Bank Earnings Begin; Apple Makes Another AI Move

Bloomberg Audio Studios, Podcasts, Radio News. Good morning, I'm Nathan 0:00:12.119 --> 0:00:15.080 Hager and I'm Karen Moscow. Here are the stories we're 0:00:15.120 --> 0:00:15.920 following today. 0:00:16.120 --> 0:00:19.320 Karen, we kick off with earning season. We hear from 0:00:19.360 --> 0:00:23.960 the first of the big banks today, JP Morgan, Chase, Citygroup, 0:00:24.000 --> 0:00:28.040 and Wells Fargo All report. Bloomberg Wall Street correspondent Shanalie 0:00:28.040 --> 0:00:30.680 Basic says inflation will affect the results. 0:00:31.560 --> 0:00:34.479 On one hand, it's kept interest rates higher for longer, 0:00:34.800 --> 0:00:37.640 and it's meant that potentially net interest income could come 0:00:37.640 --> 0:00:41.000 in higher this year than initially expected. Investors will be 0:00:41.040 --> 0:00:44.160 watching out for whether JP Morgan in particular will raise 0:00:44.280 --> 0:00:46.839 or keep their guidance for net interest income. On the 0:00:46.840 --> 0:00:49.920 other hand, inflation keeps costs high for these banks, and 0:00:49.960 --> 0:00:52.640 the likes of Citygroup, Wells Fargo, and Bank of America 0:00:52.680 --> 0:00:55.280 will be watched closely on how they're keeping a handle 0:00:55.320 --> 0:00:57.200 on those costs and what it means for their head 0:00:57.200 --> 0:01:00.200 count in New York. Shanali Basic Bloomberg. 0:00:59.800 --> 0:01:02.760 Rat All right, chan Ellie, thank you. One other note 0:01:02.840 --> 0:01:05.840 on the banking industry, Morgan Stanley dropped more than five 0:01:05.880 --> 0:01:09.319 percent in a report. US regulators are scrutinizing the firm's 0:01:09.319 --> 0:01:12.959 efforts to prevent potential money laundering by wealthy clients. The 0:01:13.000 --> 0:01:15.679 Wall Street Journal says the security is in Exchange Commission, 0:01:15.720 --> 0:01:18.039 the Office of the Controller of the Currency and other 0:01:18.120 --> 0:01:21.760 Treasury Department of fishes are all looking into the issue. 0:01:21.800 --> 0:01:25.399 Bloomberg Intelligences Elliott Stein says the investigation has been in 0:01:25.440 --> 0:01:26.520 the works for some time. 0:01:27.040 --> 0:01:29.840 We already knew from November that the Federal Reserve was 0:01:29.880 --> 0:01:35.200 investigating Morgan Stanley on this very issue. This story suggests 0:01:35.200 --> 0:01:37.880 that the probe is a little broader and other agencies 0:01:37.880 --> 0:01:41.160 are looking to including the SEC, the ROCC and Sert's 0:01:41.280 --> 0:01:43.520 you know it's more than just the Fed right now. 0:01:43.560 --> 0:01:47.000 And Bloomberg's elliott Stein says. A Morgan Stanley spokesperson declined 0:01:47.040 --> 0:01:48.240 to comment on the story. 0:01:48.480 --> 0:01:48.960 Well Karen. 0:01:48.960 --> 0:01:52.480 Economists at Deutsche Bank and Bank of America are commenting, 0:01:52.600 --> 0:01:56.640 joining the growing crowd of forecasters dialing back expectations on 0:01:57.000 --> 0:02:00.600 interest rate cuts in the US. Details on that from 0:02:00.640 --> 0:02:01.960 Bloomberg's Charlie Pellett. 0:02:02.320 --> 0:02:05.120 The move came after the consumer price index rows at 0:02:05.120 --> 0:02:08.200 a faster than expected pace for a third straight month. 0:02:08.520 --> 0:02:12.040 Strategists at Deutsche Bank and Bank of America now predict 0:02:12.080 --> 0:02:15.640 that the Federal Reserve will ease policy just once this year, 0:02:15.960 --> 0:02:20.000 in December. That is a sharp reduction in previous forecast 0:02:20.080 --> 0:02:23.720 from both firms, which each previously saw the Federal Reserve 0:02:24.000 --> 0:02:27.680 beginning to ease policy starting in June. In New York, 0:02:27.919 --> 0:02:30.000 Charlie Pellett Bloomberg Radio. 