January 12, 2023

New York City hospitals. Plus calls are growing for New York Congressman George Santos to resign. I'm Michael Barr more ahead, I'm John staf Showard Sports Jalen Brunson lived the next to a home win over in Vienna. A change on

the Jets coaching stand. That's all s tradyhead on Bloomberg Daybreak on Bloomberg eleven three, on New York, Bloomberg one, Washington, d C, Bloomberg one oh six one, Boston, Bloomberg nine sixties and Francisco Sirius x M one nineteen and around the world the Bloomberg Radio dot Com and via the Bloomberg Business app. Good morning. I'm Nathan Hagar and I'm Karin Moscow. Here are the stories we're following today. We're learning more about yesterday's air traffic meltdown and how a

computer failure caused a cascading series of problems. Amy Morris has the latest from our Bloomberg newsroom in Washington. Federal officials say this was not a cyber attack. It was a corrupted file caused by an engineer who replaced one file with another by mistake. Transportation Secretary Pete Buddha Jedge tells CBS that the investigation is ongoing. We will not

allow anything to take place that is not safe. But this is precisely why our focus right now is on understanding, identifying, and correcting anything related to the root cause of how this happened at the first place. Now, sources tell Bloomberg the problem which impacted the notice to air missions are no TAMP system also caused a failure in a related backup system, resulting in thousands of delayed and canceled flights in Washington. I'm Amy Morris, Bloomberg Daybreak. All right, Amy,

thank you. Now, another major story we're following out of Washington This morning, President Joe Biden's aides have found another set of classified documents. This time they were found in a separate location from the first, and Bloomberg said Baxter has that story. Aids have been scouring offices of Mr Biden used after his vice presidency, according to multiple media reports,

this after the finding of classified documents in Pennsylvania. It's not clear when these were found and whether they've been returned to the National Archives, as the first ones were White House spokes when Karine Jean Pierre says the White House will do the proper thing. We're committed to doing the right thing. Uh, doing the doing this in the right way, and says these fines are not akin to

Donald Trump taking classified files tomorrow. Lago House Speaker Kevin McCarthy has accused the Department of Justice of giving President Biden preferential treatment in San Francisco. I'm at Baxter Bloomberg Daybreak, Thank you. Turning to markets now, stocks are coming off two straight days of gains and there is optimism that softening inflation will lead the Fed to change gears on rate hikes. Yr Denny Research President Edyard Denny thinks the worst of the market sell off is now behind us.

I think we made a low on October twelfth in the market. I think that was the end of the bear market, and I think we're back in a bull market. Not straight up, a lot of volatility, but I think the markets are telling us that the world economy is improving. Ed Yar Denny made those comments on Bloomberg Surveillance. You can catch the show weekdays at seven am All Street time on Bloomberg Radio and subscribe to Surveillance anywhere you

get your podcasts. Of course, nathany immediate direction of markets will be greatly impacted by this morning's inflation report, and we get a preview from Bloomberg Economics correspondent Michael McKee. Old data may help the Fed make a new decision next month. Economists think December may have seen the first decline in the consumer Price Index since May. While the drop would be largely a result of falling energy prices,

it signal progress in the feds fight against inflation. And while core prices are forecast to have ticked up a bit last month, both corps and headline CPI should drop significantly compared with last year. That likely would lead Fed officials to dial back their next rate increase to just a quarter percentage point on February one. Michael McKee, Bloomberg Daybreak, All right, Mike, thanks. We also got inflation numbers out of Asia overnight. China's factory gate deflation narrowed in December,

even as COVID infections slowed plant operations. Bloomberg Daybreak Asia anchor Brian Curtis has more from Hong Kong. The PPI dropped zero point seven percent, the estimate minus zero point one percent. Consumer prices ticked up one point eight percent, which was in line with estimates. The sudden end to COVID zero slowed factory operations as workers called in sick. Officials say the reopening gains will gather momentum and both consumer and producer prices will warm up, but they say

overall inflation remains mild in Hong Kong. Priyan Curtis, Bloomberg da Break, Right, Brian, thank you. One other note out of Asia this morning, China has not updated its daily COVID data for three days. That's adding to global concerns that Beijing is masking the true impact of the world's

largest outbreak. The World Health Organization is renewing its call for more COVID data from China, and we got a couple of corporate story step take you this morning on Karen's Starting with Subway, there's where the sandwich chain maybe considering a sale Bloomberg. Jeff Balinger has the story. Subway has long been a potential target for private equity firms and other companies, and a person familiar with the matter tells Bloomberg the scent which chain is exploring a potential deal.

