Good morning.
I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today.
That is ariz in Treasury yields, Karen, and it comes after more clues that a March rate cut is not in the cards for the Federal Reserve. In an interview on CBS is sixty Minutes with Scott Pelly, FED Chair j Powell said policymakers will likely wait beyond next month to cut interest rates.
I think it's not likely that this committee will reach that level of confidence in time for the March meeting, which is in seven weeks.
How would you characterize the consensus around this table for rapecuts? Is everyone on board? Almost all?
Almost all of the nineteen participants who sit around this table believe that it will be appropriate, in their most likely case, for US to cut the federal funds right this year.
That was FED Chair Jerome Powell. In an interview on sixty Minutes from CBS, he says officials are looking for more economic data to confirm that inflation is headed down to two.
Well, Nathan, we turn now to the latest in the Middle East. The White House is promising more strikes on Iranian forces and proxies after three straight days of punishing attacks, but National Security Advisor Jake Sullivan insists the US won't be pulled into a regional conflict.
We cannot rule out that there will be further attacks from Iranian back militias in a racket Syria or from the Huthis. We have to be clear right about that. The President, in being clear right about that, has told his military commanders that they need to be positioned to respond to further attacks as well.
And Jake Sullivan was a guest on ABC's this week and as the US and France iron it's also pushing for an extended pause in fighting between Israel and Hamas to allow for more hostage releases from Gazap. Sullivan says the prospects for a deal are not imminent.
Israel has in fact put forward a proposal, and as Cutter has indicated publicly, the ball is in Hamas's court at this time.
National Security Advisor Jake Sullivan made those comments on Face the Nation from CBS.
Meanwhile, care and Washington senators have reached a deal to provide more funds for border security and aid for Ukraine, but there are still some hurdles Bloomberg's Amy Morris has details from Washington.
Senate leaders on both sides of the aisle back the more than one hundred and eighteen billion dollar compromise, with the first procedural vote set for Wednesday. President Biden says he strongly supports it, adding it would give him more authority to shut down the border while making the asylum
process fair and more efficient. House Speaker Mike Johnson called the three hundred and seventy page bill dead on arrival in the House, which sparked reaction from Republican Senator James Langford, who helped craft the deal.
I'm a little confused. It's worse than I expected. When it builds border wall, expands deportation flights, expands ice officers, border patrol officer, how it creates a faster process for deportation.
But Speaker Johnson says it just doesn't go far enough, and House Majority Leader Steve Scalise says it won't even come to a vote in the House in Washington. Amy Morris Bloomberg Radio Right. Amy Thanks Sticking with politics. Former President Donald Trump says he might impose a new tariff on Chinese goods if elected, and Bloomberg Daybreak Asia anchor Brian Curtis has more from Hong Kong.
Trump told The Washington Post he might impose his sixty percent tariff on Chinese imports. He told Fox News Sunday Morning Futures, it could be even more.
I'm not looking to hurt China.
I want to get along with China.
I think it's great.
But they've really taken advantage of our country, and we turned it around. The comments add to a long list of concerns for investors of Chinese assets. Goldman Sachs has said that a Trump reelection is among the most frequently asked questions. Trump also weighed in on Nippon Steele's move on US Steel.
US Still, you know what a name that is.
That's the most important name.
Fifty years ago there was no company like US.
Still now that Japan is buying it, I don't think i'd let that deal go through. By the way, Donald Trump on Fox in Hong Kong, I'm Brian Curtis, Bloomberg Radio.
All right, Brian, thank you. And other news involving China. Policymakers are pledging to stabilize the country's slumping equity market. The China Securities Regulatory Commission says it would guide more medium and long term funds into the market and crack down on legal activities. Some seven trillion dollars has been raised from the value of Chinese and Hong Kong equities since their peaks. In your early twenty twenty one.
Well in company news this morning, Nathan, another setback for Boeing involving its seven thirty seven Max jet. Let's get the latest from Bloomberg's John Tucker.
John, it's yet another manufacturing slip up, Karen. Boeing has found mistakes with rivet holes in the fuselage of fifty undelivered seven thirty sevens. Their supplier, Spirit Aerosystems believe responsible. There's been a string of manufacturing lapses at Boeing, including a near catastrophic panel blowout last month. Well, the FAA has stepped up scrutiny of Boeing and has capped seven
thirty seven production until the quality improves. My shares right now down two point three percent pre market, John Tucker, Bloomberg Radio.
And John, We're going to be watching shares of Amjen as well. An experimental weight loss shot from the drug maker that's taken less frequently than wildly popular treatments. For Eli Lillian Novan, Noordisk appears to keep weight off even after patients stop taking it. An early stage study and the journal Nature Metabolism says patients who got a monthly injection of Amgen's drug dubbed Manta Maritid lost up to fourteen and a half percent of weight in just twelve weeks.