0:02:29.880 --> 0:02:32.040 All right, Charlie, thanks, We'll be head to Europe now. 0:02:32.120 --> 0:02:35.440 After a mild recession, the UK economy grew for a 0:02:35.560 --> 0:02:37.960 second month, and we get the latest from Bloomberg's Ewen 0:02:38.080 --> 0:02:39.480 Pots in London ew. 0:02:40.120 --> 0:02:43.680 Karenon Nathan UK GDP grew zero point one percent in February, 0:02:43.720 --> 0:02:46.519 with January's figure revised up to an increase of zero 0:02:46.520 --> 0:02:50.600 point three percent. Both manufacturing and services came in stronger 0:02:50.600 --> 0:02:54.280 than expected. The construction was weaker, blamed on very wet weather. 0:02:54.639 --> 0:02:57.240 The figures add to evidence the British economy is gathering 0:02:57.280 --> 0:03:00.480 momentum after sliding into a shallow technical recession in the 0:03:00.520 --> 0:03:01.400 second half. 0:03:01.160 --> 0:03:01.839 Of last year. 0:03:02.000 --> 0:03:04.320 In London, I'm you and pot Splinberg Radio, okay you. 0:03:04.400 --> 0:03:04.840 And thank you. 0:03:04.919 --> 0:03:08.000 Moving to the commodity sector, the mad rush into gold 0:03:08.160 --> 0:03:11.080 continues Earlier this morning for the first time ever. Spot 0:03:11.120 --> 0:03:14.520 gold rose above twenty four hundred dollars an ounce, heightened 0:03:14.520 --> 0:03:17.080 Middle East tensions and the outlook from auditary policy of 0:03:17.080 --> 0:03:20.160 fueled these gains. Other commodities are also on the move. 0:03:20.200 --> 0:03:22.800 This morning, silver hit its highest level in more than 0:03:22.840 --> 0:03:25.960 three years. Copper is at its best since June of 0:03:26.000 --> 0:03:26.839 twenty twenty two. 0:03:27.400 --> 0:03:29.520 Well, we're also keeping an eye on oil on Nathan 0:03:29.560 --> 0:03:32.960 After a bearish new report on creude demand, the International 0:03:33.120 --> 0:03:36.360 Energy Agency is cutting its forecast for this year and next, 0:03:36.600 --> 0:03:39.920 predicting demand growth of just one point one million barrels 0:03:39.960 --> 0:03:42.680 a day in twenty twenty five. That's about a million 0:03:43.040 --> 0:03:46.560 less than the increased scene by opek. IA is also 0:03:46.680 --> 0:03:50.440 warning that persistent Ukrainian drone attacks on Russian oil refineries 0:03:50.440 --> 0:03:54.000 could disrupt the global market. Checking nimex crewede oil, it's 0:03:54.080 --> 0:03:56.360 up one and a quarter percent. It's at eighty six 0:03:56.400 --> 0:03:59.080 dollars eight cents a barrel, while Brent is it ninety 0:03:59.120 --> 0:04:01.040 dollars sixty seven and sense well, this. 0:04:01.000 --> 0:04:03.440 Can affect the oil market care and the Biden administration's 0:04:03.480 --> 0:04:06.880 planning a sweeping effort to block Arctic drilling. More on 0:04:06.920 --> 0:04:08.320 that from Bloomberg said Baxter. 0:04:08.760 --> 0:04:11.480 A century ago, the US set aside twenty three million 0:04:11.480 --> 0:04:15.080 acres of Alaska's North Slope to serve as an emergency 0:04:15.160 --> 0:04:18.800 oil supply. Now, President Biden is moving to block any 0:04:18.839 --> 0:04:22.240 oil and gas development across roughly half of it. The 0:04:22.279 --> 0:04:25.880 administration says the effort will boost land conservation and fight 0:04:25.960 --> 0:04:29.200 climate change. The oil industry says the plan is more 0:04:29.240 --> 0:04:32.920 expansive than initially thought and will make it almost impossible 0:04:32.960 --> 0:04:36.240 to build another megaproject in the region. The companies say 0:04:36.240 --> 0:04:40.479 they have recently made large discoveries which would yield supplies 0:04:40.520 --> 0:04:44.400 for decades to come. At Baxter Bloomberg Radio, All right. 