Bloomberg Daybreak: October 27, 2022 - Hour 1 (Radio)

New Jersey Senator Menendez faces another federal investigation. Plus President Biden warns Russia any nuclear attack but being an incredibly serious mistake. I'm Michael bar More Ahead, I'm done, standsdown Sports overtime at the Guard of the Nix speech Charlotte, the Nets Loft in Milwaukee. The Islanders shut out the Rangers.

That's All's trading ahead on Bloomberg Daybreak on Bloomberg eleven, FREEO, New York, Bloomberg one, Washington, d C, Bloomberg one oh six one, Boston, Bloomberg nine sixties and Francisco Serious x M one nine team, and around the world on Bloomberg Radio dot Com and via The Bloomberg Business. Good morning, I'm Nathan Hagar and I'm Karen Moscow and SMP futures are higher this morning. We're coming up to five o one on Wall Street, and we check the markets every

fifteen minutes throughout the trading day. On Bloomberg, SMP futures up nine points down, futures of one Nasdack future is lower down, twelve ten year treasury down fourteen thirty seconds, held four point oh five percent, and they yield on the two year four point four four percent. NIMEX screwed oil. That'll change, Nathan Karen. We begin with another tech earnings disappointment.

A day after Microsoft and Google shares plunged. We are seeing shares of meta platforms down almost twenty percent this morning. The Facebook owner gave a revenue forecast on the low end of estimates, and we get more from Bloomberg's Ludlow in our nine sixty news room in San Francisco. What spooked investors, at least in the first instance, was the tepid forecast met To gave for sales in the current period.

Revenue will be between thirty and thirty two point five billion dollars in the final three months of this year, below street expectations. And the story is when we know the softening ad market is hurting meta. We went into this knowing that would be the case, but as the cool started and went on, it became clear that actually what spooking investors is Meta and Zuckerberg's commitment to fuel

and fund this transition to the metaverse. Zuckerberg said that actually, on a year on year basis, Meta reality labs would continue to have growing losses above lowth for Bloomberg News in San Francisco, alright, thanks, and big tech earnings continue today. We have a pair of giants reporting this afternoon, and Bloomberg Jeff Bellinger has more. Apple and Amazon are both

scheduled to report after the market's closed today. Analysts at went Bush Securities say higher iPhone prices and an improving supply chain may have helped Apple beat revenue forecast. The of Ase Securities says Amazon likely posted faster revenue growth for unline stores and third party sellers, but both companies face headwinds. Ample is dealing with the stronger dollar and weakness in China, and a whole hum second Prime Day event at Amazon suggested more spending is going offline. Jeff

Bellinger Bloomberg day break all right, Jeff. Thanks. As Karen mentioned, US futures are higher ahead of those earnings, and despite disappointing earnings from Meta. Morgan Stanley's Mike Wilson is a well known stock market skeptic could correctly predicted this year's slump. Now he thinks the bear market in US equities could conclude sooner than many think. Ultimately, the bear market will

be over, probably some time in the first quarter. Now, all of this is, you know, subject to revision, right, So I want to make it perfectly clear. If the market starts to trade off again and the SMP breaks down and blows through thirty six fifty on the down side, will be bearish again. Morgan Stanley's Mike Wilson was ranked the number one portfolio strategist in the latest Institutional Investors survey. Well in Europe, nathan A Bank and turmoil is front

and center. This morning, shares of Credit Suite are lower, down more than fourteen percent. The Swiss bank is unveiling a massive turnaround plan, which includes a four billion dollar capital raised, a carve out of its investment bank, and thousands of job cuts. It's the most urgent attempt yet to repair credit suite after huge losses and management chaos. And we spoke this morning with CEO all Rich Kroner.

What does new credits face. You know, it's a much simpler, more stable, much more focused bank going forward, which will deliver sustainably profitable results to our shareholders. Credit Swite CEO l Rich Kroner made the comments in an interview with Bloomberg's France Lockwise. Stay tuned for more of that conversation coming up shortly. On Bloomberg daybreaking, Let's stay in Europe, Karen, because it's a big day for the European Central Bank.

The e c V is expected to lift its main interest rate to its highest level in more than a decade. We get a preview from Bloomberg's Lean Garrants seventy basis point hike is a consensus view for today's policy decision from the CP. Anything else would be a big surprise, so looking past the recession fears to keep targeting inflation.

