP measures the number of people on payrolls, in theory that should point to the direction of the overall labor market. ADP, however, has diverged from the government's payroll report, coming in weaker for the past five months. Bottom Line markets are likely to look past today's data to Friday's numbers, figuring that's what the Fed will be doing. Michael McKee, Bloomberg Daybreak, Hey, Michael, thank you. Meantime, the Fed is standing firm and it's

resolved to bring down inflation. And we get the latest live at the Bloomberg. Steve Rappaport, Good morning, Steve, Good morning, Karen and Nathan. With that resolve comes a delicate balancing act for the Federal Reserve. In a blunt morning to investors, minutes from the last policy meetings show the central Bank will not cave to public pressure to lower interest rates.

The Feed is attempting to cut inflation without triggering a recession, but JP Morgan Chip US economist Michael Faroli tells Bloomberg gets likely too late to achieve that goal. We are expecting the economy to slip into recession by the end of the year, just due to the lagged effects of the of the tightening and financial conditions that the Fed is engineered here, as well as the additional great height

set their their signaling today. The notes also highlight the Fed's rate projections being quote notably above market expectations from a policy standpoint, Live in New York. I'm Steve Rappaport, Bloomberg daybreak. All right, Steve, thanks those conscious comments from the Federal helping fuel some caution in stocks this morning. Yesterday, both the SMP five hundred and the NASTAC one hundred

snap two days of losses. Morgan stand chief US equity strategist Mike Wilson, who correctly predicted last year's dismal market, says stocks are heading even lower that we think three thousand is a very achievable number given our confidence on our earnings forecast. Ironically, I would say any absence of, you know, a recession, meaning companies decide to not off aggressively, that target looks more achievable. That may sound counterintuitive, but

that's the way we're not modeling it today. So our bear case is actually kind of we avoid a recession, but not to slowdown. If Morgan Stanley chief US equity strategist Mike Wilson's prediction comes true, stocks would decline more than from current levels, and Wilson is not the only

big bear on Wall Street. On this morning. Piper Sandler strategist Michael Kantrowitz, ranked number three in the last year's Institutional Investors survey, predicts the S and P five hundred will fall to just above thirty two hundred and again futures it will change. This morning, straight ahead, your latest local headlines, plus a check of sports, and this is Bloomberg. Thank you hearing its forty nine degrees in Central parkot Sympatchie Follock this morning. It's gonna stay cloudy and cooler

today in the low fifties. Might see a shower tonight as we get down to the low forties in the overnight hours. Time now for a look at some of the other stories making news in New York and around the world. For that, we are joined by Bloomberg's Michael bar Good morning, Michael, Good morning, Nathan. Pope Francis delivered the homia at the funeral mass for former Pope Benedict Benedetto in Italian. Pope Francis says, Benedict, faithful friend of

the bridegroom. May you enjoy be complete as you hear his voice. Mourners gathered in St. Peter Square outside the Vatican today where Benedict is being laid to rest. George Mason University professor Helen Alvary spoke about Benedict's legacy. I think he's a model of humility and modesty. He was definitely a servant of the church. He didn't want to come to Rome. He wanted to stay in Germany and remain at Theologian. He didn't want to be out of

the office of Doctrine. But John Paul too really twisted his arm, and he really did not want to be pope. Ah he he thought, you know, he was not great enough for it. Benedict will be buried in the crypt under St. Peter's Basilica. President Joe Biden says he intends to visit the US Mexico Boarder next week for a firsthand look at conditions as his administration contends with surgeon migration. Biden is already scheduled to travel to Mexico next week

to meet with the presidents of Mexico and Canada. President Biden's administration urged the U. S. Supreme Court to uphold his embattled student debt relief plan. The High Court is scheduled to hear arguments February. It's a war of words between New York City Mayor Eric Adams and former Mayor Bill de Blasio's administration. Adams is calling on his predecessor to stop his team from criticizing the current administration. It's not called Bill. The other day I said, Bill, what's

going on? You know what's going on? And then the Bill's coms guy who's probably the roast coms guy in the History of Communication. Adams is talking about the blosil's former spokesperson Bill Ninehard, who has been increasingly critical about Dams on Twitter. Adams said they had eight years to do their job. Once they're gone, their experts on everything. Heavy rains and strong winds. At California overnight it has a powerful bomb cyclone washed ashore knocking out power storm.