0:04:44.400 --> 0:04:47.200 Ed, thanks so. President Biden is also making another move 0:04:47.279 --> 0:04:50.560 to tackle student debt. He's forgiving loans for about two 0:04:50.640 --> 0:04:53.640 hundred and seventy seven thousand Americans, most of them enrolled 0:04:53.640 --> 0:04:56.960 in the government's Safe program, which promises to cancel dead 0:04:57.000 --> 0:04:59.640 after at least ten years of her payments. This move 0:04:59.680 --> 0:05:02.800 will type away about seven point four billion dollars in 0:05:02.880 --> 0:05:06.240 federal student debt. Earlier this week, President Biden announced a 0:05:06.279 --> 0:05:08.680 plan B to forgive loans for more than twenty five 0:05:08.760 --> 0:05:12.400 million borrowers. That move is likely to face court challenges. 0:05:12.720 --> 0:05:16.200 In company news, Karen, Apple is preparing to overhaul its 0:05:16.440 --> 0:05:18.960 entire Mac computer line with a new set of in 0:05:19.040 --> 0:05:23.480 house processors designed to highlight artificial intelligence. Sources say. The 0:05:23.520 --> 0:05:26.280 tech giants also nearing production of its next generation chip, 0:05:26.320 --> 0:05:30.520 the M four processor. Bloomberg's Mark German says this news 0:05:30.600 --> 0:05:32.839 is more to do with AI than the computers. 0:05:33.000 --> 0:05:37.120 It's not necessarily the MAX themselves. Obviously, MAX are a 0:05:37.240 --> 0:05:41.440 small portion of the overall revenue base for Apple on 0:05:41.480 --> 0:05:45.200 an annual basis, something around ten percent, and I'm not 0:05:45.320 --> 0:05:48.159 sure that any investor believes that's going to skyrocket to 0:05:48.560 --> 0:05:51.680 doubling revenue or even going a third hire. I think 0:05:51.680 --> 0:05:54.320 it's the focus on AI. I think that investors are 0:05:54.360 --> 0:05:57.520 seeing that Apple's trying to push artificial intelligence to every 0:05:57.560 --> 0:05:59.840 nook and cranny. It could across the company. 0:05:59.560 --> 0:06:02.039 And bloom Grgsmark German says Apples aiming to release the 0:06:02.080 --> 0:06:05.200 updated MAX beginning late this year and extending into early 0:06:05.279 --> 0:06:06.240 next well. 0:06:06.320 --> 0:06:09.000 Nathan Samsung is preparing to take the wraps off of 0:06:09.080 --> 0:06:11.920 forty four billion dollar investment in US chip making as 0:06:11.960 --> 0:06:15.479 soon as next week. It's a signature project in Washington's 0:06:15.560 --> 0:06:19.680 broader effort to bring semiconductor production back to America. Sources 0:06:19.720 --> 0:06:22.480 say the world's biggest memory chip maker plans to outline 0:06:22.480 --> 0:06:26.760 the project in Texas alongside Commerce Secretary Gina Ramondo. 0:06:26.560 --> 0:06:30.159 And welcome to the club. Amazon, the e commerce and 0:06:30.320 --> 0:06:33.719 cloud computing giant, is trading at a record Amazon is 0:06:33.760 --> 0:06:35.680 the last of the big five US tech firms to 0:06:35.680 --> 0:06:37.600 reach an all time high in the rebound from the 0:06:37.600 --> 0:06:40.720 post pandemic sell off. In a bid to win over investors, 0:06:40.760 --> 0:06:44.239 Amazon is slashed costs and restructured its business. Its efforts 0:06:44.240 --> 0:06:47.400 to streamline operations have helped to boost profits and win 0:06:47.480 --> 0:06:48.560 over shareholders. 0:06:52.240 --> 0:06:53.560 And it's time now for a look at some of 0:06:53.560 --> 0:06:56.039 the other stories making news in New York and around 0:06:56.080 --> 0:06:58.880 the world. And from that we're joined by Bloomberg's Michael Barr. Michael, 0:06:58.880 --> 0:07:00.359 good morning, Good morning Karen. 