Bloomberg Daybreak: October 20, 2022 - Hour 1 (Radio)

trust his government looks close to in floating. Justice Department prosecutors believe they have enough evidence to George Donald Trump. Plus doctors are concerned about children and R s V. Michael blah More ahead, I'm John Stashower and sports. The Yankees lost Game one of the Alcs and used to

the Nixon Nets. Both lost their season opener. That's All's train ahead on Bloomberg day Break on Bloomberg eleven three, on New York Bloomberg nine one, Washington d C, Bloomberg one oh six one, Boston Bloomberg nine sixties and Francisco Syrius Exam 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 futures are lower

this morning. We're coming up to five oh one on Wall Street, and we check the markets every fifteen minutes throughout the trading day. On bloomberg S and P Future is down about nineteen points down. Future is down forty four NASDAC features down nineties seven. The decks in Germany's down eight tenths of upper sent ten year treasury down

six thirty seconds, yield four point one five percent. They yield on a two year four point five nine percent nine next screw an oil up one point six percent of a dollar thirty six and eighty six cents of barrel comics call that will changed at sixteen thirty four twenty announced and the euro point nine two against the dollar. Nathan Karen. This morning's drop in futures comes after stocks snapped a two day winning streak on Wall Street. Treasury

yields are trading your multi year highs. On Mountain concern, a hawk ish Fed will raise the odds of a hard landing market. Veteran Dennis Gartman says don't expect the Fed the change course anytime soon. So one. Once the Fed begins to change its policies, it moves rates farther and lasts longer than anybody ever wants to anticipate. When they when they ease monetary policy, they take rate slower

than anybody believes for a longer period of time. When they tighten, they take rates higher for a longer period of time than anybody wants to anticipate. I think it's going to be at least until late in maybe four before the long awaited pivot occurs. Dennis Gartman, the former publisher of The Garment Letter, thinks stocks will remain in a bear market for some time. Well, Nathan, it will be another busy day for Feds speak with four different

officials talking at separate events. Yesterday's Chicago Fed President Charles Evans said he's hopeful the current path for interest rates will be enough to bring down inflation. Wages are going up, and that's not that's not a bad thing, but if it gets caught up in costs price uh, you know, spiral that that would be bad. And so making sure that we've got monetary policy at a sufficiently restrictive stance so that we're not seen inflation. We're trying to get

it down. Chicago Fed President Charles Evans and his colleagues have aggressively raised benchmark interest rates this year from nearly zero to just above three percent, and expect another big rate increase in next month's meeting. Karen we spoke about the move with Federal Reserve Bank of St. Louis President James Bullard. The November meeting has been more or less priced in the market at at the seventy five basis

point number. Again, you know, I think you do want to wait till you actually get to the meeting, see what the situation is there. The December meeting is a little farther away. We will have more data at that point. St. Louis FED President James Bullard made the comments in an exclusive interview with Bloomberg's Kathleen Hayes here. More of the conversation coming up later in the program. Well, let's start

to earnings now, Nathan. We get results from nearly two dozen companies in the S and P five D today. Disappointing numbers from Tesla after the bell has shares down six percent this morning. Sales fell short of estimates, and that's being blamed delivery and production bottlenecks. Still. CEO Elon Musk says demand for his company's cars remains strong. We're looking forward to a record breaking pupil, so it really you know, knock on wood, it looks like we'll have

an epic end of her and Elon must says. Tesla could repurchase five to ten billion dollars of its shares, subject to board approval and review. The stock has lost more than a third of its value so far this year. It is a different story at IBM this morning, Karen, the company reported better than expected sales and affirmed its cash flow forecast. And let's say that's as signed. Demand for software mainframe computers and hybrid cloud services remains study

well in Asia. Overnight, Nathan stocks fell but came off their lowest levels. That's after Bloomberg News reported China is considering relaxing quarantine rules. Let's get the recap from Bloomberg's Juliette Sally in Singapore. Good morning, Juliette, Good morning Nathan and Karen the off show. You one gained from record lows against the greenback on the news, Well, China cs I three hundred erased earlier losses. Chinese Xox in Hong Kong also paired earlier steep losses. On news. China is

holding emergency talks with chip firms after US curbs. The Ossi dollar declined as hiring down under almost stalled in September, and Japan's benchmark bond yield climbed above the Central Banks policy ceiling, prompting monetary authorities to announce an unscheduled bond purchase to rain it back in In Singapore, juliet Sally Bloomberg Daybreak, Juliette Thanks in Europe this morning, It's all about politics. UK Prime Minister Liz Trust's government could be

on the brink of collapse. Let's go to Learning and the LAist Life with Bloomberg's U and Parts. Good Morning, Good morning, Nathan and Karen. It has been a chaotic twenty four hours at Westminster. One of the most senior members of the British government has been fired. As she went, she criticized the Prime Minister and accused list Trust of breaking key pledges. Later, dramatic scenes in Parliament with the ports of lawmakers man handled into voting with the governments.