Is the third so called atmospheric river storm to impact California in the last two weeks. Global News twenty four hours a day on air and on Bloomberg Quick Take, powered by more than journalist and analysts more than a hundred twenty countries at Michael Barr, this is Bloomberg. Nathan Okay, Michael, Thanks down Alf of the Bloomberg Sports Update, brought to you by Tri State Audi. Good morning, John, Sasha, Good morning Nathan. The next lost to the lowly Spurs a

week ago in San Antonio. Jelly runs and didn't play that game. He did play last night at the Guard and he scored thirty eight points, career high in the regular season. Nicks pulled out the win one seventeen one fourteen. The Spurs were coming off at thirty six point loss in Brooklyn. The Nets brought that twelve game winning strengt to Chicago. It ended the Bulls won one twelve despite forty four points by Kevin durand the Nets first loss in a month. Devil's won five one at Detroit. They're

back home tonight. Road games tonight for the Rangers and Islanders. Fordam lost a tight one at Rhode Island eight two seventy nine, and the Big East Providence beat Yukon. The Huskies were fourteen now they've lost their last two. Georgetown, with a home loss to Villanova, has now lost twenty

five consecutive Big East games under coach Patrick Ewing. Red Sox having allowed shortstov Xander Bogart's has become a free agent, losing him to San Diego, holding on to all star third baseman Raphael Dever's new contract eleven years, three hundred and thirty one million. The Jets closed after season Sunday in Miami. It seems as if every press conference for Jets coach Robert Salah is a discussion of where things

stand with the bench quarterback Zach Wilson. Zack has got all the talent in the world, and we have all the confidence in the world. And and and it's just like I said, from this reset, and we're gonna we're gonna grind with him. We are and uh and through hell Ohio water. We're going to figure out how to how to get into what we know he can do. Mike White will be Stalla's starter. On Sunday, the Dolphins are

likely to start rookie QB. Skyler Thompson Miami, who liked the Jets, has lost five and Row can still make the playoffs with a win and a New England lost in Buffalo. John Stash, Now we're Bloomberg Sports. Nathan, all right, John, thank you. In the Bloomberg Sports Report was brought to you by Audie. Don't let someone else drive off in the Audi model you've always wanted. Visit your local Tri state Audie dealer to get behind the wheel of yours today,

or visit Autie Offers dot com for more information. Coming up, we'll look at what could break the standoff on Capitol Hill for House leader Kevin McCarthy. First futures are trading flat, SMP futures right now down to point, DOW futures down eighteen and NASDAC futures a lower by eight points ten. Your treasury is down seven thirty seconds. The yield on

the benchmark three point seven. Live from coast to coast, from New York to San Francisco, Boston to Washington, d C. Nationwide on Sirius Examp, the Bloomberg Business app, and Bloomberg dot Com. This is Bloomberg Daybreak. Good morning. I'm Nathan Hagar, and the focus this morning once again remains on Washington, d C. The stair down continues between House Republican leader Kevin McCarthy and those twenty and now twenty or so GOP members who seemed determined to block McCarthy's bid to

become the next Speaker of the House. Terry Haynes is with us this morning now, the founder of Pangea Policy. Terry, Good morning. I know we've talked before many times about the four factions you see in Washington, d C and the two party system, and we're certainly seeing two of those factions butt heads this week. What's it gonna take for Republicans to get along? Good morning, Nathan, Happy new year, and everybody on the program, Thanks for and thank you

for remembering the four factions so very important. The what's that gonna take? Uh? You know, I don't see this as as close to ending as we begin today. I'll tell you for two reasons. One is kind of a lucy in the football program. Uh, the twenty or so dissidence. Uh. Uh have a bunch of demands. The demands constantly shift. Uh. You can't get to the end of the demands. So that's number one. Number two is what I think of

as a super size problem. What they continue to want to what they talk about is, you know, kind of the lack of what i'll call kind of conservative focus off in the in the broader Republican conference on lots of different issues, spending issues, cultural issues, all kinds of other things. And what they really say they want when it comes down to it, is outside and outside influence on policy, on committees, on you know, kind of the levers that make things work. That's not an attack on McCarthy,

that's an attack on the entire conference. In other words, they're directly attacking the other, their fellow members who who think that, you know, things can be worked out the way they are. Uh. So, you know, I don't see this as uh as as ending real soon. Um, you know there. You know, I think they're into backing themselves into the corner because what they're doing with their of the conference that they need in order to help make a deal is make is make the case that if

we give in, then the House becomes ungovernable. So, you know, I think this is going to take a while, and I think increasingly what what folks ought to do is be looking past McCarthy and towards either a more consensus conservative or a more consensus centrist within the on the Republican side. Well, even if there is a consensus to come forward, Terry, would a consensus candidate be able to

meet the demands that those twenty Republicans have? I mean, does it make a difference whether they're making the demands of McCarthy or anybody else. Yeah, well, a very good question. And part of the reason I think this is going to take a while is because I think the what the conference is is coming to the conclusion, uh, is that is that, you know, we just can't continue to to focus on the drift drift drip here. These fits

never gonna be enough for these folks, uh. And what I think is gonna end up happening is if you end up with somebody other than McCarthy. Because it's very clear this isn't really about all the the rearranging the deck chairs on the Titanic stuff. This is a personal vendetta against McCarthy. Uh. If McCarthy goes away, a lot of these issues, a lot of these problems go away. So, uh, there's one reason why I think increasingly the Republican Conference is gonna look look to somebody else to be the

