From the Bloomberg Interactive Burgers Studios. This is Bloomberg day Break for Monday, April seventeenth.
Coming up today, Tensions.
Over China lead the agenda at the G seven meetings in Japan.
Settlement talks between Fox News and Dominion voting systems heat up on the eve of their trial.
Merk pulls the trigger on a nearly eleven billion dollar acquisition, and the head.
Of Google speaks out on artificial intelligence policem.
In Alabama, town need the public to come forward with information about another man's shooting. Plus Broadway's longest running show ends It's run. I'm Michael bar More Ahead.
I'm John Stasharon Sports Garrett Cole puts the Yankees the victory of the Mets won in Oakland. The Nets and Islanders have playoff games tonight.
That's all straight Ahead on Bloomberg day Break, the Business news you need to start your day in just one fifteen minute podcast each morning on Apples, Spotify, the Bloomberg Business app, and everywhere you get your podcasts.
Good morning, I'm Nathan Hager.
And I'm Karen Moscow. Here are the stories we're following today.
Tensions over China could be high on the agenda in Japan. That's where top diplomats from G seven nations are gathering. Amy Morris has more from our Bloomberg ninety nine one newsroom in Washington.
A senior State Department official tells Bloomberg News Now that Japan holds the rotating G seven presidency, geopolitical challenges in Asia will take on greater focus. Tensions in Taiwan especially demand attention after China held more military drills around the island and the US Navy said it sent a warship through the Taiwan Strait on Sunday. Foreign ministers in Japan will look for a common approach on issues like taiwan human rights, economic coercion, and US moves to restrict China's
access to advanced technology like computer chips. In Washington, I'm Amy Morris, Bloomberg Daybreak, Amy, thank you well.
Tensions over US DAD are also front and center this week, but no deal in the dead ceiling. The word default is being thrown around in some circles. European Central Bank President Christie and the Guard says such an outcome would have dire consequences around the world.
I have huge confidence in the United states. You know, ever since my year in this country, in this city in seventy three seventy four, I have had confidence in this country, and I just cannot believe that they would let such a major, major disaster happen.
ECB President Christie and the Guard made the comments. Unface the Nation from CBS sketched the program every Sunday on Bloomberg Radio.
In Israel, Karen Prime Minister Benjamin Netanyah, who is defending the strength of his country's democracy. That's after Moody's lowered Israel's credit outlook over a planned judicial overhaul that spurred mass protests.
Israel is a vibrant democracy, has been a vibrant democracy and will remain a vibrant democracy.
And you don't want who's the one who's most committed to that is me?
Israeli Prime Minister Benjamin Netanyah, who made those comments on NBC's Meet the Press, which can also be heard Sundays on Bloomberg Radio.
Well, Nathan, we have new development this morning on a massive lawsuit involving dominion voting systems and Fox News. Let's get the latest live with Bloomberg Steve Rappaport's Steve Good Morning.
Good Morning, Karen and Nathan. On the eve of opening statements, Judge Eric Davis announced a one day delay.
To the trial.
Sources tell The Wall Street Journal. The move is to allow the parties more time to reach a settlement dominion, says guests on Fox News shows repeatedly accused the company of rigging its voting machines in the twenty twenty election to switch votes from President Trump to Joe Biden. Fox News is expected to argue it has the right to report claims from a sitting president and his lawyers, even if those claims later turn out to be false. Live in New York, I'm Steve Rappaport Bloomberg Daybreak.
All right, Steve, Thanks, also have a couple of deals to kick off the week on Wall Street. The first involves pharmaceutical giant Merk, and we get the details live with Bloomberg's John Tucker, John.
And ninth And it's one of the largest pharm of deals in recent history. Murk is buying Prometheus Biosciences. The price tag about ten point eight billion dollars. That works out to two hundred dollars a share, a whoppings seventy five percent more than Friday's closing price. Although they have no approved drugs, Prometheus has some promising treatments in immunology. A merksman looking to beef up its business because some
of its key drugs are coming off patent. In fact, fifty five billion dollars worth of its sales are at risk over the next seven years. Let's deal expected to wrap up in the third quarter. Patent expirations are driving M and A activity across the pharma sector, so this probably won't be the last deal you're going to hear about. Live in New York. I'm John Tucker, Bloomberg Daybreak.
All right, John, thanks well shareholders of the creator of Angry Birds or anything but Angry. This morning, the company Rovio up about eighteen percent after video game maker Sega Sammy Holdings offered to buy the finished company for seven hundred and seventy six million dollars. Nobio's board unanimously recommended shareholder except shareholders U. Rovio's board unanimously recommended shareholders accept the offer.
It's staying in Europe. Karen Word of job cuts at Barclay's. Bloomberg News has learned the London based lender will eliminate a one hundred roles in its investment banking group. The cuts come as a slow down in deal making and capital markets businesses continues at Barclay's and.
We're seemore falla from the historic deal between Credit Suite and UBS. The Wall Street Journal reports outflows from Credit Suite branded investment funds have accelerated in the week since the takeover. The paper says net outflows from around three hundred funds have reached five point six billion dollars since the tie up.