Just weeks after she took over. Many members of our own Conservative Party are openly saying they want Liz Trust to go. Who would replace is another question in London, Paul Daybreak, all right, you and thank you. Now to the latest in the war in Ukraine. President Vladimir'szlenski is now urging people to use as little electricity as possible. He says Russia has destroyed much of the country's power infrastructure with Iranian made explosive drones. Ukraine is assembling its

own army of drones to monitor the front lies. It's enlisted actor Mark Hamill to help bring it together through Ukraine's United twenty four fundraising arm The Star Wars actor tells Bloomberg President Zelenski asked him to join the effort very simply. Ukraine needs drones, and you know they define war outcomes. They are They protect their land, their people there, They monitor the border, their their eyes in the sky.

Mark Hamill's spoke of our Washington correspondent Joe Matthew on Bloomberg Sound on Catch the Show weekdays at five pm Eastern on Bloomberg Radio, and I said, futures right now are down seventeen points now, futures down twenty four, nastac few tchers are lower by ninety two points ten. Your treasuries down five thirty seconds, the old four point one five percent, you old on the two year four point five eight and NIMEX screwed right now is up one

point six percent at eighty six dollars of barrel. Straight ahead, your latest local headlines, and a check of sports. This is Bloomberg five oh seven on Wall Street. Were forty five degrees in Central Park on an overturned vehicle on the westbound l I E. It's by Utopia Parkway. Details coming up in traffic. First, Michael Bars here with what else is going on in New York and around the world.

Good morning Michael, Good morning Nathan. A group of Justice Department prosecutors believe there is sufficient evidence to charge Donald Trump with obstruction of justice. Bloomberg. Sources say they are building other cases as well. Sources say they believe all charges should be complete by the end of the year. Former President Trump has finished his deposition in the case brought by a woman who claims he's sexually assaulted her and then to fame their online saying she was a liar.

Trump has claimed the entire defamation lawsuits should be dismissed because he was president and was immune to charges. In New York Trump once again said E. Gene Carroll was lying and quote not his type. Former Vice President Mike Penn said he would not necessarily vote for Donald Trump if he runs for president in Pennce has been visiting early voting states, fueling speculation he might run for president.

At an appearance at Georgetown University, a student aspens if you would vote for his former running mate in the next presidential election. If Donald Trump is the Republican nominee for president in twent trench fool, will you vote for him? Well,

there might be somebody else I'd prefer more. The former Vice president predicted Republican wins in the midterm elections, but took veiled jabs at candidates who run on opposition to Democrats without offering policy alternate Hospitals and at least twenty six states and the District of Columbia say they are struggling with a surge and pediatric respiratory illnesses like RSV, flu and the common cold. The early wave of infections is raising alarm bells for children's healthcare teams as flu

season approaches. Connecticut Children's Hospital physician in chief Dr Juan Salazar says two years of pandemic measures may have left kids immune systems unprepared for the unusual respiratory viruses, which has dramatically altered the normal epidemiology of this virus RSC specifically, and the other viruses rhinovirus, adnovirus and the introvirus which have been We're more severe than they normally are. Dr Salazar says the timing is off generally. This is something

seen in late winter early spring. Global News twenty four hours a day on air and on Bloomberg Quick Take, powered by more than twenty seven hundred journalists analysts more than a hundred twenty countries. Michael bar this is Bloomberg, Nathan, Thank you, Michael. Coming up to five Tan on Wall Street. Time for the Bloomberg Sports Updade, brought to you by Try State Outie. Here's John stan Shower, Thanks Nathan. The Alcs underway and Houston. Good start for the Yankee second

any whole run for Harrison. Beata continues to provide surprising power. His fourth homer of the postseason. Astros tied it up in Game one was one one sixth inning OH two and Gary L. Frank sits left. Stanton is going back at the wall looking up Sailetta and the Lantrys. Crofter boxing for Uli Guriel and the Astros lead at two to one. They'll pitch to McCormick. It's ash Rives a pretty heat to right center, just going back at the wall, looking up, kiss a goodbye chas McCormick coast Tea and