Less clear though, is whether we'll get any indications around the timeline for quantitative tightening, and something investors are watching closely any moves to limit the games banks on making from the ECBs crisis program of cheap loans in London. I'm Leanne Geron's Bloomberg Daybreak, Leanne. Thanks. Back here. In the US, economic growth is in focus. The government issues

data on third quarter GDP this morning. Forecast call for a gain of two point four percent, and Bloomberry's Vinydale Judai says more GDP posted back to back losses in the first and second quarters. Bloomberg Economics says the third quarters headline reabound may conceal trouble in the details, such as sales and business inventorys. There are other U s data on tap today. Manufacturing data factory owners for durable goods may indicate moderation, reflecting US inflation fears in the

US labor market. Bloomberg Economics is weekly jobless claims will probably continue to hover around historic clothes. They Bloomberg day Break, Thanks and he Let's turn to geopolitics. Now the potential setback for President Biden's economic pressure on Russia. The administration is now being forced to rework its plans for price caps on Russian oil. Bloomberg said, Baxter has the story.

It looks like they're going to have to scale back their plans, and light of the volatility in the markets, instead of strangling the Kremlin's oil revenues by imposing a strict lid on prices, US and European Union are likely to have to settle for more loosely police cap at a higher price than once. In vision and earlier iteration of the plan had the cap and the range of forty to sixty dollars per barrel, but now it looks

like it will have to be much higher. In San Francisco, I'm at Baxter Bloomberg day break, right and thanks, And finally, the world's richest man is telling Twitter employees he does not plan to cut se a staff. Bloomberg News has learned that Elon must denied those numbers and an address to workers at the come anat San Francisco office. Still, the billionaire is still expected to cut some staff when he takes over the company. Billion dollar deal is expected

to close tomorrow again. SMP futures are higher this morning. Straight ahead your latest local headlines plus a check of sports. And this is Bloomberg. I think you're carrying. It's five oh seven on Wall Street, It's fifty eight degrees in Central Park and it's problematic on westbound eighty. We've got an overturned tractor trailer by exit thirty five. Michael Bars here with more on what's going on in New York and around the world. Good morning, Michael, Good morning Nathan.

New Jersey Democratic Senator Robert Menendez faces another federal investigation about five years after a trial on federal corruption charges and into a mistrial. Menendez advisor says Senator Menendez is aware of an investigation. However, he does not know the scope of the investigation. The probe is being conducted by

federal prosecutors in the Southern District of New York. President Joe Biden warned Russias of Vladimir Putin that any use of a nuclear weapon would be an incredibly serious mistake. It comes as Russia says it carried out military exercises simulating a retaliatory nuclear strike. Meanwhile, former U s Special Representative for Ukraine negotiations and former Ambassador to NATO Kurt Volker talked about Russia's claims without evidence that Kiev's forces

intend to use a so called dirty bomb. But what Putin is doing is he is trying to get inside the heads of leaders in the West to make them feel that this is too dangerous and we have to tell the Ukrainians to surrender somehow, give up territory, you know, concede to prouting something. Former NATO ambassador Kurt Volker spoke on sound on which hairs at five pm on Bloomberg,

Iranian security forces opened fire on protesters. In the past forty days, thousands of people have taken to the streets to denounce the depth of a twenty two year old woman in custody of the country's morality police. She was accused of breaking iran strict dress code. State Department spokesperson Vendent Patel reiterated the u S efforts to support protesters

in more than one hundred cities in Iran. The regime's ongrowing, violent crackdown, pervasive surveillance of citizens, and disruption of communications are the latest reminder of the Islamic Republic's flavor and disregard for the fundamental freedoms and human rights of Iranians. Spokesman Patel says Iran's leadership is facing a problem of its own making. With just weeks until the mid term elections.

The second woman has come forward claiming that she got pregnant and then had an abortion paid for by Georgia GOP senate candidate Herschel Walker. Walker addressed Jane Doe's allegations during the campaign events, saying he is done with this foolishness. Global News twenty four hours a day on air and on Bloomberg Quicktake, powered by more than twenty seven hundred

journalists analysts more than a hundred twenty countries. Michael Barron, this is Bloomberg, Nathan, Thanks Michael, five O nine on Wall Street. Time for the Bloomberg Sports up tape. Prouty by Tri State Autie. Good morning, John stash alright, good morning, Nathan.

