Bloomberg Audio Studios, podcasts, radio news. Good morning, I'm John Tucker and I'm Karen Moscow. Here are the stories we're following today, and.
Karen the ryce and futures. And that record for gold comes as we kick off the second quarter. So also the first time. Markets are reacting to two important events on Friday when they were closed for the Good Friday holiday. First, the Fed's preferred gauge of underflying inflation cool last month after an even larger increase than previously reported in January.
And then j Pal spoke during a San Francisco Fed Bank event the Fed she are reacting to the PCEE deflator report and reiterated his outlook on rate cuts.
February is lower, but it's not as low as most of the good readings we got in the second half of last year. But it's definitely more along the lines of what we want to see. So what we said is that we don't see it as likely to be appropriate that we would begin to reduce interest rates until the Committee, the Feller Open Market Committee is confident that inflation is moving down to two percent on a sustained basis.
Fed cheer Jay pounces. He also wants to shrink the balance sheet more without disruption.
Well John reactions still pouring into Friday's two major events. Sarah House, as senior economist at Wells.
Fargo, ultimately we heard that right now Chair Pal doesn't feel like they need to be in a hurry with cutting rates. It is a big decision, as he espoused multiple times throughout the conversation. But what we heard time and again was that he views the economy as strong right now, and particularly the labor market being in a good place, which does seem to afford them some time to see if inflation can come down a bit further in the months ahead.
Well As Fargo's senior economist Sarah House, does expect rate cuts to begin in June.
The next big economic report for the investors Karen comes on Friday. That's with the jobs report for the month of March, and according to at Bloomberg survey of economists, payrolls are seen increasing by at least two hundred thousand, four or fourth straight month. The average hourly earnings are projected to climb four point one percent from the same month last year, and that's the smallest anel advance since mid twenty twenty one oh.
We want to turn to politics overseas now John. In an historic defeat for Turkish President Rejip Tayev Erdowan, Turkey state broadcaster TRT is reporting the country's main opposition party defeated the Airdiwan's AK party in municipal elections for the first time since he took power more than two decades ago. Airediwan told supporters his administration will continue addressing Turkey's pressing economic issues.
He has we will focus more on urgent issues of our country, especially the revival of the earthquake zone and solving our economic problems.
And Turkish President Erdiwan said in March that this election would be his final, after he was elected to a third presidential term last year. Airdiwan has also said this result won't amper his economic plans. The Turkish president has faced backlash from voters as the country experiences rampant inflation and the highest borrowing costs since he swept power two
decades ago. He's allowed Turkey's central Bank to raise the key interest rate to fifty percent, but has failed to reverse the trajectory of price increases and has lowered consumer sentiment. Dealira weakening and early trading.
Well back here in the US, when Congress comes back from Easter break, aid for Ukraine is on the top of the to do list. Let's get more from Bloomberg's Ed Baxter.
High Speaker Mike Johnson has promised to bring it to the floor and Congress from Mike Turner on CBS has heard on Bloomberg says he expects it to move quickly.
The Speaker has made very clear statements that when we get back, it's the next top agenda after having just passed all the bills that fund the federal government. I believe this is going to have overwhelming support in Congress, and we'll put a bill on the President's desk.
Johnson could very well face an oust move, as it has already been introduced by congress Wan Marjorie Taylor. Green Democrats have said they would likely save Johnson if Ukraine aid passes at Baxter Bloomberg.
Radio Right, and thanks now to the latest on the bridge collapse in Baltimore. Ports along the East Coast are modifying their operations to take in more cargo. Economists say they broadly expect the fallout from the disaster to be contained as other ports work longer hours to take up the slack. Despite that, Transportation Secretary Peat Buddha Judge says there's no timeline yet for reopening the Baltimore Channel.
It's not just that you have to remove the wreckage, it's that you have to do it in a way that doesn't cause portions of the bridge that are there across the water to shift. They've been under a lot of compression and tension. They could behave almost like a spring if they are not expertly managed.
Transportation Secretary peat Buddha Judge says the reopening the reopening of the ports safely is a major priority. He made the comments on CBS's Face the Nation. You can catch the program's Sunday afternoons right here on Bloomberg Radio.
All right, thanks Karen. A big data breach has been discovered at one of the country's largest telephone operators. We get details in this report from Bloomberg's Jeff Bellinger.
At and T says personal data from about seventy three million current and past account holders was leaked onto the darkweb. The company says the data, leaked about two weeks ago, includes personal information such as social security numbers and appears to be from twenty nineteen or earlier. The source of the data is still being investigated, and it is not known whether it came from the company or a vendor. AT and T says it has reset the pass codes
of about seven point six million account holders. AT and T is the nation's third largest retail wireless carrier, behind Verizon and T Mobile. In February, the company experienced a widespread outage that took hours to resolve, prompting an investigation by the federal government. Jeff Bellinger Bloomberg Radio.
