Bloomberg Daybreak: July 14, 2022 - Hour 2 (Radio)

his Middle Eastern trip continues. Two more shark attacks took place within hours off Long Island, plus the New York City Council demand's Mayor Adams restore school budgets, Michael barn More Ahead, johns fatchtowering sports. The Yankees came for barring the feet, the Red the Mets one in Atlanta, the

Open Championship Go Fuderway in Scotland. That's All's trendy head on Bloomberg day Break on Bloomberg eleven three, on New York, Bloomberg one, Washington, d C, Bloomberg one oh six one, Boston, Bloomberg nine sixties and Francisco Syrius XM one nineteen and around the world on Bloomberg Radio dot com and via the Bloomberg Business app. Good Morning, I'm Nathan Hagar and I'm Karen Moscow and US DOT in next futures are

following this morning. We're coming up to six oh one on Wall Street, and we check the markets every fifteen minutes throughout the trading day. On Bloomberg. Right now, SNP futures are down thirty seven points down, futures down two eighty and NASDAG futures down. The decks in Germany is down six tenths of a percent. Ten year Treasury down eight thirty seconds, held two point nine six percent. That yield on the two year three point one nine percent.

Nine X screwed oil is down two point four percent, down two dollars thirty seven cents at ninety three dollars, ninety three cents of barrel. COMEX gold is down one in a quarter percent, or twenty one dollar seventy cents at seventeen eighty announced, and the euro one point zero zero four or five against the dollar. Nathan, thank you, Karen. Reaction continues to pour into yesterday's hot reading on inflation. The dollar is trading at a twenty four year high

against the end. Speculation is growing that the Fed's next move maybe a one percent rate hike rather than a seventy five basis point increase. We caught up with Cleveland FED President Laretta Mester. Certainly, the inflation report suggests that there's no reason to say that a smaller rate increase than we did last time, right because nothing moved in that direction. Cleveland FED President Laretta Mester made those comments

in an interview with Bloomberg's Kathleen Hayes Well. Nathan Mester is not the only Fed official hinting of higher rates to come. Atlanta Fed President Raphael Bostick says, quote, everything is in play for policy action this month. To get more from Bloomberg Charlie Pellett. His comment came after data showed that US inflation accelerated again to a fresh four decade high last month. Speaking to reporters in St. Petersburg, Florida, Bostick said, the top line number is a source of

concern and everything is in play. The comments add fuel to be so the Fed is more likely than not to raise interest rates by one hundred basis points when it meets later the month in New York. Charlie Pellocks Bloomberg Daybreak, Okay, Charlie thank you, and coming up today, we get another reading on inflation with the release of the Producer Price Index for June. Here with the preview

is Bloomberg's Michael McKee. Though it would seem logical, the producer price index actually doesn't really lead moves of the consumer price index, and that may be a good thing. Unlike consumer prices, producer prices have been falling a little bit after reaching a peak in March. The economist consensus forecast is that continued to come down in June. But CPI surprised to the upside last month, and there's a

risk at least headline PPI could do the same. Oil and gas a lead prices rose as did other commodities, pushing up the cost of goods. The unanswered question is how service prices have behaved. Watched the Trade Services index in the pp I. It's something of a proxy for margins. As earning season gets underway in the US, Michael McKee,

Bloomberg daybreak. All right, Michael, thank you, and speaking of earnings, this season gets started this morning and earnest when big banks you're poor, And we get the details from Bloomberg. A Global Finds Correspondencnally basic, JP Morrigan and Morgan Stanley kickoff earnings for the biggest US banks, and recession fears are growing across the economy. The question is our provisions

for loan losses going to build? Especially at JP Morgan where net interest income is also rising due to higher interest rates. The question is how much will that offset any future pains from any potential recession ahead. I'm Shnei Bask Bloomberg Daybreak occastionally thanks. As recession fears grow on Wall Street, one top tech executive says the industry will be able to weather the storm. Let's get that live from Bloomberg. Jnading on Good Morning, Nita, Good Morning Nathan.