Back here in the US, Careen, the CEO of Google is speaking out about artificial intelligence. Alphabet Sundar Paschai says the push to adopt AI technology must be well regulated to avoid potential harmful effects.
The pace at which we can think can adapt as societal institutions compared to the pace at which the technology is evolving, there seems to be a mismatch. On the other hand, compared to any other technology, I've seen more people worried about it earlier in its life cycle, so I feel optimistic.
Alphabet sud Dar Paschai made the comments on sixty Minutes from CBS our Washington. Listeners can catch the show Sunday Nights on Bloomberg ninety nine to one.
Another tech news. This morning, Apples sales in India had a new high, reaching almost six billion dollars for the year through March. Sources say revenue in India grew by nearly fifty percent from the prior year. This search highlights the market's increasing importance for the iPhone maker, as CEO Tim Cook arrives in the country to open its first local stores.
Finally, Karen, Netflix is apologizing to its customers this morning. The service buckled under the strain of popular live streamed reunion episode of Love is Blind. Down detector says thousands of users reported Netflix streaming was unavailable yesterday. Straight ahead, we'll get your latest local headline, Santa Check of sports. This is Bloomberg. It is fifty five degrees in New York. Should have some partial clearing this afternoon with Heisenem for sixties.
We'll get down to the low fifties tonight under a partly cloudy sky. Time now to look at some of the other stories making news in New York and around the world. For that, we're joined by Bloomberg's Michael Barr. Good morning, Michael, Good morning, Nathan Als.
Republicans are holding a hearing in Manhattan today targeting District Attorney Alvin Bragg, the chair of the House Judiciary Committee. Ohio Republican Jim Jordan scheduled the hearing at the Javit Center, accusing brag of interfering in the twenty twenty four election with the prosecution of former President Trump. However, Senate Majority Leader Chuck Schumer says the real threat to New Yorker's safety is a call by Jordan and Trump to defund the FBI and police Department.
Every member in the House and Senate Democrat, Republican, liberal conservative should denounce such attempts by former President Trump and his allies to degrade public trust in our law enforcement agencies out of personal peak and grievance.
Schumer calls Jordan's hearing a political stunt. Today, authorities in one Alabama town are asking for the public's help to make an arrest in another mass shooting. It happened over the weekend at a birthday party in Dadeville. At least four people were killed and more than two dozen injured. Sudan's embattled capital faces a third day of heavy fighting between the army and a power full rival force were control of the country. The weekend civilian death toll in
Khartom has risen to around one hundred. Secretary of State Anthony Blincoln says there is a shared deep concern about the fighting.
We're also closely in touch with any American citizens INSIDAM to make sure that those who are registered with the embassy and that we're actually in contact with get all the information they can about how to remain sales secure.
Secretary Blinken spoke of the G seven Foreign Ministries meeting in Japan. The countdown is onto this morning's launch of the tallest rocket ever built. Elon Musk's SpaceX is preparing to launch Starship, the most powerful rocket ever built, into space. After thirty five years, Broadway's longest running show has taken its final bow. After nearly fourteen thousand performances, Phantom of
the Opera bid it farewell. Sunday. The last curtain call brought out not just cast, crew and musicians, but the original Broadway company and Andrew Lloyd Ubber himself.
He couldn't go.
Out with the best of conformance was bord to Christi.
Fandom won seven tony awards including Best Musical. Global News twenty four hours a day, powered by more than twenty seven hundred journalist and analysts and over one hundred and twenty countries. Michael Barr, this is Bloomberg ninth.
And it's still there inside your mind. Thank you, Michael, Thank you. After the Bloomberg Sports up date. Good morning, John Stanshall by Nathan NBA playoffs just getting started. Everyone's played once already. Injuries are looming large.
Milwaukee had the best regular season record, but the Bucks lost Game one to Miami. Had to play most of the way without Yanna's son to the Company's got a bad back. They say the x rays were clean and the heat also saw a key player go down in this game, Tyler Hero broke his hand and Memphis John Moran left with a hand injury. Those x rays were negative. Grizzlies lost only six times all season. They lost to the Lakers. The Clippers won in Phoenix, easy for Denver.
The Nets have game two tonight in Philadelphia. It's also opening night in the Stanley Cup playoffs. The Islanders visit Carolina. Speaking of injuries, another one for Yankees slugger John Carlos Stantony's got a hamstring injury, expecting to miss at least a month.
Here's Aaron Bruce.
I know he's he's really frustrated, but you know it's it's opportunity now, it's opportunity for frankly people. We have a lot of confidence in that we can mix and match. We're gonna get some other people back here and then in the next days, in the next couple of weeks, and uh, you know, we gotta make.