The Knixer back this season with pretty much the same roster, with one except of the initiative Jalen brunts in the new Knick point guard on display at the Guard and twenty seven points, thirteen assists, seven rebounds, Nick's peach Charlotte one thirty four, one thirty one and overtime. They're up to a three and one start, worth noting they began last season five and one and still ended up being

a down year, missing the cliff. The Nets are just one and three lost in Milwaukee one ten ninety nine too much. Jana's Sons of the Cup of forty three points, Kevin Duran had thirty three. Steve Nash got ejected for the first time in his coaching career. Lebron James had not started a season oh and four since his rookie year in Cleveland twenty years ago. Lakers are owing four they lost in tender. Rangers started three and one. They've lost their last four. I've score only five goals over

those four games. Shut out at the Ubs Arena by the Islanders, Elias Aurokan, Kyle Palm Mary scoring twice the Aisles one three to nothing. Weake eight starts tonight at Tampa Bay, where Tom Brady and the Bucks are just three and four. They taken on Baltimore Giants. Look for US seven and one start Sunday and see. I had a lot of reasons for the Giants improvement. One is certainly Daniel Jones, having thrown only two in reception. I'm trying to make quicker decisions, trying to get the ball

out of my hands as as soon as possible. I don't think that's any different from uh things I've done in the past. I think you know you're you're better at it every week and and I'm certainly better at it and I've been in the past. So uh, that's the goal for me, is it. Can you continue to be quicker and and uh make the right decision and get the ball in my hand? And Jones just named NFC Offensive Player of the Way hal Steinbrenner's first comment

since the end of the season. The Yankees owner said he doesn't see the Yanks not keeping manager John snashowar Boomberg Sports John, Thank you. SFP futures are up seven points down. Futures up a hundred thirty eight. Nastec features are lower down twenty one points. Meta platform shares down nearly twenty percent on earnings. Bloomberg quick takes alex Web joins us next on Meta. This is Bloomberg and the

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

a Bloomberg Business flash and I'm fared. Moscow stocks are slipping in US Dock Index futures are pairing gains as traders digest a flurry of major earnings and prepare for another jumbo European Central Bank rate hike later today. We checked the markets every fifteen minutes throughout the trading day on Bloomberg Right now S and P futures they're up about eight points down. Futures at six and NASDACK futures are lower, down twenty five the decks in Germany's down

four tenths of upper set. Can your treasury down fourteen thirty seconds? You had four point six percent in the yield on the two year four point four four percent nine x Screwed oil is little change this morning at eighty seven dollars eighty eight cents of barrel comax s gold is down about two tens of upper cent or two dollars ninety cents at sixteen sixty six. Forty announced the euro one point zero zero five zero against the dollar, British bound one point one f h two and the

end one forty six point to three. I'm looking at bitcoin this morning, down six tens of a percent at twenty thousand, six 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 carried out military exercises simulating a retaliatory nuclear strike, as President Joe Biden warned Vladimir Putin than any use of

a nuclear weapon would be an incredibly serious mistake. Secretary of State Anthony B. Lincoln accused China of underminding the decades long status quo that has kept both nations from going to war over Taiwan, same Beijing was trying to speed up at seizure of the island. A second woman that's come forward claiming Georgia's Senate candidate, Herschel Walker paid for her to have an abortion. Walker denied the allegations,

saying I am done with this foolishness. In the NBA, the next one in overtime over the Hornets one one. The Nets lost. In hockey, the Islanders blanked Rangers three zip. Thursday Night football, the Ravens take on the Buccaneers Global News twenty four hours a day on air and on Bloomberg Quick Take, powered by more than twenty seven hundred journalists and analysts more than a hundred twenty countries. How

Michael Barrow, this is Bloomberg, Nathan, Thanks Michael. It's five nineteen on Wall Street Live from the Bloomberg Interactive Broker Studios. This is Bloomberg Daybreak, and we continue to watch shares of Facebook parent Meta platforms. They're getting punished in the pre market this morning, down twenty percent on a disappointing revenue forecast. But maybe the shift away from Facebook for CEO Mark Zuckerberg the giving investors some indigestion this morning.