IBM CEO Arvin Christna says he believes business technology spending will remain robust above GDP growth, including in Europe, and this is even after others in the industry have been pest pessimistic in the face of a potential US recession and resulting slower growth. When you look at supply chain inflation, libo demographics, interest rates. Technology offers you away to scale without necessary increasing costs that are linear. IBM CEO Arvin

Krishna is less optimistic about supply chain problems. He says they're a real fundamental issue and will go on for a couple more years. Live in New York. I'm really need a Young Bloomberg daybreak. I real need to thank you. Are turning to politics now. President Biden will sign know like continuing US commitment to Israel's defense. As part of his trip through the Middle East, the President signs a joint declaration with Israel's new Prime minister, extending an agreement

that provides billions of dollars to the country's military. Tomorrow, Biden heads to Saudi Arabia. Democratic Congresswoman Abigail Spenberger says he'll need to project American values when he meets with Crown Prince Mohammed been salmoned. He must raise the issue of Jamal Kasos murder. He must continue to ensure that we have strong expectations of what our Saudi partners are or are not bringing to the table, whether they are or are not um meeting the expectations we have in

terms of the values that they u are abiding. Congresswoman Abigail Spenberger of Virginia spoke with Our Washington corresponded Joe Matthew on Bloomberg Sound on. Catch the program weekdays at five pm Eastern on Bloomberg Radio. Their new developments in the pandemic The Battle against the Pandemic. This morning, Karen, the nation's top doctor, says all Macron b A five is getting more worrisome. Bloomberg said, Baxter has the story.

COVID Response Coordinator Doctor Ashisha Jaw says it's something to very carefully watch. It is certainly the most immunovative. What we're seeing as people who are previously infected getting reinfections at high rates, people who got vaccinated let's say last year, having a ton of breakthrough infections. So something that we're you know, obviously paying very close attention to. Yeah. Dr Josh has mitigation tools like smart use of masks, and

of course vaccinations is important. He says, everybody over fifty needs a second booster. In San Francisco, I'm at Baxter Bloomberg Daybreak and thanks. And despite COVID concerns and current economic conditions, back to school shoppers are expected to spend a record amount this year. According to a survey by deloittch sales for this season are expected to total thirty four point four billion dollars. That breaks down to six hundred sixty one dollar per student, an increase of eight

percent from a year earlier. Your local headlines straight ahead, This is Bloomberg. Thanks Terence six o seven on Wall Street, seventy two degrees in Central Park and better news now for rail riders. Let's get that and more on what's going on in New York and around the world with Bloomberg's Michael Barr. Michael, thank you very much, Nathan. Rail communities are saying hallelujah. New Jersey Transit service has resumed

in and out of New York City. Rail service was suspended into and out of Penn Station in New York due jamtrack overhead wire issues. New Jersey Transit tickets and passes no longer being cross hunored by a path. It is the third shark attack in ten days on Long Island. Year old man was attacked by a shark yesterday evening, less than twelve hours after a little border was attacked

at a nearby beach that morning. According to the Suffolk County Police, the man was standing waist deep in the water at Seaview Beach on Fire Island when he was bitten on his wrist and leg. Around six pm earlier, a forty one year old man was bitten by a shark while palle boarding at Smith Point Beach. Both suffered non life threatening injuries. Suffolk County Executive Steve blog I think it is an indication, however, that what we're looking

at is uh something of a new normal. Suffolk County Executive Steve Bloone says the tiger sharks are closer to shore than they've been. New York City Council members are calling on Mayor Eric Adams and the Department of Education not to exercise budget cuts and a joint letter council members say he will result in the city spending less

on each child. Last month, the city Council signed off on the two fifteen million dollar budget cut and adams twenty three city budget, But now council members say that the Adams administration misled them by saying the cuts would be fully accounted for by declining enrollment. A new mental health clinic in the Bronx just opened its doors. Mayor Eric Adams says the short term treatment center will provide New Yorkers with mental health and substance abuse issues immediate

access to Service. We unfairly treated the New York City Police Department in this city in so many ways. We called on them to do everything. We called on them when someone had a gun. We called on them, when someone had a cat up the tree. We called on them when someone was going through a mental health crisis. We called on them for everything, and didn't realize that we had other agencies that we should have coordinated with.

Mayor Adams. Manhattan apartment rants reached another record high in June. According to appraiser Miller Samuel and brokerage Douglas Element real Estate. New leases were signed last month. At the Media and A four thousand and fifty dollars Global News twenty four hours a day on a R and on Bloomberg Quick Take, powered by more than twenty seven hundred journalists analysts in

more than a d twenty countries. On Michael Barr, This is Bloomberg, Nathan, Thanks Michael, tuned up to six ten on Wall Street Time for the Bloomberg Sports Update with John stash Ower. All right, Nathan, Yankees trying to avoid their first four game losing streak of the season. The night did not begin well. Lauis Sevareno injured most of the last three seasons. He's been so good this year.

