Fed Hawks Send Stocks Lower and Credit Card Debt Hits a Record

board meeting after a student committed suicide. Plus more headaches for travelers at JFK Airport. Michael bar More Ahead, I'm John Stashoward Sports. The Devil's Locked in St. Louis. The Rangers played tonight at an impressive first round for Tiger Woods. That's all straight ahead on Bloomberg day Break, The business news you need disturb your day, and just one fifteen minute podcast each pointing on Apples, Spotify, The Bloomberg Business

Appen everywhere you get your podcasts. Good morning. I'm Nathan Hagar and I'm Karen Moscow. Here are the stories we're following today. Karen. The Hawks our front end center at the FED this morning, and that is stoking fears of higher interest rates to come. Both St. Louis Fed President James Bullard and Cleveland Fed Chief Laretamester see the case for raising rates by fifty basis points at their next meeting.

I think we can lock in this disinflationary trend by continuing to have policy rate increases during even though the real economies looks like it's gonna continue to grow and the labor market broadly across the country looks like it remains strong. But this juncture the incoming data have not changed my view that we will need to bring the Fed funds rate above five and hold it there for

some time. Indeed, at our meeting two weeks ago, setting aside what financial market participation participants expected us to do, I saw a compelling economic case for a fifty basis point increase, which have brought the top of the target range to five percent. Both Cleveland Fed President Larettamester and St. Louis Fed Chief James Bullard are not voting members on the f O m C, but they do have influence. Right now, markets are still pricing in a twenty five

basis point hike next month. Well, Nathan, those hawkish comments have stocks lower once again, this morning after dropping one point four percent yesterday. S ANDP futures are down about six tents of uppercent this morning. Ken van Lewin, CEO of Van Lewin and Company, says Mester and Bullard are rattling investors. The FED has its mandate to control inflation, and it looks like they're going to be doing that, So that's what's pushing rates up. Of course, in the

markets down. Ken van Lewin notes that benchmark can your treasury yields are trading at their highest level this year. Right now there are at three point eight nine percent. Well equities are lower. Karen one stocks bucking the trend this morning. Shares of Applied Materials are up nearly one percent. The company gave a strong sales forecast thanks to increased demand for gear that makes auto and industrial chips. We get more from Bloomberg's Charlie Pellett. Applied is the biggest

maker of semiconductor manufacturing equipment. It says second quarter sales will be about six point four billion dollars, that beat the average annalist estimate of six point three billion. Many of Applied Materials largest customers have slashed their budgets for new plants and equipment this year in response to a widespread glut, but its latest outlook suggests there are still bright spots in the chip industry, including automotive semiconductors in

New York. Charlie Pellett Bloom Bird Day break Right, Earlie, thank you well. Let's take a look at some other stocks on the move this morning. Shares a Door dash Or a more than six percent. The food delivery company is forecasting earnings that toped estimates. Shares the DraftKings up five percent, the gambling company posting fourth quarter sales that beat estimates, And on the flip side, shares of Texas Roadhouse Or down more than six percent, the restaurant chain

missing fourth quarter estimates. Let's turn to politics now, Karen, because US China relations remain on the front burner. President Biden expects to speak with President Shi Jinping soon about that Chinese balloon shot down by the US. President addressed the matter at the White House yesterday. We are going to keep our allies and the Congress contemporaries informed all we know and all we learn, and uh, I expect to be speaking with President she and I hope we

have We're going to get to the bottoms. But I make no apologies for taking down that balloon. President Biden is still facing plenty of criticism from Republicans after his speech. House Armed Services Committee Chair Mike Rogers says the suspected Chinese spy balloon covered a lot of ground before the President ordered it shot down. They watched it go over Guam. Guess what. Lots of US presidents they are focused on. Asia, watched to go over Hawaii. Lots of US military presence,

they're focused on Asia. We've watched the go for Alaska, by the way, last military presence, But that thing was collecting for a very long time. House Arm Services Chair Mike Rogers spoke with Our Washington corresponded Joe Matthew on Bloomberg Sound on. Catch the program weekdays at five pm Eastern on Bloomberg Radio or listen on demand wherever you get your podcasts. Will US China tensions run high here, and there's yet another thing that could complicate them even further.

The White House will reportedly send its top Pentagon official to Taiwan in the coming days. That's according to the Financial Times. It's unclear how Beijing will respond. A Foreign ministry spokesman says China opposes military ties between Washington and Taipei. Well, Nathan, we turned to this week's retail sales figures, which showed Americans continue to spend despite tight policy from the Fed.

