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.
Stocks are coming off their best week of the year ahead of a key speech from FED chair J Powell. The S and P five hundred has gained for seven straight sessions. A flurry of strong economic data last week was cheered on by investors. Nadia Lovell, as senior US equity strategist at UBS Global Wealth Management, she is still bullish on tech stocks.
Well, we have been advising clients to do, particularly our international clients that tends to have Leod's exposure to attack just because of home bias, is to continue to buy on the weakness in tech.
I mean, we heard some positive data points throughout the earnesties and particularly around the AI story. I mean we're continuing to see those hyper scales, those large hyper scales, those cloud service providers increase capax and quite frankly, we think that there's upside the APEX estimates into twenty twenty five.
UBS isnadi a level notes the Nasdaq one hundreds more than five percent game last week was a good sign for tech stocks going forward, well as for the FED.
Nathan. The majority of economists and investors expect a twenty five basis point rate cut next month, but City US economist Veronica Clark is still looking for something bigger.
Starting with that fifty basis points in September, of the bar is relatively low. There is the sense in which you know, if they'd had that July employment data just a couple of days earlier at that July FOMC meeting, they probably would have cut in July. Maybe you're making up for lost time a bit. The trend of the
unemployment rate has just been consistently rising. That we will have one more employment report before September, but that's probably not enough to convince you that those risks are not asymmetric to the upside of the unemployment rate. So I think it's easy for them to start with a fifty in September.
And Citi's Veronica Clark pricing in the swaps market implies around thirty basis points of easing next month and about ninety three by the end of the year. That marks a big retreat from earlier this month, when traders indicated more than one hundred and fifty bases points of cuts for twenty twenty four.
Then Karen, we could get more clues on rate cuts at the end of the week, that is when Federal Reserve chair Jay Powell speaks in Wyoming. Bloomberg's Michael McKee will be there for the Jackson Hole Symposium and has this preview.
This is the week all Wall Street has been waiting for. The Kansas City Fence Annual Jackson Hole Symposium is actually an academic conference about economic theory, not current monetary policy. Except for the Federal Reserve Chairman's opening remarks on Friday morning, Jay Powell isn't expected to give investors a lot of detail about the Central banks plans for rate cuts. He is expected to say cuts remain on track as inflation
keeps coming down. The tone he sets, we'll set market expectations for the next month until the next policy meeting September eighteenth, Wall Street can decide whether the reality of Jackson Hole lives up to the hype. Michael McKee, Bloomberg Radio.
Right and Mike, thanks, So, we do have a deal to tell you about this Morning Circle k operator Kushtard has made a proposal to take over much larger rival seven eleven Owners, seven and I Holdings. A merger would create a global network of roughly one hundred thousand convenience stores.
Now Karen to the latest from the Middle East, Secretary of State Anthony Blinkin is set to meet with Israel's Prime minister later today, as mediators say they are closing in on a deal to halt the war in Gaza and free hostages captured by Hamas. Blinken spoke earlier in Tel Aviv.
I'm here as part of an intensive diplomatic effort on President Biden's instructions to try to get this agreement to the line and ultimately over the line.
It is time to get done.
This is Secretary of State Lincoln's ninth trip to the Middle East since the conflict began.
Well back in the US, Nathan Democrats are coming together for their convention in Chicago, but infighting over the Israel Hamas war threatens to pull them apart. Bloomberg's Amy Morris has more.
The backdrop of the Democratic National Convention this week is made up of pro Palaceian protests, incumbents ousted for criticizing Israel, and warnings from the left over rising anti Semitism. Now as the party tries to pull together in a show of unity, Democrats remain split over Israel's war in Gaza. Pro Palestinian and pro Israeli groups say they'll be there, which means security is tight. Chicago and the DNC expect fifty thousand visitors, twenty thousand members of the press, and
fifty five hundred delegates and more. President Biden speaks tonight, Former President Obama speaks tomorrow night, Former President Bill Clinton speaks on Wednesday, and Vice President Harris takes the stage on Thursday. Amy Moore as Bloomberg Radio.
Thanks Amy. Vice President Harris spent the day before the convention on a bus tour through the battleground state of Pennsylvania.
We know our country is going to be as strong as our willingness.
To fight for it and to fight for what.
We stand for.
You know, and you know what you stand for.
You know what to fight for.
When the vice presidents spoke there to supporters in Beaver County, Pennsylvania. Harris heads into the convention with the New Washington Post ABC News whose IPSOS poll showing her in the lead against former President Trump among registered voters. Forty nine percent to forty five percent. The poll's margin of er is two percent. The same poll last month showed a dead heats between Trump and President Biden.
