Disney Surges and Credit Suisse Tumbles

and Connecticut's budget promises more tax cuts. I'm John Stashoer and sports and a blockbuster trade than nets delve Kevin Durant of Phoenix for three players and four draft picks. The Rangers beat Vancouver. That's all straight ahead on Bloomberg day Break, The business news you need disturn your day, and just one fifteen minute podcast each pointing on Apple, Spotify, The Bloomberg Business Appen everywhere you get your podcasts. Good morning,

I'm Nathan Hagar and I'm kerin Moscow. Here are the stories we're following today. We begin this morning with earnings and job cuts at Disney. They have the stock up six and a quarter percent in early trading. Disney reported better than expected sales and profit, led by its theme parks division, and CEO Bob Iger is planning to cut

seven thousand jobs as part of a dramatic restructuring. We are going to take a really hard look at the cost for everything that we make, both across television and film, because things in a very competitive world have just simply gotten more expensive. And that's something that is already underway here. Disney CEO Bob Iger is seeking five and a half billion dollars in cost savings. More than half of that's expected to come from the movie and TV budget. Well.

On the flip side, Nathan Shares of credit suites are down more than five percent. This morning, the Swiss banks that it expects a substantial loss this year. Clients pulled direct one hundred ten billions with Frank's in the latest quarter, capping the bank's worst annual performance since the financial crisis. CEO al Rick Kerner spoke with us about the results.

The results are unacceptable, obviously, and that's why we created the News to Edgy transformation program, which we as you know, communicated enter October to Credit a new Credit Swiss, much more focused, simpler build around client needs in the mid term, very profitable and the executing at Pace and Credit Swis CEO Rick Kerner says fixed income trading revenues were down eighty four percent year on year, while equities trading revenues from ninety six percent. Stay tuned for more of that

interview coming up shortly on Bloomberg Daybreak. Well, Karen, We're hearing from another banking executive this morning, this time on the Fed. In an interview with Reuters, JP Morgan CEO Jamie Diamond said the Fed may need to lift its benchmark interest rate above five Diamond sent off inflation stops falling and gets stuck around three and a half percent, the Fed quote may have to go higher than five percent. Diamonds comments follow several calls from Fed officials for more

interest rate hikes. Nathan Policymakers, speaking at separate events yesterday, delivered a similar message. And here's FED Governor Christopher Waller. We are seeing that effort begin to pay off, but we have farther to go, and it might be a long fight, with interest rates higher for longer than some are currently expecting. But it will not hesitate to do what is needed to get my job done. And those comments from Christopher Waller were echoed by his colleague, Minneapolis

Fed President Neil cash Curry. There's not yet much evidence in my judgment that the rate hikes that we've done so far are having much effect on the labor market, and we need to bring the labor market into balance. So that tells me we need to do more. How much more, I don't know for sure. Neil cash Curry says the Fed will likely need to raise interest rates to around five point four percent in order to get

inflation down to the feds two percent goal. Well, those hawkish calls by the Fed lead to a sell off in stocks yesterday about the SNP NAZDAC fell more than one percent. Robert Stimpson, his chief investment officer at Oak associates, Well, I think the market has gotten the message and that two thousand and twenty three is going to be more of the same, where the market gets optimistic that the set is close to a pivot or done, only to

be reminded that no, it may not be. Robert Stimpson at Oak Associate says the FETE is still concerned about the strong job markets impact on prices. And now let's head to the Middle East, Nathan, where the disaster from last week's earthquakes is getting worse. The death toll has now passed sixteen thousand across Turkey and Syria. Bloomberry symondemic Can has the latest from Istanbul. Rescue fs are still underway, but it's definitely a race against time to try and

save as many people as possible. Of course, this is the fourth day of rescue efforts now. Both Turkish President bridget Type as One and his US counterpart Joe Biden, have caught this disaster the worst in a century. President as One visited the disaster so in yesterday and he promised to rebuild in a year in Bloombergy Simon Demican reports that Turkeys stock exchange will be closed for five trading days. The country's benchmark index erased twenty one billion

dollars in value after yesterday's trades were canceled. On the geopolitical frontcar in US China relations continue to remain in focus and President Biden is denying that ties between the two countries are being strained after the balloon incident, Bloomberg said Baxter has the story. Biden says he has not

spoken with China President She Jumping since the incident. On PBS, when asked if the relations had taken a big hit, he flatly answered, no, No, We're going to compete fully with China, but we're not going to look if we're not looking for conflict and uh and that's been the case so far. Meanwhile, the administration is saying it is collecting very valuable information on China's balloon intelligence gathering operation

