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Good morning.
I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
Here, and we begin with tensions escalating in the Middle East. An Egyptian soldier has been killed in a clash with Israeli troops at the Rafa border crossing in Gaza. The death comes after an Israeli airstrike killed and estimated forty five Palestinians at a camp for displaced people in the territory. We get more from Bloomberg Middle East anchor Jumana Bersecci.
But the big question for the international community is whether or not what happened over the weekend constitutes a red line as far as the US are concerned, and whether actually it would lead to any impact on the shipment of military equipment or even a pause of the military equipment that the US had promised to provide Israel with.
Bloomberg's Jamani Barsati says Israeli Prime Minister Benjamin Nittanyahu has called the airstrike in Rafas Sunday a quote tragic mistake.
Well, Nathan, Former President Donald Trump is taking a hardline stance on pro Palestinian demonstrations on college campuses. According to her report in The Washington Post, he told donors at a recent event in New York that he deports student protesters, and he praised New York City police for clearing the demonstration at Columbia University. Trump said he supports Israel's right to continue its war on terror, but donors at the gathering say he didn't mention Prime Minister net Yahoo that
you have not spoken in years. Trump has complained about net Yaho publicly after he acknowledged President Biden's win in twenty twenty.
Well.
Meanwhile, Karen closing arguments are expected today in Trump's criminal hush money trial in New York. Bloomberg Zamy Morris as a preview.
Prosecutors will present their summations first as they try to convince the jury that Donald Trump falsified business records. They have to prove beyond a reasonable doubt that Trump intentionally made or directed others to make false entries in business records, did so with the intent to commit another underlying crime, and sought to conceal the commission of that crime. Now, the defense only has to sway one juror because the verdict has to be unanimous. If the jury deadlocks, the
judge can declare a mistrial. Judge Wan Mershaun said last week he hopes the jury will get the case by tomorrow. Amy Morris, Bloomberg Radio.
All right, Amy, thanks. Back at the White House, the Biden administration is unveiling a new approach to climate policy. Treasury Secretary Janet Yellen and other cabinet officials are recommending that companies be allowed to use curbon credits to offset some of their so called Scope three emissions, or those generated by their suppliers and customers. Carbon offsets have been criticized in the past. Some of the methods used to calculate carbon dioxide taken out of the atmosphere have not
fulfilled their claims. Secretary Yellen says voluntary carbon markets can help unlock the power of private markets to reduce emissions, but only if we address existing challenges well.
Turning to financial markets, Karen wall Street gets back to work following the long holiday week, and perhaps the biggest market moving event of the week is going to come on Friday. That's when we get the Federal reserves, favorite measure of underlying inflation. We get a preview now from Bloomberg's Jeff Bellinger.
The Fed's first line inflation gauge may be about to show some modest relief from stubborn price pressures. Economists expect the Personal Consumption Expenditures price index minus food and energy to rise two tenths of a percent in April. That would mark the smallest advance so far this year for the measure, which provides a better snapshot of underlying inflation.
FED Chair Jay Powell and his colleagues have stressed the need for more evidence that inflation is on a sustained path to their two percent goal before cutting the benchmark interest rate. That rate has been at a two decade high since July. Jeff Bellinger, Bloomberg Radio, all.
Right, Jeff, thanks so. We also continue to hear from several FED officials this week. This morning in Tokyo, Cleveland, FED President Loretta mess said the US Central Bank should consider ways to better communicate to the public how economic
conditions will affect future policy decisions. Mester recommended two key changes, adding more words to the Fed's post meeting policy statement to describe how officials assess economic developments and potential risk to the outlook and more detail to its quarterly summary of policy makers Economic Forecasts.
Well, here's a milestone, Karen. For the first time in one hundred years, stock trades on Wall Street will have to settle in a single day. Shift to the system known as T plus one will cut the time it takes to complete every transaction in half. We get more from Bloomberg's Crity Gupta.
This needs to be a T plus five. This needs to take five days to settle trades. And the reason back then that they had to kind of shrink the time was because so many people were getting involved in the stock market. It was called the Roaring twenties for a reason. Fast forward essentially later, you see the same kind of impulse to get involved in the stock market in twenty twenty one. And that's where all of this
comes from. The problem is there are some teething paints that come with it, and so when all a lot of people are hitting their desks today, they're going to be saying, Okay, well, let's all kind of brace for impact here, because there are liquidity concerns, there are staffing concerns, there are technical glitches that can go wrong as they adopt the system, now.
Boomberg's Critty Gibda says this isn't the first time Wall Street's gone through a transition like this, but industry pros say it will be the most challenging.
