Speaker 1: Good morning.
Speaker 2: I'm Nathan Hager and I'm Karen Moscow. Here are the
Speaker 2: stories we're following today.
Speaker 3: We begin with major news on the political front. The
Speaker 3: New York Times is reporting former President Donald Trump may
Speaker 3: have shared potentially sensitive information regarding US nuclear submarines. Bloomberg
Speaker 3: Zed Baxter has the story.
Speaker 4: The shared information reportedly included how many nuclear warheads US
Speaker 4: submarines carry and how close they can get to a
Speaker 4: Russian submarine without being detected, part of a conversation after
Speaker 4: Trump left office at mar A Lago with Australian businessman
Speaker 4: Anthony Pratt, who runs one of the world's largest cardboard companies.
Speaker 4: The report says Special counsel Jack Smith has reviewed the claims.
Speaker 4: A Trump spokesperson says the DOJ should be looking into
Speaker 4: criminal leaking instead of perpetrating baseless witch hunts. I'm at
Speaker 4: Baxter Bloomberg Radio.
Speaker 2: All right, ed, thank you. While former President Trump effaces
Speaker 2: this new accusation, he's getting even more involved in the
Speaker 2: speakership fight on Capitol Hill. Trump is endorsing Congressman Jim
Speaker 2: Jordan over Steve Scalise, calling him a star on his
Speaker 2: truth social account. A fellow conservative Republic and Congressman Byron Donald,
Speaker 2: so Florida says he supports Jordan too.
Speaker 5: Jim Jordan can stept right into the top leadership spot,
Speaker 5: lead our conference and get us back focused on not
Speaker 5: just doing the appropriations process, but also the accountability of
Speaker 5: this administration and the Democrats up here on Capitol Hill
Speaker 5: number two. Jim Jordan has been in the center of
Speaker 5: our political battles for quite some times. He knows the pitfalls.
Speaker 2: Congressman Byron Donald spoke with Joe Matthew and Marie hor
Speaker 2: Dern on Balance of Power. Catch the show weekdays at
Speaker 2: five pm Eastern on Bloomberg Television.
Speaker 3: Turning to the White House, Karen, President Biden maybe getting
Speaker 3: closer to firming up a meeting with Chinese President she
Speaker 3: Jen Ping next month, sources tell Bloomberg. Both the US
Speaker 3: and China have been scouting sites where the two leaders
Speaker 3: could get together at next month's APEC summit in San Francisco.
Speaker 3: President She hasn't sat face to face with President Biden
Speaker 3: since the G twenty in Bali, Indonesia, last November.
Speaker 2: While turning to the economy, now, Nathan wall Street is
Speaker 2: racing for the September jobs are poored economists expect the
Speaker 2: data to show employers added one hundred and seventy thousand
Speaker 2: workers to payrolls last month, and we get a preview
Speaker 2: from Bloomberg's Michael McKee.
Speaker 6: It's not what the Fed does, or, to a lesser extent,
Speaker 6: what it says. It's how the market reacts to the
Speaker 6: September payrolls report that will matter. Bond deals have leaped
Speaker 6: upwards in the past few weeks, tightening financial conditions and
Speaker 6: raising recession worries. The Bloomberg Economists' consensus forecast calls for
Speaker 6: slower job growth, but Wall Street's Whisper Numbers suggests traders
Speaker 6: are positioned for a strong payrolls report. It may be
Speaker 6: a classic case of good news being bad news for
Speaker 6: the markets, and have Fed trying to slow labor demand
Speaker 6: to keep inflation in check. Michael McKee, Bloomberg News.
Speaker 2: Mike, thank you. Be sure to stay with Bloomberg for
Speaker 2: the job's numbers coming at eight thirty Wall Street Time.
Speaker 7: Now.
Speaker 3: If the labor market and inflation continue to cool San
Speaker 3: Francisco Fed as it in, Mary Daily says, policymakers could
Speaker 3: hold interest rates. Daily spoke with Bloomberg's Lisa Abramowitz at
Speaker 3: the Economic Club of New York.
Speaker 8: If we continue to see a cooling labor market and
Speaker 8: inflation heading back to our target, we can hold interest
Speaker 8: rates study and let the effects of policy continue to work.
Speaker 8: Even if we hold rates study exactly where they are today,
Speaker 8: policy is going to grow excreasingly more restrictive as inflation
Speaker 8: and inflation expectations fall.
Speaker 3: And you can hear the full conversation with San Francisco
Speaker 3: Fed President Mary Daily on the Bloomberg Talks podcast.
Speaker 2: Feed Well Nathan as the Fed and investors the way
Speaker 2: that jobs report. Credit markets are on course for the
Speaker 2: worst week since the global banking turmoil in March. A
Speaker 2: selloff and treasuries pushed up risk premiums on concerns interest
Speaker 2: rates may stay higher for longer.