the Astros go up three to one. K B m E both home runs hit off Clark Schmidt and in later Jeremy Paenia homer off Rankie Mantas. The Astros one for to two, remained unbeaten in the postseason. Thirty nine year old Justin Burlander gave up that Beder home run and only two other hits. He struck out eleven in two. Tonight, Luis Sevreno on the mound for the Yankster San Diego. The Phillies, having won the NLCS opener to nothing, led for nothing, but the Padres came back to within eight

to five. Five on fifth and he wants Soto had a big hit and so did Padres. Capture Austin Nola. He was facing his brother. Nicks and Nets both lost their openers in different fashion. Tight game in Memphis after the Knicks rallied from nineteen down, but the Grizzlies pulled it out in overtime one fifteen, one twelve. John Brant thirty four points. Julius Randall led the Knicks with twenty four rough opener for r. J. Barry shot three of

eighteen in Brooklyn. All Pelicans their stars. Zion Williamson back after missing last season. He scored twenty five. New Orleans won one thirty to one oh eight. Kevin Durant led the Nets with thirty two. Kyrie you Irving shot six of nineteen. John Stasward Bloomberg Sports, Nathan John thank USMP futures down sixteen points, now Dal futures down eighteen nez Deck futures lower by eighty eight points. Tesla shares down five and a half percent in the pre market on

disappointing third quarter sales. We'll talk about the numbers next. Ford Ives, senior equity research analyst at Wedbush Securities. This is Bloomberg. 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, markets, headlines and breaking news twenty four hours a day at Bloomberg dot com The Bloomberg Business Outland at Bloomberg Quicktake. This is a Bloomberg Business large and I'm Karen Moscow. European stocks and US stock index futures are falling amid rising von yields, with investors concerned that strong inflation and

Hakish monetary policy will further slow the global economy. We checked the markets every fifteen minutes throughout the trading day on Bloomberg s and p Future is down about fifteen points. Staff futures down twelve nasdack futures down on the decks in Germany's down six tenths of uppercent. Ten year treasury down two thirty seconds, held four point one four percent yield on the two year four point five eight percent.

Nimex screwed oil up one point six percent of a dollar thirty six at eighty six cents of arrol comics gold up two tens per cent or three dollars seventy cents at sixteen thirty seven ninety an ounce. The euro point nine seven eight four against the dollar, British pound one point one eight zero and the N one forty nine point age six, and bitcoin is down a third of u percent at nineteen thousand, one hundred dollars. That's a Bloomberg business flash. Now here's Michael Barr with more

on what's going on around the world. Michael, good morning, Good morning, Karen. Russia has declared its intention to increase its targeting of Ukraine's power, water, and other vital infrastructure in its latest phase of the nearly eight month old war. Ukrainian President of Voladimir Zelenski says that Moscow's forces have destroyed thirty percent of the country's power stations since October tenth.

At least one person is dead after a sixty hard crash in thick fall on Interstate five in Lynn County, Oregon. Big rigs and cars were n't able to see stop traffic in front of them. In baseball, the Yankees lost Game one of the a LCS against the Astros four two. In the NLCS, the Padres even the series at a game of piece after beating the Phillies eight five. 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 Barr and this is Bloomberg an Thanks Michael. It's five nineteen on Wall Street Life from the Bloomberg Interactor Broker Studios. This is Bloomberg Daybreak, and we continue to watch shares of Tesla this morning, dropping about five and a half percent in the pre market. Elon Musk's electric carmaker came in with sales at came in short of Wall Street estimates. Let's get more on the earnings now. Dan Ives joins

us senior analyst at web Bush Securities. Dan, it's great to speak with you, and I know you've been bullish on this company and the e V sector more oddly for a long time. Here does this quarter shake your confidence? Yeah? Look, it's been a Cinderella story for Tests of the last three years and they're hitting a rough patch. And I think that's what you saw last night in terms of earnings. Now,