Let's bring in Bloomberg Quick Take correspondent Alex Web for more on the Metal platforms story. Alex, good morning. Uh, this long term play towards the metaverse is a really untested bed, isn't it. Yes? And that is fundamentally what he's driving the shares down because from a sales perspective,

Meta outperformed the market's expectations. Uh, it's the cost piece which is really driven them way down below expectations on on all the profit measures of there's a little bit on the outlook, which clearly is not good news, but you know that probably plays into it as well, because they're investing, of course, partly in the competing products to TikTok, but largely in this metaverse effort, which is hardware and

software and a colossal lift for the company. Now CEO Mark Zuckerberg in the past has you know, come to investors and said, you know, be patient, We've got a long term strategy here. And in the past it's kind they paid off. When you think about how Facebook has been able to sort of copy the way it's competitors to do business and capitalize on that. Is this a different scenario though, for asking investors to be patient on the prospects of a of a whole new way of

looking at the Internet. I think so because of the capital intensity. You know, when he was pivoting the company towards mobile as he did, you know, that's part of a decade ago. Yes, it was gearing everything the company did towards a particular product, but it was still a software product, right, It was still just changing the things you're already doing. This is an entirely new product. Category, and it is hardware, which costs a lot more to develop.

The play is going to be a lot longer as well. You know, they're able to pivot to mobile in the space of a year or two. There's pieces of the technology in this. You know, when we think about a year ago, the presentation they gave when they announced the new name of Matter, and they showed all the things they want to be able to do in the metaverse. Well, most or certainly a lot of those things you cannot do just yet. The technology isn't there. Um, it's not

something that the competitor could do either. So they are building towards something which remains somewhere away. Yeah, and in the meantime, they've got to count on advertising revenue to provide the underpinnings for this technology that could be years away. What are these earnings that we've just gotten say about the advertising environment for the tech sector more broadly, Well, it's not good. You know, We've seen plenty of other ad tech companies over the past few days, for past

this earning season not post good numbers. If the fact that even Google, which is probably the most resilient to them all, is feeling the pain. Um, tells its own story. I think when you play that into the metaverse, you know one of the reasons Facebook is doing this is because they don't want to be beholden to the whims of their gatekeepers, who in this case of Google and Apple and Apple in particular, has made it a lot harder to track to use data from across different apps

in order to measure add effectiveness. So if you own the hardware um the gateway essentially to your tech, then you're not beholding to those whims. If it makes that work, then has an advantage over Apple because you know, it can use the ads income to subsidize the cost of the consumer of the hardware, so it may be able

to undercut Apple on price. But it has one significant disadvanced to Wrapple, which in that it doesn't have the millions of developers developing for its platform, which Apple does. And we're gonna get those Apple earnings of course later on after the closing belt today and Alex Weev of Bloomberg quick Take, thanks for this, really appreciate it. Karen. All right, Nathan, it is five twenty three on Wall Street.

This is Bloomberg Daybreak, and now we want to bring you our interview with Credit Swiss CEO L Rick Kerner. Credit Swiss announced it's along awaited overhaul, unvailing, a plan that will see a multibillion dollar capital raise, curve out of the investment bank and thousands of job cuts. The restructuring will occur over the next three years. CEO L Rick Kerner talked to bloom Ex Francy in Laqua about the new plan and when the bank plans to be profitable again. This is, as you say, a big day.

We are all there, that we are there, it's a big day also for all our people when we announcing now today what is basically new Credits and what is the new Credit Swizz. You know, it's a much simpler, more stable, much more focused bank going forward which will deliver sustainably profitable results to our shareholders. And what is very important, if we may add here, how we how we came here, so to say, we have a very hard look, you know, at the needs of our clients

and designed everything around the needs of our clients. So what was your overarching theme? How did you come up with this plan? What was your reasoning? And getting here? Many different reasons. I think the as I said, the bank is slightly too complict ad it today. The bank has parts which are not profitable enough, as we all know from the shell to perspective, and that's why we came up with, you know, the need of taking very decisive affections in mainly three different areas. The one is

radical restructuring off the investment bank. The second one is significant to do something costs going forward. As who I have seen and Sei Yes said, managers don't get results that are off the charts when their solutions are off the shelf. Learn how sci is operating platform can turn infrastructure into a competitive advantage At sc SC dot com slash tech Man, we're just about 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 continue to watch shares of Meta Platforms. This morning, they are downmost twenty percent after the company gave a disappointing outlook. It also revealed ballooning costs to fund its virtual reality project, the Metaverse. CEO Mark Zuckerberg pleaded patients on a call with investors, I think we're going to resolve each of these things over different periods of time, and I appreciate the patients, and I think that those were patient and invest with us to wind up being rewarded.