speaker in this Congress. So are you saying that they're gonna just gonna drop their demands if McCarthy steps aside? But yeah, I think a lot of the problems will be considered to go away if there's another personality in the speaker's chair. Yes, Okay, what what is the possibility that we could see some kind of deal made with Democrats? I mean that's something that McCarthy had warned could be

a scenario if this continues to play out. Could we could we see a situation where we have some kind of I guess American version of a coalition government come forward in Congress. Yeah, it's a very smart question. I think you know you you played a clip from former Congressman Tim Romer, very savvy former Democrats from Indiana. UH, and Tim Tim's point was very simple that you know, there's actually no incentive for Democrats don't want to work

on this. Number one UH Number two UH. I know what's one thing that's getting play at least on on the Bloomberg site is a proposal by for a current Congressman Brad Sherman of California that they could probably work with UH with Republicans if they'd agree to UH TO and increase the debt ceiling deal on spending, you know, not shut the government down that sort of thing. UH. Congressman Sherman is always a bit of a freelancer, so I wouldn't take this as it wouldn't take his view

as some sort of official Democratic position at all. Secondly, UM, you know that doesn't work with the vast majority of the conference. The idea that they give up effective control on spending in debt limit UH is something that the Republicans wouldn't accept. So that's a nonstarter, all right. Terry Haynes, founder of Pangia Policy. We'll see how things unfold today as we get ready for round seven voting for the

next Speaker of the House. As we've been saying all week, it's been a hundred years since we've been in a position like this, and it continues to unfold. In Washington, d C. Terry Haynes, founder of Pangia Policy, with us this morning. Future is flat. SMP futures little changed to the upside down. Futures down three points, NAZAC futures down one point. This Bloomberg Markets Headlines and breaking news twenty four hours a day at Bloomberg dot Com, the Bloomberg

Business and at Bloomberg Quicktake. She's a Bloomberg Business Flash and I'm Karen Moscow US not Index. Futures are little change this morning. As investors balanced further signs of China's reopening with conscious commentary from the Federal Reserve's latest meeting. European shares paired their declines with the report showing Euro Area producer prices film more than expected in November. We checked the markets all day long here on Bloomberg again,

futures are little change. The ten year treasury down six thirty seconds. He had three point seven zero percent, and they yield in the two year four point three eight percent. And that's a Bloomberg Business Flash. Now, here's Michael Barr with Moore on what's going on around the world. Uncle, good morning, Good morning, Karen. The U S House will resume session later today after Kevin McCarthy and GOP dissidents failed to reach a deal on the California Republicans bid

to become speaker. Today is day three of the standoff between McCarthy and twenty colleagues withholding the support he needs for the job. Six votes have failed to elect a speaker. Pulpe frances is honoring his predecessor, Benedict. St. Francis is presiding over a mass for Benedict before thousands of mourners in St. Peter's Square in the NBA. The next one, the Nets and Warriors lost in hockey. The Devil's won.

Global news twenty four hours a day on air and on Bloomberg Quicktake, powered by more than twenty seven hundred journalists and analysts, are more than a hundred twenty countries. Michael Barn, this is Bloomberg, Nathan. Thanks Michael. It's five twenty three on Wall Street. I'm Nathan Hagar. This is

Bloomberg Daybreak. We're watching shares of Amazon this morning, they have two and a half percent in the pre market on we're now confirmed from CEO Andy Jesse that the e commerce giant will lay off more than eighteen thousand employees. That's nearly twice as many as previously expected. Potential signed the tech industry slump maybe getting worse. Joining us now for more on this is a quick take. Corres Fund and Alex Webb Alex so, we knew Amazon was tightening

its belt. Should this even bigger round of job cuts come as a surprise for investors? Well, it clearly has come as a bit of a surprise, given the share reaction. They had telegraphed that would have been reported there was going to be something in the order of ten thousand DROB cuts, so it's almost double that. Let's not forget though, that you know, Amazon has in the order of one

and a half million employees globally. It added between twenty two a million additional head count that's equivalent to the entire U S Army, So you know, compared to that, eighteen thousand is still a relatively small percentage to people being affected by the job cuts. It's not small deal for them, but it means that the share price reaction two and a half percent when it's eight thousand of the one and a half one a half million, seems

maybe a little bit overplayed. Don't forget, of course, they're also talking about some real estate pair backs. Amazon's expansion during the lockdowns wasn't just headcount. They also added a huge amount of warehousing, and the general consensus being that they expanded too quickly. Now so it seems as though this is just a reshuffle of sort of a return back to a pre pandemic sort of normal for Amazon. Is that how we should be looking at it. That's

half of it. Look, what happened was with that expansion is if you look at the revenue per employee, so you average out the total revenue by the total head count, revenue per employee had actually declined over the past few years, which kind of shows how they had expanded too quickly. But don't forget. We also then have the broader interest rate story, which has helped bring the Amazon share price down. It's lost trillion dollars in market cap over the past

few months. That means that management probably feels the need to do something. It's not entirely Amazon's fault that partly to do with the recovery post pandemic, but it's also to do with, you know, investors being able to find

good returns or more reliable returns elsewhere. So you look at those two factors, the operational impact and then the broader stock market performance, and management probably then feels on the one had the need to do something, but also the opportunity to right size what they would see as right sizing their business because you know, they kind of have the air cover to do it. Yeah, good point about the FED picture as well, but it's coming out on the heels this this confirmed news from Amazon of

