Oil Surges As OPEC Cuts Production

Service confirms four tornado's touchdown in New Jersey. Plus the US has a pointed message to Russia about a detained American reporter. I'm Michael barn Or Ahead, I'm John Stashayward wins for the Mets, Yankees, Knicks, Nets, and Rangers. The

National Championship Game will be played tonight. That's all straight Ahead on Bloomberg day Break, The business news you need disturn your day, and just one fifteen minute podcast each pointing on Apple's Spotify, the Bloomberg Business App, and everywhere you get your podcasts. Good morning, I'm Nathan Hagar and I'm Karon Moscow. Here are the stories we're following today. Karen. We begin this morning with a jump in oil prices.

Right now, West Texas Intermediate CREWD is up five and a half percent to seventy nine dollars eighty four cents of barrel. That's after OPEC Plus announced a surprise production cut of more than one million barrels a day. The move flies in the face of previous assurances that it would hold supply steady. We get more from Bloomberg's Christine Burke in riod. So we're coming off of a pretty soft quarter for oil prices. Brent was down about seven

percent in the first quarters. We have seen some weakness and that is I think very much why we're seeing OPEC Plus take this decision to cut production is they have seen that that prices have come down so much. We're dealing with a lot of macro and certainty. You've got a lot of uncertainty around the Fed, a lot of questions about what's going to happen with the banking crisis, and so OPEC really stepping in here to try and signal to the market that it wants those higher prices.

Man Bloomberg's Christine Burke says the White House is responding, calling opex production cut quote ill advised and we're seeing oil stocks rally on the OPEC News Nathan shares of Chevron and Exxon Mobile or at more than three percent in early trading. Haliburton, Marathon Oil, and Schlumberge are all lot more than four percent. And another major story this morning,

Karen centers on massive job cuts at UBS. A Swiss newspaper is reporting UBS will cut its workforce by up to thirty percent after completing the takeover of Credit Suis. We get more from Bloomberg's Russell Ward. These are pretty dramatic numbers, as many as eleven thousand staff domestically twenty five thousand abroad according to the report. That's much more than the nine thousand that Sweets was cutting before the takeover. But as you say, large scale job cuts do appear

to be inevitable given the huge overlaps at these two banks. Domestically, both banks have branches and main street main streets all over the country. You know some of these which just simply have to close. And globally UBS has pledged to downsize Credit Swiss investment banking. This is to fit into its conservative cultures, so you can expect cuts abroad to center on that area and in another development, Bloomberg's Russell Award says Swiss prosecutors are opening an investigation into possible

crimes linked to the takeover of Credit Suites. And Nathan, We've seen a recent rally in tech stocks, but one strategist says this surge is overdone. Mike Wilson is CHPUS equity strategist at Morgan Stanley and one of the most prominent bears on stocks. He warns the tech rally that succeeded twenty percent is not sustainable and that the sector will eventually hit new lows. Let's zoom out from the markets now. Karen and turned to politics for the latest

developments on the indictment of former President Donald Trump. For that, we're joined live by Bloomberg's John Tucker in New York. Good morning, John, and Nathan. Trump is expanded to travel to New York today and stay overnight at his home on Fifth Avenue before his arrangement tomorrow in criminal court. He'll be fingerprinted and have a mug shot taken. Trump's attorney, Joe Tekapina, was on ABC's This Week, says Trump will plead not guilty and called the case a political persecution.

Had Donald Trump not being Donald Trump and it was John Smith. This case now would have been brought if he was not running for reelection. There's no way this case would have brought. The exact charges haven't been revealed, but they are related to hushmoney payments to poor An actress Stormy Daniels. Trump isn't making any friends with a judge who will be presiding over the case is already

bashed him on social media. Key streets and Lower Manhattan will be closed in anticipation of any demonstrations and ours anti the Raymond. Trump is expected to return to Florida and deliver an evening address from Mara Lago Live in New York. I'm John Tucker Bloomberg Daybreak. All right, John, thank you. When it comes to the race for the White House, former President Trump has another challenger. Former Arkansas Governor Aesa Hutchinson is entering the race for the Republican nomination.