Mark Zuckerberg says met his long term bets will pay off, but he didn't explain further. We'll stick you with the big tech, Nathan, we get too massive. Earning's reports after the bell today when Apple and Amazon report, and looking at Twitter, Bloomberg News has learned test last CEO Elon Musk, who's set to take over the company tomorrow, told employees he does not plan to cut seventy percent of staff, has previously reported. Bloomberg said. Ludlow has more he didn't

explicitly rule out layoffs. Generally speaking, Um, he walked into the Market Street office carrying a kitchen sinker there, and I think that the joke was, this is really happening. We should all let that same in and Bloomberg said. Ludlow says Elon Musk will meet with staff tomorrow, when his forty four billion dollar deal to buy Twitter is set to close. Turning to markets this morning, Karen, futures

are mainly higher as earning season continues. Notorious bear Mike Wilson says his team at Morgan Stanley thinks the downward trended US equities could conclude, so we're still bearish in the intermediate term. We don't think the bear markets over, but we do think this tactical rally is going to be big enough to try and pivot and trade it. Morgan Stanley Chief equity strategist Mike Wilson says that outlook could still change. Traders will also be watching economic data closely.

We get a reading on third quarter US g d P at eight thirty am Wall Street Time. Well Over in Europe, Nathan Banks are in focus, with Credit Suites down more than twelve percent after posting its fourth straight quarterly loss. The bank also unveiled a massive turnaround plan that includes a multibillion dollar capital race, a carve out of its investment bank, and massive jump cuts. CEO al Rick Kerner spoke with us about the plans. We want to go through the transformation off the next three years

with a very very strong capital base. It will become profited it definitely from twenty four onwards. CEO al Rick Karner says Credit Swite plans to be profitable again starting in and another note from overseas, Karen the European Central Bank is expected if it's main interest rate today to the highest level in more than a decade. Stay tuned for complete coverage of that announcement. It's coming up this morning. On Bloomberg surveillance. N SMP futures are higher, up four

points this morning. Dow future is up one d sixteen, while NASDACK futures are lower, down thirties seven. The decks in Germany is down half percent now. Ten year treasury down fourteen thirty seconds, held four point oh six percent, and they yield on the two year four point four or four percent, and I'm ex screwed oils down to ten percent or sixteen cents at eighty seven dollar seventy five cents a barrel. Straight ahead, your latest local headlines

plus the check of sports, and this is Bloomberg. Thanks Karen thirty three on Wall Street fifty degrees in Central Park. Heads up, we've got an overturned tractor trailer westbound eighty at exit thirty five in Rockaway. And Michael barrs here with more on what's going on in New York and around the world. Michael, thank you very much. Nathan Democratic Senator above and Ndez of New Jersey, who avoided conviction on corruption charges five years ago, is reportedly the subject

of a new federal investigation. An advisor for the Senator Michael Soliman says Senatorman and As is aware of an investigation. However, he does not know the scope of the investigation, the word on what sort of alleged wrongdoing was involved. Russia carried out military exercises simulating a retaliatory nuclear strike, as President Joe Biden warned Vladimir Putin than any use of

a nuclear weapon would be an incredibly serious mistake. Echoing Biden's warning of grave consequences, Secretary of State Anthony Blincoln spoke in an interview with Bloomberg, we haven't seen reason to change our own nuclear posture, but it's something that we're tracking very carefully, and we've also uh communicated directly and very clearly to to the Russians, to President Putin about the consequences that would flow from any use of

a nuclear device. The Pentagon says the US had been notified that Russia would conduct the excess size and compliance with arms control obligations. This is all alive. That's the response from US Senate candidate herschel Walker to a second accusation from a former girlfriend who says Walker paid for her to get an abortion. Walker, appearing at the campaign stop in Dillard, Georgia, dismissed the matter as nothing more than a stunt brought on by his political opponents. He

got crushed at a debate. Now the Democrats of Doist say whatever they even can win is by wind is the seat. But I was then to know they don't know horshell Walking, Walker added, I'm done with this foolishness. A judge ordered former White House Chief of Staff Mark Meadows to testify before special grand jury that's investigating with the President Trump and his allies he illegally tried to

sway Georgia's results in the election. Global News twenty four hours a day on air and on Bloomberg Quicktake, powered by more than twenty seven hundred journalist and analysts and more than a hundred twenty countries. I'm Michael Barr, and this is Bloomberg n Thanks Michael on Wall Street. Time for the Bloomberg sports uthing, brought to you by Try State Outie. Here's John stash Our. Thanks to the Knicks who began their season with an overtime loss, had themselves