Salesforce announcing a ten percent staff layoff. What is that to say about the tech sector overall, Well, let's let's not forget that a lot of these companies, what we call the tech sector, they are enabling up businesses in other sectors. And Salesforce, you know, a lot of that is sort of the advertising business, right and advertising is, as we know, something that gets hit hard by economic slowdowns. The first thing that companies tend to slash from their budgets.

Online sales, of course have been growing, and Salesforce is a company that enables that. Um But the pace of that growth has slowed down a bit, so you know, we're seeing salesforce h you know, probably pre emptying some of the some of the broader impacts on its business

and and trying to get ahead of these effects. All right, Alex Web Bloomberg Quick Take correspondent with us this morning to talk all things tech once again, and on the word official now from CEO Andy Jesse that Amazon will be laying off more than eighteen thousand of its more than million plus workforce. The shares this morning are higher by two and a half percent in the pre market. The futures as a whole are trading flat. SMP futures little changed, uh DAL futures are down three points, Nasdaq

futures little changed to the downside as well. Ten Your treasury is down five thirty seconds, yield three point seven zero percent, and the yield on the two year right now is at four point three eight percent. Coming out next, your top stories of the morning, local headlines, and a fuller check of markets. First, we check in with Rob

Carolin for today's Bloomberg weather forecast. So, Mary's apache fog around the Tristate area this morning looks like kind of a cloudy day, shaping up once the fog lifts fifty to fifty five. Today, clouds night may be a straight shower of forty to forty five. It will turn partly sunny in cooler Tomorrow, highs forty five to fifty. Saturday partial sun near forty five. Sunday looks partly sunny as well. Highest there will be around forty degrees. I'm Rob Carolyn

with your weekend forecast. I'm Bloomberg eleven three oh broadcasting ve from the Bloomberg Interactive Broker Studio in New York, Bloomberg Elving three to Washington, d C. Bloomberg ninety nine one to Boston, Bloomberg on six. What does San Francisco Bloomberg nomes sixty to the country Sirius XM ch A one nineteen and around the globe the Bloomberg Business apt and Bloomberg Radio dot Com. This is Bloomberg Daybreak, and we're coming up to five thirty on Wall Street. Good morning.

I'm caerin Moscow, and I'm Nathan Hagar. Bloomberg Daybreak is brought to you by Innovation Refunds that small business is impacted by the COVID nineteen pandemic may qualify for the Employee Retention Credit Let Innovation Refunds. Do the work to find out now if your organization qualifies for e r C assistance. They've already held businesses claim over two billion dollars in payroll tax refunds. Learn more at get refunds dot com. And we're nearly four hours away from the

open of US trading. Let's get you up to date on the news you need to know at this hour. We begin with the political turmoil in Washington. The House has adjourned once again after six rounds of voting without electing a speaker. Twenty Conservatives are blocking Kevin McCarthy's path to this speakership. Now, the standoff is drawing negative attention from President Biden. It's embarrassing for the country, I mean

literally making a part of their reality. And President Biden says that GOP does function is not a good look to the rest of the world. Lawmakers reconvene at noon today for a seventh round of votes. Ahead of that, Karen dissenting republic Kins don't appear to have a specific candidate in mind for the speakership. That's according to former Indiana Democratic Congressman Tim Romer. He tells this gop TO

centers just want to oppose McCarthy. These four or five or twenty We'll see this as a real victory, just taking McCarthy down. Former Congressman Tim Rohmer spoke on Bloomberg Sound On with Joe Matthew. You can catch a weekday's five pm Eastern on Bloomberg Radio. Well, another major story we're following this morning, Nathan, involves those job cuts at Amazon. The company plans to eliminate just over eighteen thousand roles,

more than was initially announced in November. Most of the const will come in Amazon's retail division and human resources department. As for the broader economy, Karen, all eyes are on the Fed and the Central Bank is affirming its resolve to bring down inflation. At Bloomberg, Steve Rappaport joins us Live. Good morning, Steve, you, good morning, Nathan and Karen. Despite that resolve, policymakers say they're not afraid to keep interest

rates high, at least in the short term. Minutes from their last meeting, note in unwarranted easing and financial conditions, especially if driven by a misperception by the public of the comittee's reaction function would complicate efforts to restore price stability. The Central Bank's goal is to eventually bring down inflation by two percent or to two percent, while keeping the economy out of a recession. Live in New York Time,

