From the Bloomberg Interactive Burgers Studios. This is Bloomberg day Break for Monday, May eighth.
Coming up today, Janet Yellen warns of a constitutional crisis over the debt ceiling.
Joe Biden trails Donald Trump in a new presidential poll.
Pac West extends gains after Friday's.
Record search, and Wall Street awaits two key readings on inflation.
Protests continue over last week's depth of a homeless New York subway writer. Glass of vigil was held in Allen, Texas for those killed in the latest mass shooting. I'm Michael Barr.
More ahead, I'm John staph Shown sports lost US with the Mets and Yankees. The Devil's won Game three. The Knicks have their game board tonight.
That's all straight ahead on Bloomberg day Break, The business news you need to starn 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.
Treasury Secretary Janet Yellen says there are no good options for solving the issue. Other than Congress lifting the cab. Yellen says the White House invoking the fourteenth Amendment is not a good option and could provoke a constitutional crisis.
All I want to say is that it's Congress's job to do this. If they fail to do it, we will have an economic and financial catastrophe that will be of our own making. And there is no action that President Biden in the US Treasury can take to prevent that catastrophe.
Treasury Secretary Yellen made the comments on ABC's This Week. You can catch the program every Sunday on Bloomberg Radio.
Well Nathan. While the president tries to reach a debt ceiling deal, he's also struggling on another front. The president's approval rating has now reached a career low. Amy Morris has details from our Bloomberg ninety nine one news room in Washington.
The ABC News Washington Post poll finds Biden's approval rating at thirty six percent, six points lower than in February. Some fifty six percent disapproved of Biden's performance. Sixty eight percent say President Biden, who is eighty, is too old to serve a second term. Biden is lagging behind Donald Trump and early voter preferences for the twenty twenty four election.
The poll shows voters rated Trump's physical health and mental acuity higher than Biden's, and they believe he did a better job with the economy than Biden has done so far. In Washington, I'm Mamy Morris Bloomberg Daybreak.
Thanks Amy Meantime, President Biden's unveiling plans today that could affect travel around the country. He's looking to make things easier for passengers who experience flight delays or cancelations. The President will announce new rules that could require airlines to provide meals, hotels, and additional compensation to travelers uncanceled or severely delayed flights. The move comes ahead of an expected spike in summer travel.
Well. Turning to the economy, now, Nathan, A few key economic reports this week have an impact on FED policy. We get data on consumer prices this Wednesday, followed by a reading on producer prices on Thursday. We get more from Bloomberg Economics correspondent Michael McKee.
We get two CPI reports, two jobs reports before the next FED meeting, and one PCE so we will have the opportunity to see a couple months worth of inflation data. It may or may not have a bearing on what they do the next month, but if it does come down, that will feed into this narrative that maybe.
We're going to get out of this not without.
A recession necessarily, but without having a real slowed down or forcing the Fed to raise rates so much more.
And Bloomberg's Michael McKee says economists expect Wednesday CPI report to show prices increased four tenths of a percent in April, and that would bring the annual inflation rate to five percent.
So there's economic data and the debt ceiling careen, but let's not also forget about earnings. Wall Street gets more of those to digest. This week. We get a preview from Bloomberg's Charlie Pellett.
There are ongoing concerns over turmoil in the financial sector, of the debt ceiling, sticky inflation, and economic growth. Sarah Mallick is chief investment officer at Neuven.
Revenue growth has been positive, but it basically significantly has pricing power in it rather than volume growth. And if in inflation is rolling over, so I think it's going to be hard for companies to hold onto that pricing power. That's another leg that will take earnings down and that I think then at the S ANDP looks expensive.
Among some of the companies reporting this week, Apollo Global Management, Devon Energy, Duke Energy, Occidental Petroleum, PayPal, and the Walt Disney Company in New York, Charlie Palett Bloomberg Daybreak. All right, Charlie, thanks well. Over the weekend, we got earnings from Berkshire. Hathaway Warren.
Buffett's conglomerate reported in almost thirteen percent gain in operating earnings to post results of more than eight billion dollars in the first quarter. However, Buffett expects earnings at the majority of Berkshire's operations to fall this year, he says as a long predicted downturn will slow economic activity.
Seeing regional banks continue their bounce back this morning, Karen Pack West, which surged eighty one percent on Friday, is up another thirteen and a half percent this morning. The bank slashed its quarterly dividend and said business remains sound. Western Alliance is also gaining. It's up nearly five percent after soaring forty nine percent on Friday.