Some people kept it off up to one hundred and fifty days after stopping the drug.
Well Nathan and the entertainment world, the records keep coming. For Taylor Swift, she won Album of the Year at the Grammys for Midnights. For me, the award is the work. All I want to do is keep being able to do this.
I love it so much.
It makes me so happy.
The win from Swift on last night's CBS broadcast breaks a Grammy's record for most wins in the category with four.
Finally, Karen, a couple of business executives have been added to Harvard University's governing board, former MERC CEO Ken Fraser and KKR co CEO Joseph Bayer. Joining that says Harvard continues to deal with intense scrutiny and criticism from alumni, lawmakers, and faculty over its handling of on campus anti semitism.
Nathan, thanks. It's time now for a look at some of the other stories making news around the world, and for that we're joined by Bloomberg's Amy Morris Amy, Good Morning, Good.
Morning, Karen. House Speaker Mike Johnson says a Republican backed effort to impeach Homeland Security secretary of the Hondre new Yorcas is completely different from the Democratic backed impeachment of former President Trump.
We have followed the facts where they have led, not for political purposes, not because we take pleasure in this. It's again a heavy thing to look at the impeachment of a president or a cabinet secretary.
Johnson tell's NBC's Meet the Press. The Republican led committees have methodically gone through the impeachment process and determined new Orcus broke the law. The vote on the articles of impeachment was strictly a party line vote, but Johnson says it's still not for political purposes. Nikki Haley was back on the campaign trail in her home state of South Carolina yesterday, fresh offer surprise cameo on Saturday Night Live, addressing a crowd of about one thousand people on Daniel
Island and Charleston. Hailey continued to attack her chief rival, former President Donald Trump.
But you got to acknowledge the fact he can't win a general election. So you can vote for him all day long and he can come out of this primary, but he won't win a general.
The South Carolina Republican presidential primary will be held February twenty fourth, but the Democratic primary in South Carolina was Saturday, and President Biden was victorious in the first Democratic presidential primary in the nation. He saw an overwhelming victory over Congressman Dean Phillips and author Mary and Williamson. President Biden then spent time campaigning in Las Vegas, Nevada, where he talked about the naysayers who were convinced a recession is around the corner.
How many times you hear when I first got elected president my policy, We're going to bring a recession next month, every month, none a merceand it anymore.
President Biden's stop came two days before Nevada's Democratic presidential primary. California Governor Gavin Newsom is declaring a state of emergency for eight counties in southern California. Newsom says high winds and heavy rains have already impacted several areas of southern California. The state has already mobilized a record eighty five hundred state coordinated Emergency Response assets ready to respond to potential flooding and landslides. Global news twenty four hours a day
and whenever you want it with Bloomberg News Now. I'm Amy Morris, and this is Bloomberg Karen.
All right, Amy, Thanks. We do bring you news throughout the day right here on Bloomberg Radio. But now you can get the latest news on demand whenever you want it. Subscribe to Bloomberg News Now to get the latest headlines right at the click of a button. Get informed on your schedule. You can listen and subscribe to Bloomberg News Now on the Bloomberg Business app, Bloomberg dot com plus Apple, Spotify,
and anywhere else you get your podcasts. By thirty four on Wall Street Time Now for a look at the Bloomberg Sports update, here's John stash Hour John Yarn.
The World Cup soccer is coming to North America in twenty twenty six. In a lot of cities whe're lining up to host the championship game. The winner East rot Theford, New Jersey MetLife getze. Despite Dallas having a Yager Stadium, they'll get a semi final game, so will Atlanta. Miami will host the bronze medal game, the first game involved in the United States. We'll be in La Las Vegas, hosting the Super Bowl for obviously the first time. The
Chiefs in forty nine ers arrived last night. We'll start meeting the media. The sievening Patrick Mahomes may get asked about his father. The former Mets pitcher Pat Mahomes's got a DWI in Tyler, Texas. He has learned it's the third one he's received and that he served forty days in jail. In twenty eighteen, they played the Pro Bowl.
It was Flagg football on a fifty yard field in Orlando, and for what it's worth, the NFC won sixty four fifty nine with Baker Mayfield the Tampa Bay QB the MVP Eli Manning coaching the NFC to victory over King's brother. They currently unemployed. Bill Belichick took out a full page ad in Sunday's Boston Globe, expressing his gratitude to Patriots fans. They couldn't play golf at Pebble Beach yesterday and won't even try today, So it's the first PG events in
twenty sixteen. Green shortened Wyndham Clark off that sensational third round of six, gets his first victory since he won the US Open last year. College basketball battle for first place in the Big Ten, second ranked Purdue one at sixth rank Wisconsin seventy five to sixty nine. Also in the Big Tan, Illinois beat Nebraska Pac twelve, Arizona knockdoff Stanford, Big East, Villanova Beach Properts John Stash. That were Bloomberg.