an overtime win at the Garden against Charlotte Nicks. Led by twelve, then trailed by five with just over two minutes left. Jalen Brunson big three pointer and ot the nixt one one thirty four, one thirty one. Big night for Brunts in the new point guard scored twenty seventy at thirteen assists, seven rebounds. We're not playing our best and when we give up leads, how can we respond? And um, those are signs of good teams if you

can do it consistently. I think we're gonna put ourself in position where we can be the best team we can be. But um, I think this is a good step for us. You definitely gotta continue about it. But this is what this is a good step after three home wins day, it will be tougher for the next tomorrow in Milwaukee Bucks or three and oh they just beat the Nets one nine nine. That's at a big second quarter, up twelve and a half and then outscored

second half sixty seven to forty four. The second half is where Jana sent to the compost, scored thirty four of his forty three points at vas Arena. Islanders shut out the slumping Rangers three nothing, forty one saves for Ilias Surok and Kyle Palmary scored twice. The Rangers have scored only five goals in their last four games. NFL to Night Baltimore at slumping Tampa Bay Bucks just three and four. Tom Brady hasn't had a record like that

since twenty years ago. In New England, the Patriots speaking to them visit the Jets Sunday. Pats have won the

last twelve meetings. Mac Jones will reportedly be there starting QB despite getting bench the other Night Giants Sunday in Seattle, Giants has had two offensive linemen suffered knee injuries, but Nick Gates has been activated out since Week two last season when Gates suffered a gruesome leg injury that needed seven surgeries to the stay there with Bloomberg Scorre Wow, thank you John seven on Wall Street Time for the Tri State Business Report with Bloomberg's Denise Pellegrini Kempton's homes

selling faster than ever A Princer Miller Samuel and brokerage Douglas Sulliman say properties in Posh Long Island beach towns listed for an average of only seventy days last quarter, down from nine d a year ago, and the median purchase price levitated at record highs. Inventory remained type Converting unwanted office space to residential won't be enough to solve

New York City's housing shortage. North Wind Groups founder Randallias have telling BIS journals that means rental prices, especially in Manhattan, could keep rising. Connecticut furniture maker Ethan Allen out with quarterly learnings and beat estimates. Company says benefited from efficiencies and a higher backlog of orders, and the downturn in

financial markets is hurting pension funds. In New Jersey, the Public Worker Pension Fund lost nearly ten billion dollars in market value in the year that ended in June, putting its value at about eighties six billion dollars. With the Bloomberg Try State Business Report, I'm Denise Pelaguini 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 of fillion Radio stations around the world. I'm Steve polos Kan K and EX in Los Angeles. We're talking about the former Kanye West being escorted out of the California based headquarters of Athletic Shoemaker Sketchers. I'm Gina Servetti in for w b B. I'm in Chicago. I'm reporting that just in time for Halloween, more zombie

foreclosures are stumbling onto the scene. I'm Stephen Carol on Bloomberg d a B Digital Radio in London. We've been reporting on credit sweets major overhaul plan, which was the raising four billion francs in New Capital. I'm Speligren and on w w J in Detroit. Board is trimming its profit outlook. Those are some of the stories our twentyd Bloomberg journalists and analysts are 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. Last Sunday, in Beijing, Chinese President jj and Ping erased any doubts about the scope of his power, filling all the top of editions in the Communist Party with loyalists and enforcers. The move suggests China will prioritize ideology over the clear eyed, practical decision making that has enabled its stunning postmu economic rise.

In dealing with this new China, the US and its partners would be wise to remember that the more flexible and realistic they are, the more effective they'll be. Above all, the US must keep seeking opportunities to limit confrontation with China. If Biden meets the Chinese leader at the G twenty summit next month in Jakarta, he should give him a better sense of what Chinese actions would elicit a friendlier attitude US China tensitions may now be unavoidable, but they

shouldn't be uncontainable. This editorial was written by the Bloomberg Editorial Board. For more Bloomberg opinion, please go to Bloomberg dot com, slash Opinion or O P I n go on the Bloomberg terminal. This has been Bloomberg. You can hear Bloomberg opinion editorials every weekday at this time. Terminal customers can read more at O P I n go. SMB futures up four points. That's the end of a

tenth percent down future is up a hundred sixteen. NASAC futures still lower, down thirty six points to drop of three tenths per cent. Andrew sheets of Morgan Stanley's with us next. This is Bloomberg. Bloomberg Sports is brought to you by Audie. Don't let someone else drive off in

the outie model you've always wanted. Visit your local price 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 Flash and I'm Karen