Speaker 3: Oil is also on course for its worst week since March.
Speaker 3: Karen concerns over the global economy clouded the demand outlook.
Speaker 3: Commodities have been rocked by gains in the dollar and
Speaker 3: a surgeon bond yields and checking prices. Now nimexcrued is
Speaker 3: at eighty two twenty four a barrel well, I mean,
Speaker 3: maybe on.
Speaker 2: The verge of a huge deal in the oil industry.
Speaker 2: Bloomberg has learned Exon mobils and talks to acquire pioneer
Speaker 2: natural resources. We get more from Bloomberg Energy reporter Anthony D.
Speaker 2: Paola oil companies like Exon are flushed with cash and
Speaker 2: they're looking for close to use it.
Speaker 4: So they've been doing a lot of things like giving
Speaker 4: cash tractor shareholders.
Speaker 9: Investment is becoming less and less popular because of ESG concerns,
Speaker 9: So this is a good use of cash.
Speaker 2: And that's Bloomberg Energy reporter Anthony Dpaola, who says if
Speaker 2: the deal is completed, it would be Exon Mobile's biggest
Speaker 2: since nineteen ninety nine. The Wall Street Journal says the
Speaker 2: transaction may be worth as much as sixty billion dollars.
Speaker 3: Now to the latest developments in the Sam Bankman Freed
Speaker 3: trialcaren two of the closest friends of the FTX co
Speaker 3: founder took the stand. Bloomberg Legal reporter Ava Benny Morrison
Speaker 3: says one was another FTX founder and Bankman Freed's math
Speaker 3: camp buddy, Gary Wong.
Speaker 10: We walked into the court, he didn't make eye contact
Speaker 10: with Sam. He sat in the witness books and we're
Speaker 10: speaking very quickly. Could tell he was a little bit nervous.
Speaker 10: He said that yes, he committed financial crime with Stateman Freed.
Speaker 10: See also the code that allowed Alameda to borrow billions
Speaker 10: of dollars from FTX and hit it from the public.
Speaker 3: And Bloomberg Save of Benny Morrison says an mit class
Speaker 3: made also testified bankmin Freed confided about a potential eight
Speaker 3: billion dollars shortfall at FTX from loans to Alabeda five
Speaker 3: months before both companies collapsed.
Speaker 2: And breaking news Nathan the Nobel Peace Prize has been
Speaker 2: awarded to imprisoned activists and Nargist Mohammadi for a fighting
Speaker 2: oppression of women in Iran. Time now for a look
Speaker 2: at some of the other stories making news around the world.
Speaker 2: For that, we're joined by Bloomberg's John Tucker. John, Good Morning, Good.
Speaker 11: Morning, Karen. Among some of the other stories were following
Speaker 11: former President Trump dropping a five hundred million dollar a
Speaker 11: lawsuit against his ex lawyer Michael Cohen, a spokesperson for Trump,
Speaker 11: stated that the former president intends to revisit the lawsuit
Speaker 11: after dealing with what he said were the witch hunts
Speaker 11: against him. Trump was scheduled sit for a deposition of
Speaker 11: the Coen case on Monday, the same day as a
Speaker 11: campaign event in New Hampshire. We're learning more about the
Speaker 11: cost of that casino hack at MGM Resorts International. That
Speaker 11: story in this report this morning from Bloomberg's Charlie Pellnett
Speaker 11: one hundred million dollars. The hack shut down many services
Speaker 11: at its casino hotels. The company also said it incurred
Speaker 11: less than ten million dollars in expenses related to technology,
Speaker 11: consulting services and legal fees. MGM is the largest casino
Speaker 11: operator on the Las Vegas Strip. It said the impact
Speaker 11: of the hack is contained at this point. In New
Speaker 11: York Charlie Pellett, Bloomberg Daybreak, Tens of thousands of healthcare
Speaker 11: workers at Kaiser Permanente are walking the picket lines on
Speaker 11: the final day of their three day strike, seventy five
Speaker 11: thousand workers with one of the largest US medical employers
Speaker 11: for demanding higher wages and better working conditions. Caroline Lucas
Speaker 11: is executive director of the coalition of Kaiser Permanente unions.
Speaker 12: We are having overwhelming from existing Kaiser patients who have
Speaker 12: called email to showed up to our strike clients to
Speaker 12: tell us that they are overwhelmed and tired by the
Speaker 12: Kaiserweight to get appointments today.
Speaker 11: Both the union and Kaiser say the strike is affecting services.