Well, Nathan, the shine may be back on Apple and China. iPhone staged a rebound last month, with shipment's rising fifty two percent amid a flurry of discounts from retail partners. Apple and its Chinese resellers have been cutting prices since it started a year, and those deals are extending into this summer sales season. Shares of Apple are at more than two percent in early trading.
Yeah, we got to keep an eye on so called meme stocks as well, Karen. They are back on the move. Game Stop and AMC Entertainment are two of the most actively traded stocks this morning. Shares of game Stop are up nineteen and a half percent. The video game retailer brought in nearly a billion dollars from a share sale program. AMC is up five and a half percent.
And it's time now for a look at some of the other stories making news in New York and around the world. And for that were joined by Bloomberg's Michael Barr Michael, Good morning.
Good morning, Karen. A series of powerful storms in the central and southern US over the Memorial Day holiday weekend has killed at least twenty three people living, homes and businesses destroyed, and power outages. In Valley View, Texas. This man says he was driving with his wife and took shelter at a gas station.
It got so intense that I could feel every particle of dirt, sand, fiberglass, glass hitting my face.
The destructive storms also caused deaths in Texas, Oklahoma, and Arkansas. The big return home day for the holiday weekend was not an easy trip for some airline passengers who were impacted by bad weather. In the northeast. La Guardia Airport and Newark Liberty experienced the worst of canceled and delayed flights. The TSA two point nine million people were screened at
US airports on Friday, a single day record. Passengers on board a Spirit Airlines flight who came close to a water landing and now sharing their stories the moments before their safe return to Montego Bay Terminal in Jamaica, they were having a frightening experience. This passenger says of the fort Lauderdale, Florida bound flight first announced he would be turning the plane back to Jamaica's airport to address a maintenance issue, and then she heard the pilot again, and when he.
Said prepare for emergency landing, I took my earbud out and I looked at the two people in my raw.
I said, did he just say water landing?
And they said yeah.
Everyone on board was provided with meal vouchers, hotel accommodations, and were rebooked. The search for three men who were allegedly involved in the death of a soap star continues. Los Angeles police say thirty seven year old Johnny wactor who played Brando Corbett on ABC's General Hospital, I've interrupted a possible car theft right before the gunshots early Saturday morning. Fellow actor and friend Colin Flynn.
Donnie is just an unbelievable friend. He such a humble, loving, passionate person.
He did tons of service to help other people.
According to police, the suspects who got away with trying to steal Wactors catalytic converter on his car. It's primary runoff day in Texas. There are seven GOP congressional nominations up for grabs. Incumbent Republican Congressman Tony Gonzalez of San Antonio is facing a fight for the party nomination against Second Amendment activists YouTuber Brandon Herrera, known online as the Ak Guy, Global News twenty four hours a day and
whenever you want it with the Bloomberg News. Now, I'm Michael Barr, and this is Bloomberg Karen.
All right, Michael Barr, thank you time now for the Bloomberg Sports Update with John Stashauer. John, good morning, Good.
Morning, Karen. Celtics. Not only could I really should have lost games one and three versus Indiana, the Pacers had late leads in both. In Game four, also close was tied in the final minute.
Jayleb stops out of time, troubles to the middle of the floor, jump pass.
Out of the corner Derek White for three.
Got it.
Derek White from the right corner.
As David Boston a one oh five one oh two.
League on ninety eight five sports iuve in Boston. That was the final. Celtics finished the sweep advance to the NBA Finals, where the twenty third time looks like they'll played Dallas. The Mats are up three zip on Minnesota Game four. Tonight, the basketball world remembering Hall of famer Bill Walton, passed away from cancer went healthy one of the greatest ever nineteen seventy three NCAA Championship game with UCLA, he scored forty four points, shot twenty one of twenty two.
Four years later led Portland to the NBA title and that game a long run of foot injuries, but in nineteen eighty six he helped the Celtics to the championship, and then despite a lifelong stuttering problem, Walton became a broadcaster and safe to say, there's never been another one like and Bill Walton, who estimated that he had attended over eight fifty Grateful Dead concerts, it was seventy one.
No One at tennis history has dominated a tournament like rockfielded out the French Open, but the fourteen time champion, now thirty seven, is battled injuries, nearing retirement, and since he was unseated, he had to face Sasha asze Verev in the opening round of doll lost in straight sets. Stanley Cup Playoffs, Dallas came from two goals down to win five to three, and Edmonton's Stars lead the series two to one Rangers, bringing two to one lead the
game four tonight at Florida. For the last five Ranger winnings are coming overtime. Mets and Dodgers reigned down so a straight doubleheader today at City Field, starting the four Yankee starter a series at the Angels Orioles fifth straight win eleven three over the Red Sox. Nationals beat the Braves eight to four. Giants beat the Phillies eight to four. Angel Hernandez has ended his umpiring career after thirty three seasons.