Thanks Jeff as sure as of AT and T down almost two percent in early training.
On Asia, John A private measure of China's manufacturing expanded in March, and Bloomberg's Brian Curtis has more from Hong Kong.
The Taishien Manufacturing PMI rose to fifty one point one, the highest in more than a year. That was up from fifty point nine in February, and it adds to signals that the industrial side of the economy is stabilizing. The official PMI released on Sunday also showed activity expanding last month. That was for the first time since September, but home sales dragged the value of sales dropping forty six percent from a year earlier, and that's keeping consumers
at bay in Hong Kong. Brian Curtis, Bloomberg Radio.
All right, Brian, thank you. It 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. Israeli Prime Minister Benjamin det Yahoo is undergoing surgery for hernia as anger mounts against his failure to bring home the hostage is still held by Hamas families of the hostages joined thousands who demonstrated in Jerusalem demanding a deal to return them home. Horns blared in the largest demonstration seen so far held in Jerusalem since the war began. About one hundred thousand people were in the streets, with anti government protesters and many families of the hostages
now joining forces. Here in the US, the unfolding human catastrophe in Gaza is dividing the Democratic Party. The Biden administration has moved in recent weeks to fulfill agreements to ship more fighter jets and two thousand pound bombs to Israel while still waiting for assurances from NET and Yahoo not to invade Rafa inside Gaza and to increase aid shipments. However, Maryland Democratic Senator Chris van Holland criticizes the way the Biden administration is handling Israel's war in Gaza.
Net Yahoo continues to essentially give the finger to the President the United States, and we're sending more bombs.
That doesn't make sense.
Senator Van Holland spoke on ABC's This Week Heard Sundays on Bloomberg. Pope Francis, recovering from respiratory problems, led about sixty thousand people in Easter celebrations to make a strong appeal for a ceasefire in Gaza and a prisoner swap between Russia and Ukraine. Francis presided over Easter Sunday Mass in Saint Peter's Square Church. Services and masses were held across Baltimore on Easter Sunday to remember those who died
in the collapse of the Francis Scott Key Bridge. Reverend Akoe Walker at Sacred Heart of Jesus Church remember the six construction crew workers who were on the bridge and presumed dead.
Yes, we can rebuild a bridge, but we also have to look at the way in which migrant workers are.
Treated on how best we can improve their situation.
As they come to the United States of America to make the United States of America better.
Please.
Two other workers survived New York. A fire in a Brooklyn church during Easter Sunday services prompted dozens of worshippers to flee the burning building. About one hundred and fifty people were worshiping in Our Lady of the Rosary of Pompeii when smoke billowed in from a fire in the rectory attached to the rear of the church. This man was one of the worshippers.
Everything to go black, so everybody get up, get get up, so everybody get all fed, running and everybody.
A closed door had kept the fire from spreading from the rectory into the church itself. Fortunately there were no serious injuries. Global News twenty four hours a day and whenever you want it with the Bloomberg News Now Michael Barr and this is Bloomberg Karen.
Sorry, Michael Barr, thank you time now for the Bloomberg Sports Update, brought to you by Tri State Audi. Here's John stash hour, John.
Thanks Karon and CAA tournament. Four teams left headed next week into Phoenix Peril one seeds, You Come and Produe a four seed in Alabama and Cinderella and S an eleven seed, a team that finished in tenth place in the ACC surprisingly won the tournament. That's how they got an NCAA invite, and they wins have continued. The wolf Pack upset Duke, just as they did at the ACC tourny seventy six sixty four, DJ burns twenty nine points. Per Due got forty from its big man Zachi Eed.
He got by Tennessee seventy two to sixty six. The Bals got thirty seven in defeat. From there, All American Dalton connect NC State women also going to the final four and upset of their own, beating top seed in Texas, South Carolina for the second UNI row will bring a thirty six to ohero record to the Final four. At the Guard nixt to a ten point lead to the fourth quarter, lost by one to Oklahoma City, won thirteen
one to twelve. Shay gilgis Alexander who won it for the thunder, scoring with under two seconds left at Barkley's forty points for thirty nine year old Lebron James. Lakers beat the Nets one sixteen, one oh four. The Yankees are four to oh. It's only the fourth time in seventy four years they have started a season like that. Juan Soto big part in all four wins in Houston. He was at the plate with two outs of the ninth to eight of a tie game.
There goes tours?
The third fish line pasent whatlve field? How do I like that? Taurus scores? The Yankees take a four to three lead. Oh is he good?
Ho? No?
We love Sodo.
Wf an what's not to love? Soto hitting five twenty nine. The Mets first zero and three start in a decade in Milwaukee. One again at City Field, four to one, red Sox one in Seattle, Nationals gave up three in the ninth, lost in Cincinnati. Yonick Center won the tennis in Miami. John stash Thatward Bloomberg Sports Karen.
