Good morning.
I'm John Tucker and I'm Karen Moscow.
Here are the stories we're following today with Jackson.
Hole in the rear View mirror. One constant theme emerged. The world's top central bankers stress the need to keep interest rates high until inflation is contained. Here's FED Shair J. Powell.
We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.
Like J.
Powell, the European Central Banks Christine Lagard, in an exclusive interview at Bloomberg's Tom Keane, says the goal is to bring inflation back to its goal.
It's critically important that inflation expectations remain anchored at two percent. If trade unions and business associations appreciate that in relatively short order inflation will be back to two percent, they will not want to fuel more inflation by having wage or margin increases that would not be consistent with don.
Both Christine Legarn's, the ECB and FED make polities policy decisions next month, Well.
John, both central banks will have a lot of data to digest before those decisions. The first big one in the US comes on Friday with the youngest jobs report, and we get a preview from Bloomberg's of any down.
Judaie US job growth probably slowed in August, says the shutdown at yellow freight lines led to the end of thousands of jobs. At the same time, Bloomberg Economics as temporary job supporting concerts and movies, Taylor, Swift, Barbie and Oppenheimer probably provided a cushion. The report is set for Friday. Also in this week's data agenda, ism figures on American manufacturing, which will probably signal more weakness. Finny Dell Junice, Bloomberg Day Break.
All right, thanks Finny. In addition to the jobs report, we get some more earnings this week. That's good a preview from Bloomberg's Charlie Pellett.
We will hear from a number of tech companies this week amid a buzz around artificial intelligence and concern about higher interest rates. Diana Almoa is chief investment Officer for long based Strategies at Kirkerswald Asset Management.
So I think what's been supporting equities despite the higher rates that we're seeing is actually the earnings I think this last earning season especially surprised. We've seen significant revisions in some of the key sectors that are big components of the indices, such as in the tech sector.
Among the tech names reporting this week crowd Strike, Dell Technologies, HP, VMware, and Sales Force in New York Charlie Bloomberg daybreak, All.
Right, Charlie, thanks well. In Asia, after initially searching more than five percent, Chinese stocks paired most of their early gains to end the session up just over one percent. Beijing's recent efforts to boost markets are falling flat in the finish of economic worries. Bloomberg's Joanne Wong has more from Hong Kong.
China's Ministry of Finance that will have the one tenth of one percent levy as of today. The nation has also pledged to slow the pace of initial public offerings. That's among US lieu of new measures to wool investors back to US flagging equities markets. Regulators have also cut handling fees on stock transactions. They brought up usual fund managers to increase purchases of their own equity funds, and encouraged companies to do more share buybacks.
And bloombergs Joanne Wong says Chinese authorities have asked some mutual funds to avoid selling equities on a net basis and more proof.
This spring, global investors have little confidence that China will succeed in suring up its financial markets. There's a new poll of investors by Bloomberg. He predicts that mounting economic stress will drive the yuan's offshore exchange rate to historic lows. According to the latest Markets Live pol survey, they one is seen depreciating to seven point six per dollar before the end of the year. That would be about a four percent drop from the current levels.
Meanwhile, john US Commerce Secretary Gina Ramando is visiting China. She stressed the importance of stable economic ties between the world's biggest economies.
It's a complicated relationship, it's a challenging relationship.
We will, of course disagree on certain issues, but I believe that we can make progress.
If we are direct, open and practical.
And Commerce Secretary Gina Ramando is the fourth high profile US official to visit China in the past three months, and.
In corporate in his current Malincrot has gone bankrupt for the second time less than three years Under a proposed restructuring deal, the one hundred and fifty six year old company plans to give opioid victims a final two hundred and fifty million dollar one time payment, a move that would leave them with a billion dollars less than they were promised as last year. Malincrant first went bankrupt in twenty twenty, overwhelmed by costly litigation tied to its role in the opioid.
Crisis, and three M has tentatively agreed to pay more than five and a half billion dollars to resolve lawsuits over military ear plugs. We get more from Bloomberg's Doug Krisner.