I believe it's more of logestics and demand driven. But for Musk, it's a moment of truth to get Testa through this rough patch, and that's the street is going to be digesting now, what's must need to do to get through the rough patch. I mean he's been talking about issues with supply chain bottlenecks, delivery difficulties for for

quite some time here, not even just before this earnings period. Yeah, and well, Tessa has seen what other automakers are around the world in terms of logestics issues, some battery prob

from a component perspective. But but the issue here is the Bears are going to say this is demand driven and that's an excuse, and and that's now this is going to be a critical three to six months to Tessa to show they could get their sea legs back and start to hit that fifty saying growth target, which looks like they're going to come unto that in Q four and for the year. And that's why you're going to see the negative knee jerk reaction today. How much

of a headwind is China? He called out China specifically, saying they're in a recession of sorts in the property sector. But there's still an ongoing risk, isn't there that potentiality for shutdowns from COVID could affect the Shanghai factory. Yeah, it's a great classic China it's the hearts and lungs of the Tesla story. That's that's key, the both thesis, and that's where they're hitting some of the issues wigistics

and even around the edges on demand. So it's a it's really an arms hury He's going on in China with domestic players as well as Tesla, and that's why this is all happening as Musk is juggling all these different balls, with Twitter of course front and center, and I think you're starting to see a little bloom come off the rows in terms of the way the Street used Musk and the Tesla story, I would now just a critical juncture. Yeah, jugglings balls is a good way

to put it. I did want to ask you about the Twitter saga, whether that may have been more of a distraction than even Musk might have let on, even with all the tweeting he was doing during that buyout drama. Well,

I think that's part of the problem. You don't want to see Musk focus shifting, and the last thing you want to see is the Twitter situations that him just actually focused on Tesla and then the bigger elephant in the room continues to be Muscle more Tesla stock to potentially fund the Twitter deal with some financing looking like could fall apart. That is the perfect storm combined with

what we saw with the soft delivery number. What about other products cyber truck, for example, it's been so long since it was introduced and we still haven't seen actual cyber trucks in the show rooms. Is that a problem? It is a it's a boy that crowed wolf problem, and especially at the time you need that to hit in two thousand twenty three with GM rivan Ford and others coming up and going ap to ev pickup trucks.

And that's why Musk No ultimately talks cheap need to execute, and I think you're starting to see patients were thin on some of the musk antics. Fiber truck needs to hit over the next year, otherwise they're gonna lose share. You got about a minute left here, Dan, We got a lot of tech earnings to get to next week with Apple, Amazon, Microsoft, a few others reporting. What are you looking at. I think it's most important tech earnings season potentially in the last two years because of what's

happened overall demand store. In terms of the macro tech needs to prove that the resilience is their enterprise spend. Microsoft, that's gonna be keen in terms of cloud as well as with Amazon. And then probably the most important name for earning season across the board, not just tech, is Apple. What's the consumer spending on? Is the iPhone fourteen product cycle happening? Look, I think Bart's worse in the bite in terms of attack. I view it next weeks more

as a positive catalyst rather than something to fear. In just ten seconds, are you sticking with the outperform on Tesla? Sticking with outperform remains one of the most disruptive technology companies out there, but it wasn't rainbows and roses, and I think that's what you can see the stock down. I think they get through the rough patch, and right now the stock is down nearly six percent in the pre market. Dan, i'ves web Bush security is always great

to talk with you. Thanks for joining us this morning on Bloomberg day Break. Looking ahead to the market open, uh NAZAC futures are leading the declines. Tesla's pretty heavy there. Nasdack Future is down right now. Down Future is down. SMP futures are lower by seventeen points and the tenure treasuries down four thirty seconds for yield of four point

one five per cent. You're listening to Bloomberg Daybreak Bloomberg eleventh three oh weather sunny, breezy, upper fifties today, low sixties, sunny Tomorrow, will be in the upper sixties by Saturday. Showers develop on Sunday. Right now forty five in Central Park, Broadcasting live from the Bloomberg Interactive Broker Studio in New York.

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the news you need to know. At this shower, US futures are lower, adding to yesterday's losses when stocks is snapping a two gay when stocks snapped rather a two day winning streak. Concerns continue to swirl about hawkish FED policy and how it will impact growth. Silver Crest Head of Investment Policy Robert Teeter says timing will be everything. The timeline question I think is in focus here and it's a matter of do we get inflation under control?