But he served up three home runs in the second and then and while taking his warm up tosses in the third, departed headed for an m r in his shoulder. Yanks trailed the Reds four. Nothing came back. Isaiah kinnerd fell left at three run double. They led five to four. They fell behind again. John Carlos Stanton game tying home run eighth inning, Yanks scored in the tent for another walk off win, seven to six. Mets used the long ball in Atlanta, delivers and Lindor rips it deep in

the air right field. Kunia turns around, watches it fly. That one's way outta here. But three run blass for Francisco Windoor. He comes through in the top of the third inning and he extends the Nets lead to four nothing. CBS solo shots from Mark Canada, Ward Escobar. Mets beat the Brave seven three. Chris Bassett got to win. The Mets take the series lead at Lanta now by two

and a half. They visit the Cubs tonight. Two American League teams both stretched their winning streaks to attend the Seattle Mariners, who have gone longer than any team in all of sports without making the postseason, and the Baltimore Orioles, baseball's worst team over the last several years. The Mariners now tied for the playoffs spot in the Orioles, only

two games behind Toronto fired their manager, Charlie Montoyo. The Rangers of segn Friedge and Vincent tro Check away from Carolina Open Championship Golf hundred fifty edition at St. Andrew's. An American Cameron Young thirty one on the front night. He's just moved into the lead at five hundred. John stash Award, Bloomberg Sports Nathan Okay, John, thank you, SMP. Futures down thirty eight points down, futures down two nestact

future is lower five one hundred points. Ten year treasuries down nine thirty seconds, the yield two point nine six per cent. You're listening to Bloomberg Day Brain Bloomberg eleven three oh weather. Showers and storms developing through the day as we had near ninety degrees. It will be partably the mostly sunny Tomorrow, mixed the sun and cloud Saturday.

Both days in the upper eighties. Right now, seventy two in Central Park Markets, headlines and breaking news twenty four hours a day at Bloomberg dot com, The Bloomberg Business and at Bloomberg Quick Take. This is a Bloomberg Business flash and I'm Cameron Moscow. US stock index futures are following this morning, along with stocks in Europe and the dollar resuming its upward March checker hi US inflation hardened expectations for more aggressive Federal Reserve monetary tightening that could

trigger a recession. If you check the markets every fifteen minutes throughout the trading day on Bloomberg s ANDP futures down thirty nine points, now futures down three hundred four and NASDACK futures down one hundred five. The decks in Germany's down six tenths of a percent, Pennier treasury down eight thirty seconds, held two point nine six percent yield

on the two year three point two zero percent. Nine max screwed oil is down two point four percent, down two dollars thirty four cents and ninety three dollars ninety six cents of barrel coll MIxS. Gold is down one point four percent, or two dollars twenty cents at seventeen eleven thirty announced the euro one point zero zero three five against the dollar, British found one point five six

and the en one thirty eight point eight four. Looking at bitcoin, it's higher, up about seven tenths percent and nineteen thousand seven d eighty five dollars. Today we get another reading on inflation, the producer price, and next sun at eight thirty Wall Street time, we also get the weekly report on initial jobless claims, and we're looking for earnings from JP Morgan Chase and Morgan Stanley. As a Bloomberg business flash. Now here's Michael Barr with more on

what's going on around the world. Mantel, hearen, thank you very much. President Joe Biden will seek the bolster co operation between the US, Israel, and other countries. During his first full day in the Middle East. Is edual today involves meetings with Israeli prim Minister Yar Lapide. In baseball, the Yankees beat the Rads, the Mets beat the Braves. The Nationals lost both games of a double header to the Mariners. As earning hour old say, the Orioles are

flapping their wings. They beat the Cubs to win their tenth straight. The Giants stopped the Diamondbacks. They's lost to the Rangers. Global News twenty four hours a day on here and on Bloomberg Quick Take Power by more than journalists, analysts more than a hundred twenty countries. Michael bar this is Bloomberg. What a time to be alive when the Orioles are doing well for a change. Thank you, Michael. It is six nineteen on Wall Street Live from the

Bloomberg Interactive Broker Studios. This is a Bloomberg daybreak. Of course, investors focused not just on the front of inflation, higher rate hikes, but the kickoff of bank earning season. With JP Morgan Chase and UH Morgan Stanley reporting this morning.

Ken Leon is with US now Director of Equity Research or at c f R. A Ken, It's great to speak with you this morning and wonder what your expectations are when it comes to the bank earnings, because of course they have so much that they can tell us about the strength or or what of you, what have you when it comes to the US economy. But that's right, and it's really where are we going. We're at an inflection point in terms of questions about the economy or

the consumer. And looking ahead, I think the banks are going to be cautious. They need to build up bank reserves if we run into recession next year. And of course, you know, the investment banking area has been weak, but all of that is really factored into expectations and stock prices.