Steve Rapp Report Bloomberg Daybreak, Great Steve, thank you. While the SNP and NASDACS shook off fed caution yesterday, snapping two days of losses. But Morgan Stanley chief US equity strategist Mike Wilson says, with earnings around the corner, investors

need to gear up for rough days ahead. We're gonna get a nasty earnings recession, and so the companies that can deliver on the cost deficiency are the ones that are going to continue to perform until you fully price you know, whatever this downturn on earnings are going to be. And Morgan Stanley's Mike Wilson thanks, stocks could decline more than twenty percent from current levels. Again, futurists this morning,

they are little changed. The ten year treasury down six thirties seconds, you know, three point seven zero percent yield on the two year four point three eight percent, straight ahead, your latest local headlines, plus a check of sports, and this is Bloomberg. Thanks Karen. It's high thirty one on Wall Street and Michael Barr has those New York headlines and look at what's going on around the world as well.

Good morning Michael, Good morning Nathan. Mourners poured into St. Peter Square for the funeral of former press a, former Pope, Benedict Bell's told and the crowd applauded as Paul bearers carried Benedict's cypress coffin out of the basilica and rested it before the altar. Helena Alvary is a George Mason University professor. He's going to be remembered as one of the greatest intellects in the history of the church, which

is saying something in two thousand years. Uh. He is going to be the person who pursued all the great questions in you know, more than sixty five books and probably hundreds of articles. Heads of state, royalty and clergy from around the world flocked to the Vannikan. It is a war of words between New York City Mayor Eric Adams and former Mayor Bill de Blasio's administration. Adams is calling on his predace ester to stop his team from

criticizing the current administration. I am so tied of the previous administration and the antics, Adams slammed de Blasil's former spokesperson, who has been increasingly critical of Adams on Twitter. Adams said they had eight years to do their job. Once they're gone, their experts on everything. President Joe Biden says he intends to visit the US Mexico Board next week for a firsthand look at the conditions as his administration

contends with a surge in migration. President Joe Biden said he is considering sending Ukraine American Bradley fighting vehicles to aid the country's defense against Russia's invasion. That Bradley is an armored vehicle capable of transporting soldiers to the front lines while attacking targets with cannon and anti tank missiles. Rick Singer, the mastermind of the nationwide college admissions bribery scheme that instead celebrities and prominent people, was sentenced the

three and a half years in prison. Global News twenty four hours a day on air and on Bloomberg Quick Take word by more than twenty seven hundred journalists analysts more than a hundred twenty countries. I'm Michael bar this is Bloomberg. Nathan all right, Michael, thanks three on Wall Street time for the Bloomberg Sports update. Front you by tri State out of yours, John stet Show, Thanks Nathan san Antonio. Spurs came to New York, lost by thirty

six at Brooklyn, much closer at the Garden. Spurs had a chance to tie the game at the end, but the Knicks held on one seventeen one fourteen. Jalen Brunson scored thirty eight. Knicks played tomorrow in Toronto. The next twelve game win streak ended at Chicago, the Bulls on twelve. In the lost, Kevin Rant forty four points, Kyrie every had five, Seth Curry two. The rest of the team

combined for only twenty one. Donovan Mitchell's first game since he scored seventy one points held at twenty, but the Cavs beat Phoenix. Jana's son to the Comfort was coming off a Queer high fifty five points, settled for thirty at twenty one rebounds. Tennis has Milwaukee waned Toronto. Lakers played with Lebron without Lebron James, who was out sick.

They still beat in Miami and Detroit hit a shot at the buzzer for an upset when at Golden State, who would only lost twice all year at home, Devil's a five one win at Detroit tomorrow. Hamlet said to be showing signs of improvement from this cardiac arrest one day in Cincinnati. Quarterback news going to week eighteen, Washington will have its third different QB in three weeks, now going to rookie Sam Howell. Chicago starts Nathan Peterman for the injured Justin Fields, who was trying to set the

record for most rushing yards by a QB. Miami will likely start rookie Skyler Thompson against the Jets. Not known yet of Jalen Hurtful return from injury for Philadelphia. The Eagles hosted giant Jim Harbaugh Spolk with the Carolina Panthers, but said he expects to remain as the coach at Michigan. John Stasheller Bloomberg Sports. All right, John, thank you for that, and the Bloomberg Sports Report was brought to you by Audie. Don't let someone else drive off in the Audi model

you've always wanted. Visit your local Tri State Audie dealer to get behind the wheel of yours today, or visit Audie Offers dot com for more information on Wall Street. Time for the Tri State Business Report with Bloomberg's ed Corey. Rupert Murdoch's Media Empire is recommitting to Manhattan office space after News Corps and Fox signed leases that will keep