And Nathan former President. Trump is planning events in four swing states during the four days of the convention, including a trip to the border later this week, and Bloomberg's Ed Baxter has that story.
Immigration has been a sweet spot for Republicans in their attack against Vice President Kamala Harris. Trump will be in Montezuma, Pass Thursday, the same day Harris will accept the nomination. Now Democratic Arizona Senator Mark Kelly on CBS has heard on Bloomberg says the Republicans just go to the border for photo ops, but says the truth is Trump is standing in the way. I mean, he specifically told my Senate colleagues that they could not support this bill because
he wanted to have this issue for the election. Trump is scheduled to get a briefing as well at the border, Ed Baxter, Bloomberg Radio said.
In Ukraine, President Vladimir Lensky says the name of his country's incursion into Russia is to create a buffer zone between the two countries. His comments come as key of has expanded its operation into the Curs region over the weekend. It is nightly addressed to the nations. Zelensky made a direct appeal to the US, UK and France.
In every direction, our troops are doing an outstanding job. However, when it comes to supplies from our partners, we need things to speed up. There are no holidays in war. We need decisions, We need timely logistics with the promised aid packages.
Speaking through an interpreter, Ukrainian President Vladimir Lensky said his forces have struck two key bridges in the Curs region and disrupted some of Moscow's main supply roots.
And it's time now if for a look at some of the other stories making news in New York and around the world. And for that we're joined by Bloomberg's Michael Barr Michael, good morning.
Good morning, Karen. Flooding hit the Northeast after heavy rains swamped the area. Vehicles were still in the high water, especially in New Jersey, and people had to be rescued. This stranded driver told ABC seven he was on a date in Woodland Park when water enveloped the parking lot and his vehicle wound up disabled.
Point and laugh. You know, it's like, oh that pour succer No, we're the sucker.
To make for shirt.
Meanwhile, in western Connecticut.
This water is at least four to five feet high, nearly a.
Foot of rain falling in just hours. Streets and sidewalks were suddenly overwhelmed by water moving fast enough to carry away cars. Storms sweeping through New York City disrupted flights and train service. Tropical storm in Esto became a hurricane again as it turned away from Bermuda and headed further out in the northeastern Atlantic. Ernesto is sending powerful swells toward the US East Coast, generating dangerous rip currents associated
with at least one depth and prompting many rescues. Many East Coast beaches are closed, including in New York. The National Hurricane Said in Miami said Ernesto's maximum sustained wins we're seventy five miles per hour. That's barely Category one strength. The storm is expected to pass near southeastern Newfoundland late today and early tomorrow. Alsted Representative George Santos is expected
to plead guilty today to multiple felony accounts. The New York Republican is charged with nearly two dozen counts, including wire fraud, money laundering, and theft of public funds. Santo's faced twenty years in prison for the twenty three federal charges of fraud that the US Attorney's Office has brought against him. With the plea deal, no word on whether the plea deal will help them avoid jail time. Finally, it's that time of the year when parents and kids
head to stores from back to school shopping. A Bank Great survey finds inflation is impacting buying habits, but not as much as it was a couple of years ago. Bank Great senior analyst Ted Russman.
About a third of back to school shoppers thirty two percent say that inflation is changing.
The way they buy.
A couple of years ago that was forty one percent.
Analyst Ted Rossman says another area as inflation is having a greater impact, but back to school's shopping is one area where people seem to be feeling a lot better. Global News twenty four hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barrn. This is Bloomberg Karen.
All right, Michael barr thank you time now for the Bloomberg Sports Update with John stash Hour.
John, Good morning, Good morning, Karen. The little leaguers who got to watch the Yankees and Tigers up close in Wayiamsport, Pennsylvania saw bizarre game bottom the night day and the Yanks led one did nothing. They had scored a run without a hit. To that point. There had only been nine hits in the game, all singles. But Detroit tied the game with two outs of the night off Clay Holmes, who blew a safe for a major league leading tenth time.
After the Yanks reclaimed the lad top of the tenth, the Tigers tied it again in the bottom and were not done there. We had a one to two pitch scrow bowl side that's through for a base hit and could well win it the Kid's tree around third to Vegas with a throw of the play in the head first slide is in time and the Tigers win in walk up fashion.
Three to two over the Yankees.