So I think any any leaf of good news is going to help in terms of optimism, and bank stocks may be going higher, but this is not going to be a pretty firing on all cylinders kind of quarter for the banks, and I think their tone is going to be pretty low key. I think it has to be said that JP Morgan Chase CEO Jamie Diamond may have set expectations when he made that well repeated quote

about an economic hurricane on the horizon. Are you expecting that that kind of language could continue or I mean, is there is there a possibility that we could see, uh, some evidence of green shoots. Yeah, the green shoots. It's gonna be tough because of the pressure of rising rates.

You know, the fact going maybe up on our basis points next time on their meeting, and you know, I think, uh, you know, the real secret to the story is banks built reserves and if we go into a shallow recession next year, possibly they can reverse those and and that could help earnings next year. But the you know, the health of the businesses lending is likely to be less than the second half first the first half of this year. Capital markets is a big, big question more particularly in

terms of underwriting and overwall. You know, right now, the bank just aren't selling cracks in terms of credit credit risk, particularly in on the commercial side. There isn't a distress industry, so you know, again it's a cross roads. And banks are very different than a industrial company where they can build reserves. And if if things don't get so bad,

then that's gonna help earnings next year. Could the volatility that we've seen in the market, uh, and the possibility that trading desks have been able to manage to do well based on that, could that sort of outweigh some of the headwinds that banks could be seeing from some of the other issues surrounding rates they are, and that's going to offset you know, lower underwriting and mergers and acquisitions, equity and fixed income trading or up anywhere twenty um

and volatility has helped, But for investors, bank stocks never really get rewarded on the volatility of trading because it's so difficult to sustain or predict. But yes, the print is going to be positive for trading, you know when they report soon. Does that make it tough to think of financials more broadly as a buy when it comes to investing in some of these big Wall Street names. Banks are constantly trying to get higher recurring revenue, more

more consistency in their performance. They're getting that from asset and wealth management and trust services UM and some other areas related to the consumer. But the deltas against that higher growth would be you know, obviously higher credit card

spending and then also loan activity. But we're saying all of this where the bank stocks are at a fifty two week low, they're trading at record low priced and that tangible book value we had a nice um announcements have to the Fed Bank in terms of return of capital with siven in increases and buy backs. So the bank stocks even they're yields some of them, like Morgan Stanley JP Morgan around three and a half percent for really great franchises in our fu Thanks for this, Ken,

great having you on this morning. Ken Leon Director of Equity Research at cf R A as we await JP Morgan Chase second quarter earnings are duet around seven am Wall Street Time. Morgan Stanley follows at seven thirty. We will of course have full coverage for you throughout the day here on Bloomberg Radio. SMP futures right now down forty one point. Staff futures are lower by three twenty. Nasdaq futures down a hundred seven points. The tenure Treasury

is down six thirty seconds. Yield two point nine five percent. Yield on the two year three point one nine percent. Just ahead, you look ahead to another read on inflation in producer prices and why a big tech ceo thinks his sector can weather the storm. Five things you need to note start your day. Coming up on Bloomberg day Break Bloomberg eleven three oh weather showers and storms developing

through the day as we had near ninety degrees. Will be back in the sunshine oper eight ees tomorrow mix of sun and clouds ouper eighties Saturday right now seventy two in Central Park, criadcasting live from the Bloomberg Interactive Broker Studio in New York. Bloomberg e Living Free on to Washington, d C. Bloomberg to Boston, Bloomberg one O six one to San Francisco, Bloomberg No. Sixteen to the country Sirius XM Chad A one nineteen and around the

globe the Bloomberg Business and Bloomberg Radio dot com. This is Bloomberg Daybreak six thirty on Wall Street. Good morning, I'm Nathan Hagar and I'm Karen Moscow. We are just about three hours away from the open of US trading. Time for the five things that you need to know to start your day out to you by Interactive Brokers. Interactive Brokers Global Analysts helps you find new global investment opportunities to diversify your portfolio and discover undervalued companies that

may have greater growth potential. Try ibk our Global Analysts today at ibk R dot com slash g A. A first reaction, still rolling into yesterday's hot reading on inflation and their speculation that the FEDS next move maybe a one percent rate hike. Cleveland Fed President Loretta Memester says there's more work to do to cut inflation. Job one

for us is to get inflation under control. And I say that knowing that the risk of recession have one, but that's part of what we're trying to do is normalize or or moderate demand, because if we don't do this, we're gonna have many more problems in the economy going forward. Cleveland Fed, President of the Rerdemester made the comments to