His reputation was that he was baseball's worst umpire. John Stashedward Bloomberg Sports Kenny.
Nava 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. Weel we are heading into a holiday shortened trading week this morning with a lot of investor focus on what's coming. At the end of this week. The feds preferred reading on inflation could give more of a clue on the path for interest rates for the next rest of this year. For more, we are joined in our Bloomberg Interactive Brokers Studio by Lori Calvacina, head of US Equity Strategy at RBC Capital Markets, Lourd,
good morning. Always great to speak with you. So is it all about the PCE at the end of the week or is there something else that investors should be watching out for this week?
Well, thanks for having me as always, Nathan. And look, you know there it feels like kind of a lightish week on the economic date. I think we've got a consumer sentiment reading we'll keep an eye on. But I do think you're right. I think it's all about inflation, you know, in my meetings and I was on the road again last week at all you know, centers around this debate over when is the Fed going to move?
When should they move? But really that is the debate and at all hinges on the inflation readings.
Now we got even more clues just this morning on a competing network from Minneapolis FED President Neil Keshkari saying that he's seeing inflation move sideways and he's still not in a hurry to cut interest rates. I mean, is that the message that that Fed officials are putting out here? Is there sort of consolidation around that.
So look, I go back to the FED presser a couple of weeks ago, and what I heard was the case being made for no hikes, not necessarily more cuts, And I think there was a little bit of confusion initially in the investment community, and I think we're sort of, in my mind at least, just sort of circling back to that initial message that was put out. I will say, Nathan, as I talked to investors last week, and I was really mostly talking to long only investors, not hedge funds.
So maybe there's a little bit of a difference in sentiment between those two communities in recent weeks. But for the most part, the folks I was talking to last week's said, Okay, you know what, if the FED doesn't cut and the economy stays strong and we're trying to keep the inflation genie in the bottle, that's okay. There wasn't really a lot of consternation on the idea that we might not get any cuts this year from the investors I spoke with last week at least.
Is that a sentiment that you share that we could see more of a rally even if we do remain in a higher for longer rate environment.
So I generally think that the market is fine and I think that valuations can stay fine. Where we are. You know, we are at my price target of fifty three hundred. You know, we haven't done sort of the big second half outlook. We haven't done a twenty twenty five outlook yet, but we do think based on sort of the messaging of where you know, the economy is likely to be this year, what the FED is likely to do or not do this year, and where inflation
is likely to end up, we seem fairly valued. And I know that's a little bit of a boring message, but we do feel a little bit stuck in neutral for the moment. I will say I am not in the bearish camp. We do have few strategists who are still sitting over there, and we do think that we're sort of midway through a recovery that begin off recession like conditions in twenty twenty two. But sometimes we do get a little bit stuck in the market. And that's how I'm feeling at the moment.
Well, it does seem as though the bearish camp is getting lighter and lighter by the day, and not a whole lot of bears left at least embong prominent voices. Could that potentially be a conturing indicator if we have potentially too much polishness in the market right now?
You know, it's a great point, Nathan. And as someone who's been knocking around the equity strategy world for you know, I think it's been like twenty three twenty four years since I made my way into the first strategy job as a peon, mind you, but the reality is that
is something we do tend to learn. When you tend to see strategists, you know, sort of rush to you know, kind of all raise their targets in a market that's been rallying and surprising expectations, it makes you want to stop and pause and reflect and be very very careful. And I'm not saying that they're all wrong. We do talk about our valuation work as more of a compass, not a GPS I. You know, we do generally side, you know, with the bulls over the b and these scenarios.
But I do think when we just look at data, we look at AAII, we look at CFTC, you know, sort of hard weekly data points that we continue to get, they're still showing us sort of either at froth on the CFTC data or on the cusp of being frothy again on the AAII data. So I do think this is a good time to maybe just sit and think a little.
Got about a minute left. If we're sitting and thinking on the S and P five hundred level, does that carry through into broader indexes like the Russell two thousand.
So the Russell two thousand is weakening again and we're retesting those lows that we've made a couple times over the past years relative to the S and P. And I think that's really because small caps are caught up in FED cut optimism and it's been kind of sucked out of the market again. That's pressured that part of
the market. There's a lot of interesting stuff in terms of relative valuation positioning looks interesting, but at the end of the day, we need the confidence that the fed cuts are coming to get that part of the market working again.
This is Bloomberg day Break Today, your morning brief on the stories making news from Wall Street to washing to nan beyond.
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I'm Nathan Hager and I'm Karen Moscow.
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