We're told the settlement stems from over three high hundred thousand lawsuits. They claimed the ear plugs were defective over a twelve year period starting in two thousand and three. Current and former service members alleged three M knew it's air plugs were too short to work effectively. The company was also accused of failing to warn the US government or users, and of failing to take steps to fix
the product. The sum is about half the roughly ten billion dollars some financial analysts predicted three M could end up paying in New York. I'm Doug Prisoner Bloomberg Daybreak.
All right, thanks to Karen five oh seven Wall Street Time down 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 Parr. Michael, good morning, Good morning John.
Friends and family in Jacksonville, Florida, are greeting as a community after a racially motivated shooting by a white man who killed three black people inside a Dollar General store on Saturday before taking his own life. At a community vigili yesterday, pastors offered prayers for healing to help Jacksonville push past this tragedy. Sheriff TK Waters says, the tragedy will not define Jacksonville.
One evil man who decides to take his hateful rhetoric and his hateful thoughts and put those into action. They cannot shake our resolve and we will not allow it to do so.
Jacksonville Mayor don A.
Degan, the division has to stop, the hate has to stop, the rhetoric has to stop.
Florida Governor Und Descant is canceled today at presidential campaign appearances to deal with Jacksonville and prepares for what is expected to be a hurricane to hit the state this week. Tropical Storm at Dahlia is now forecast to become a hurricane by late Tuesday afternoon, possibly hitting Florida's Big Ben region as a category two on Wednesday. Right now, Donnie Alli is near the coast of Cuba on a potential track to come ashore as a hurricane in the southern US.
It is more than one hundred miles off the western tip of Cuba, with maximum sustained winds of sixty miles per hour. Governor round DeSantis in Tallahassee is warning people in its path to prepare for power outages and possibly more.
We have mobilized eleven hundred National guardsmen and they have at their disposal twenty four hundred high water vehicles as well as twelve aircraft that can be used for rescue and recovery efforts.
Governor DeSantis says power companies will start pre staging linemen today. Military investigators are trying to find out what caused an Osprey aircraft to crash on Melville Island in Australia Sunday, killing three Marines five more US troops of the twenty three on board were injured and are hospitalized in serious condition. Dozens of heated demonstrators were in front of Gracie Mansion over the migrant crisis in New York City. Protesters and
counter demonstrators clashed. At one point they got physical and the NYPD had to step in to separate both sides. Bus loads of asylum seekers continue to come into the city daily. Mayor Adam says New York has run out of beds and money. Global News twenty four hours a day, powered by more than twenty seven hundred journalist and analyst over one hundred and twenty countries. I'm Michael Barr.
This is Bloomberg, John, Michael, thank you, and time down for a Bloomberg Sports update, Tam for the Let's bring in John Stasher.
John, Good morning, r Good morning John. It is opening day at the US Open. Plus he met of the women's top seed, eaganstry Untech plays the first match at Ash Stadium, followed by Francis Tafo. He made that great run of the semi finals last year before he fell in five sets to the ventral champ Carlos Alcaraztiapo seated ten fellow American Taylor Fritz seeded ninth. He plays this afternoon at Armstrong Stadium. Novak Djokovic and Coco Goff both
played tonight. Golf comes to the Open having won her last two tournaments. Victor Hoblin, the twenty four year old Norwegian, won the Tour Championship in Atlanta, going away by five Johnts. He won the FedEx Cup and the eighteen million dollar Bonus Yankee in Tampa had a four to two lead, then lost to the Rays seven to four. Yanks had three home runs but had only one other hit, and they have now failed to win any of their last ten series. They'll start one tonight in Detroit, the Mets
home for Texas. They salvaged one with the Angels at City Field, scored bottom of the ninth to win three to two. The X met Noah Cindergard released by Cleveland. He had earlier been with the Dodgers. He was two and six with a six and a half e ra Hi Drama and williams Ford Pennsylvania finals of the Little League World Series. Curasau tied the game with a grand slam in the fifth innings, so it was five to five. El Segundo California, then up bottom of the sixth.
Dozin World Series Chess.
Come on ABC. Simone Files won the US Gymnastics Championship for the eighth time. John stash Away, Bloomberg Sports.