Bloomberg's Kathleen Hayes. No earning season gets underway today, Karen has big banks open their books for the second quarter of Bloomberg's Jeff Bellinger has more analysts say that overall, the numbers from the financial services sector will likely be lower by comparison to the very strong results from a year ago. Will hear from JP Morgan Chase and Morgan Stanley this morning. Bloomberg Intelligence says JP Morgan's market leadership

positions support profitability and long term growth. A profit of two dollars nine two cents a share is predicted. The forecast for Morgan Stanley is for a profit of a dollar fifty seven a share. Jeff Bellinger Bloomberg Daybreak. All right, Jeff, thank you. As your session fears grow on Wall Street one, top executives in the industry will be able to weather the storm. And Bloomberg's Rnity Young joins US Live with

more Good Morning Radio, Good Morning Karen. IBM CEO Arvid Krishna says he believes business technology spending will remain robust above GDP growth, including in Europe. This following pessimistic sentiment from others in the industry. When you look at supply chain inflation, liabo demographics, interest rates. Technology offers you away to scale without necessarily increasing costs that are linear. IBM CEO Arvind Krishnas does say, however, supply chain problems will

last a couple more years. Live in New York, I'm gonna need a young Bloomberg daybreak, Okay, we need to thanks attorning to politics, President Biden signs a joint declaration today with Israel's new prime minister to provide billions to the Israeli military. The President visits Saudi Arabia tomorrow. And that's the fine things you need to notice start your day.

Brought to you by Interactive Brokers. Futures are lower this morning, straight ahead, your latest local headlines plus the check of sports, and this is Bloomberg. Thanks here. In six thirty three on Wall Street, seventy two degrees in Central Park, out of crash on southbound Harlem River Drive at a hundred forty five. But better news for rail riders. This morning. Michael Barr has that and more on what's going on

in New York and around the world. Good morning, Michael, Good morning, Nathan, and rail commuters are saying welcome back, old friend. New Jersey Transit as resume service in and out of New York York City. It was suspended earlier this morning because of overhead wire issues buses and the path train. Now I've stopped that cross honoring stuff. Two more shark bites happened within hours off Long Island yesterday. Suffolk County Executive Steve Bloone called it the new normal.

They've always been here, but they're closer to the shore now. Blogs has in. One attack is surfer punched. The predator was knocked off his sport and then saw this shark coming back around towards him. Suffolk County Executive Steve Belone says both men suffered non life threatening injuries. It is the third shark attack in ten days off Long Island.

The New York City Council called on Mayor Eric Adams and the Department of Education to halt school budget cuts Day say will result in the city spending less on each child. Last month, the city Council signed off on the two hundred fifteen million dollar budget cut in passing adams three city budget. However, in a joint letter, council members say they were misled when the Adams administration said the cuts would be fully accounted for by declining enrollment.

Mayor Adams announced the opening of a short term treatment center in the Bronx that will provide New Yorkers with mental health and substance abuse issues immediate access to services. Adams says, for decades, the city has relied on NYPD officers to respond to mental health crisis and offered few alternatives to emergency rooms for people in crisis who are seeking help. They're going to come and they're gonna walk through the meditation room. They're gonna come and have a

place where they can get their medication if needed. They're going to come and get three males, a shower, a place of sleep, just to de escalate your crisis instead of having to call the police to respond. And that blue uniform sometimes can activate the situation instead of de escalate the situation there, Adams says, mental health crisis is not a crime. It's crime not to give people the

services they need. A Manhattan bar has agreed to pay a half million dollars to current and former employees who can managers provided a hostile and discriminatory workplace the Attorney General's Office as managers had sweeten fishes in Nolita's subjected employees to sex discrimination and sexual and gender based harassment. Global News twenty four hours a day on air and on Bloomberg Quick Take, powered by more than seven hundred

journalists and analysts more than a hundred twenty countries. Michael bar this is Bloomberg, Navid. Thank you Michael. Just about six thirty six on Wall Street, John Stanho has the Bloomberg Sports Update, Thanks Dathan. The Yankees had lost three in a row, blown leads in all three. This time they were the ones that came from behind down four nothing, later six five. They beat the Reds at the Stadium seven six and ten and the winning one square in

a wild pitch. Isaiah Kiner Felfa had a big three run double giant Colo Stanton a game tieing home run, and now the Yanks the wait word on an m R I on Luis Severino's shoulder. He knew early on last night something was wrong. I think it was like you know what lost not me, but I told like I couldn't got a little bit more, but uh for the sick rainy. You know, when I was long enough, it was gods from getting worse. So I told him myself, like before or something even bigger happened. I mean, you