Speaker 11: More than fifty dead after a Russian missile strike against
Speaker 11: a village in northeast Ukraine, one of the deadliest missile
Speaker 11: strikes since the beginning of the war. And Elon boss
Speaker 11: Ex Corporation formerly known as Twitter, testing three tiers of
Speaker 11: premium service, which would allow the commody to charge customers
Speaker 11: different amounts depending on how many ads are shown. The
Speaker 11: premium plan, which currently cost seven ninety nine a month,
Speaker 11: would be split into Basic, Standard, and Plus variations. Global
Speaker 11: News twenty four hours a day. We're powerpying more than
Speaker 11: twenty seven hundred journalist and analysts and more than one
Speaker 11: hundred and twenty countries. I'm John Tucker, and this is
Speaker 11: Bloomberg Karen, all.
Speaker 2: Right, John, thank you well. We bring you news throughout
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Speaker 2: You can listen and subscribe to Bloomberg News Now on
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Speaker 2: and anywhere else you get your podcasts. But it is
Speaker 2: time now for the Bloomberg Sports Update. Here's John stash
Speaker 2: Hour John Karen.
Speaker 9: Before the Bears took the field at Washington, they learned
Speaker 9: of the passing of Dick Buses. At the age of
Speaker 9: eighty A Chicago went through and through, grew up on
Speaker 9: the South Side, went to the University of Illinois. The
Speaker 9: Bears took him as the third pick of the nineteen
Speaker 9: sixty five draft. Spent his entire nine year career in Chicago,
Speaker 9: and he was an All Pro in each of the
Speaker 9: first eight seasons. A first ballot Hall of Famer, known
Speaker 9: for the ferocity for which he played with. The Bears
Speaker 9: hadn't won a game in almost a calendar year, and
Speaker 9: yet they won at Washington forty to twenty. It was
Speaker 9: a huge game from Chicago receiver DJ Moore. He was
Speaker 9: asked later if he realized just how many yards he had.
Speaker 13: I felt like it was people was like, do you
Speaker 13: know how many yards you got? I'm like, please don't
Speaker 13: tell me. That's not thanks tonight, and let's just focus
Speaker 13: on his win. But when we got when we got
Speaker 13: off the field. It was all everybody telling me what
Speaker 13: I did, and it was good.
Speaker 9: Moore had two hundred and thirty yards in receptions. He
Speaker 9: scored three touchdowns the Bears and a fourteen game losing
Speaker 9: Street Baseball postseason continues tomorrow at the start of the
Speaker 9: Division Series, and a couple of future Hall of Famers
Speaker 9: will be on the mound. Justin berlind Are in Houston
Speaker 9: against Minnesota Clayton Kershaw in LA as the Dodgers take
Speaker 9: on Arizona. WNBA is expanding. San Francisco will join the
Speaker 9: league in twenty twenty five. Joe l Embiid latest to
Speaker 9: commit to playing the Olympics fourth USA in Paris next summer.
Speaker 9: He could have played for France or Cameroon. Lebron, James
Speaker 9: dep Curry, Kevin Durant all expected to play as well.
Speaker 9: John Stanshiedward Bloomberg Sports.
Speaker 7: From coast to coast, from New York to San Francisco,
Speaker 7: Boston to Washington, DC, nationwide on Sirius Exam, the Bloomberg
Speaker 7: Business app in Bloomberg dot Com. This is Bloomberg Daybreak.
Speaker 4: Good morning.
Speaker 3: I'm Nathan Hager. If the labor market and inflation continue
Speaker 3: to cool and financial conditions remain tight, Federal Reserve could
Speaker 3: keep interest rates on hold. It's a lot of ifs.
Speaker 3: That is what we're hearing from San Francisco FED President
Speaker 3: Mary Daily. Bloomberg's Lisa Bromwoitz spoke with Daily at the
Speaker 3: Economic Club of New York.
Speaker 8: Let's go back to the June SEP where if you remember,
Speaker 8: or maybe you don't, I'll remind, in the June Summari
Speaker 8: of economic projections there were two more rate hikes projected
Speaker 8: for this year. Then in July we took one of
Speaker 8: those rate hikes and another one in the September SEP
Speaker 8: was the median outlook. But the bond market has tightened
Speaker 8: quite considerably over about thirty six basis points since we
Speaker 8: met in September. Well, that is equivalent to about a
Speaker 8: rate hike, right, and so then the need to do
Speaker 8: tightening additionally is not there. So from my own perspective,
Speaker 8: that's what I look at. My job as I see it.
Speaker 8: Our job, as I see it, is not to tighten,
Speaker 8: just do our part. It's to watch financial conditions. Because
Speaker 8: monetary policy works, We raise the funds rate and it
Speaker 8: moves through all the other interest rates. If financial conditions
Speaker 8: are sufficiently tight, our work is not necessary because we
Speaker 8: don't need to boost them more. Yeah, does that makes sense?
Speaker 14: Absolutely? And reach clared I said, the rise and yields
Speaker 14: actually does the Fed's job for it. Would you sympathize
Speaker 14: with that kind of sentiment?