Do we get the Fed pausing before you start to see some of that pass through, whether it's lagged effects or otherwise, onto the consumer and onto earnings. And so that's really the race that's in place right now is which happens first, the break in inflation or a break in the economy. Robert Teeter with Silver Crest Downset Management says if consumer spending days strong, it will help the Fed bring down inflation. Now, today will be another busy

one for Fed speakers, Karen. Four different officials appear at separative today Yesterday are Kathleen Hayes sat down with St. Louis FED President James Bullard, who indicated there's still no clear timeline for a FED pivot. We started off at a very low level. That's why we've moved so fast, so far, so quickly. But at some point we'll get to a level that the Committee judges will be sufficient

to put meaningful downloard pressure on inflation. Then we'll be able to adjust from there, and we'll bring you more of our conversation with St. Louis FED President James Bullard later in the program. Meantime, the FED gets another key day to point this morning with weekly jobless claims. You out at eight thirty a m. Wall Street time. Well, let's turn to earnings now, Nathan. Nearly two dozen companies in the S and P five d or por today meantime shares of Tesla. They're down five and a half

percent after sales game, in short of estimates. Still, CEO Elon Must says demand remains strong despite bottlenecks. Were enough trains? Who weren't enough car carriers? Do you actually support the wave? Has it got too big? And CEO Elon Must says Tesla could repurchase up to ten billion dollars of its share subject at board approval and review. It's a different story at IBM this morning, Karen, that stock is up three percent after reporting better than expected sales and affirming

its cash flow forecast. And over in Europe today, Nathan, it's all about politics. UK Prime Minister Liz Trust's government could be on the brink of collapse. Trust fired one minister over security breach and two others were heard resigning before reserving that decision. There are growing calls from her party for Trust to resign immediately. Straight ahead your latest local headlines plus a check of sports, and this is Bloomberg. Thanks on Wall Street, forty five degrees in Central Park,

Gotta crash westbound Jackie Robinson Parkway, a Union Turnpike. More coming up in traffic. First Michael Barr with what else is going on in New York and around the world. Michael, thank you very much, Nathan. A group of Justice Department prosecutors believe there is sufficient evidence to challenge Donald Trump with obstruction of justice. Bloomberg's head box to as the story.

Secutors and FBI involved in the investigations. Further, Department of Justice feel there is now enough evidence to move forward with a case for obstruction. Bloomberg sources say they are building other cases though as well, but are looking at all the angles before moving forward on them. The sources say they feel all charges should be complete by the end of the year, and if nothing else, they can proceed with obstruction. In San Francisco, I'm at Baxter Bloomberg Daybreak.

President Biden is back campaigning again today, this time in Pennsylvania, where one race could decide which party controls the US Senate next year. The President heading back to Pittsburgh to hindland his infrastructure plan that helped fix a bridge that collapse their last winter. Democratic Senate candidate John Fetterman will join him. In addition to the flu and COVID, there's

another illness kid should be mindful of. It's called r S v. It causes running noses, decrease and appetite, coughing, sneezing, fever, and wheezing. All Health pediatric infectious diseases specialist Dr Thomas Murray says COVID as weak and kids immune systems not because of the virus itself, but because kids have been isolated for so long. I think their new system just hasn't seen the number of viruses a typical child prior

to the pandemic would have seen. And therefore, when you have five or six different viruses, you can become sick with one right after the other. Dr Murray says rs V is straining the hospital system. The US has raised concerns with Saudi Arabia about an American citizen whom the kingdom sentenced the sixteen years in prison for posting tweets critical of the Saudi government. Sad Ibrahim Almani was taken into custody last November when traveling to Ria to visit

his family. Global News twenty four hours a day on air and on Bloomberg Quick Take, powered by more than twenty seven hundred journalists and analysts in more than a hundred twenty countries. I'm Michael Vard. This is Bloomberg Nathan. Thanks Michael on Wall Street. Time for the Bloomberg Sports Up. They brought to you by Try State Out of Years, John stash Hour Nathan. The Houston Astros in the American League Championship Series for the sixth year a row that

includes two ALCS wins over the Yankees. Astros made it to the World Series last year without the injured Justin Verlander. Now he's back at age thirty nine, had a brilliant regular season, and in Game one in Houston, Verlander went six in things, allowed just three hits, struck out eleven at one point six in a row. The Astros hit three solo home runs off the Yankee bullpen. They beat

the Yanks in Game one, four to two. After Verlander left, the Houston bullpen added six more strikeouts, so seventeen for the game. Aaron Judd, well aware of how good the Astros pitching is. You got a great staff of the talk the bottom um. He only got great arms out of the pen. You know, they can are effected on both sides of the plate. You know, righty's and lefties and kinda starting pitchers that can work you know only one or two pitches, but you know mixing you know,

three or four pitches. So it's a it's a tough matchup that's you know you want to against. So we got in front of Judge made a terrific catch in right field, saving a couple of runs for the Yanks, squandered some earlier scoring chances, also had the tie and run on in the ad Matt Carpenter and Josh Donaldson had rough nights. They combined to strike out seven times. Game two is tonight and LCS Title one Padres game

from four nothing downbeat the Phillies eight to five. The Knicks open the season in Memphis, trailed by nineteen came back a Can Reddish three pointner set the game to overtime. Reddish as his best game as a Nick. The twenty two points off defense with the Grizzlies one one fifteen to one twelve. John Brand scored thirty four except their home opener tomorrow at Bartney's, All Pelicans blew out the