know right here. Heavurino has made it back from multiple injuries over the previous few seasons. The Mets one in Atlanta, seven to three. They hit three home runs Mark Canna at warda West Bar three run shot for Francisco Lindor. The Mets win the series, lead the Braves now by two and a half. Tonight, they played the Cubs at Wrigley where Baltimore one again last night. The Orioles have

won ten in a row. They're still in last place, but they're over five hundred, the only two games out of a playoff spot and hl free agency, the Rangers signed Vincent tro Check to a seven year deal he'd been with Carolina. They also added a veteran backup goalie Artos slap Lock fright for Toronto, and Andrew Copp, who the Rangers added at the trade deadline. That both moved on,

but Toronto signed with Anaheim, cop with Detroit. At the Open Championship at St. Andrew's American Cameron Young six under through eleven holes. He's got a two shot lead. John stash Award Bloomberg Sports, Nathan, thank you, John sixty seven on Wall Street. Time to take a look at stock, some of the names moving in the pre market. Bloomberg Radio on TV Markets corresponded, Creany Gufta is back with

us this morning watching financials. I'm sure with the first big bank earnings now just minutes away, creating just minutes away. JP Morgan's what we have our I on here. Those shares are down a by one point one percent in the pre market. This is really important, Nathan, because we're about to get numbers across the board that don't you have repercussions for JP Morgan's bottom line, but for the

broader economy as well. Lone lost provisions, for example, how much are some of these big banks JP Morgan in particular preparing and bracing for some sort of recession, bracing for some sort of consumer default. That's going to be a key part of the equation. Trading revenue is going to be another one, especially, I have to add when you do see all his volatility in the markets. Remember fixed income commodity markets have been extremely hard to navigate.

JP Morgan and the like tends to be market makers and that their offering some of the spreads that volatility usually helps trading revenue for some of these banks. Is it going to help again to the point that actually offsets some of the pain and some of the other businesses, other businesses like for example, investment banking. We also know that deal volume has really been dropping and dropping quite quickly on these recession fears and financing fears. So how

much of that is going to show up? And remember this all comes up in the background of a two's tense inverted yield curve, which has huge repercussions in terms of how much JP Morgan can actually charge interest on some of the loans they provide. So a lot to digest in the next couple of minutes. Yeah, deep in version with twos and tens and with the broader market pointing lower once again this morning, creaty, what else you're watching? Well, we have to talk about the commodity names. This is

going to be very significant. One of the major movers to the downside is Freeport mcmaran. Now this is a copper company or largest copper company. I have to say f c X as your taker, down about three point four percent in the pre market. And then if you took a look at the macro picture and take a

look at commodities broadly, they are all lower. Commodities are supposed to be not just kind of this bid on inflation in that play, but also the idea that you are supposed to be seeing global demand for commodities, that the economy is still growing. In the last couple of days, you've seen the exact opposite, stronger dollar, commodities dropping really signifying some of those growth fears. And the way that shows up in the stock market is through commodity exposed

names life Freeport Macbran. Like I said, f c X down three point four percent. But take a look some of the oil names as well. X on Mobile for example, x O M is your taker down two percent. E O G Resources another one down to percent as well. So once again, all of the commodity names that have been such a surefire trade in the past couple of I want to say months right now, they're the ones that are leading the sell off. Nathan all Right, Bloomberg

Radio on TV. Markets correspondent, pretty cooped up with us this morning while we wait for those JP Morgan and Morgan Chase results now minutes away. We'll have them for you live here on Bloomberg Radio. The head of the market. Open futures are moving lower. SMP futures down thirty nine points down, futures down three or eighteen. Nasdaq futures are

lower by ninety points. Mentioned two's tens inversion, the ten year down six thirty seconds right now, the yield two point nine five percent yield on the two year three point to zero up. Next Bloomberg's Andree hor Durn live from Jerusalem as President Biden continues his trip to Israel. Bloomberg eleven three oh weather showers and storms developing through the day, upper eighties for highs. In fact, will be in the upper eighties tomorrow and the next day with

probably mostly cloudy skies. Right now seventy two in Central Park. Markets, headlines and breaking news twenty four hours a day at Bloomberg dot Com, bloo Bloomberg Business Out and at Bloomberg quick tape. He's a Bloomberg Business flash and I'm fair in Moscow. Futures are lower this morning. We go to the First Word Breaking news desk for today's morning call and he there's Bill Maloney. Bill, good morning, Good morning, Karen.