Speaker 8: That is actually how it works, right if financial conditions tighten.
Speaker 8: I mean, one of the things that's happened in the
Speaker 8: last ninety days and certainly in the last few weeks,
Speaker 8: is that financial markets have collectively seem to take on
Speaker 8: board a variety of things. But one of the things
Speaker 8: that I heard from many commentators and many of the
Speaker 8: market outreach I do is that they have a general
Speaker 8: understanding now that we are committed at the FOMC to
Speaker 8: keeping rates higher for longer in an effort to bring
Speaker 8: inflation fully back down to two percent. And that recognition,
Speaker 8: along with all the other factors we could put in
Speaker 8: a list about why bond yields have risen, are affecting
Speaker 8: certainly the financial conditions and the tightening. And I see
Speaker 8: that as a positive outcome that we would have tighter
Speaker 8: financial conditions, because then we can really get the job
Speaker 8: done of putting inflation.
Speaker 2: Back to rest.
Speaker 14: One is a sell off, something that's welcome from a
Speaker 14: perspective of finding the market is coming to terms with
Speaker 14: what the FED has been saying, and when is it
Speaker 14: disorderly disruptive on a level that causes concern.
Speaker 8: You always want an orderly repricing over a disorderly repricing.
Speaker 8: And so far, what I see is this, you know,
Speaker 8: and this is why we watch it so carefully. But
Speaker 8: here's how I'm seeing it is that what we're having,
Speaker 8: what is happening is financial markets are actually trying to
Speaker 8: find their footing in the right price for things, and
Speaker 8: they've got to digest a lot of information. One is
Speaker 8: the supply and demand changes in the treasury space, right,
Speaker 8: so supplies going up and demand is going down, especially
Speaker 8: from foreign buyers. So that is a one factor to digest.
Speaker 8: Another factor to just is FED policy and for guidance
Speaker 8: in the SEP. A third factor to digest is this
Speaker 8: increasing conversation people are having about whether the real neutral
Speaker 8: rate of interest is actually risen. So we came into
Speaker 8: the pandemic or with it at about point five, which
Speaker 8: means nominal neutral about two point five. And when people say, oh,
Speaker 8: the neutral rate might have risen for variety of factors.
Speaker 8: I'm hearing everything from maybe it's five to something that
Speaker 8: I would seem more likely, which is between two five
Speaker 8: and three for the nominal neutral. You know, probably there is.
Speaker 8: We don't know if it's risen. Frankly, I don't think
Speaker 8: anybody really knows, but certainly we should have those conversations.
Speaker 14: Back in March when there was this concern about the
Speaker 14: banking situation, yields were at the low of March. We're
Speaker 14: about one hundred and fifty bass points lower than where
Speaker 14: they are now. Are you seeing the same type of
Speaker 14: financial distress today that you did back then, even on
Speaker 14: the peripheries?
Speaker 13: How do you.
Speaker 14: Rationalize why it hasn't materialized in the same kind of way.
Speaker 8: So March was a unique situation, and we want to
Speaker 8: learn from that unique situation. But it was an unique
Speaker 8: situation in this way. We had a bank run, an old,
Speaker 8: very old fashioned but true bank run, where the bank's
Speaker 8: liquidity was completely squeezed and it went, you know, it
Speaker 8: dissolved in a period that was it was short, rapid
Speaker 8: period of dissolution, and then that's billed over to two
Speaker 8: other banks and that was the extent. Now, one of
Speaker 8: the things I always remind people of is we have
Speaker 8: over four thousand banks in the country and three failed
Speaker 8: and all other banks that even felt the stresses, and
Speaker 8: there were a large number that felt stresses because they
Speaker 8: were near neighbors in sort of size and balance sheet
Speaker 8: distribution composition. They felt stresses, but they managed those stresses
Speaker 8: because in part they had been a little more effective
Speaker 8: at edging their risks. And then the FED and the
Speaker 8: Treasure with the Treasury support came in with the BTFP,
Speaker 8: and that produced a lot of calmness in the water.
Speaker 8: So since that time, banking stress have really not been
Speaker 8: something that when you ask people in the community or
Speaker 8: business leaders, when you just top of your worries, that
Speaker 8: is not something they list. They list inflation, uncertainty, et cetera.
Speaker 8: So I think one of the reasons that we are
Speaker 8: seeing this yield rising knot spilling back over is that
Speaker 8: essentially we know what's going on in the banking sector.
Speaker 8: Investor letters have been published for months saying here's what
Speaker 8: this balance sheet looks like. Here's what this balance sheet
Speaker 8: looks like. So there's not a surprise.
Speaker 1: This is Bloomberg day Break today, your morning brief on
Speaker 1: the stories making news from Wall Street to Washington and beyond.
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