Here in Williamsport, ESPN the call of the Parker Meadows walk off of Mark Later it was Jason Dominguez making that throw from left field. Teams were allowed to add a player and the Yanks brought Domingas up from Scranton. He had hit four home runs in eight games to the Yanks last season before he got hurt. Last night, he went zero for four, struck out three times at Cityfield,
Marlins beat the Mets three to two. The Mets got Sterling mart Day back after missing two months with a knee injury, but Brandon Nimmo, who homered and the loss, then left the game with an achy shoulder. I'll have an MRI today. The Mets tonight host Baltimore. The Orioles, despite being out hit eleven to three, beat the Red Sox four to two in Baltimore, back in the first place time with the Yankees. Then Nationals won six to four at Philadelphia, and the Giants won four to two
in Oakland. Last game ever between two Bay Area teams as the Aser move into Las Vegas by way of Sacramento. In Memphis Reki Matsuyama, but the other day with a five shot lead, he won the Saint Jude Golf by two. John Stashawer Bloomberg Sports Karen Nathan.
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. Investors are heading into this new week with expectations riding high that the Federal Reserve is on track to start cutting interest rates next month, that all eyes will be on Chairman Powell and his speech at Jackson Hole at the end of the week to see if he seals in those bets. Joining us now to get us ready for what's ahead live in our interactive Brookers Studios this morning. Lori Calvacina, head of US Equity strategy at RBC Capital Market, It's great to
have you with us in person this morning, Laurie. As we watch S and P on a seven day winning streak heading into this week. How much does this rally hinge on what Chairman Powell has to say on Friday.
Well, thanks for having me as all, Nathan, And look, I think it's probably his to not mess up at this point, not that that's going to be his end goal, but I do think that we've settled into the equity part of the market, at least just the idea that these rate cuts are coming in September. I do feel like, at least in my conversations, questions about fifty have been
dialed down. It does seem like we've sort of I wouldn't say we're completely out of the soft patch on the economy or the concerns about labor and the consumer, but it does seem like we're in a better place on that. So, you know, I think at this point we need to hear more of the same. You know, I would assume that the commentary is going to be carefully tailored to match what's been said previously, but as always, we're going to have to tune in and.
See to that point about potentially not being out of the rough patch in the economy. We did get some pretty positive economic data at the end of the week, particularly on retail sales and the dial down of weekly jobless claims as well. Do you still have concerns about the consumer after what we've heard at the at the end of last week.
So, you know, we've never been in the recession camp. We've thought that there was, you know, a moment that we've been experiencing right now where consumers are reacting pretty profoundly right to the higher interest rate environment. The cumulative
impact of inflation. As I looked at the retail sales data, one thing that struck me was just how how kind of back and forth it's been in recent months, you know, sort of the idea, at least in my mind, that maybe consumers are reacting and then have to go out and buy the you know, buy the things and do the things they need to do that life goes on. They were talking in an earlier segment about back to school, right.
I mean, it is a great reminder that as long as we do have jobs, and that's what we're really seeing in that claims data. That's given people so much comfort that consumers will go out and do the things they need to do, even if they are reacting in real time to some of these pressures. And I think it's just a very very you know, sort of interesting
moment that we're in right now. One of the companies that reported last week, they had a comment about the sort of deferral mindset, and you know, I sort of flashed back to kind of the mediate period after COVID. I don't know if we you know, exactly where we define that, but the idea of demand that was delayed, not destroyed, was sort of a phrase. They kind of bopped back into my mind, and I think we're going to have some puts and takes. I think the data
is going to be important to watch. In my mind, we are going to come out to a better place.
Yeah, that was some interesting commentary from Home Depot last week about this deferral mindset. When we have this idea that consumers might be getting a little choosier now in this high inflation, high interest rate environment. What sectors do well in an environment like this?
You know, I'm not sure if there's any one particular set of sectors or you know, or industries. I do think you have to take it company by company. I will tell you that we've been neutral the consumer discretionary sector, but we've been underweight consumer staples. And if you look at consumer staples, it is a quite cheap sector. It's, you know, in theory, if you're kind of going into an economic soft patch, right, it's one that you might
think that you want to go into. But I think at this point in time, you know, as I read through just a very broad array of transcripts from those companies, and I'm thinking back, you know, not just this reporting season, but going back the last reporting season or two. It really seems to me that that's a sector that's been very slow to understand the sort of reaction that consumers are having. And I do think that they're sort of on the front lines of that war, so to speak,
right now. And that's enough to sort of keep me on the sidelines for that sector with an underweight despite you know, some attractive valuations on my quant work.
Just about thirty seconds left, Lourie, But after Chairman Palace speech on Friday, we get Nvidia earnings a week from Wednesday. I mean, how big a deal is that going to be for the rally?
So I think the AI theme generally, you know, it's been a fascinating one to track. I mean, we had some you know, disappointments relative to high expectations early on. Overlooked parts of this last reporting season. I think we've had is that companies are starting to come out and talk about how they're trying to use that technology and
how it's making an impact on the day to day. Now, maybe that in and of its office two small potatoes for investors and underwhelming, but I do think we've entered into a place where you're starting to see some of the results manifest.
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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