A sale could value Subway at more than ten billion dollars. The process is said to be in the early stages, and Subway could still decide against a sale, and emailed statement from Subway notes it is a privately held company and it does not comment on its business plans. Jeff Bellinger, Bloomberg day Break Right, Jeff, thank you. Bloomberg News has also learned that T Mobile may buy a budget wireless

carrier back by actor Ryan Reynolds, Mint Mobile. We're told T Mobile has been holding talks with mint but no final decision has been made. Reynolds owns about one fourth of the company, and Disney is preparing for a proxy war with activist investor Nelson pelts Peltz nominated himself to the board and what could become a highly public debate over CEO Bob Iger's leadership. At the same time, the executive chair of Nike, Mark Parker, will take over as

Disney's chairman. Parker will advise Eiger and the board in finding the CEO's replacement. Straight ahead, your latest local headlines plus a check of sports. This is Bloomberg starting nine degrees in Central Park right now. We're expecting scattered showers today behind your fifty. Temperatures are gonna rise a bit tonight as the rain and a breeze continue. Time to take a look at some of the other stories now making news in New York and around the world, with

Bloomberg's Michael Bark. Good morning, Michael, Good morning Nathan. There are reports of a possible tentative agreement overnight as we enter day four of a nurse's strike in New York City. As according to ABC seven, the nurses union and administrators from the two hospitals effected have been negotiating. Roughly seven thousand nurses from Mount Sinai in Manhattan and Montefiore in the Bronx went on strike, calling for better patient to

staff ratios. This nurse said. Montafiora says that the COVID nineteen pandemic put stress on an already strained healthcare system. We don't have a normal yet in healthcare because we are still grappling with the effects of the pandemic, and part of that is how much management is demanding of nurses that is simply unsafe and not beneficial to the patients. We are serving no word yet on any details of the tentative pact. Embattled Republican Congressman George Santos of New

York is facing more calls to step down. Speaker Kevin McCarthy declined to call for santos resignation on Capitol Hill, and Santos says he won't step down. I will know this as Republicans from his Long Island district called for him to resign. The head of the party in Nassau County, Joseph Cairo Jr. Says Santos ran a campaign of lies, deceit, and fabrications. He disgraced the House of Representatives, and in particular,

his fabrications went too far. Many groups were hurt. Specifically, I look at those families that were touched by the horrors of the Holocaust and feel for them. The gops Joseph Cairo as federal prosecutors are looking into santos his financial disclosures after he admitted to lying about many parts of his resume ahead of winning his seat. Thousands have been evacuated in northern California, which has been hit by days of heavy rain and powerful wind, with entire towns

under water. The death toll is now at least eighteen over the past two weeks. Most of California received up to six of its normal rainfall. A guitar powerhouse has gone Jeff Beck, who pushed the boundaries of blues, jazz, and rock and roll. As time, Jeff Beck was global news twenty four hours a day on air and on Bloomberg Quicktake, powered by more than twenty seven hundred journalists and analysts more than a hundred twenty countries. Michael Barr

and this is Bloomberg. Nathan. All right, Michael, thanks time for the Bloomberg Sports update, brought to you by Trice stayed Out. Good morning, John stash Hour, Good morning, Nathan Knicks. Back at the Garden two nights after they blew us seventeen point third quarter lead, and nearly happened again. Nicks went from up five up only two. What a seven

nothing run games ceiling three pointer by Quentin Grimes. Nicks beat Indiana one nineteen one thirteen of the big game for Jalen Brunts, and he followed up his forty four point game with thirty four more. R J. Barrett returned from his finger injury to score twenty seven and Knicks visit Washington tomorrow. The NETS's Boston tonight battle the top two teams in the East. Rangers and Islanders both have home games tonight as well. College hoops Ructors at Northwestern

Cam Spencer twenty three points. He made six of seven three pointers. Carlos Correa passed his physical in Minnesota, something that did not happen with the Mets or Giants. Robert Sale goes way back with his offensive pointer. Mike Lafleur, but la Fleur coach the Jets offense that was dreadful, especially down the stretch, and Salah fired. La Fleur, whose brother is the head coach at Dream Bay, asked for

Giants coach Brian day Ball. He was asked if making the playoffs was the goal at the start, goal is gonna come out every season and beating lousy. It's to improve and keep competing and win as many football games as you can. You know, our foundation is built on our consistency, our approach, our work ethic, how we do things on and off the field, all those type of things. And again, you know, like I say every week, I can live with the with the results. I don't like him.

I can live with them if we're doing the right stuff. It's Giants and Vikings Sunday in Minnesota, playoff game between two teams who both were outscored to the regular season. John Stash, Bloomberg Sports, Nathan thank John Bloomberg Sports was brought to you by Audie. Don't let someone else drive off in the Audi model you've always wanted. Visit your local Tri state Audie dealer to get behind the wheel of yours today, or visit Autie Offers dot com for

more information. We'll hear about the potential Washington reaction to the airport meltdown. Just to head first, SMP futures are down two points down, futures down fourteen, NASTAC futures down nine points ten, Your treasuries down one thirty second yield three point five percent, and the yield on the two

year is four point to four percent. As we wait CPI data eight thirty Wall Street Time 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 Haygar on a morning when the Biden administration

is facing pressure on policy and political fronts. First, on policy, lots of questions for the Federal Aviation Administration this morning, after that system meltdown that stranded thousands of flights across the country. And on politics, another batch of classified documents could give Republicans more fodder to use against the president. From more on all this, We're joined by Terry Haynes, founder of PANGEA Policy. Terry, it's good to speak with you.

Let's start with the f a A. What does this flight system meltdown mean when it comes to the effectiveness of the regulators whose goal it is, whose job it is to keep passengers safe in the air. Good morning, Nathan. A couple of things on that one. Uh. Uh yeah, kudos to them in the for for at least stepping up and been doing the right thing when they when they saw something go haywire. Uh. That inconvenienced an awful lot of people. But uh, but it was the right

decision to take. Uh. So you know firstly that Secondly, I think we're about to find out whether Secretary Buddhas is an active or reactive Secretary of Transportation. What you got here is uh a situation where the the oversight of the department on the f A and the FA

itself looks much more passive than active. Uh. Bloomberg has been doing some excellent reporting on this, by the way, and the one of the things that your reporter's note is that, uh, the agency has been in the process of updating this no TAM system, but the upgrade is behind schedule, apparently in in part because of cuts and funding to the agency's technology budget. And uh and the

system that failed was based on older technology. So UH, the department, I think is gonna in the Secretary himself, since he's been there for two years, is going to have a lot of questions the answer about what the department's priorities are and frankly, why they're not uh, why they're not paying better attention to make sure that the pipes that that link the transportation systems all to get

other aren't leaking and in fact or state of the art. Well, what do you need to see, Terry, in order to show that the f A is making progress in keeping its systems up to date? Uh, Well, they're gonna have to do on a whole lot more. They're gonna have to uh, pour a lot more money into technology. And that's a decision for the Secretary and for for Congress, to the extent the Congress is involved in making the cuts,

but certainly for the Secretary, who can reprogram some money. Uh. And uh, you know, if I were them, I'd be I'd be interested in doing a task force that made it clear substantially and made it clear to the public that fixing this and making it making the system overall better is the top priority of the agency. Um. And it's not clear that it is right now. I want to move to this report of another set of classified documents reportedly found at another office the President Biden used

while he was out of office. Is this going to be tougher for the President to explain it already is you know glass houses. Huh. A lot of a lot of people, including uh, including this network who uh you know, brought out all the all the outrage that Biden expressed about the things that Trump was doing. I'm not meaning to, uh to suggest equivalency here. There's two there's strengthly too much we don't know. But the behavior so far, I

think is is troubling. In out of trouble anybody who's a supporter of the president's You've got before the even the first uh revelation if two to three months lag

here in uh in talking about it publicly, which is curious. Um, and there's no comment at all on on you know what or why these problems are existing and UH, and it's very strange that you've got a situation, you know, over two years or about two years after the president became president, that there's still offices around that are that have documents and of any kind of I mean, I don't understand what they're doing with that. Uh. So you know, there's a bigger story here. No nobody knows what it

is right now. I think Congress will play some role in getting to the bottom of that. But UH, and I think frankly the press will too. But White House is behind the eight ball on this so far. Only about thirty seconds left here, Terry. But the Republicans have said that they're going to investigate the president on multiple fronts. Does this turn into a main focus for them? It'll turn into a big a much bigger focus than it

had before. It is a matter of going back to the not meaning to compare this to water Gate, of course, but going back to the Watergate days. This is gonna be a matter of what the president knew and uh and when did he know it? Uh? They're going to have a chain of custody, uh, argument and uh and and the White House is not going to have any good answers as to how this occurred that gonna fan

the Flans here. 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 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