Nets one thirty to one oh eight. Rangers Tonight host San Josette, John Stashill, Bloomberg Sports Nathan thanks John seven on Wall Street Time for the Tri State Business Report with Bloomberg Stunies Pellegrini. Some tough times for local home builders. New Jersey baysed tuugh Nannian is cutting its earnings outlook. The Red Bank home builder is citing inflation, mortgage rates, supply chain issues, and Hurricane Ian in a whole we

works business model absolutely imploded. Well now there is new evidence that flexible office space in New York City is making a comeback. The Instant Group tells bus journals increase are increasing and the biggest interest is from small companies with three to nine desks. Some good news for Connecticut work from Homer's Comcast is expanding faster internet service. That's

his rival Frontier rolls out its fiber optic cable. New York pet food maker Bark expanding, adding French bulldog, Boxer, German Shepherd and Golden Rechiever to its lineup of breed specific products. And a new business is opening. Markue's Caviare has just launched its new location in Grand Central at the market there near Murray's Cheese and Say Bars with the chry to say business report, I'm Denise Pellegrini. Alright, Denise,

thank you. Eight on Wall Street. Bloomberg Radio is on the air from San Francisco to New York, London to Hong Kong. Let's check in with our global news team for some of the top stories heard on our three hundred affiliate radio stations around the world. Um Corney Donahoe on k Fabian Omaha trucking Giant night Swift as warning of a rapid slowdown in the freight market. I'm Steve

Podas kan K and X in Los Angeles. We're talking about the shrinking amount of cargo going through the port of l A. I'm TODs Peligreny on w w J in Detroit. G M is considering a mid size Hummer um Corney Donahoe on kerl Dan Dallas. Fewer Americans are planning winter vacations due to inflation. I'm Caroline Headed Bloomberg

d A B. Dishdo in London. We've been reporting on the pressure on the Prime Minister in the Trust after more resignations and chaotic scenes in Flament and those are some of the stories our twenty seven hundred Bloomberg journalists and analysts working on this morning around the world. It's five thirty nine on Wall Street. The following is an editorial from Bloomberg Opinion. This editorial was written by the

Bloomberg Editorial Board. With its ground war in Ukraine faltering, Russia has intensified its use of unmanned drone to attack Ukraine's critical infrastructure and signaled a willingness to conduct similar strikes against the West. Last week, Russian President Vladimir Putin suggested that any critically important object of transport, energy, or utilities. Infrastructure,

regardless of location, could be fair game. In the face of such threats, US and European leaders should ramp up efforts to protect critical infrastructure and make clear that any deliberate acts of sabotage will bring an equally punishing response. Russia's threats against critical infrastructure represent a dangerous escalation. Swift and coordinated action to strengthen the West defenses is the best response. This editorial was written by the Bloomberg Editorial Board.

For more Bloomberg opinion, please go to Bloomberg dot com, slash opinion or ope I n go on the Bloomberg terminal. This has been Bloomberg Open, and you can hear Bloomberg opinion editorials every weekday. At this time. Terminal customers can read more at O P I n go. SMP futures are down eleven points. DOW futures are in the green now just barely up four points, NASDAC futures still in the red, down sixty seven points. This is Bloomberg. The

Bloomberg Sports Report was brought to you by Audie. Don't let someone else drive off in the Outie model. You've always wanted to visit your local tri state autie dealer to get behind the wheel of yours today, or visit autie Offers dot com for more information, markets, headlines and breaking news twenty four hours a day at Bloomberg dot com, The Bloomberg Business at and at Bloomberg Quick Tape. He's

a Bloomberg Business lash. Europeans stocks are lower. US stock index futures are as well, but trimming their declines just a bit. This coming as amid rising bond yields, with investors concerned that strong inflation and hawkish monetary policy will further slow the global economy. We check the markets every fifteen minutes throughout the trading day. On Bloomberg, SMP future is now not about nine points down, futures are a little changed, and NASDAG futures are down fifty nine. That's

down about half percent still. DAX in Germany's down six tenths of upper set. Now. Looking at the ten year treasury, it is little change now the yield four point one three per cent. The yield him A two year four

point five seven percent. Nine X curt oil is up about two percent of a dollar sixty nine at eighty seven dollars twenty four cents of barrel Comics gold is up three tens per cent, or five dollars at sixteen thirty nine twenty announced the euro point nine seven eight four against the dollar, British found one point one two oh eight the N one forty nine point eight three and big coin is down about two tens percent in nineteen thousand one d fifty dollars. That's a Bloomberg business flash.