Even so, Nathan, this year's banking turmoil is winging on the sector. Overall regional bank shares and the S and P five hundred are down forty percent on the year, and the recent selloff threatens to push broader bank shares below a technical threshold that could say no more pain ahead. The S and P five hundred Financials indexes on the verge of falling back below its two thousand and seven peak, and we get more from Bloemberg Market's reporter Valerie Titel.
You think about what happened after thousand and two thousand and eight, and that hit to the banking.
Sector took a decade to clawback.
And now we're teetering about to fall below those two thousand and seven highs. And you have to think of that with the backdrop that it looks like monetary policy is going to say restrictive for longer. Given Friday to Day's hot payroll report, it doesn't look like the labor market in the US is starting to turn, and the Fed is not going to pivot into cuts until they start to see some real weakness there.
In Bloomberg's Valery Titels, as we'll get an update on how banks are adapting to the turmoil on the fence quarterly lending Standards survey, and that's due out later today.
Time out to take a look at some of the other stories making news in New York and around the world. For that, we're joined by Bloomberg's Michael Vahr.
Good morning, Michael, Good morning, Nathan. New York protesters are demanding justice in the choke old death of thirty year old Jordan Neely in the subway. The corner has ruled the death of homicide. The Manhattan District Attorney's office is investigating the case, which could go before a grand jury this week. The twenty four year old man Daniel Penny, who allegedly caused Neely's death, says he was defending himself
after Neely aggressively threatened him and others on board the train. Meanwhile, some demonstrators supporting Neely jumped on the tracks, preventing the f train from arriving.
It is devastating and it was absolutely preventable and the city and the state have failed us again.
Police arrested thirteen people over the weekend. The city of Allen, Texas, held a vigiled yesterday and for the eight people killed and seven injured during a weekend mass shooting in a shopping mall. Governor Abbott and Lieutenant Governor Patrick were among the crowd at Cottonwood Creek Church, which hosted the vigil. Alan Mayor ken Folk also spoke at the vigil.
We will not let the actions of one individual impact our resolve. We will band together as a community and will emerge even stronger. But in this time of sorrow, please continue to pray for the victims and the families of the victims.
The gunman was killed. President Biden ordered flags flown and half staff, denouncing the violence as senseless. In Brownsville, Texas, yesterday, an suv plowed into people gathered near a migrant shelter, killing eight. The shelter's director said that the facility surveillance video showed an suv running a light and crashing into people's sitting at the bus stop. Victor Maldonado runs the Ozamanam Center, a shelter serving people in need of emergency housing assistant.
It's is tragic. I mean, we've never had a situation like this happening, you know, here at the shelter or in the city.
Maldonado says. Some of the victims were migrants. Closing arguments began today in the New York civil assault and defamation trial against former President Donald Trump. He decided not to testify in his own defense. Author e Jen Carroll claims Trump sexually assaulted her in a Bergdorf Goodman dressing room
in the nineteen nineties. Jury deliberations are expected tomorrow. Global News twenty four hours a day, powered by more than twenty seven hundred journalist nanailists in over one hundred and twenty countries. I'm Michael Barr, and this is Bloomberg, Nathan. Thank you, Michael.
Time now for our Bloomberg Sports Update. Good morning, John Stanshout.
Good morning, Avan mess and Yankees combined to win two two one hundred regular season games last season. Things not going so well this year, and both they're looking at already large deficits in their divisions. Mets look City Field lost to Colorado thirteen to six. Rockies hit two home runs of the seven run fifteen. The Mets have now lost five to the last six, eleven of the last fourteen, and Atlanta keeps winning.
The Braziers seven games ahead.
Looked as if the Yankees were.
Gonna win the series at Tampa Bay got six to nothing with Garrett Cole on the mount. In seven starts, Cole had not allowed more than two runs.
He allowed six.
Raise took the lead.
Yanks tied at the Raise one eight to seven.
In ten.
It is there now twenty eight and seven. They are ten games ahead of the Yankees, who are expecting to get Aaron Judge back tomorrow via Blue who passed away at seventy three. As a twenty one year old. Pitching for Oakland, Golo won the Cy Young and MDP Awards. Familiar script for the Devils, who lost games one and two to the Rangers by combining ten to two, but then won the series. They lost the first two to Carolina by a combined eleven to two, but they won
Game three in Newark eight to four. Jack Hughes two goals to assist brother Luke added two assist seattlebey Dallas seven to two, surprising Florida one again three two and overtime over Toronto. Sixers beat the Celtics in overtime. That series tied to two. So are the Nuggets and Sons Phoenix one game for an incident in that game when Denver Starr Nikoliochers took the ball from a fan made contact with him, and that fan was Matt as Bia, who owns the Sons. Jocus contended it was Ishbia who
first made contact with him. Next to their two losses to the heat of shot, only fifteen of seventy four on three point ers. Game four is tonight in Miami. John stash Hellen.