the companies in Midtown for another twenty years. New York City will begin to replace nearly nine hundred twenty five of its fleet vehicles with electric ones thanks to a ten million dollar federal grant. The funds will be used to buy three hundred eighty two Chevy Bolts, three hundred sixty Ford transit vans, and one hundred fifty Ford F one fifty E lightning pickups. The Department of Sanitation will

get twenty five hybrid street sweepers. New Jersey has extended its health benefits contract with Horizon Blue Cross Blue Shield for another year, even after the state officials alleged the health insurer failed to meet terms of the deal. The state will pay lower fees in exchange for reducing the scope of some services. Horizon was originally hired to provide that your Bloomberg dry fake business report. I did Corey alright, thank you? It is five on Wall Street. The following

is an editorial from Bloomberg Opinion. This editorial was written by the Bloomberg Editorial Board. Starting this week, travelers on US bound flights from China will have to be tested for COVID nineteen. Other countries are implementing similar new restrictions. Given the scale of the outbreak currently ravaging China, such moves make sense, but on their own they aren't enough to manage the global risk posed by the virus. The US, for its part, should maintain its efforts to supply China

with more potent mr NA vaccines. It should also lead a swift, coordinated global effort to boost genetic sequencing, which can help track variants. Critics of testing before travel are right. It won't prevent all transmission, but combined with common sense precautions, better surveillance, and more vaccines, it should help keep the worst effects of the virus at bay. This editorial was

written by the Bloomberg Editorial Board. For more Bloomberg Opinion, please go to Blue Bomberg dot com, slash Opinion or OPI and go on the Bloomberg terminal. This has been Bloomberg Opinion, and you can hear Bloomberg opinion editorials every weekday. At this time, terminal customers can read more at O, P I N GO. Now, another story we're following this morning. Dell reportedly wants to phase out semiconductors made in China

by four according to Japan's NIEK news service. The computer maker is also telling its suppliers to significantly reduce the amount of other components produced in China. Delt reportedly wants to diversify its supply chain because of concerns about US China tensions. S ANDP futures right now are highed by one point, Dow futures are down one point, and NASAC futures are higher by six points. Now send your treasury

is down five thirty seconds. Heal three point seven zero percent yield on the two year four point three eight percent. Stay with us, We'll get an outlook on this market from Eric Friedman of US Bank Asset Management. He joins us shortly. This is Bloomberg Markets, headlines and breaking news twenty four hours a day at Bloomberg dot Com. Of Bloomberg Business at and at Bloomberg Quick Take, this is

a Bloomberg Business lash and I'm Karen. Moscow futures this morning they're little changed to higher SNP futures and down future is both pretty much little change. NaSTA Future is up a tenth of a percent, about eleven points right now. The decks in Germany is down about a tenth of uppercent ten year treasury down five thirties seconds. You have three point seven zero percent yield on the two year

four point three eight percent. Nine X for oil is up two point seven percent of a dollar ninety six at seventy four dollars eighties cents of barrel comes golled down two tenths of a percent, or three dollars thirty cents at eighteen fifty five seventy announced the euro one point six one eight against the dollar. British found one point two zero to seven the one thirty two point four five and bitcoin this morning it's little change. It's

had about sixteen thousand, eight hundred dollars. As a Bloomberg Business flash, how here's Michael Barr with more on les's going on around the world. Michael, Karen, thank you very much. The House of Representatives will try now for a third day to lock in a speaker. Disagreements among Republicans lad to Kevin McCarthy, losing now a total of six ballots. Pope Frances is honoring his predecessor, Benedict sixteenth. Frances is presiding over a mass for Benedict before thousands of mourners

in St. Peter's Square. Officials in California ordered evacuations in high risk coastal areas as a huge storm barreled into the state. It is bringing high winds and rain that threatened widespread flooding and knocked out power to more than a hundred thousand people in the NBA. The next one

the Nets and Warriors lost in hockey. The Devil's One Global news twenty four hours a day on air and on Bloomberg Quick Tank, powered by more than twenty seven hundred journalists and analysts more than a hundred twenty countries. Michael bar this is Bloomberg. Nathan, Okay, Michael, thank you. We're coming up to forty two on Wall Street. This is Bloomberg Daybreak. I'm Nathan Hagar along with Karen Moscow. Let's take a look at some of the other stories

we're watching this morning. Strikes on the British rail network reach a critical peak today. Some of London's biggest rail stations will be closed, while some airports will also be deprived of train service. Union train drivers are walking out following a long dispute over pay go back. Here in the US, Nathan, the labor market is also front and center, but this time a focus on jobs. Payroll Process or a DP, issues its employment report for December this morning.