John, all right, John, thank you, And futures are at rising this morning, S and P. Futures up a third of up percent or twenty points down. Futures up three tenths of up percent or one hundred eleven points, Nasdaq futures up half percent or one hundred points, and the ten year Treasury up three thirty seconds. They yelled four point one eight percent.
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.
And it's fine fourteen Wall Street. This morning marks the first day of trading since we received the fans preferred gauge of underlying inflation, that's the Core Personal Consumption Expenditures Index. We also got comments from Jay Powell on Friday. Right now, let's get you set up for the trading day, and I'm happy to say we're joined in studio by Lori Calvacina, ahead of US Equity Strategy at RBC Capital Market. It's pleasure to see you. Thanks for being with us, Thanks
for having me Core PCE cooled. I guess that's the takeaway. Is this what traders have been waiting for?
So Look, I don't think there are any major surprises here from my end. I mean, we've generally been looking for a moderation and inflation At RBC, our guys cautioned me very early, you know, in the year, late last year, that there are going to be some bumps in the road. And for now the thesis still seems to be intact, and our guys still think we're headed for June.
Cuts, June cuts and what after that? How many cuts this year?
So we originally had been looking for five as a house. They've dialed it down now to three. I will say, our guys were never in the March camp, so I think we've had less distance to travel to get to where our current assumptions are. So we haven't really been you know, overly, you know, kind of negative reacting to some of the negative adjustments that have happened, kind of the dialing down of expectations. But they think the FED wants to get started and then we'll go slow.
The FED has a gigantic balance sheet. They're starting to trim it. Should we we be worried about that? Will that have much of an impact in markets? Or can they handle that in such a way that it's going to have a minimal impact?
You know, It's funny. I'm a little bit of a data nerd, and we had done some analysis trying like that lot. I know, I know, it's kind of my thing, but you know, there had been a period of time post GFC where the FED balance sheet really seemed to be driving the pe multiple in the S and P five hundred that really broke down last year. I think the FED has done a good job of sort of pushing, you know, the balance sheet to sort of a side.
From an equity market perspective, it's just not as in focus and as much of a driver as.
It used to be and to the quarter much in terms of rebalancing and portfolios and how how is that impacting things?
So look, I.
Think at the end of the quarter, you know, we saw some funny moves.
You know.
From my perspective, what I thought was interesting was that the Rustle two thousand had a strong finish, and so the idea that we've really been looking for signs that the leadership rotation in the market is going to get underway. To me, that was the most sort of interesting kind of short term stuff we saw at the end of the quarter. And I think this market is itching to rotate. Anything I put out on the mag seven, I feel
like that's the chart everybody looks for. I think there's a lot of you know, sort of concern that we've had some false starts on that leadership rotation, But I think investors are ready to do something different. So that's what I'd be looking for going leadership rotation.
That's a healthy sign for.
Marcus, I think it is. I think we're due for one big catch up trade in the market from you know, kind of everything outside of the MAG seven, whether it's small cap, whether it's you know, kind of the non tech sectors. If you look at the PE and the market X the MAG seven, it's trading around sixteen times. The MAG seven's been trading between twenty seven and twenty eight times on a forward PE and kind of a round pas peak. So I think there's room for the
rest of the market to kind of catch up. I'm not saying we have to get quite that over valued, but there's room for the rest of the market to make a move.
Do you see conflicting cross currency in markets? What are they?
If you do so, I would say on the positive side, GDP forecasts have moved up tremendously since the start of the year, kind of moved us back into a range that's typically favorable for stocks. From one you know, kind of a sluggish range that was anticipated to start the year as lousy for stocks. We've moved out of that. But sentiment is pretty enthusiastic right now, whether you're looking
at AAII survey or the weekly CFTC data. So I do expect to get a pullback at some point in time, but you know, I've been looking for one for a while and we haven't gotten it yet.
You're a little more neutral on risk. Does that indicate some degree of bearishness on your part? That's thirty seconds.
Yeah, I would say, Look, we're not in the bear camp. We do feel like the market is fairly priced at this particular moment, though, all right, just give.
Me a preview of earnings. Ten seconds.
So, look, it's going to be all about margins and how good companies are at expanding them. We're modeling flat, but there's room for upside.
Okay, And your year end price target for the S and P five and I'll throw one more in for you, lord.
Okay, what is it.
We're at fifty three hundred and we just nudged that up. Some of our models can get us to around fifty four hundred or a little bit higher.
Glory Calvesina ahead of US Equity Strategy at RBC Capital Markets in studio with us. This morning, you're listening to Bloomberg Daybreak Today, your morning brief on the story's making news from Wall Street to Washington and beyond.
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I'm John Tucker and I'm Karen Moscow.
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