Bloomberg Sports.
Live from coast to coast, from New York to San Francisco, Boston to Washington, d C. Nationwide on SiriusXM, the Bloomberg Business app in Bloomberg dot com. This is Bloomberg Day Break. Good morning, I'm Nathan Hager.
We are kicking off a new trading week that could be dominated by concerns over the debt impasse in Washington, the health of regional banks as well. That says the Federal Reserve appears on course to keep interest rates elevated after another strong monthly jobs report. Well, this week's inflation
data changed the calculus for this central bank. Let's bring in Dennis Gartman to get this trading week started, chairman of the University of Akron Endowment Investment Committee, and of course, the former publisher of the Gartman Letter, Dennis, good morning. What's the biggest market risk for you right now?
I think the biggest risk is the fact that people, including yourself, called the employment number on Friday a strong number. Let's be honest, it really wasn't that strong.
There.
Revisions were one hundred and forty thousand down for the previous month, and actually almost all in fact, all of the increase was predicated upon the birth death adjustment number, which was plus three hundred and eighty thousand. It's the largest number of the year. We'll probably start to see some lesser numbers on the birth death adjustment. So I think that the non farm payrolls number was actually almost clearly almost negative if you take out the birth the
birth death adjustment phenomenon. So let's be honest, it was not that strong a number. And I was quite surprised by the response by the stock market, with the Dow gaining what five hundred points during the course of the day. That caught me rather off guard. I'm I'm somewhat bearish of stocks, marginally, so in my own account, I'm short about seven percent. I've got a large cash position, a large position in a two year note, and a somewhat
larger position in gold. So I'm short a little bit of stocks, long a little bit of gold that basically predicated upon the uncertainty regarding the economy. My biggest position is in the two year note, and I'm comfortable sitting right there essentially on the sidelines.
All Right, So you have been pretty bearish on this market for quite some time. Are you raising your forecast for a recession coming out of the data that we've seen.
I think that when the data is actually revised, I think given the fact that we've revised downward the non farm payrolls number by one hundred and forty, which is a big number, I think we may well be already in recession. It depends on which industry you're in. If you're in the if you're in the commercial real estate,
there's no question you're in recession. If you're in retail business, you're probably worried about being the in recession, and if you're in some if you're in travel, you're you're wondering, how can it be any better than what we've got? So it depends upon which industry you're in. But I think on balance, when we when the NBER sits down in several months and looks back and says the recession began probably in the first quarter of this year. Tom will tell right now.
You've also said that you believe that the Fed is going to keep interest rates higher for quite a bit longer than the market is expecting. If we are starting to get the data showing the possibility of a recession sooner than expected, could that cause the Fed to bring rates down sooner than expected?
The Fed will be slow in responding. To be quite honest, the Fed is always slow. They're always laid to the adjustment, either to tighten or to ease. I've maintained that the Fed will be holding interest rates higher for a longer period of time, listening to what mister Powell has said and basically reverberating or or reiterating what he is always what he has commented upon. I think the odds of the SAD pivoting and reducing interest rates by the end
of the year are negligible, borderline zero. I think it'll be early in twenty twenty four before the Fed considers the possibility of lowering the overnight FED funds. Right, so it's a long ways into the future.
And I also heard you say that you're comfortable staying in two year treasuries. Where do you see treasury yields going in this environment?
Probably not much direction either way. We haven't gone far either way in the course of the past several months, and I think we're going to sit essentially where we are right now. So holding short term interest rates or holding short term positions, either in short term te bills or two year notes is probably the place to be for the next twelve to eighteen months. I don't think there'll be much movement and in the state direction higher or lower from here.
In our last minute here, Dennis, we've seen a rally at least in the last couple of days in regional bank stocks. What's your outlook for the regionals and the impact that they could have on the brighter stock market.
I think we've probably had too much bearishness in the regional bank stocks. If there's one area in the economy where you want to be a buyer, buying the regionals, especially in the southeast here in the United States. So I think that's a very good place to go hide for a while. If you must hold equities, holding them in regional bank stocks that have I think been decimated and unduly so over the course the past month and
a half or so. So that's one of the few areas that I can actually put together a bullish pheno, a bullish posture.
This is Bloomberg Daybreak Today, your morning brief on the stories making news from Wall Street to Washington and beyond.
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