Now here's Michael Barr with more on what's going on around the world. Michael Karen, thank you very much. Starting today, Russian President Putin has declared martial law in the four border regions of Ukraine that the Russia illegally nexed, giving authorities they're more power to crack down on the population. This as Ukraine braces today for four hour blackouts in response the recent Russian missile and drone attacks on the country's power infrastructure. List Trust's UK premiership is on the

brink of collapse. Tory MPs openly said she should go. A tumultuous day in parliament yesterday saw Trust fire a senior minister. In baseball, the Yankees lost Game one of the a LCS against the Astros four two. In the NLCS, the Padres even the series at the Game of Piece after beating the Phillies eight five. In the NBA, the Knicks lost their opener against the Grizzlies and overtime one

one twelve, the Nets lost the Wizards. One. Global News twenty four hours a day on air and on Bloomberg Quicktake, powered by more than hundred journalists and analysts more than a hundred twenty countries. Michael Bard, this is Bloomberg, Nathan, Michael. Thanks, It's five forty nine on Wall Street Live from the Bloomberg Interactive Broker Studios. This is Bloomberg Daybreak, and Daniel Morris is with us now chief market strategist at BNP

Party Asset Management. Daniel, it's great to speak with you this morning. We're coming off two straight days of gains to start the week. We gave some of that back yesterday. This morning things are looking kind of choppy. What's the trajectory for this market for you? Uh, well, I guess I think it comes down to your horizon. The fact that we've had a bit of a rally coming into the earning season and doesn't surprise us if you think

that sentiment has just been so negative. You look at bowls, bears, ratios, pook called ratios. You know, no one likes equities, but that means if you get a bit of good news in that environment, you can get a balance. And we were anticipating with the earning season on balance that it was going to come out to be just fine. Uh, given that earnings expectations had already been lowered a lot,

that left room for positive earning surprises. It'll come down to what kind of guidance we get on the outlook. But given that growth right now in the US is still pretty solid, it seems unlikely that that CEOs are going to be really pessimistic. So we think that that impetus in the near term is probably still there. But when you think about what the Fed is doing, you know, eventually those interest rate hikes are going to tell that's the point, But we think it's not quite yet that

it's really going to hit equities again. Now we've heard from more FED speakers just in the last day, sort of signaling that they've at least hope that the interest rate hikes and the projections they put forward are going to do something to tamp inflation down. What does that tell you about what the FED rate hike path could look like into next year. Well, it really is going

to depend how inflation of alls. And I think i'll us have learned to be quite humble when it comes to predicting the path in inflation, so won't hazard too much about where it might go. But I think it depending on which direction it takes. If we do see a peak, uh, and it starts to go down, that give the FED and opening to perhaps pause or pivot sooner than they said that they will. If, on the

other hand, it stays high. And there's certainly reasons we think that could be the case, given the pressure we've had in in shelter inflation, what we're seeing now in services, you know, the FEDS you know, currently says they're going to keep rates uh kind of right easy in and high until the end of the end of next year. So it's whether that happens or they can pivot sooner. It just is a bit of wait and see. What does that wait and see mean for stocks in the

medium term? I mean rates elevated right now? That puts pressure on stocks anyway, doesn't it. Well, I think you you've seen a change in the dynamic of what's driving stocks so up to now. I guess for most of this year it's been the fact that interest rates have gone up dramatically. That's driven most of the decline we've had in ECUs so far. You know, your interest rates are going up, row rates are going up, discount rate going up, so that reduces the multiple, particularly for growth stocks,

and that's that's been the key driver. We think that process is more or less over. We don't think expectations need to go up much more from here. We're already quite high nearly five percent. But the next leg, the next you if you will, that has to drop is going to be the impact of that increase in interest rates on growth, economic growth, and are ultimately corporate earnings. And again we haven't seen that yet, but at some