As I've traveled a country for six months, I hear people talk about the leadership of our country, and I'm convinced that people want leaders that appeal to the best of America and not simply appeal to our worst instincts. And former Arkansas Governor Aesa Hutchinson says he'll make a formal announcement on his presidential run later this month. He made the comments on ABC's This Week or Sundays on

Bloomberg Radio. Let's turn to corporate news now, Karen. Word of a possible deal this morning involving World Wrestling Entertainment could have a new owner soon. Let's get the latest on that, Live with Bloomberg. Steve Rappaford, Good morning, Stave, Good morning, Nathan, and Karen. Sources tell us in Debora Group Holdings will announce a deal this week to buy WWE for about nine billion dollars, though it's possible talks

could still fall through. Founder and majority shareholder Vince McMahon is expected to remain involved in the business after the deal. McMahon left WWE last year after revelations that he paid millions of dollars to settle claims of sexual misconduct. The seventy seven year old reinstated himself as chairman in January to oversee a strategic review of the company. Live in New York, I'm Steve Rappaport Bloomberg Daybreak. All right, Steve,

thank you all. Tesla's shares are hitting the brakes this morning. They're down two point one percent in early trading. Sled did report record deliveries in the first quarter, but they fell short of the pace required to meet Elon muskol a fifty percent annual growth. Tesla delivered almost four hundred

and twenty three thousand cars worldwide last quarter. After it cut prices and Karen of bankruptcy filing maybe looming for bed, Bath and Beyond, the home goods retailer has three weeks to raise another three hundred million dollars from equity markets that have largely turned against the company. The shares plunged fifty percent after it raised three hundred and sixty million

from a hedge fund. That deal diluted existing shareholders. Straight ahead, we'll get your latest local headlines into check of sports. This is Bloomberg. It's thirty nine degrees in New York. We have a frost advisor this morning in the suburbs, but will be mostly sunny, sixty degrees by this afternoon, mostly cloudy tonight, headed down to around fifty. Let's take a look at some of the other stories making news in New York and around the world. With Bloomberg's Michael

bar Good morning, Michael, Good morning, Nathan. The National Weather Service confirmed that ford tornado it's touched down over the weekend. In New Jerry. One twister hit Jackson Township. This woman and her fiance got an alert on their cell phones and took cover. Lights started flickering and then eventually went off, and we grabbed flashlights and went to the basement as fast as we could. Jackson Township residents woke up to find downed power lines and trees brought to the ground.

Weekend tornadoes killed more than two dozen people in several states, including five fatalities in Arkansas. Tornadoes were reported spanning from Alabama to as far north as Delaware. Arkansas Governor Sarah Huckaby Sanders says they're preparing for more severe weather that is forecast for the region tomorrow. Huckaby Sanders spoke in wind which took a direct tornado hit. What I found to be so amazing are the people who are stepping up, not just from this community but across all of Arkansas,

coming together and helping build their neighbors up. Almost four hundred thousand people are without power across a dozen states, Senator John Feederman is talking about his inpatient treatment for clinical depression. He spends six weeks in Washington d ses Walter Read Medical Center. The Pennsylvania Democrat was released on Friday and returned to his home. His office said his

depression is in remission. During an interview with CBS Sunday morning, he recalled feeling low the ninety one the election to the Senate. It's like you just won the biggest race in the country. And the whole thing about depression is is that objectively you may have won, but the depression can absolutely convince you that you actually lost. And that's exactly what happened, and that was the start of a downward spiral. Feederman suffered a stroke last May when he

was a candidate for the Senate. A deadly bomb attack in Russia has killed a pro Russian military blogger and art and supporter of the war in Ukraine. Dozens of people were injured in the blast and explosive device ripped through a cafe in the heart of Saint Petersburg. The attack, looking like an assassin nation killed Maxim Foeman, who used

the pseudonym Vladmin Tatarski on his blogs. Global news twenty four hours a day, powered by more than twenty seven hundred journalists and analysts in over one hundred twenty countries. I'm Michael bar This is Bloomberg, Nathan. Thank you Michael, now for the Bloomberg Sports Update. Good morning, John stash Hour, Good morning Nathan. It was a Sunday where seven New York area professional teams played. The Islanders and Devils both lost on the road, but the other five one including

the Nixon Rangers, who both beat teams from Washington. Knicks at the Garden over the Wizards one eighteen one oh nine, first time in five years. Nicks had four players scored more than twenty points, Jalen Brunson, Quentin Grimes, Manual Quickly and Obie Top and Nick's clinch a playoff. Birth Rangers were in Washington, jumped in front three nothing went on to beat the Capitols five to two. The Nets led Utah by twenty in the fourth quarter of the league

schrump to one. Nets held on one ten. They lead Miami by two games. Teams in the race to finish sixth in the East and avoid the play And so that was in Brooklyn. In the Bronx a tape measure shot. Stead in swings, girls flop the deep glove center feel up ball is high. That is fuck hoo us god

shut Oh what a shot. That is a Stantonian home run A plus drilled the deep glove center n WFA and four hundred and eighty five feet longest for John Carlos Stanton since a five hundred footer in twenty sixteen when he was with Miami. Aaron Judge also Homer started Kyle de Gasha. Yoka Yankees blanked the Giant six nothing, already their second shutout victory the Mets, also with solid pitching from Kodai Singa and his Met's debut, they won

five one at Miami. Tommy fam had three hits, three RBIs LSU won at first ever NCUBA Women's Championship one h two to eighty five over Iowa, highest scoring title game ever. Yukon and San Diego State meet tonight in Houston to decide the men's championship. John Stash Howard Bloomberg Sports live from coast to coast, from New York to San Francisco, Boston to Washington, DC, nationwide on Sirius Exam The Bloomberg Business app and Bloomberg dot Com. This is