Moscow stocks are slipping this morning. U Stock Index futures are mixed as traders digestive flurry of made your earnings and prepared for another jumbo European Central Bank rate high later today. The Nazdak is lower as shares a meta platforms fall more than twenty percent in early training after it reported earnings. Right now, Nazdack futures are down thirty

six points. SMP futures are up about four down futures up one fourteen the decks in Germany's down half percent, the ten your treasury down fourteen thirty seconds you at four point six percent. They yield them the two year four point four or four percent. NIMEX screwed oil little change at eighty seven dollars nineties cents of barrel, the euro one point zero zero three four against the dollar. 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. Russian President Vladimir Putin personally oversaw Moscow's first major nuclear drill since the innovatd Ukraine, simulating a massive nuclear strike. Mr n Allies Warren. Russia could use such an event as a false flag to blame Ukraine for an attack that OSCO carries out itself. The International Energy Agency says it believes global emissions will peak.

In the group's annual World Energy Outlook report finds that the global energy crisis, triggered by Russia's invasion of Ukraine and the ensuing increase in kill prices are propelling investment in renewable energy in the NBA. The next one in overtime over the Hornets one, The Nets lost in hockey, The Islanders blanked Rangers three Zip Thursday Night Football, The

Ravens take on the Buccaneers. Global News twenty four hours a day on air and on Bloomberg Quicktake, powered by more than twenty seven hundred journalist and analyst more than a hundred twenty countries. High Michael Barr and this is Bloomberg, Nathan. Thanks Michael. We're coming up to five forty nine on Wall Street Live from the Bloomberg Interactive Broker Studios. This is Bloomberg Daybreak. Let's take a closer look at this market now. For that, we're joined by Andrew Sheets, Chief

Cross Assets Strategistic Morgan Stanley. Great to speak with you this morning, Andrew, on a week where we've seen tech shares in particular get hammered on earnings and we're seeing Nasdaq futures fall a little bit lower still this morning. Does this that further to wash out or could this be a buy opportunity now that tech shares have uh fallen so far? Yeah. Thanks, it's great to be with you this morning. So I think we are seeing an

interesting shift in leadership within the market. You know, one of the concerns we have had on the US market side, A major concern in my colleague Mike Wilson, or US equity strategist, has been that earnings expectations are are too high in the market, and we do think that that's an adjustment process that needs to play out. But you know, I think it's also at the same time encouraging that we've been able to see other parts of the market continue to hold up better as these kind of old

leaders of the market have seen more weakness. So you know, in the near term, we still think that there's a window for a little bit more tactical strength. But I think with different leadership than we've seen before, which leadership, do you think what's gonna start coming out on top now? Well, we still think that some of the defensive assets within defensive equity sectors can still perform well. We continue like healthcare as a sector that could benefit as the market

looks ahead in the first quarters. He used, decelerating economic activity maybe starts to get a little bit more confident that the feed is getting closer to a terminal rate by the early part of next year, and you know, I think that could set the market up well for some continued preference in the defensive parts of the market. Do you think we're gonna see further evidence of that deceleration in the GDP numbers that come out this morning, or does the or does the feed need to see

even more before we can start thinking about pivoting. Yeah, I think that's a great question. I we think they need to see more. You know, you still had pretty strong job gains, You've still had pretty robust economic activity. It's the data has been mixed. I think it's been holding up a lot better than UH investors would have expected a couple of months ago. And so you know, it might be into the early parts of next year where where the FED can really get a lot more

confident that that deceleration is coming through. And again, you know, trying to marry up some of the micro and macro you know, our our stock analysts that are looking at you know, so the payments companies in the US, they're still seeing quite strong underlying activity there as people still spend on credit cards and the like. So you know, we don't think we're yet seeing enough that will allow

the FED to back off just yet. How much more do you think the FED needs to see how much higher or potentially do market conditions need to get tightened before we start to think about the FED potentially making

a move here. Yeah. So, so one of the key, you know, themes from our economists has been that the real economy might be more important to this pivot than the financial economy, that the so called FED put just really isn't in action for the equity market, and that the FED would would really only intervene if you start to see for the weakness and the investment grade credit market,

much more weakness that we've seen already. So I think it is that real economy side that's going to be more important, and I think what we need to see there is, you know, more signs of weaker job growth, more months of non farm payrolls coming in a hundred under a hundred thousand, those types of things we think would make the set a little bit more confident that the rate hikes they've already done that are going to affect the economy in the future or maybe already starting