point it's got to common. I think that's going to be the vulnerability for the market when we start pricing in a decline in earnings instead of an increase in earnings. This is what you have now with consensus ess to its. With the vulnerabilities out there, Daniel, where do you look for opportunity? Are there certain sectors or styles in the market that are less insulated from tighter monetary policy. Well, ultimately, if we're moving into a recession, of course you want

to be defensively positioned anyway. But I think one thing that perhaps is in the process of changing. I mean, for most of this year it's been clear than a performance of growth docks versus value because of that increase in interest rates and the impact on the multiple. If we're right that rates have more or less top down, uh, that pressure should should lack As you get closer to a recession, growth becomes that much more important, So that

should increase the interesting growth as a style. And then particularly at some point the FED will pivot, interest rates will start to fall, and that's going to drag on the value sector because you think of financials, lower growth should be bad for Commodity is also a big part of value. So we think you're gonna see, you know, at some point in rotation and see some outperformance of growth. If that's quite yet, maybe not, but it's something we

might anticipate in the month's hut at some point. All right, Daniel, thanks as always. Daniel Morris's chief market strategist at BNP party Bomb Asset Management Karen Nathan. It is five fifties three on Wall Street. It's time now for our daily Bloomberg lob reef exploring legal issues in the news, brought to you by American Arbitration Association. Business disputes are inevitable result anster with the American Arbitration Association, the global leader

in alternative dispute resolution for over ninety years. More at a d R dot org. Now here's a legal story we're following this morning. After three and a half years of investigating the FBI's investigation into the Trump campaigns alleged Russia connections, Special counsel John Durham has lost the only two cases to go to trial on Tuesday, had jury found Igor d Chenko, the Russian analyst who was the primary source for the Steel dossier, not guilty of lying

to the FBI about where he got his information. The investigation has cost the taxpayers more than five point eight million dollars with little to show for it. For more of Bloomberg, Joon Grassos speaks to Bloomberg legal reporter Eric Larson. So, then the remaining four counts were all about one person

and one call. That's correct. There's all about whether or not, Mr Vanchenko truly believed that an anonymous phone call that he got in two thousand sixteen from a tipster, the one who had the tip about the well developed conspiracy between the Trump campaign and the Kremlin. Whether or not he truly believed that that caller was a guy named Sergean Million, who was the president of the Russian American Chamber of Commerce at the time. So it was his belief.

He said in his FBI interview that he believed that's who the person was who had called, and the FBI said, not only do they believe that it wasn't him who called, but that the call never happened. But they didn't really present enough evidence to prove that. I don't know how you bring a federal case over what someone believed at the time. It seems awfully the fin was stretching it. It did seem, you know, bin a stay. The evidence

that was presented. It wasn't very hard evidence. It could go sort of either way about whether or not he believed it. So the jury apparently felt the same. I mean, as we know, back in May, the first case from his investigation to go to trial against former Clinton campaign lawyer Michael Stuffman also ended in acquittal, and he was also charged with lying to the FBI by the Trump

Russia tips. So to bring these narrow cases about telling you know, what amounts of fairly small lies, I guess you could say alleged lives that that's really what this is focusing on. After all of this time and money spent. Is not a terribly good book for the Special Council. How big a defeat is this coming on top of the last acquittal? And you know, prosecutors don't usually lose cases. It's unusual because if they're bringing a case, they think

they have enough evidence to prove it beyond a reasonable death. Well, there's of course speculation that these trials were really about putting the FBI agents on the stand, whether or not that's the proper use of the federal criminal trial, you know, but that's what's certainly a lot of dorms to Own supporters and Trump supporters have been saying, is not all these verdicts, you know, they're beside. The point doesn't matter. It was exposing these FBI agents, getting details of the

investigation out in the open. It's like, yeah, you're right, Usually the government, you know, comes in a case like this with the upper hand, and then usually they also come at it with a lot more evidence. So you know, we'll see what its final report doesn't assuming it'll be pretty damning, mostly about the FBI and as Bloomberg the

Legal reporter Eric Larson speaking with Bloomberg student Grosso. Catch more of that interview, plus analysis of the latest legal news by subscribing to the Bloomberg Law Podcast or downloading

the show at Bloomberg dot com slash podcast. Attorneys can find exceptional legal research and business development tools at Bloomberg Law dot com and on the Bloomberg terminal at b law Go SNP Futures they're down about eleven points down, futures remain little change and nasday futures down sixty five ten year Treasury down to thirties seconds Field four point one four percent and still ahead. On Bloomberg Daybreak and check on the business headlines and all the news you

need to start your day. And this is Bloomberg