That's right. US futures are under pressure right now with Doubt futures down three forty five point says to be drop forty three and NASDA futures are lowered by nineties seven and you just don't hear at JP Morgan just reported Q two adjusted revenue thirty one point six three billion. Estimate was thirty one point nine seven billion, The US ten year old at two point nine six percent. Gold is down twenty two, Oil trading lower and Big Cooin

is little changed. Asian markets were acquired overnight. Note that Taiwan semi hyped its outlook and European markets are in the red this morning. Back in the US on the economic frontday thirty initial jobs claims and June p p I and besides JP Morgan earnings, look for Morgan Stanley to report around seven thirty. In other news, the Tesla executive overseeing AI n Autopilot is stepping down and crypto

lenders Celsius filed for bankruptcy, wrapping things up. Five was cut to neutral at Credit Suits, Cisco cut to neutral at JP Morgan, and Tesla was raided new by a truist price star. Get there a thousand live from the first breaking Newsscon, Bill Maloney care all right, Phil, thank you, and to hear live breaking news of your Bloomberg typ squawk on your terminal squ a w K. And again

we did get earnings from JP Morgan. They're crossing the Bloomberg now adjusted revenue just missing analysts estimates and second quarter investment banking or revenue also looking like a missed analysts estimates. We're gonna have full details with Bloomberg Intelligence. Is senior analyst Allison Williams in just a moment, and that's a Bloomberg business flash. Now here's Muchele bar with more on what's going on around the world. Michael Karen,

thank you very much. High stakes talks in the Middle East during his first full day in Israel, President Biden and Prime Minister Lapide will hold a full joint briefing later today and as wide curfew was in effect in Sri Lanka from last night until this morning, after protesters surrounded and entered the Prime Minister's office in Colombo. Yesterday. In baseball, the Yankees beat the Reds, the Mets beat the Braves. The Nationals lost both games of a doubleheader

to the Mariners. The Orioles beat the Cubs to win their tenth straight. A Giant stop the Diamondbacks. The A's lost to the Rangers. Global News twenty four hours a day on air and on Bloomberg Quick Take, powered by more than journalists and analysts in more than a hundred twenty countries. Michael Barr and this is Bloomberg. Nathan all right, Michael, thank you. We are live from the Bloomberg Interactive Brokers studios where at sixty nine on Wall Street Time Now

to check what's going on in d c or. Some of the top stories include new hurdles for a Democratic

spending package. State and local taxes are apparently off the table, Democrats seeing a slim down Chips bill as the path to a deal there, and the Washington Post reporting this morning that former President Donald Trump could announce another run for the nation's highest office before this year's mid terms, but the main focus this morning is on the Middle East, where President Biden is signaling a continued US commitment to

Israel's military. This morning, Bloomberg Washington correspondent and Marie Hordern is traveling with President Biden and joins US Live this morning from Jerusalem. And Marie, good morning. I know the President is meeting right now with the new Prime Minister of Israel. Ye are lapide to talk a little bit more about what's happening in the discussions? Yeah? Yeah, the repeated is the caretaker prime minister at the moment. There's actually no government here. The coalition broke down and now

there's going to be a fresh elections in November. President will also be meeting with the opposition leader who was the prime minister of course, Benjamin net Yahoo. But really this is real, Uh, they're reaffirming their commitment to Israel. This was a deal that was signed to the Obama administration that some turtles at that moment that Yah who was um, you know, really upset with America wanting to join the nuclear agreement with Iran, but they were able

to come to the security agreement. It means billions of dollars for Israeli defense. The President yesterday was briefed on some of that defense, including the iron Dome and this new iron beam technology, and that now as its States goes to a two thousand and twenty eight, it's a ten year agreement, and what they are reaffirming is that they will continue that agreement into the future. But they

didn't give us a date. It kind of low hanging fruit, to be honest, because you'd be hard press to find an American president who's not going to come to Israel and reaffirmed that commitment to Jerusalem and television. Now a lot of this uh true to Israel at least, and Ray think is about bridging a divide between the US and Israel when it comes to how to deal with Iran and the stalled nuclear deal. Yeah, it is. The

nuclear deal at the moment is stalled. The President was asked about this from a local news station, and he said he believes that a nuclear deal is still the right path because it can stop Iran from getting closer to and capabilities of having a nuclear weapons. He said that j c p o A signed under Obama, which her former president Trump told the United States Adam was working. Of course, the Israelis, the Saudis and Marati's. They do not want to see the United States negotiating with Iran.