Economists are predicting a gain of around one hundred fifty thousand, and Bloomberg's Minnie down Judas has more. November's ADP data showed the gain of one hundred twenty seven thousand jobs, the weakest showing since January. Some industries, notorably technology and finance, are cutting jobs, are freezing hiring, and yet is Bloomberg Economics notes almost half of small businesses report difficulty finding

qualified workers. The government issues official employment data Friday, and economists anticipate a modest showing in that report as well. Beneath Dealt, Jude I Sploomberg Daybreak Alright, thanks Manny, turning to corporate news now. Yesterday's equity session saw shares a Jeffrey's Financial Group jump thirteen percent. That comes after a report that Japan's Sumitomo Mitsui Financial Group is considering raising its steak in the US investment bank. That story now

from Bloomberg's Charlie Pellett. Summatomo's CEO says he hopes to make Jeffreys an equity method affiliate, and that could involve an interest of twenty to fifty percent, according to Nikai, The CEO did not say when his firm might make an additional investment, and indicated that such decisions would come once his company holds discussions with New York based Jeffreys and US regulators. The Japanese company already has a stake of almost five percent in Jeffrey's, part of a strategic

alliance reached last year in New York. Charlie Pellett Bloomberg Daybreak. All right, Charlie, thank you well. One of Wall Street's top bears. He's another down year for the stock market. Piper Sandler strategist Michael Kantrowitz ranked number three, and the last year's Institutional Investors survey predicts that the S and P five hundred bill fall this year to a level just above the price target is the lowest among Wall

Street analyst track by Bloomberg. Should that come true, it will be only the fifth time in nearly a century that the benchmark index suffered at two consecutive years of double digit declines. Let sets us up very nicely for the conversation we're about to have right now with Eric Friedman, chief investment officer at US Bank Asset Management. Ericod Mourning.

It's nice to speak with you as the SMP five hundred sits around a thirty eight hundred fifty level right now, but we do keep hearing the Breyers roar should the bear case be the base case for this market? Nathan, good morning, and to be with you, we do think that downsize is the more likely outcome. Let's go over

the next three to four months. And and so the really rationale behind that we think you're hearing across the street is number one, unconcerned about earn investimates, the need for those to come down, and then secondly just the persistency of of inflation and the and they likely that we'll see interest rates probably remain a bit higher. I think that one of the big reconciliations that has to happen. Is the Fed's view on rates and the markets view

on rates really diverge right now, Nathan. That's something that does cause us a little bit of anxiety of the next couple of months. Yeah, I guess we're kind of seeing that play out with the action and the futures this morning. Kind of a note of caution coming off the back of the FED minutes yesterday and that warning about unwarranted easing of financial conditions potentially causing the FED to act here. Does that change your case on what the FEDS policy path is going to be over the

next few months. Yeah, we that that reconciliation that has to happen, and really centers around the idea that the FED will likely stay more hawkished for longer. And if you look at the divergence in in FED futures in terms of what the Fed has said and then what the market has said, there's about a percent difference between

now the next year, and that's that's material. Doesn't sound like a lot, but if you look at the levels of concerns in sort of just discounting future earnings, when you have a percent difference in the FED says, Look, we think race will be higher. The market says, no,

we actually think there'll be a bit lower. That's that's where we We do think that more information the FED, both in terms of their upcoming meeting in February as well as more of the speaker series that will start hearing more about we do think there's a chance to the FED reinforces this idea of longer, of higher rates for longer. You said that you think there's gonna be more downside over the next few months. Let you find

you down a little bit on that. How much more downside do you think there's gonna be And does that imply that you think stocks are going to bounce back either there the second quarter or the second half of this year. Yeah, we know. We we've put the downside risk levels. You know, we do think that the possibility of retesting where we came out and the lows of of last year is it is probably a likely battleground, if you will, So let's call it SMBT hundred as

a key level. The fact that we couldn't Nathan reach thirty nine hundred earlier in the week, we think is is something to pay attention to. That's of course, where a couple of big moving averages converged. So we do think that that, you know, a test of that sub thirty level is something that market will is going to happen to deal with. Now, we do expect there to be a more shallow economic recession, and so our viewpoint, our base case right now is that we likely have

a lower trop of activity. But we do think that the duration of that trap, in other words, not so much the Y axis but the X acts, which really

how long that trop lasts, will be key. So we do think that that the back half of the year isn't going to magically get better, but we do think that there's going to be a shallow uh, a shallow down that's gonna allow companies that probably recalibrate, And we think that the tail this year, in the early part of will be a better opportunity for particularly technology and some of the longer duration, longer earning cycle types of those.