Bloomberg Daybreak. Good morning, I'm Nathan Hager. We are getting the second quarter of twenty twenty three started with a surgeon energy stocks this morning. The surprise announcement from OPEC Plus that it's taking more than a million barrels of oil off the market per day has shaken this market. So let's get more on what the potential impact could be as we head into this new quarter. For that, we are joined live by Laurie Calvacin ahead of US

Equity Strategy at RBC Capital Markets. Laurie, good morning. Do you change your equity strategy now that OPEC plus seems to have changed its strategy? Well, thanks for having me, Honor Vollways, Nathan, and look, there's no change in our strategy here in terms of sectors. We've been telling people here to keep a balance between defense, between values, sequicality

and the growth trade. And it's because of you know, the kind of moves we saw on track in the first quarter and the kind of move were likely to see an energy today. We feel like this is a market that's bouncing along, you know, sort of a bottom sort of a similar messy normalization period of what we had in O two, O three, And we think that sector trades in terms of leadership can be vicious in

terms of their ability to shift direction quickly. And we frankly have thought that energy was one of the babies that was getting thrown out with the bathwater. Over the last few weeks, valuations have been very, very cheap. I've got cheaper in recent weeks and now we've got this surprise cut. So I I think energy will have a good day, and I think it's it's a part of

the market that deserves to have one. What's the potential macroeconomic impact of oil this much oil being taken off the market potentially, and does that have a bleed through into stocks more broadly besides sector moves. Well, look, I think we can always, you know, kind of trace everything back these days to the inflation argument and the FED.

I think the FED does, you know, look at inflation in terms of what it can control, so we'll see how, you know, shake out they're going forward in terms of different speeches. I'm not overly worried there because of the banking crisis, because we are still seeing outside of energy,

you know, a good trend in moderation and inflation. And in fact, we actually wrote this morning about the Duke's CFO survey that came out last week where some of the questions actually spoke to the seeds of inflation, specifically pricing and wage growth, where CFOs optimism or you know, sort of expectations have taken a hit both for this year and next year. So we think inflation is headed in the right direction, despite you know, what you might

get from energy markets. Tell me a little bit more about why you think inflation is heading in the right direction. We have seen some moderation in the Federal reserves preferred measure of inflation. Do you think that's the trajectory that we're going toward? That we could see either further moderation or a further slowdown in inflation. So our economists have been arguing that we're sort of headed back to the three percent type area at the end of the year.

If you look at core CPI specifically, and if you look at consensus expectations within Bloomberg on the ECFC function, if you look at things like PC and core PC for quite some time, they've been headed back down in that direction. So I think that you know, despite all the noise that we've been seeing in the marketplace over this debate, that's really been sort of a core belief of the professional forecasting community, and that's really been guiding

a lot of things. And in addition to know sort of what we heard from the CFO survey and what we saw on the PC data last week, you know, we are continuing to see good improvement in supply chains. Something else our economists wrote about recently was how he looked at all the regional federal reserves surveys that have come out recently. They've all been showing weakness in the services sector, and that's something that we don't often see

when all five regions are an agreement on that. So I think, no matter where you look, you're seeing you Yes, inflation is still high. Yes, it is still a pain that that moderation does seem to be in place. So do you think then that the market is right to be pricing in rate cuts from the Fed this year? A lot of the commentary we're hearing from Fed speakers

is that's really not on the table at this point. Well, look, I think the FED always ends up being data dependent, and if you talk to our economists, they are they are baking in a couple of cuts later this year. I think there is some degree of uncertainty in the forecast. But what we have seen if you look at market based expectations on the FED, no matter where people were before PRESCB on terminal, you know cuts, people are pricing in a less aggressive or more accommodative FED for both

this year and next year than they were previously. So interest rate expectations bottom line. You know, we can all fight about, you know, the exact member cuts, the exact level of terminal, but expectations are getting rained in and that's ultimately supportive of pe multiples in the stock market. So in our last thirty seconds before we pick up this conversation after the commercial break, what does that mean for earnings expectations if we do see a little bit

more moderation from this FED. So look, I think that one of the key things about, you know, sort of the FED debate is just its feed through into uncertainty in terms of outlooks from companies. I think it will end up keeping guidance conservative, even if companies still tell us they weren't affected by SVB or they have the ability you know, to kind of manage whatever gets thrown at them. But I think that's really just, you know, the idea that it weighs on uncertainty and adds to

that uncertainty is the big read through. This is Bloomberg day Break 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.

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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