to have that impact. But I think it's really focusing on on the hard data on the real side of the economy that we think is going to be most important. To that that downshift of FED action. Does that feed into the thesis from Mike Wilson that we could get that bottom a little sooner than the market has been thinking. I mean, if the Fed does wait a little longer, what what makes you think that the market could see

them around the first quarter next year. Yeah, So some of this is based on the idea that the markets will lead the economy. And so if if economic data is troughing around to say the middle of next year or in the second quarter of next year, then I think there would be good historical precedent for you know, markets, you know, bottoming three to six months ahead of that, because the markets are anticipatory. And again, you know, this is a cycle where everything is seemed to play out

incredibly fast. So you know, I think the idea that you could also have that emphasizing that trend. Thanks Andrew Great having gone with us this morning. Andrew Sheets is chief cross assets strategist at Morgan Stanley. Karen Well Nathan, it is five fifty three on Wall Street. It is time now for a legal story we're watching this morning. The criminal tax fraud trial of the Trump organization began

this week in Manhattan with jury selection. Prosecutors claim the company routinely low ball that's tax exposure by paying senior executives with perks like company curs and rent free apartments. The company's former chief financial officer, Alan Weisselberg will be the reluctant star witness for the prosecution. For more, Bloomberg's Juran Grosso speaks to Bloomberg the legal reporter Greg Farrell.

Trump has not been charged personally in the case, but it seems like his presence is looming over the jury selection. Are all the jurors being asked questions about their feelings toward him? Yes, June, absolutely, that's. In fact, the questionnaire that all the potential jurors had filled out had a number of questions that tried to elicit their feelings about

Trump as a person as a politician. Then there's another set of questions that's interesting about whether or not you feel that corporations have an obligation to pay their fair share of taxes. So you can usually reverse engineer these questionnaires into what interests each set of lawyers had, And obviously the lawyers for the Trump Corporation wanted to see how deep the biases and I saw a clear example

of it. All the jurors say to the question, can you render a fair and impartial verdict based on the evidence, And they all say yes to varying degrees of certainty. But one guy, it was clear that he was not a Trump fan. One of the lawyers for the Trump organization asked him, well, why do you think you can be fair then? And he said, listen, the guy's no morals.

He's a criminal, he's a fraud, but he's caused so much damaged in such a large scale that something like this kind of a small potatoes I could be fair in that. So obviously he was struck from the panel. The prosecutors told prospective juror that the government star witness may be reluctant to answer questions. What is Weisselberg's position, he's not cooperating with the prosecutors, but he's testifying in

this trial, so where's his good question? He is not necessarily cooperating with the d a's investigation of Donald Trump the person. However, once a last minute attempt to get this case thrown out in early August failed and it was going to go to trial, you know, he did the math and made a very rational decision, and he and his lawyers reach to deal with the d A's office. If I plead guilty to the charges you've been filed,

can you cap my jail time at five months? And the prosecutors agreed to it, and as part of that agreement, he has to testify truthfully at trial. So there's a bit of risk here for the d a's office. However, if Weislberg abides by that and testifies truthfully and he's asked about whether or not any of these perks went to Trump family members. You know, A, I think they'll be able to prove that because they have the documentation,

But B who knew about it? And did the recipients know that this is something that probably would cause problems on taxes? That is probably going to be the most interesting part of the trial, his testimony and that fine line that he's trying to straddle between not cooperating against Donald Trump because he's not been cast out of Trump Land yet and because he's on leave ABS and I think Trump is paying his legal bills. So it's a

very delicate dance. It's not a simple plea deal with cooperation, and that's Bloomark Legal reporter Greg far Else beging with Bloomberg Student Grass. So catch more of that interview, plus analysis of the latest legal news by subscribing to the Bloomberg Law Podcast or downloading this show at Bloomberg dot

com slash podcasts. Attorneys can find exceptional legal research and business development tools at Bloomberg Law dot com and on the Bloomberg terminal at the Law Go and futures this morning, well, let'sten P futures are now little change. DAL futures are up a hundred NASDAG features are down fifty year, being led lower by companies including Meta Platforms, which is falling about twenty percent in early training after reporting earnings. Ten

year treasury down fourteen thirty seconds. You old four point six percent and they yield on the two year four point four four percent, and Bloomberg day break continues. This is Bloomberg