All right, you mentioned technology, Do you see any other pockets for opportunity on that path into four where we could see some upside. We've got about a minute left here, Eric Nathon, Probably the playbook for us would be to focus on cash flows first, So we like utilities, We like infrastructure. We think that energy slad a decent fundamental case as well. That's the playbook that we'd be involved with as the market really wrestles with with this this

interest rate phenomenon. So, I mean the first part, we do think it's too early on technology. We think cyclicals and value are probably a place that the people can again hide out in. But this is probably more of a of a relative opportunity than an absolute opportunity until we can see more stability with both you know, caex four pasts as well as what's gonna happen with injured trades. Really appreciate getting your insights this morning, Eric, thanks so

much for being with us this morning. Eric Friedman, chief investment officer at us Bank Asset Management. Futures this morning trading flat after those fed minutes. We've got SMP futures hired by two points right now. It's been a swing between gains and losses just incrementally on the session this morning. Down futures are hired by five points and a sore NASTAC futures actually and the tenure treasury right now down

three thirty seconds. You'ld three point six nine percent, and the yield on the two year is at four point three seven percent. I'm ex Scrooge moment higher two and a half percent, or a dollar eighty one seventy four dollars sixty five cents. Baryl Comex golds down two tenths percent at eighteen fifty four seventy announced and right now the Euro slightly stronger against the dollar, trading at one

point zero six one four. This is Bloomberg Markets, headlines and breaking news twenty four hours a day at Bloomberg dot Com, the Bloomberg Business at Land at Bloomberg Quicktake. This's a Bloomberg Business flash, and I'm Karen Moscow. Futures are little change this morning. The decks in Germany's down a tenth of upper cent and the tenure treasury down three thirty seconds you at three point six nine percent. They yield on the two year four point three seven percent.

Nimex screwed oil is down is up rather up two point six percent, up a dollar eighty nine It's seventy four dollars seventy three cents. A barrel comes Gold is down a quarter percent or five dollars twenty cents at eighteen fifty three eighty announced the euro this morning one point six one four against the dollar, the yen one thirty two point for eight and as a Bloomberg Business Flash, Nathan all right, Karen, Thanks, it's almost fifty six on

Wall Street. It's time for our daily Bloomberg lob Brief, exploring legal issues in the news. Today we look at one of the most controversial terms in Supreme Court history. Two saw the leak of a draft opinion that would eventually overturn abortion rights. There were ethics scandals, a man charged with the attempted murder of Justice Brett Kavanaugh, and public confidence in the Court at an all time low.

But you never know any of that. Reading Chief Justice John Roberts year end report on the Judiciary for more, Bloomberg's June Grosso speaks with constitutional law professor Stephen Vladdock of the University of Texas Law School. His report was most remarkable for what it didn't say about two being

this tumultuous year at the Court. Yeah, I think that's right, and I think the you know, the year end report, at least as it was originally conceigued by two Cutice War and Burger was meant to be a bit more of a sober and transparent reflection on not necessarily individual decision June, but on the work of the Court and on play is where the Court, specifically in the federal courts in general, could benefit from potential legislative reforms, and I think what we saw in this year's report is

really very little of that. No reflection on where the Court is as an institution, no reflection on potential places where changes might benefit the judiciary. Really just not much more than an anecdote, and thank you to Congress for legislation that already passed about judicial security. What was glaringly missing there was no mention of the leak of the draft opinion in the Job's case and the investigation that Roberts had ordered into the leak more than seven months ago.

I'm not supprised there's no mention of it in the report. I'm a little suppised in the mention of it anywhere else, But I think so it's a symptom of this broader disease, which is that there are pretty significant issues affecting the Supreme Court that are unrelated to the substance of specific decisions and by not addressing those issues. What did our own report does is it says one of two things.

It's truth. Either the Chief Justice doesn't agree that these are serious issues worthy of conversation and studies, or you know, he agrees that they're serious issues, but he doesn't think that the political branches should have any role in discussing or responding to them. And you know, dude, I don't know which of those two things it's an accurate description of where the Chief Justice is. I think they're both

problematic in separate, but you know, equally important respects. See, I'm beginning to think we are not going to find out where the lead came from, not because they haven't found out, but that they're just not going to tell us. You would ask me, gosh, last July, I think I would have predicted this exact in neumb right. I mean, this always had all of the hallmarks of a you know, don't worry, trust us, We've got us under control, and we can think of reasons why we're never going to

find out. Perhaps the Chief Justice did not like the answer when they figured out who the leaker was. Perhaps they really haven't figured out where the leaker was, and whatever it is. Yeah. I think anyone who thought this was going to be some big public thing, I think didn't fully appreciate how little it is in the Supreme Court interest to perpetuate the conversation about leaks and its

internal decision making processies. And that was Stephen Vladdock of the University of Texas Law School speaking with Bloomberg's June Grosso. You can catch more of that interview, plus analysis of the latest legal news by subscribing to the Bloomberg Law Podcast. You can download the show at Bloomberg dot com slash podcast, and attorneys can find exceptional legal research and business development tools at Bloomberg Law dot com and on the Bloomberg

terminal at b law. Go Futures flat will check the business headlines, all the news you need to start your day hour two if Bloomberg Daybreak starts right now,