Host to coast from New York to San Francisco, Boston to Washington, DC, nationwide on Syrias Exam the Bloomberg Business Appen Bloomberg dot Com.
This is Bloomberg Daybreak and good morning.
I'm John Tucker. Equity futures again edging higher this morning, stocks rose and treasury yields jumped on Friday. That came after FED shair Jerome Palce stuck to the script and is jackson Holes speech saying that the Fed is prepared to raise rates further if appropriate. Right now, let's get you set up for the trading day ahead with economist Dennis Carment Share at the University of Akron Endowment Committee.
Always a pleasure. Dennis. Did the meeting of the Central bankers and Jackson Hole in any way alter your outlook for markets?
No, not really, John, It was very boring, to be quite honest. And the only comment I would make is that the chairman Todell, rather than saying higher for longer said Hi for longer. No big deal. The fact that we will probably see one last increase in the in the overnight Fed funds rate. Maybe it'll happen at the September meeting. They might take the overnight Fed funds rate another twenty five basis points higher in September. If not September,
then November. But I think we're probably done with raising the overnight Fed funds rate. However, it shall be a long period of time before they begin the process of easy monetary policy, at least well into twenty twenty four, maybe into twenty twenty five before we see the Fed changes direction of policy. So it's high for longer, not higher for longer. That's probably the biggest thing that I can say about the the meeting last week in Jackson Hall.
Will this rate regime lead to a sell off in stocks? What does it do for the equity markets?
I think stocks have been overpriced for six months. It's been, to me an egregiously overpriced stock market. We got the CNN and Fear and Greed Index got to high of eighty five, which is characteristically that's when markets begin to turn down. That's when the public has been too egregiously involved to abundantly long, and that turned lower about five
weeks ago. We had technically an unusual circumstance midweek last week, when we opened higher on the on the Nvidia excuse me, on the Nvidia earnings, then you close lower upon the day.
Well, let me just just interrupt theres after we got those blowout numbers from in Vidia, there wasn't the rally that some had expected to lift all boats if you would, Does that indicate some degree of fatigue on the part of equity investors?
Exactly, That's exactly what happened. The fact that you had blowout earnings, you open the market demonstrably higher and close lower upon the day. That's a very rare circumstance called an outside reversal day. I tend to pay attention to a few technical circumstances other than the reversal days. They're very rare, they're very meaningful, they're very telling, and they happened very infrequently, and when they do, you should pay
attention to them. The other thing that I find interesting is that we tend to go down on big volume and up on lighter volume, which is also indicative of a market that's over extended to the upside and do for correction. So I'm in this school of thought that thinks that stock prices are going to go at least five to ten percent lower from recent highs, maybe even a bit lower than that, over the next three to four to five to six months.
What is your cash position right now? For the University of acron endowment.
We raised about a year and a half ago. We raised one year's worth of spending, took it out of the stock market, which is about eight percent of our portfolio, which turned out to be a very wise, and let's be blunting, a lucky decision, because we sold the market two days from the highs, which is nothing other than unintended and glamorous luck. But we got very fortunate, and we're continuing to hold that two years worth of spending
on the sidelines. As an endowment, we have to a certain amount of an abundant amount of position in the stock market, but to reduce it by two years worth of spending is by most standards, a very aggressive position. So we're comfortable with that position, and we're holding a fair amount of cash, a lot of two year notes, a lot of tips in a reduced amount of equities. But that's been the year and a half to two years that we've made that decision.
To return to monetary policy. For a moment, the two percent target, that almost sounds like somebody found that on their secret decoder ring. Where does that come from? Does that change?
I think it doesn't change. I think that mister Powers made it abundantly clear that it's going to be two percent, and he's going to have to hit the two percent number. Not two point nine, not two point eight, not two point seven, but two point zero. It's going to be a long period of time before we get there. We see commodity prices have been under some pressure. We prices, corn prices, soybean prices have been under pressure. Cotton prices
have been under pressure. About the only area the commodity markets that have been to the upside in recent months have been crude oil prices, which the public pays a great good deal of attention to. But the inflationary numbers have been demonstrably less than people had anticipated, demosterly less than the market had thought likely. And two percent inflation is the target. They're going to get there. It's just a matter of time.
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