Do Yankees off. Tonight before welcoming in the Angels, they gained us one of the four game series of the Twins, winning two nothing at the stadium thanks to Garrett Cole complete game two hit or ten strike ass. Cole's already four to zero. His era is under one. Mett's visited the Dodgers tonight. They completed a sleep in Oakland, winning four to three and ten names. Peter Wonzo a game time home run of the ninth and he already is
eighth of the season. Matt Fitzpatrick is a brit who has a kid vacationed every year at Hilton Had he won the heritage It's fine to the playoff with Jordan Speed, John Stash that Bloomberg Sports.
Live from coast to coast, from New York to San Francisco, Boston to Washington, d C. Nationwide on SIRIUSXAM, the Bloomberg Business app, and Bloomberg dot Com. This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. Stocks are getting off to a relatively quiet start this morning. We'll see whether that continues as we make our way further into first quarter earning season.
So let's get you set for the trading week ahead. We are joined this morning by Lori Calvacina, head of US Equity Strategy at RBC Capital Markets. Laurie, it's always great to speak with you, and we have seen stocks do relatively well so far this year. Where do you see the momentum going for equities?
Well, thanks for having me. As always, look, we think it's going to continue to be a choppy environment this year. I do think the bears have really, you know, sort of overstated their case. I probably see more upside risk than downside risk, but we have been training right around forty one hundred target. I don't see anything really eminent that would derail us. We'll see what happens in this reporting season. We are watching Nasdaq futures positioning pretty closely
as a potential short term cell catalyst. But I think investors just need to get ready for what is likely to be not as bad as what some of the bears are saying, but just a chopping environment for the duration of the year.
Now, the bears have been pretty loud. We've heard once again from Mike Wilson, probably the biggest bear on Wall Street over at Morgan Stanley saying there needs to be more earnings down grades. Why do you think the bears have overstated their case? What's your case?
Well, look, I think it really all goes back to how close are you looking at the history of how markets trade around Earning's downgrade cycled. And I think the bear case has largely rested on the idea of, hey, earnings expectations are way too high. We think the number is going to be lower, therefore markets need to come down and retest the low. And I think that's just overly simple, and I don't think it really has an appropriate view of how Earning's grade cycles have impacted stock
prices in the past. If you go back historically, what we have seen very consistently is that three to six months before earning downgrade cycles are done, stock markets tend to put in their bottom and I really shouldn't even use the word ten, because that's what always tends to happen, or actually always does happen in these major downgrade cycles.
We've gone back looking at this over several decades. The other thing we've seen is that if you look at the price action in the S and P five hundred last year, and price action does loosely tend to follow earnings, but around major inflections, stock prices do tend to lead earnings.
And when we compare how the stock price is acted to what the earnings expectations are for this year, both consensus and my well below consensus number, the price action reflects a more onerous earnings environment than even what I'm anticipating with my two hundred number. And then the last thing I would say, if you look at earning downgrade cycles, you tend to get the cuts in largely by the April May timeframe. In the SMP and the small caps,
it tends to be more like May June. But really this is the little reporting season where the numbers do need to get cleaned up. Cell Grant the bears that for that market bottom back in October to hold. So I think it all goes back to the idea of what is baked into stocks, and stocks already baked in a pretty onerous earnings environment last year, and that's always what they do in these downgrade cycles.
How do you read what we've heard from the big banks so far? As we've just gotten earning season kicked off here by JP Morgan, Chase, Wells Fargo, and City Group, do you see the momentum continuing for them?
So look, it's very very early in the financials reporting season. And you know, I will say, if you look at the BKX performance, and we've been watching it very closely relative to the Nasdaq one hundred performance, it does look like it is trying to stabilize. So I think the market is looking for an excuse to have some good reaction to these earnings numbers. And you know, I think Friday ended up being a little bit weaker than perhaps the headlines from the banks themselves would have suggested.
My read.
And again I'm not a banks jannalyst, I'm a strategists. I'm looking more for macro clues. But I was comforted by the fact that we saw one of the banks saying they weren't going to unreasonably tighten in here because of past events. I thought there was a lot of focus on regulation, which I think is appropriate. I think that's a longer term issue that banks have to contend with.
But generally, if we look back over the last couple of weeks, what companies are telling us, not just in the banks but elsewhere, was that the sort of impact from the recent events in banking has been pretty limited. So far, we aren't seeing an overly alarmist tone from companies. We're seeing more echoes of what we saw in the Duke CFO survey a couple of weeks ago, where corporate sentiment was actually improving prior to the SBB crisis. So I think it's going to be really important to watch
the tone from here. I don't think we can read too much from Friday. I think we were off to a good start. Would have liked to have seen a slightly better stock market reaction, but I think in general, the idea that this was a contained crisis, I think that is bearing out.
Just about thirty seconds left in this segment, Laurie, so do you think that the worst is over then for the banking turmoil.
I think that's that's what the market is telling us right now, and I think that's the vote of confidence we're seeing in the stabilization. In that VKX performance. We've actually started to see a little bit of underperformance from the NASDAT complex again, and that tells the investors are starting to worry about the set again, which can only happen, you know, if the Fed feels confident enough to go.
This is Bloomberg day Break Today, your morning brief on the stories making news from Wall Street to Washington and beyond.
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I'm Karen Moscow. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak