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, we begin with a health scare at McDonald's and a plunge in shares of the fast food giant. For the latest, let's bring in Bloomberg's John Tucker, John and Nathan.
The CDC says forty nine people from ten states have contracted E coli traced to ingredients in McDonald's quarter pounders. Ten people have been hospitalized. An elderly person in Colorado has died. Every patient interviewed by the CDC said they ate at McDonald's before falling ill. Most of the eight quarter pounder hamburger specifically, McDonald's USA president is Joe Erlinger.
This is a temporary change as the investigation continues, and we are working quickly to return our full menu in these states as soon as possible.
Well, the company thinks it could be the youngions that going to quarter pounders. Apparently the quarter pounders are the only sandwiches that routinely take these particular onions. The true number of people, in fact, it likely much higher than is currently known, and may involve additional states. According to the CDC, McDonald's is a member of the DELL also has the thirty fifth biggest waiting of the S and P five hundred. A major outbreak is going to haunt
restaurant chains for years. You'll recall back in twenty fifteen, an E. Colian neurovirus outbreak across Chipotle locations in multiple states led to a drastic drop in sales there. McDonald's shares down six percent pre market in New York. I'm John Tucker, Bloomberg Radio.
All right, John, thank you. Now we want to turn to geopolitics and the latest from the Middle East. Secretary of State Anony blenk In is on his way to Saudi Arabia after a meeting with Israeli Prime Minister Benjamin nettan Yahoo in Jerusalem. He says they both agree that the killing of Hamas leader Yaya Sinwar has opened new possibilities for ending the war in Gaza.
You're resolute in our defense of Israel when it comes to a tax it's receiving from Iran, from Iran's proxies, and we stand with Israel, and we'll always stand with Israel in its defense. It's also very important that Israel respond in ways that do not create greater escalation and do not risk breading the conflict.
Anthony Blenkin is on his eleventh trip to the Middle East since the October seventh Hamas attack that sparked the Gaza conflict. Overnight, Israel said it confirm the death of cleric Haschem Safadin at an airstrike in Lebanon three weeks ago. He was widely expected to become the next leader of Hesbola after the killing of Hassan ISRAELA.
Now, Karen, let's head back to the US and get the latest from the campaign trail. Kamala Harris says she would work with Congress to raise the federal minimum wage to at least fifteen dollars an hour if elected. The Vice president discussed your economic proposals in an interview with NBC News.
My plans are focused on working people, the middle class, and what we must do is strengthen hardworking people to be able to to do what they dream and aspire to be able to do. His plans are about giving tax cuts, massive tax cuts to billionaires in big corporations.
Vice President Harris has called for raising the minimum wage before, but hasn't specified a dollar amount. Former President Trump sidestepped a question about the issue during a campaign stop at a McDonald's in Pennsylvania over the weekend.
Well Nathan Donald Trump was back in North Carolina last night, outing his pledge to make it easier to buy a car.
I will make interest on car loans fully tax deductible, because affording a car is essential to restoring the American.
At a rally in Greensboro, North Carolina, the former president said the tax break would only apply to cars made in the US. He did not say whether his plan would apply to foreign owned automakers that manufacture in the US, like Volkswagen, Toyota, and Hyundai.
Well Karen Donald Trump's views on monetary policymakers in global trade are being challenged by Christine Legard. In an interview with Bloomberg, the European Central Bank president invited the Republican nominee to ec he's headquarters in Frankfurt.
He should come and visit us, And you know I have I have thousands of hard working people, economists, jurists, a computer scientists, and I can assure you that they work super hard every day, not just once a month.
ECB President Christine Legard made the comments to Bloomberg's Francine Lockwa. Donald Trump told Bloomberg earlier this month, the FED share has the greatest job in government. In his words, you show up to the office once a month.
Well, turning to the markets now, Nathan, bonds are extending to clients this morning. They have sold off significantly since the Fed started cutting interest rates. Two year treasury yields have climbed thirty four basis points in September. That's a move not seen since nineteen ninety five. Bank of America CEO Brian moyna has has urged Federal Reserve policymakers to be measured.
We've got to get back in line. And so they're on that path. They're late to the game. They've got to make sure they don't go too hard now. And that's what they are all trying to figure out. Watching the data.
Brian moynihan tells Bloomberg he expects the FED to cut rates by fifty basis points by the end of the year.
Well, that differs Karen from the view of Apollo Management chief economist Torsten Slock. He says the chances are rising the Fed doesn't cut at all next month.
I mean, you really do begin to ask the question, where is the slowdown?
And as we've been debating before, so it's monetary policy really restrictive.
If it is so restrictive, why is the economy.
Still doing so well?
Apollo Management chief economists Torsten Slocks says tailwinds from looser financial conditions, higher government spending, and elevated stocks and GDP growth are building well.
Nathan, is a busy day on the earnings front, with nearly three dozen companies in the SNP five hundred reporting. We'll hear from Coca Cola, IBM, and AT and T today. We also have a couple of big reports out of Europe. This morning, we go to London and get the latest from Bloomberg's Ewen Paus. Good morning, Ewen.