and we'll share it with allies around the world. In San Francisco, I'm at baxter Burg daybreak, all right, and thank you. Meantime, China is blasting President Biden over his critical comments about President She jan Ping, and the PBS interview ed mentioned the President repeated comments made in his State of the Union address that no world leader would want to trade places with President She in Beijing this morning, at Chinese Foreign Ministry spokeswoman said, quote, the US remarks

are highly irresponsible and violate basic diplomatic protocols. Future is higher this morning. Straight ahead, we have your latest headlines, plus a check of sports, and this is Bloomberg. Forty one degrees in Central Park It's going to turn cloudy today with showers likely this afternoon, going up to near fifty degrees. As those showers move out, tonight will dip down into the upper forties, and temperatures will rise through

the overnight hours. So I'm now to look at some of the other stories making news in New York and around the world with Bloomberg's Amy Morris. Good morning, Amy, Good morning, Nathan. Southwest Airlines is canceled two thirds of its flights in the wake up severe winter weather and internal systems issues, and it's not expected to get caught

up until this weekend at the earliest. Co and analyst Helene Becker tells Bloomberg TV that Southwest under invested in I T and now that's come back to haunt them. They're doing what should be automated by hand. Um, when you have six thousand flights today and and you probably shouldn't, you should probably have two thirds of that. Um, it's nothing I don't have enough people. It's that they don't know where their people are. She says, more than eight

percent of flight cancelations earlier this week. We're just by Southwest Airlines. Connecticut Governor Ned Lamont has unveiled a more than fifty billion dollar by any Ill budget that would cut income taxes to four and a half percent, down from five percent for families making up to one hundred thousand dollars per year. He projects it will save about

four hundred forty million dollars each year. The budget also increases spending by three and a half percent this fiscal year and then by another one point eight percent next year. A councilman from New Jersey was shot to death yesterday. That's the second set shooting in a week. Russell Heller was a councilman from Milford and was killed outside the

PSC in g Somerset Division headquarters in Franklin. Police say the suspect and that shooting was a former employee, Garry Curtis, who was found later dead from a self inflicted gunshot wound. This just one week after Sayerville councilwoman unict One Far was fatally shot in a vehicle near her home. In New York. Police say the alleged NYPD cup killer has

had previous run ins with law enforcement. Mayor Eric Adams tells MSNBC he's not surprised the suspect, thirty eight year old Randy Jones has a criminal record to evolve into a recidivism that you're seen in not only New York but our country is impact in how we keep our city safe. Jones was arrested once in New York City for strangulation and two other times in Virginia. Now he's charged with murder and attempted robbery in the fatal shooting

of twenty six year old add Fayez. Grand Central Madison will officially kick off its full l I Double R service schedule at the end of this month's or is Tell w NBC TV. Full service will begin on Monday, February Global News powered by more than twenty seven hundred journalists and analysts and over one twenty countries. I'm Amy

Morris and this is Bloomberg Nathan. Thanks Amy, time for the Bloomberg Sports Update, brought to you by Trice stayed out a major departure in Brooklyn, John Stan Shouer, Yeah, Nathan, last one out the door, turned out the lights. You know they say you need multiple All stars to win an NBA championship. Well, a year ago, the Nets had put together three of the best players in the NBA, but James Harden Kyrie aving Kevin Durant only played sixteen

games together. All three had expressed desires previously their careers to get traded. All three would express that same desire to the Nets a year ago, Hard and ship to Philadelphia. He's playing for his fourth different team, just this past Sunday, Irving Delta Dallas, that's his fourth team. And last night then that's traded Kevin Durant to Phoenix, So the Sons will become the fourth team that k D has aid for.

T J. Warren also goes to the Sun's. In return, the Nets get three decent players mckel Bridges, Cam Johnson, Jay Crowder. They get four first round draft picks. A year ago the next traded a first round pick in Atlanta for Cam Reddish. He hadn't played a single minute for the Knicks in the last two months. Reddish Delta Portland with the first round pick. The Knicks get Josh Hart from the Blazer's NBA trade deadline coming this afternoon. At the Garden, Rangers won their third in a row,

beat Vancouver four to three. Seaton Halls three game winning Street came to an end a home lost to Creighton Fordham one again beat you Mass The Rams are now nineteen and five and Yukon women lost at Marquette and they've now lost two games in a row for the first time in thirty years. NFL honors go out to

night Patrick Mahomes getting ready for the Super Bowl. He's expected to win m v P. Two Jets could win Rookie of the Year awards, Garry Wilson on the offense and Sauce Gardener for defense, a little over a month after he nearly died on the field in Buffalo. Tomorrow, Hamlin was a Super Bowl Week of Phoenix, picking up

the NFL Community Service Award. John Stashower Bloomberg Sport Live from coast to coast, from New York to San Francisco, Boston to Washington, d C. Nationwide on Sirius, example of Bloomberg Business app and Bloomberg dot Com. This is Bloomberg Daybreak. Good morning. I'm Nathan Hacker. Credit Suite still expects to return to profit in that's despite warning of a significant loss this year and reporting a fifth straight quarterly decline.

