Oil Rises on Saudi Cut Pledge; New Apple Headset

From the Bloomberg Interactive Burgers Studios. This is Bloomberg day Break for Monday, June fit Coming up today.

Oil gains after Saudi Arabia pledges to cut supplies by a million.

Barrels a day.

The dead ceiling deal could set off a flood of borrowing for the Treasury.

UBS plans to complete its Credit SUITEE takeover by next week.

I my stocks on the cost of a bull market.

Morgan Stanley says the rally won't last.

Assessn't a plane that was edited to long island crash in Virginia, plus as Ukraine started its counter defensive against Russia. I'm Michael Barner.

More Ahead, I'm Don Stansdallen Sports than Miami Heat won Game two of the NBA Finals in Denver. The Yankees top the Dodgers. The Mets lost again to the Blue Jay.

That's all straight Ahead on Bloomberg day Break, The Business News You need to sturn your day in just one fifteen minute podcast each morning on Apples, Spotify, the Bloomberg Business app and everywhere you get your podcasts.

Good morning, I'm Nathan Hager.

And I'm Karen Moscow. Here are the stories. We're following today.

Oil is on the rise this morning.

That's after Saudi Arabia announced it'll cut supplies by one million barrels a day starting next month. The move takes Saudi crude production to its lowest level in several years. Here's United Arab Emirates Oil Minister Sahail Mohammad alb Musruri.

It was a good deal, of a historical deal, and we look forward to monitor the market. But that deal is giving clarity to the market and giving the market's visibility on next seat.

And checking all prices.

Right now, Nimax screw's up two and a half percent at seventy three dollars fifty one cents a barrel.

Well, Nathan back here in the USh. The thread of the government of faulting on its debts is now on hold until after the next presidential election. President Biden has signed the deal with House Speaker Kevin McCarthy. That's a spenser nation's debt ceiling until January of twenty twenty five.

This is vital.

It's because it's essential to the progress we made over the last few years. Is keeping full faith and credit of the United States of America and passing a budget that continues to grow our economy and reflects our values as a nation.

And the President addressed the nation from the Oval Office before signing the bill on Saturday. This gives the Treasury Department the green light to issue more than a trillion dollars in new debt after months of disruption. Bank of America estimates the wave of new issueance could have the same impact as a quarter percent interest rate hike from the Fed by draining liquidity from banks.

Speaking of banks, Karen, US regulators are reportedly preparing to force large lenders to shore up their financial footing after this year's regional bank collapses. According to the Wall Street Journal, the changes could raise overall capital requirements at large lenders by roughly twenty percent. The paper says institutions with large trading businesses would take the biggest hit, while those heavily dependent on fee income could also face significant increases.

Well in Europe, Nathan, you be expect to complete its tank over of credit sweets as soon as next week and week at the detailser on Bloomberg's Ewan pots in London.

Good morning, Ewan, Good morning Karon, Nathan.

It has been a tumultuous period for the normally sleepy world of Swiss banking, but now that period is joined to close, as UBS says it's credits Wee takeover could be completed as soon as next Monday. Credits we share holds to receive one UBS chef for every twenty two point eight outsigning shares held. The deal agreed in that dramatic weekend back in March creates a megabank that not only dwarfs every other Swiss lender, it's also double the size of Switzerland's economy in London.

I'm you in pot'spom book day Break, ooky Ewan, thank you.

Turning to markets now, the sm P five hundred enters the week on the cusp of entering a ball market, a level which would see the index rise twenty percent from it's October low. But Morgan Stanley does not expect this stock rally to last because of a pullback in corporate earnings. In fact, Morgan predicts urnings per share for the SMP will drop sixteen percent this year. That's one of the most bearish predictions among those tracked by Bloomberg.

Well Nathan expect airline revenues to take off. The airline industry's main lobbying body is doubling its estimate for global net profit this year. The International Air Transport Association expects profits to reach nine point eight billion dollars this year. The association expects more than four point three billion passengers to travel this year, and that's around ninety six percent of twenty nineteen levels.

Well, one carrier in the US, Karen jet Blue, is weighing its options. It's after a federal judge rule the Northeast alliance between Jet Blue and American Airlines broke anti trust law. The judge ordered the pair to dissolve the arrangement within thirty days. We caught up with Jet Blue CEO Robin Hayes. He talked about a possible problem this busy summer travel season.

The biggest challenge that we face in the United States really is air traffic controller staffing, and the FAA has said that air traffic controllers in New York are down to fifty four percent of what they need and as a result of that, we've already had to cut.

Flights Jed Blue CEO Robin hayespoke with Bloomberg from the sidelines of the IATA Annual General Meeting in istanbul Well Nathan.

Apple is poised to unveil a long rumored headset today. While no product will ever live up to the iPhone, the headset has the potential to usher in a new era. I could have kicked off this shift to a different interface that up ends how people work, play games, and entertain themselves. It's also a risky endeavor that could backfire for Apple. Mixed reality headsets are still a nason field, and many people are hesitant to wear a computer on

Finally, Karen, financial professionals have a warning for their employers. Don't ask me to come into the office more often, or I'll quit. Bloomberg's latest Markets Life Pulse survey finds about one in two people who work in finance would change jobs or already have if their managers required them to spend more time in the workplace. More than half of responded Star poll globally prefer a hybrid arrangement. Only

Good morning, Michael, Good morning, Nathan.