Karla Nathan Deeutsche Bank kaz apport today. Forty two percent increase in profits in the third quarter are help by gains at the investment bank, but Germany's biggest lender also sounding a note of course and setting aside more money
to cover bad debt. Over at Heineken, it was bad weather in Europe and slow consumer spending in the US that saw bier volumes misestimates, but the Dutch brewer says higher pricing means it will still hit its profit target for the year and over at the world's biggest beauty company. Another sales decline in China, the fifth straight quarter of lower sales there for Laurel investors today asking if the shares are still worth it? In London, I'm you Imports Bloomberg Radio.
Thanks you, and Apple CEO Tim Cook is in China, promising to keep investing in the country during a meeting with Beijing's top technology official. China is the world's largest smartphone market and remains Apple's most important market outside the US. This is Tim Cook's second visit to the country this year.
And finally, Nathan, what would you like to hear about on Bloomberg Radio? Help make shures like ours even better by taking our Bloomberg Audience survey. Visit YouTube dot com slash Bloomberg podcast and click the link in our profile or community section to take this survey, which is hosted by our partner's Material. Fill it out now at YouTube
dot com slash Bloomberg Podcasts. Time now for 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. The Georgia Supreme Court rejected a last minute push by the Republican Party to reinstate a set of new election rules that included, among other things, a requirement that ballots be handcounted in the upcoming US presidential vote. The Republican National Committee challenged a lower court's decision last week to strike down the rules as unlawful. Scott Turner, founder of the nonprofit Eternal Vigilance.
Action, that collective sigh of relief you heard was from our election officials around the state.
The court's decision means the rules will remain blocked at least heading into the November fifth election. Two Georgia election workers to fame by former Trump attorney rudyja Gi are getting some of his prized possessions. The ruling comes from a federal judge, as Ruby Freeman and Shay Moss have been trying to collect on a one hundred and forty
six million dollar defamation judgment. The possessions include his nineteen eighty Mercedes Benz, signed photos of Yankees' legends, some luxury watches, and his New York City apartment. We're learning more about the arrest of the former CEO of Abercrombie and Fitch. Michael Jeffries, along with two other co defendants, have been indicted for allegedly running an international prostitution and sex trafficking ring for decades. According to the Eastern District of New York,
they forced male models into participating in lude acts. US Attorney Brion Peace to anyone who thinks they can exploit and coerce others by using the so called casting couch system, this case is served as a warning Jeffrey's attorney. He says that they will respond in court, not in the media. Los Angeles County District Attorney George Gasson says that he'll have an announcement soon on his decision regarding a possible re sentencing of the Menendez brothers.
As I said about it ten days ago, I said I would make a decision within ten days or so.
I planned to have a decision by the end of this week.
Lyell and Eric Menendez were sentenced to life in prison for the nineteen eighty nine murders of their parents. Their defense team says there is new evidence supporting the brothers claims of sexual and physical abuse by their parents. New York's MTA may face a six hundred and fifty two million dollars budget shortfall in twenty twenty eight, as higher overtime costs and lower fare box collections threatened to strain
the transit agency's finances. New York State Comptrollert Thomas Denopoli warned in a report that about two hundred million dollars larger than the MTA's own production projections for its budget gap in twenty twenty eight. Global News twenty four hours Day and Whenever you want it with Bloomberg News Now. Michael Barbs is Bloomberg hereing.
Sorry Michael Barr, thank you time now for the Bloomberg Sports update. Bron to you by try State Outie. Here's John Stashauer, John, good morning.
Good morning, Karen. The Knicks made a couple of big offseason moves in hopes of catching the Celtics to the Eastern Conference. They added Karl Anthony Towns and Mchal Bridges for one night. Anyway, those moves didn't help open the night in Boston, so the Celtics Oyster the championship ender and then took a twenty four point lead in the first half. Boston won won thirty two to one.
On nine.
Jason Tatum scored thirty seven. He made eight of the Celtics twenty nine three pointers. Twenty nine threes ties the NBA record. Then some NBA history in La Lebron James sharing the court with his son Bronni. You only played three minutes. The Lakers beat Minnesota. Good start for the Rangers, good start to their season. They're five oho to one in Montreal, two goals in the first two minutes. Rangers won seven to two. Devils lost to Tampa Bay eight
to five. The Islanders lost to a t That's right, one nothing. Capitol's won four one in Philadelphia. The Bruins shut out in Nashville for nothing. No lack of star power for the World Series against Friday in LA. But there's no doubt who the biggest headliners are. And here's Aaron Judge on shoe Hey Otani.
It's for average, it's for power, the speed, you know, doing what he did this year with the fifty stolen bases. That's it got talked about a lot I don't think it got talked about enough. It's just he's an impressive, impressive athlete, you know, the best player in the game and order to ambassador for the sport.
Speaking of out Tony, the ball he hit for his fiftieth home run was sold a option for four point four million. Meanwhile, Dodger legend has passed away. Fernando Alezuela was sixty three, had been ill, came from Mexico, burst onto the scene as a twenty year old. In nineteen eighty one, Fernando Mania was born. He won the Rookie of the Year and the say Young John Stashey, We're Bloomberg Sports Karen Ethan.
Coast to coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg and the Bloomberg Business app. This is Bloomberg Daybreak.
Good morning. I'm Nathan Hager bringing you an exclusive conversation with Bank of America's CEO Brian moynihan. Speaking with Bloomberg's Heidi Stroud Watts in Sydney. They talked about interest rates, his warning for the FED, and what the election could mean for America's fiscal situation. Let's listen.
In you think about the US economy, you have great insight on what's going on. If you look at that consumer spending this year, the month of October so far versus last year, or third quarter versus last year's third quarter, it's up in a four to five percent range, which
is consistent with a low inflation, low growth economy. That's across about a trillion and a quarter dollars to twenty and a half dollars spent in a quarter, so it's a big sample and the people moving around they spend it each quarter on all different things, but generally growing consistent where we were pre pandemic, when you had fed funds rate at the two percent level, two and a half percent level, you had inflation and control, and you
had growth in the two percent level. So that gives us confidence that our experts to do all analysis are backed up by the data we see our client, and that's what we see for the consumer.
Is there of a degree of bifurcation the demographically.
It's less about bifurcation because I'd assume that the sort of too it's look inflation hits people in the lower brackets more than it does others. Because but the good news is gas prices come down, food prices are tipped over inflations, and controls down in the three percent range as opposed it was running pretty hot, and so that helps. But if you have auto debt, that debt and you want to get a new car, that debt is higher. If you have mortgage debt and you already had a
mortgage loan, it's very low. And so it really depends on the consumer and really where they are. But the average American consumer has more money than they did before the pandemic, is in better credit quality before the pandemic, still has the money and accounts from some of this stimulus in the pandemic and is spending money. And that's all good stuff for the US economy because we're such a consumer. That's the unique thing about it's a consumer driven economy. It's a consumer lot economy.
Are you thinking about making allocations or allowances with stress at this point?
We always do that. So every quarter we run stressed has thousands of them. Every day we run them into market's business stuff. We always look at it and so what's the case if it turns out the wrong way. So even how we set our reserves. We have a modeled series of cases we put in, so it's not all base case based cases about half and the rest are stress cases and the atom all together. We're actually set our reserves as if unemployment was going to be a five percent at the end of next year, not
what the market predicts at four point three. So there's a conservatism built in to that, and then we look beyond that.
Those those are some potential complications for the FED depending on what happens in just under two weeks time. Right does the fiscal scenario, particularly under another Trump administration, but also certainly there are risks when it comes to the Harris camp as well. Is that something that you're thinking about.
I would separate a very near term question of the FED getting the trajectory. Our experts have them cutting again a couple more times this year, one hundred basis points this year, and another one hundred basis points more evenly
spread a quarter each quarter next year. It gets to three to three point twenty five as a terminal rate, and an inflation comes down to the two two point three percent is a move in the twenty five and the twenty six, and so that is a well engineered fed change, and so the dangers that data or they go too fast or too slow, and that risk is higher now than it was six months ago. And so as they move, everybody's going to watch them. And you see the self in territories one day and you see
the rally the other day. Everybody's going to watch all that. That is completely different from and I don't think that will be impacted by the elections. All the fiscal problem in the United States, And to give you the sound bite, the US just finished the fiscal year. The budget deficit for that year was equal to the entire economy of the country of Australia one point eight trillion dollars. So think about the size of that, and we've got to get back in line. These are good times and we
should be managing more carefully. And frankly, we need to have the politicians too, set those budgets, fund those budgets, and run tax policy against those budgets to figure out how to make this work. It's probably gonna be raising revenue and cutting expense or some combination. It's not a new problem. That's one we got to start to wrestle with. Not that it's critical tomorrow morning, that it'll be critical over the next few years.
But given that risk, do you think the FED went too big too soon.
No, they were late to the game and they admit that. So it's nothing that we're saying. It's they were late and they had to move fast because inflation got ahead of them and they and they've done a good job of bringing it back down from probably a double digit rate down to about three percent last quarter three and
a quarters. They're getting close to it. And it's never the inflation average from if one of my teammates tolling from nineteen ninety to twenty twenty four was two and a half percent, the inflation average from nineteen from two thousand twenty two and a half percent. It's four and a half percent just in the last twenty twenty to twenty four, and so we've got to get back in line. And so they're on that path. They were late to
the game. They got to make sure they don't go too hard now, and that's what they are all trying to figure out watching the data. But whether it's it's a terminal rate that's the key, and that we think is around three percent, that's a whole different indust rate environment in the US and other markets than it's been in the last fifteen years or so.
This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.
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And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg.
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