Sports from coast to coast, from New York to San Francisco, Boston to Washington, DC, nationwide on SYRIASXAM, the Bloomberg Business Appen, Bloomberg dot com.
This is Bloomberg Daybreak. Good morning. I'm Nathan Hager. That first cut from the FED might have to wait till after March. That's what we heard from FED shaw Jerome Powell, reiterating a message we heard from the January meeting in his first interview with CBS's Sixty Minutes since twenty twenty one, when inflation was just starting to surge, but with price pressures now on the decline for nearly a year, J Powell was asked, why not cut now?
We want to see more evidence that inflation is moving sustainably down to two percent. We have some confidence in that, our confidence is rising. We just want some more confidence before we take that very important step step of beginning to cut interest rates.
And again that was FED share Jpowen interview airing last night on CBS's sixty Minutes for More. We're joined by Lori Calvacina, the head of US equity strategy at RBC Capital Markets. Thisays a message that we've heard before from this chairman and from policymakers across the FED. Lorie, is there a read through to stocks from what we're getting from this Federal Reserve?
So I think that you know, in terms of the pushback on the March expectations. Over at RBC, we've been a little bit confused why those March expectations were there to begin with. Our team's call has always been for a June start of the cutting cycle. I do think though, you have to pay attention to what was priced into the market, and we are sitting at a point where there was a lot of excitement about rate cuts in twenty twenty four that was baked into the stock market
in that monster fourth quarter rally. We've seen we've got sentiment indicators that are sitting around a sort of dangerous levels right now or worry some levels at least in the short term. And so it wouldn't you know, surprise me if this does have a little bit of a negative impact in the short term, but I would say overall doesn't really do anything to derail our constructive view on the year.
You pushed yourself back a bit by saying that sentiments at dangerous levels. What's Scott you concerned about? Where sentiment is right now?
So the one you know where I would maybe apply the more sort of dangerous term would be looking at the weekly CFTC data, which frankly, if you look at Byside positioning in US equity futures and you combine all the contracts together, we're actually sitting above levels that we saw back in early twenty eighteen and twenty twenty, as well as you know, well above the highest frankly of
twenty twenty one. In twenty twenty two. So you see major indications of frost there when you look at the AAII survey, which is an indicator I like a little bit better. We have more history on that, we can do more back testing. That one's hovering around one standard deviation above the long term average in terms of net bullishness, got their early December, was sitting there early January. It's pulled back just a little bit, so it's right below
that one standard deviation mark right now. That one is telling you to be looking out for a short term pullback in the equity market, but more like a six and a half percent gain on the year, so not quite as worrisome as that institutional data set from CSPC.
How big a pullback could we see though, given what you're seeing in those indicators, so.
You now we haven't put a number on it. I would say that anytime you start thinking about pullbacks in the US equity market, you know, kind of a garden variety, something that's typical and nothing to get too concerned about, would be anywhere from say five percent to ten percent, and that's you know, really kind of looking at an outlier.
If you get anything beyond ten percent, you're really kind of getting into growth scare territory, and we actually think the economy is still on pretty solid flitting, So I wouldn't be looking for anything nefarious like that.
What are you hearing from companies as they report earnings about their outlook for the economy. We've seen so many strong indicators of how this economy has been able to perform up to now what's the outlook that you're hearing?
So I would say, you know, we read through a lot of transcripts and the thing we've written the last couple of weeks in our weekly is just that the commentary on the outlook and the macro backdrop is just very varied at this point in time. So on the one hand, you have a lot of companies who are talking about stabilization, who are talking about resilience, about consumers moving things around and being judicious, but not really showing
any you know, significant signs of weakness. On the other hand, you do have some companies and we actually had one company last week use the word dismal, you know, but really highlighting the uncertainty of the geopolitical risks, of the longer lead times in terms of getting deal sealed. So it really is is varied, to be honest, and you even see that within industries.
All right, So in our last minute, Laurie, we're getting into the heart of earning season here, another very busy week when it comes to reporting season. What's your expectation based on what we've heard so far?
So I think that we're getting more sector color. We're going to have a better sense of the sector of winners and losers in another week or so. But really, the reactions to the earning speeds in aggregate haven't been you know, that's that significant. To be honest, We're seeing more muted reactions than what we typically see. So I think investors are looking for color on cost margins and
that sort of thing. But I think, to be honest, this is just a reporting season we've got to work through where we adjust numbers down a little bit, get some slightly more realistic expectations in, and then we can move on.
Wow.
This is Bloomberg day Break today, your morning brief on the stories making news from Wall Street to Washington and beyond.
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