Russia says it thwarted a large Ukrainian attack in the eastern province of Dunesk, though it's unclear if this was the start of a Ukrainian counter offensive. Russian Defense Ministry spokesman igor Kannakenshkov, through a translator, thanks all due.

Brat you nicky that neils them.

The enemy did not achieve its tasks. It had no success as a result of capable and calculated actions of the Group of Forces East. The Ukrainian army suffered losses of more than two hundred fifty people, sixteen tanks, three armored personnel carriers, and twenty one armored vehicles.

Ukraine did not comment assessana plane that was headed to Long Island, New York crashed in Virginia. The wayward plane flew over restricted airspace. In Washington, DC, the Capitol and White House were briefly placed on high alert and f sixteen jet hit supersonic speeds to reach the unresponsive pilot of the Cessna. The F six Singh caused a sonic boom over the Washington, DC area. The private plane ended up crashing over mountainous terrain near Montebello, Virginia. No survivors

The Director's Guild of America has reached a tentative agreement on a new contract with the Alliance of Motion Picture and Television Producers, one of the unions that represents Hollywood studios. The deal will include a five percent way increase in the first year, a four percent increase in year two, with the three and a half percent raise in the third year. The agreement also says that generative AI will

Bloomberg, Nathan, Thank you, Michael.

Time now for our Bloomberg Sports date. Good morning, John Stan Shout.

Good morning. Eighth.

At terrific Game two the NBA Finals in Denver, both the Heat and the Nuggets shot it well. Miami made almost half of its three pointers, Denver over fifty percent over all. Miami up by eleven in the first quarter and then down by fifteen, and Denver was up eight starting the fourth quarter. They were thirty seven and one this season with that big of lead, but Miami went from down eight to up twelve. Nuggets then got it down to three. Miami hung on to win one eleven

And the lefty ferguson to the plee swinging a deep shot left field, backing up his outman.

He's watching it.

It is gode the home run.

Anthony Vopie goest yard into left field.

It hits the bleachers, a two run shot, and some night didn't insurance for the Yankees.

Wfan Yx won four to one.

They went four and two on the road ship the Mets homestand had that sweep of the Phillies, but then they got swept over the weekend by Toronto, who finished the sweep winning six to four on a Brandon belt to run home run seventh any French Opendovak Djokovic into the quarterfinal, fourteenth in a row for him in Paris.

Bloomberg Sports.

From coast to coast, from New York to San Francisco, Boston to Washington, DC, nationwide on siriusxam, the Bloomberg Business app in Bloomberg dot com.

This is Bloomberg Daybreak. Good morning. I'm Nathan Hager.

We head into a new trading week, a little bit more than a week before the next Federal Reserve decision, with the S and P five hundred on the cusp of a bull market and oil prices surging this morning after Saudi Arabia announced it'll cut production by another million barrels a day, following the OPEC plus production cut from earlier this year, let's get this trading week started. We're joined by Dennis Gartman, the former publisher of the Gartment Letter,

We have to be very careful because if you take a look at the S and P, what ten of the stocks, A handful of the stocks have been what almost up ninety percent of the valuation, they've about ten percent over the course of the past year, and the other four hundred ninety stocks are down on the year. Out of the S and P five hundred, so you have to be careful. This market, as they commonly say, has bad breadth, so be careful out there. But nonetheless,

Do you think that the growth trade, some of the moves that we're seeing into big tech stocks has gotten a little bit crowded or does it have further to run.

I'm not sure it's crowded, but it's certainly overdone. Buying the n video what several hundred times annual sales is a little bit beyond Mike can I can't understand it. And as my good friend Gary Shilling once said, markets can remain illogical far longer than you or I can remain solvent. A lot of people are short. I wouldn't be short of those stocks, but I would I clearly would not be a buyer of Nvidia. I would not be a buyer of Microsoft. I would not be a

Does it make sense to get further breadth into this market? When we get calls from the likes of Andrew Sheets over at Morgan Stanley last night saying that we could see a sixteen percent earnings per share cut for the S and P five hundred that could bring this rally to an end.

Well, I think that's a little bit too pessimistic on my part or on his part. I think he's probably ill advised to make that kind of a statement. I think earnings are actually bottoming out rather than topping out, and I think they'll probably be higher in the four hundred and ninety stocks that haven't done very well over the course of the past year, so I think earnings are going to do better. The big question this morning is we Opek having cut or Saudi Arabia having cut

Well, what does that dynamic mean for oil prices going forward?

Here?

If we do continue to see the US leading in crude production, does that put a floor on oil prices or could we see more of a rally there.

We're probably going to end up seeing more of a rally. It's really quite impressively. One thing that has bothered me about the oil market is that the term structure of the futures market has been backwardated, has lost its baquidation excuse me, and has gone to a very slight tentangle in the front end that usually is bearish. But nonetheless, this cut is a bit of surprising. I think the

We have about a minute left here now that we have resolution with the debt ceiling in Washington, d C. What's the market impact there? What could it mean for treasuries.

Well, it's a good thing that the idea of default has been taking off the blackboard completely. That's a step forward, and I think it does a lot of the Federal Reserve Bank the chance to the new term skip the raising rates at the next meeting this week or next week. So I think that that's probably a relatively good thing. But we're going to end up seeing at the short end of the curve slightly higher rates. I own a lot of two years. I'm comfortable owning a lot of

This is Bloomberg Daybreak Today, your morning brief on the stories making news from Wall Street to Washington and beyond.

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