And right now the Star talks have fall. There were recent talks a few weeks ago and Doha, we reported about those. Nothing came of um. But you're right. Part of this trip is also and part of the reason why you see a really change in the Middle East is you have behind the scenes and not really publicly, but because Israel has not normalized in Saudi Arabia, but you do have the Arab country way more willing to work with Israel because it's really about coalescing against Kien,

that is their common adversary in the region. Now Bloomberg Samery Horde during traveling with the President in Jerusalem, Emory, thanks for the update from the Middle East. We want to turn now to JP Morgan Chase earnings. The shares are falling this morning after second quarter results. Let's bring in Bloomberg Intelligence senior analysts for global investment banks, Alison Williams. Alison, good morning. It was a miss on revenue, big miss

on investment banking. What else is standing out to you? So the big mess, as you said, is on revenue investment banking fees really much lower than expected. And UM, you know, we don't have all the all the full paperwork that they file, but but I'm wondering if there's some kind of leveraged loan right down we that's something we expect to see across the banks. Bank of America already sort of announced theirs and sometimes you don't know the geography of where they put those right downs. But

FICK trading UM also a bit weaker than expected. But in general, UM investors tend not to get overly concerned about those types of numbers because UM trading tends tends to be volatile UM. And I would say, on the on the positive that side of things, net charge offs coming in better than expected, the reserve build a little bit more than expected, so that might be something that investors are concerned about, but certainly it's not. It's not

the size of the reserve build that we saw last quarter. UM. And just to put that into context, the reserve build is looking at future losses and that's something that we're really focusing on this quarter in terms of what UM, what the banks are telling us about their expectation UM for future quarters. This quarter credit good, net interest income coming in just as around as expected, if not better, and capital also coming in a bit better than expected.

I see the headlines about JP Morgan suspending buy backs, but I think that was expected, it wasn't. I mean, it seems like that's a lot of what's sparking this sell off in early trading. This headline does red headline that JP Morgan is temporarily suspending share buy backs. So the FED stress tests UM which came out in late June.

When those came out, I think that was really the big surprise in terms of their UM stress capital buffer, which determines their capital requirement, really jumped, and so UM, I think that was when I was really I think it was clear that they were going to have to suspend buy backs. UM. You know, perhaps um, perhaps not as clear as to some and maybe, but that's why the stock is trading off. But um, this is the second quarter I think in a row where capital is

becoming a focus. We have the bonds trading off. Short term interest rates are good for net interest income. Higher long term interest rates hurts the value of bond valuations for the largest banks. That feeds into your capital ratio, makes it look weaker in the near term and UM, as I said, with the stress test, their capital requirements are going up, so I think it's prudent that they

are putting a plause on buy backs. We heard from most of the bank's last quarter that they were stalling buy backs or sort of doing lesser buy backs to build capital UM. And then this morning JP Morgan just confirming that UM they're suspending. Yeah, and the shares down four percent as investors continue to digest these numbers. Bloomberg Intelligence analysts tell Allison Williams, thanks for keeping us up to speed as we continue to watch these numbers. Roll in, Karen, very, Nathan,

thank you. Six fifty six on Wall Street, we turned to Notions Science and Technology Now with a Bloomberg n j I T STEM Report. It has brought to you by New Jersey Institute of Technology, ranked to top fifty national public university by US News and World Report in a number of fourteen in a nation on Money's Best Colleges list. Learn more at n j I T dot e DU and here's just Mega News and Science, Technology, Engineering and Math and Tokyo. The government has raised the

COVID infection alert to its highest level. Almost seventeen thousand infections were reported in the city yesterday, compared with thirty five July one. So far, the number of severe infections remains low. The European Space Agency is celebrating the first flight of its Vegas see rocket, which is designed to provide more bang for customers book and the increasingly competitive business of launching satellites into your orbit. Vegas c as an upgrade to the Vega rocket that made its debut

in twelve. As a launcher specializing in lifting small payloads into space, the new rocket can carry heavier payloads and its predecessor while burning less fuel. And Tesla is top artificial intelligence executive and an architect of its autopilot self driving system, is planning to depart. The maker of electric vehicles. Andre Carpathi, who joined Tesla in sev announced his departure

in a series of tweets yesterday. Carpathi led the computer vision teams overseeing the technology at the core of autopilot, in addition to groups responsible for data labeling and deployment of the feature. And that's the Bloomberg and j I t STEM report. And again, futures this morning are moving lower and the tenure Treasuries down six thirty seconds, held two point nine of five per cent, and continue to watch. Shares at JP Morgan Chase this morning, down about four

percent in early trading after reporting earnings. More ahead on Bloomberg surveillance for Nathan Hager. I'm Karen Moscow, and this is Bloomberg