Now your fresh data showing consumers have also racked up nearly one trillion dollars in credit card debt, Bloomberg said, Baxter has the story. This is definitely the result of Americans wanting to buy things and spend running smack dab into inflation. Most of the increase came in the final quarter of two and it breaks a record set in twenty nineteen, and the sixty one billion dollar up from the prior quarter was the biggest scene in data going

back to nineteen ninety nine. Now, along with users just swiping and tapping more, they're also missing payments, with delinquency rates surpassing pre pandemic averages in San Francisco. I'm at Baxter Bloomberg daybreak. All right, thanks, we have fresh data on college endowment returns. They're not painting a rosy picture either. US endowment returns tumbled last year during the global market route.

A new study says they lost an average eight percent on the year ending June is a reversal from an average gain of almost thirty one percent the prairie year. This is Bloomberg. We're gonna have showers ending this morning. It'll turn cloudy and breezy today. We're gonna get into the low sixties early, but temperatures will fall through the afternoon. By tonight, we'll be down in the upper twenties. Not gonna look at some of the other stories making news

in New York and around the world. Good morning, Michael bar Good morning, Nathan Angry. Parents in New Jersey pack to school board meeting for the Central Regional High School OOL in Bayville, where a teenager died by suicide last week after a video allegedly captured her being bullied by four classmates. Those four students are now facing criminal charges, and the district superintendent has resigned. Parents like this man say it's time for the school board to listen to

the community. His school system is currently in their national spotlight for halliblasons. This school system has and is failing our students. This administration is failing our students. I feel that everything in this district is handled in a reactionary in e jerk way when it's too late before the meeting. Acting Superintendent Dr. Douglas Corbett says the district is working with police and state officials in connection with the death of the fourteen year old student by suicide who had

been cyber bullied. Of course, consequences followed, but I can't tell the victim's parents what those consequences are. Superintendent Corbett also says a thirty member crisis team is ready to respond to the concern of parents and students. The parents of a twelve year old New Jersey boy are grieving after their son collapsed and died during football practice in Newark. The tragedy occurred last week during a youth team's workout. Elijah Jordan Brown Garcia went with his ten year old

brother to his wrecked team practice last Friday. He was running some drills when he collapsed at West Side Park. It took more than a half hour for e MS to arrive, but by then it was too late. The family is calling for CPR training for all coaches involved in youth sports. A terminal at JFK Airport will remain closed today. A power outage yesterday at Terminal one caused flight delays and cancelations. This woman was among passengers left stranded.

We're getting news like all the other terminals are open, just this one. A footnote to the story of flight from Auckland to JFK made a U turn and went back to New Zealand after traveling about nine thousand miles. Passengers on the flight spent sixteen hours in the air to fly back to Square One. Arizona Appeals Court has rejected Republican carry Links challenge of her defeat in the

Arizona governor's race to Democrat Katie Hobbs. The court denied a request to throw out election results in the state's most populous county and hold the election again. Global News twenty four hours a day, powered by more than hundred journalists analysts in over a hundred twenty countries. I'm Michael Barr. This is Bloomberg Nathan. Thanks Michael, time for the Bloomberg Sports update, brought to you by Try State Out. He

Good morning, John Stansharn, Good morning. Eighth than the NBA regular season about three forts over, but now is the All Star Breaks. Sunday's game is in Utah for the first time in thirty years. Le Bron James and Yanniston's the Compo are the captains. They will not pick the squads until just before tip off the next Julius Randall will play. Jalon Bronson hopes to get a late invite because there are three Eastern Conference All Stars with injuries.

DeMar De Rhodon and Jalen Brown have both missed the last couple of games, and Jani's last night had to leave with a sprained wrist. The Bucks one in Chicago. They've won twelve in a row. Phoenix lost to the l A Clippers. Kevin Durrant, now a member of the Sun's, reflected on his time with the net There was a lot of ups and downs, but I love the crime so and everybody, and broken the load of the crime too. So I built the family over there as they're gonna

always be a part of my journey. So we didn't accomplish what we wanted to accomplish as far as winning a championship, just like I told him, But I enjoyed the crime kat. He added that once Kyrie Irving was traded, the Nets were a team without an identity. He still injured. Hopes to make his son's debut next month. Devils lost in St. Louis four to just their fourth regulation road lost. The Rangers are just behind the Devil's in the standings.

They've won six in a row. They played tonight and Edmonton. Tiger was his first tournament in seven months at Riviera in l A. Of course he's very familiar with and Tiger finished strong. Bernie the last three holes shot two under sixty nineties, five shots behind the co leaders Maxioma and Keith Mitchell. Tim McCarver has died. He was eight one. After long playing career, he was on the Mets broadcast booth for sixteen years. He also called twenty three World

Series for three different networks. John stash Award Bloomberg Sports Live from coast to coast, from New York to San Francisco, Boston to Washington, d C. Nationwide on Sirius, XAMP, the Bloomberg Business app, and Bloomberg dot Com. This is Bloomberg Daybreak. Good morning, I'm Nathan Hagar. Let's take the pulse of the auto industry. Now, it has been quite the year for the sector and General Motor CEO Mary Barra says demand for expensive trucks remains strong and that's allowing GM

to invest heavily in the future electric vehicles. In an exclusive interview with Bloomberg's David Weston, CEO Mary Barra laid out GM's path toward electrification while meeting demand for those gas powered vehicles. Let's bring you part of that conversation. Now, you've talked about I think a million vehicles by five e vs. Right by that point, you believe you will know or be in alcohol investment mode, that is to

say you'll start being to turn to profit. Well, we've talked about I said, you know, we think our margins at that point for our ev business will be in the low single digits without i RA, a high er with IRA. But we'll still be investing because as I said, you know, we have I talked about the three battery plants we have in the not too distant future, will be announcing a fourth. But we see other investments will make their and there's still parts of the portfolio that

we have an announced that will continue to add. So you know we're going to be getting the right EVY portfolio to cover the market uh through that period, so it will extend beyond twenty but once we ramp up some of these battery plants and they're running at full rate. That's what allows us on those you know, the products

we have to start to really improve those margins. Are you seeing the demand you need in order to get to the levels you need for electric vehicles and people wanting these well so far, you know, our our Hummer our GMC Hummer e V is sold out. In fact, we're not even taking orders. I can't wait till I can turn that order bank on again. The lyric is doing well. By the end of first quarter, will have uh.

You know, we believe delivered our our first year limited edition and and you know, vecin taking orders for the

second model year and we've seen really strong interests there. Uh. Similarly, we have a quarter of a million hand raisers for the Equinox of Chevrolet Equinox and the Blazer e V and the Silverado UM that's the one that will be out in just a handful of weeks and against strong interests, were very very confident that will sell all of those this model year's UM sales uh and then some so really strong demand and I think it's because of our products,

because they can more off the ultiam platform. We didn't have to make compromises in what the performance or the range. We were able to really understand what the customers looking for in that vehicle and deliver it. You mentioned supply chains, and obviously the automotive industry in general has had a tough time because it chips in the last couple of

years because it'sply chains. What did you learn from that experience and most specifically, what did you learn about what general motors needs to own, what they need to control, and what they can really shop out. I think what we saw with you know, issues of the pandemic and then all the side effects of that UM that we

needed to have a more resilient supply chain. And you know, we've always from a final assembly aimed to build where we sell, and I think we need to have sourcing for the different countries we operate in UM that that is more focused, so there's you know, there's more control

from that perspective. So that's what we're working to do, especially as we look at our battery supply chain, what we need to build these and also from a semiconductor perspective, so you know, we are making changes to be more

robusts that I have to give a giant. Shout out to our our team because between engineering, manufacturing and our sourcing team, the miracles they worked over the last two years to enable us to build the vehicles that we did took a tremendous effort, and I want you to know that we also last year we're able to do that and our quality went up where most in the industry went down. How important is it for you to fill in all the different price points so you can

reach the full range of the DEA ship consumers. It's critically important. If we want to achieve goals to get to forty fifty and beyond a percentage of all new vehicles sold to be electric vehicles, you have to get into that thirty range because that's where the bulk of the market is. And so that's why I'm so proud of the Chevrolet Equinox and the Chevrolet Blazer, both evs

that are coming out this year. You know, the Equinox will be around thirty dollars and the Blazer will be in the you know, and those are very affordable vehicles and best that they're loaded with technology, safety, technology, connectivity, and I think the performance of those vehicles are just going to surprise and delight our customers. And because it's in the sweet spot of the market, we think, you know, there's gonna be a huge opportunity to sell a lot

of them. As you look forward to the future, general motors, where do you think you need to spend more? Where do you think you need to spend less? Clearly we're optimizing our internal combustion business, but we found that we can do that with a lot less complexity. For instance, I'm mentioned the Chevrolet trucks that will have one engine, and so you know that allows us to do the vehicle in a very efficient manner but still meet the

customer needs. Through COVID, we found we could take cost out, reduced bureaucracy um and now we've got to you know, continue to get at that, and that's why we announced with earnings, even though it was record earnings, we announced that and committed to take two billion dollars out of structural cost between twenty three and twenty four. And I know the team can do it. This is Bloomberg day Break 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

Election device SIS Just say Alexa play Bloomberg BLUs. Listen coast to coast on the Bloomberg Business app, Serius 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