Credit Swite saw a record hundred twenty billion dollars in outflows in the latest quarter, and it's making significant cuts to its bonus pool. The CEO of Credit swiz al Rick Kerner, spoke about all that and more with Bloomberg's Francine Lakwa. Let's listen in we have results. You your first got feeling about them. The results are unacceptable, obviously, and that's why we created the News to Edgy transformation program,

which we as you know, communicated er October. To Credit New Credits is much more focused, simpler, built around client needs in the midterm, very profitable, and we are executing at pace. And let we also say we are confirming all our targets we gave by the end of October. So when do you think results will be acceptable? When will they be at a level that you're comfortable with. Look, we said this is a three year, three year transformation. We gave targets on on return, on times aroacuity. As

you know, we reconfirmed them. So it will take some time, certainly a very transformative year, and then we get better and better. What's your outlook for asset flows? So we have seen what has happened in October. Let me say that you know the outflows we have seen basically are more than eighty five stemming from October and November, and if you click only in October is more than six.

So what we did immediately after we could communicate the end of October, we put in place and at least what the colleagues tell me, an unprecedented client outreach program. So we talked in the meantime to more than ten thousand wealth management clients individual as we talk, and more than fifty thousand clients in Switzerland. And I think that has created very good momentum. So if I look into January, the group overall isn't that positive on deposits, wealth's management

globally as well. Let's menationedent Asia Peck as well. Let's mentioned PEC being positive on that new assets and Switzerland as well. So I think the situation has changed completely. When will Christmas be reliably profit again? Look, that is a far reaching, far reaching question. We said very clearly we will make a loss in twenty twenty three and from there on um we will get better and better. Talk to me a little bit about compensation. I mean

there's certainly created waves. There was talk about you delaying compensation or doing in the three transits. What is the reasoning behind that? No, we we are don't doing it in two responsors. So we have we haven't hadn't pick you know, sort of say compensation day like today before yesterday. And there are very small parts of the firm, particular seniors in CSFB that was delighted of it. But you know we are we're doing that over the next couple

of days. But overall it was done globally more less at the same day. So what's your strategy on compensation and bonuses? Look at this vergy in quotation market is pretty simple. That needs to be in line with the results more or less um and and I think that's the current thinking and and the future thinking. And I think there is also something which is very important, you know, if you think about new credits with that provides us with the opportunity to create an also new culture. And

that is all what we are defining now. And I think the new culture when it comes to compensation in principle going forward will be you know, you make profit, you paper honest, if you don't, you pay the very little or nothing. So that's that's the culture around bonus going forward. Are you reallocating bonuses actually at the bank? Like how you think about it? What do you mean

by reallocating in terms of the units. So is it seems pretty I guess intuitive that if you make a profit or if you would do good, you have bonuses. Are you taking some away from certain people to give it to others? Like? How has that changed in the last twelve months looked not in principle or not. But the only thing which we are doing, obviously is as you have seen we we we cut the bonus pool significantly, which you would expect, I guess in a year like

last year. But then we make sure and that's maybe the the only overlay as we are creating and make sure you know that we can really keep the franchise. And in this sense it might be that you know, a little bit goes more left than right and so on, but in principle it goes on the on the underlying results. Are you worried about people leaving the firm? Look, we have a tough bonus on the sands we are, we

are in competition with all our friendly peers. But on the other hand, I think I believe very strong in that one is, you know, new credits bees, but also see SFP for important colleagues. On that side creates really something which they can believe in. This is something new, This is a very very good story, will be very profitable on both sides, and there's something people believe it.

This is Bloomberg Daybreak Today, your morning brief on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed at six am Eastern each morning, on Apple, Spotify, and anywhere else you get your podcasts. You can also listen live each morning starting at five am Wall Street time on Bloomberg eleven three oh in New York, Bloomberg in Washington, Bloomberg one oh six one in Boston, and Bloomberg nine six in

San Francisco. Our flagship New York station is also available on your Amazon Alexa devices. Just say Alexa play Bloomberg eleven Plus listen coast to coast on the Bloomberg Business apps, Sirius XM Channel one nine, the I Heart Radio app, and on Bloomberg dot Com. I'm Nathan Hager and I'm Karen Moscow. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak