Bloomberg Audio Studios, Podcasts, Radio News.
Good morning.
I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
Karen, let's get more on this global market route. We are joined by Bloomberg's Kritty, Goopta and Kritty. We saw a historic sell off in Asia overnight.
We certainly did, and the selloff is one of historic proportions. The topics down twelve percent, the Nike also down another twelve percent. But it's not just Japan. You're also seeing the stock really spread off. Stock self spread off in the chip sector across Asia. COSPI, the KAUSDAK, basically the South Korean indexes that have that major Samsung havevyweight, both
down somewhere between eight and nine percent. You even have the KOSAK in particular, which is of course at the South Korean version of the Nasdaq, basically down a whopping eleven percent. That's just in the equity space, Nathan, you also have a similar story over in the currency space, where dollar yen now at a one forty two handle, really shaking things up in the effect space.
Yeah, we're seeing this sell off spread into Europe where you are, though it doesn't look quite as bad there, Critty.
It doesn't, but it is still read on the screen in line with the moves that you are seeing globally. About a two percent decline in the eurostocks fifty. The Footy one hundred is your underperformer as well, down about two point two percent. Ironically, France isn't selling off as much. It's only down one point eight percent. But the reason for that is simply that these markets aren't as deep as the ones in Asia. They're not as liquid as the ones in the States either.
All right, Creatie goopto will be checking in with you all morning. Thank you. Treasuries do continue to rally this morning. Bets increasing there will be an emergency FED rate cut. In fact, traders now see roughly sixty percent chance of an emergency quarter point cut within one week. JP Morgan and Citigroup are revamping their forecast to predict a half point cut in the US in September. It all follows Friday's weaker than expected JOMPS report and believes that the
Fed is too slow to support a slowing economy. Former Offen economist Claudia sum to a Bloomberg Radio that data triggers her famous recession indicator.
This summ rule way too much momentum in the unemployment rate in recent months, I mean four point three percent. So whether we are at that moment of a recession or not, this is your build into substantial weakening in the labor market.
Claudia sam with some consulting, made the comments Friday on Bloomberg Surveillance right after the job's report, And.
Karen, as you mentioned, we're seeing Nasdaq futures plunge now nearly four percent this morning. Several big names are in the red. Let's get the latest from Bloomberg's Lisa Matteo.
Lisa, good morning. Yeah, we're seeing the tech sell off extending. We have Nvidia down more than eight percent. We have Microsoft metap plunging more than four percent, Alphabet down more than four percent, Amazon falling more than two percent. We have in Tesla taking a hit, down more than five percent. But this comes after the Naszac entered into that technical correction on Friday, and this was amid that drawback from
the overheated artificial intelligence rally. Now that gate page actually touched a record high less than a month ago, but it's not just AI. Investors also concerned about over elevated valuations on the impact of also the presidential election on geopolitical tensions in New York. Lisa Mateo, Bloomberg Radio.
Right, Lisa, thank you. Apple shares they're down about eight percent over the weekend. Berkshire Hathaway revealed it's still nearly half of its position in Apple during the second quarter, and we get more from Bloomberg's Doug Prisner.
The move could be interpreted as a lack of conviction in the Apple growth story. At the end of March, Berkshire's position was worth roughly one hundred and forty billion dollars. Then, as of the end of June, it was worth eighty four billion. Since twenty sixteen, when Berkshire first has closed its stake, Apple shares have sored nearly nine hundred percent. Even with the sale, Apple does remain Berkshire's largest single position.
If you're wondering about valuation, Apple's multiple is thirty three times future profits. That's eleven points higher than the s and P five hundred our Cime, Derek Prisoner, Bloomberg Radio.
Thanks Doug. Tech stocks aren't the only assets selling off this morning. We're also watching cryptocurrencies. Bitcoin is down nearly eleven percent, adding to a thirteen point one percent drop last week, the worst then since the period when the FTX exchange imploded. US exchange traded funds for bitcoin suffer their largest outflows in about three months last Friday.
Well, Nathan, we'll have much more on the market selloff in five minutes when we speak with RBC Capital Markets Head of US equity Strategy, Lori Calvesina. But now we want to get the latest on the Middle East tensions there maybe piling on to negative market sentiment. Israel is racing for possible attacks from Iran and regional militias after the high profile assassinations of Hamas and hes Beila leaders
last week. Prime Minister Benjamin Ettnyah, who says his country is in a quote multi front war against Iran's Axis of Evil. But the White House is urging NETANYAHUO to redouble ceasefire negotiations with Hamas, even as the US moves in a fighter jets Squander and keeps an aircraft carrier in the area. Here's Deputy National Security Advisor Jonathan Finer.
What we're trying to do is prepare for any eventuality, any possibility that's only responsible for the United States. Obviously, we've been quite clear that we'll work with our ally, Israel, to defend itself against any threats that it faces, and we are in a moment that appears to be of heightened threat.
White House Deputy National Security Advisor John Finer made those comments on CBS's Face the Nation heard Sundays on Bloomberg Radio.
Think Karen Well, the White House focuses on geopolitical tensions. Vice President Kamala Harris is reportedly focusing on the final stretch of choosing a running mate in her presidential campaign. We get that story from Bloomberg's Ed Baxter.
Three people on our shortlist met with her over the weekend. Arizona Senator Mark Kelly, Pennsylvania Governor Josh Shapiro, and Minnesota Governor Tim Walls. Kentucky Governor Andy Basher, Transportation Secretary Pete Buddhachic, and Illinois Governor JB. Pritzker also names that are still
being floated now. The Democratic Party is planning a virtually nominated ticket by August seventh, and Harris has said the shop plans day at the campaign trail weather running mate tomorrow, Ed Baxter Bloomberg Radio.
All right, ed, thanks.
Time now for a look at some of the other stories making news in New York and around the world. For that, we're joined by Bloomberg's John Tucker.
John, Good Morning, Good morning, Karen. Debbie strengthened into a hurricane. Has the system neared landflow in Florida's Big Bend region, where residents have fled ahead of a potential week long disaster across the South. Bloomberg mediorologist Rob Carolyn is tracking the storm now.
The very big concern with Debbie is as it moves inlet over in North Florida over the next day or so, the steering currents are going to collapse, and that means there's going to be nothing pushing the storm along, So it's just going to conder meander over portions of southeastern Georgia, maybe eventually off the coast of southeastern South Carolina. This means some very heavy localized rain are going to fall over North Florida, Eastern Georgia, and South Carolina.
Through the first part of the workweek, top wins intensified to eighty miles per hour, making Debbie a Category one. System Defense Secretary Lloyd Austin has revoked a plea agreement reached last week with the accused mastermind of the September eleventh terror attacks and two alleged accomplices. That story this morning from Bloomberg's Denise Penegreni Secretary.
Austin has now assumed direct oversight of the case and canceled the plea agreement with Khaleage Sheik Mohammed and his lodged accomplices for the attacks that killed nearly three thousand people in New York City, at the Pentagon and in a Pennsylvania field. This effectively reinstates it as a death penalty case. Austin also relieved the senior Defense Department official
responsible for oversight of this case. His decision brought relief to some family members of victims who had expressed anger over the deal, but it also left uncertain the next steps of the prosecution. Denise Pelgrinny Bloomberg Radio, and.
After ten days in theaters, Deadpool and Wolverine ready the highest grossing R rated movie ever. In a second weekend, the Marvel Studios Blockboster, starring Ryan Reynolds and Hugh Jackman, continued to steamroll through movie theaters collecting ninety seven million dollars according to Studio estimates. Global News twenty four hours a day and whatever you wanted with Bloomberg News Now. I'm John Tucker. This is Bloomberg Nathan and Karen.
John, thank you time now for the Bloomberg Sports Update with John stash Hour.
John, Good morning, Good morning.
Care of the Yankees and Blue Jays. Rubbert game at the stadium and won Soto Homemwerd seventh, thenning Yanks had their first lead, Toronto tie the game. Then there was a rain delay, and then there was a DJ Lemy who walk off hit the tenth innning. The Yanks won four to three. They've won seven of their last eight. Mets held the five Hits lost three to two. They lost two of three to the Angels in Anaheim. The Chicago White Sox swept by the Twins. The White Sox
have lost twenty games in a row. They have been only two longer losing streaks since nineteen hundred. The sixty one Phillies dropped twenty three straight. The nineteen eighty eight Orioles began their season oh and twenty one. The White Sox will try again tonight in Oakland Noah Isles one to one hundred meters in Paris by five one thousands
of a second. There's a belief that it was the closest race in Olympic history, not official because they didn't used to carry the times out that many decimal points. With Lyles can now be called the fastest man in the world. He is the first American to win one hundred meters in twenty years. Novak Djokovic can now be called an Olympic gold medal winner. He beat Carlos Alcareza and the thirty seven year old winner of twenty four Grand Slams.
Was asked where this ranks twenty twelve opening ceremony in London, carrying the flag for my country the opening ceremony opening in the Olympic Games is the best feeling that an athlete could have until today. This kind of supersedes everything that I imagined, that hoped that I could experience, and that I could feel.
Scotti Schefler on Olympic go then golf for the furious finish final round sixty two. Had Bobby Finke not won the fifteen hundred meters in the last individual event of the Games, would have been the only time in Olympic history no US goals and individual men's swimming, but Fink one. He broke the world record. The US men did not win the medley. Really, they had won each of the fifteen previous ones. They were in Johns Dashedward Bloomberg Sports Karen daven.
Coast to Coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg dot Com and the Bloomberg Business app.
This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. The global stock route that began last week is intensifying this morning, growing concerns about a weakening economy and a FED that may have been too late to act to stop it. To get some perspective on this market reaction, we are joined now by Lori Calvacina, head of US Equity Strategy at RBC Capital Markets. Luri, good morning. It is very tough to find some green on the screen this morning.
Is it a pivot point for the market or our investors reacting?
Hi, Nathan, Well, thanks for having me. Look. I think there was a lot of confusion on Friday with the jobs report. I think we also had some negative data points from ism last week, and to be honest, it really stands in contrast on both those reports with the tone we've been hearing from companies throughout this reporting season. So I think that there is a lot of sorting
out to do right here. I do think that one of the reasons we've seen such a big reaction in markets has been sort of the sharp detour that we've seen. But I do think we need a little bit more information at this point as.
That sorting out period continues. Lorie, We're seeing markets already pricing in something like sixty percent odds that the Fed's going to cut rates this week. I mean, how would stocks react if the Fed essentially makes up for last week's lost time.
So I think that we always have to ask about the reason that these sorts of things happen. I remember, this is market pricing, this is an official action. We did sort of look at this phenomenon last year during the Regional Banking CIS, and what we found was that really you have to be careful what you wish for, you know, in this kind of regards. And I know there's been a lot of talk about, you know, sort
of fifty basis point cuts that have come out. We did actually publish something on that this morning, looking at when we've seen fifty basis point cuts in just recent decades, and it's tended to be associated with periods like the GFC, periods like COVID. You know, at the moment, that doesn't seem to be the sort of environment that we are in. So again, I think we need to wait and see
what we're going to get from the FED. But if you look at the history, the fifty basis point cuts, you know, just in recent decades have been associated with sort of major periods of distress and markets. You can go back farther and look at the nineties and earlier to find other examples where that was not the case. But I do think that's the kind of playbook a live investors have in their heads.
So while we wait for the FED, and while we wait for further data, do you see this route going further or could this be a by opportunity.
I think we're going to have to watch the data this week that comes in. But what I will tell you is that we came into the third quarter thinking that we were at risk of a pullback. Now, we did not have sudden concerns about a recession on our BINGO card. But the reality is that if you look at the CFTC data, and we looked at US equity
futures positioning, this is something we track every week. If you look at where we've been throughout most of this year, frankly, it's been on US equity future positioning broadly, and S and P five hundred future positioning in particular above the January twenty eighteen highs and above the February twenty twenty highs, and so we had, you know, obviously a tough year in twenty eighteen, but we did have you know, sort of a milder draw down on the low ball and
wined early that year twenty twenty. Obviously we all know what happened there. But from a positioning perspective, whether you're looking S and P naddak futures positioning as well, has looked extremely extended and we have looked vulnerable to bad news from that perspective.
You know, I think this is just maybe the last time or two we spoke, you had cautiously raised your S and P five hundred price target for the end of this year. Now that we've seen this pretty significant dive this morning and the potential for more. Are you rethinking that?
So what we had baked into our outlook was the idea that we would see a five to ten percent type draw down, and that's a garden variety type drawdown. But if you go beyond ten percent, what the history tends to tell us is that it's associated with a pretty intense growth scare. So obviously those risks have risen
in here. We don't know that it's certain we're going to get that time of twenty percent draw down, but if you look at those periods, especially in recent history, we've seen those kinds of draw downs fifteen percent back in twenty ten, twenty percent, and twenty eleven. Obviously, if you go back to the twenty fifteen twenty sixteen growth scare, I think we fell about fourteen percent. So those are the kinds of periods. We have not baked in that kind of scenario into our modeling.
As of now, about thirty seconds left, Laurie, what's it going to take to bring confidence back into this market?
So I think let's watch the sentiment positioning indicators. Remember AAII has also looked stretch. When we get down to the one standard deviation mark below the long term average that has typically, you know, in recent years, given us a buy signal. Also, watch valuations. They've been very extended for the broad market. They've been very extended for the top ten megacat names. Let's watch what happens when those
numbers get back down to average. We can often see markets try to make a stand around those kinds of levels and the source of environment.
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 to zero in New York, Bloomberg ninety nine to one in Washington, Bloomberg one oh six to one in Boston, and Bloomberg nine sixty in San Francisco.
Our flagship New York station is also available on your Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty plus listen coast to coast on the Bloomberg Business app, Serious XM, the iHeartRadio 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