0:07:00.400 --> 0:07:04.320 Today the House will vote on reauthorizing the Foreign Intelligence 0:07:04.360 --> 0:07:08.279 Surveillance Act. Earlier this week, House Republicans blocked FISA from 0:07:08.320 --> 0:07:12.360 being renewed after former President Trump pressed them to kill it, 0:07:12.760 --> 0:07:16.720 claiming it was used to spy on his campaign. Yesterday, 0:07:16.880 --> 0:07:21.240 FBI Director Christopher Ray talked about ongoing threats the US 0:07:21.360 --> 0:07:23.640 faces and urged Congress to renew it. 0:07:23.760 --> 0:07:28.640 Failure to reauthorize seven two, or gutting it with some 0:07:28.760 --> 0:07:33.080 new kind of warrant requirement would be dangerous and put Americans' 0:07:33.760 --> 0:07:34.880 lives at risk. 0:07:35.280 --> 0:07:38.680 FBI Director Ray testified at a House subcommittee hearing on 0:07:38.720 --> 0:07:42.440 the fiscal year twenty twenty five budget requests for the bureau. 0:07:43.000 --> 0:07:46.480 The NYPD has ramped up security around the courthouse where 0:07:46.560 --> 0:07:50.080 jerry selection is set to start Monday in Manhattan. In 0:07:50.200 --> 0:07:53.720 former President Donald Trump's hush money trial, the presumpt of 0:07:53.720 --> 0:07:59.440 Republican presidential nominee as pleaded not guilty. The proceedings present 0:07:59.760 --> 0:08:03.360 his historic challenge for the court and the lawyers, including 0:08:03.440 --> 0:08:08.119 finding prospective jurors who can be impartial. Police. A part 0:08:08.200 --> 0:08:10.760 of New York City will be frozen during the trial. 0:08:11.320 --> 0:08:14.040 The death of O. J. Simpson reminded America about the 0:08:14.160 --> 0:08:17.400 murder victims in the infamous case his ex wife, Nicole 0:08:17.440 --> 0:08:21.840 Brown Simpson and her friend Ronald Goldman. Kat o'kaalin, Simpson's 0:08:21.880 --> 0:08:24.520 former house guest, who served as a witness in the 0:08:24.560 --> 0:08:28.160 nineteen ninety five murder trial, issued a video statement to. 0:08:28.120 --> 0:08:31.080 The family of the beautiful Nicole Brown Simpson, May we 0:08:31.080 --> 0:08:35.520 always cherish her memories. Nicole was a beacon of light 0:08:35.600 --> 0:08:38.640 that burned bright. May we never forget her. 0:08:39.360 --> 0:08:43.200 Meanwhile, Simpson died without having paid the lion's share of 0:08:44.440 --> 0:08:47.800 thirty three point five million dollar judgment. The civil jury 0:08:47.840 --> 0:08:50.480 in nineteen ninety seven awarded it to the families of 0:08:50.520 --> 0:08:53.840 his ex wife and Goldman. The Goldman and Brown families 0:08:53.880 --> 0:08:55.720 could be at the front of the line to get 0:08:55.760 --> 0:08:59.600 paid whatever Simpson left behind. President Joe Biden has added 0:08:59.600 --> 0:09:03.000 more China these companies and individuals to an export blacklist 0:09:03.280 --> 0:09:08.000 than any US administration. The Commerce Department added six Chinese 0:09:08.080 --> 0:09:11.640 companies to its entity list yesterday, bringing the tally of 0:09:11.720 --> 0:09:15.439 new targets during the Biden administration to three hundred and nineteen. 0:09:16.040 --> 0:09:19.040 Global News twenty four hours a day and whenever you 0:09:19.120 --> 0:09:21.920 want it with the Bloomberg News Now Michael Barr and 0:09:22.280 --> 0:09:24.400 this is Bloomberg Karen, all right. 0:09:24.320 --> 0:09:30.680 Michael Barr, thank you, and it is time now for 0:09:30.720 --> 0:09:33.400 the Bloomberg Sports Update with John stash Hour. 0:09:33.559 --> 0:09:36.679 John, thanks Garrets by the early rain, they got most 0:09:36.720 --> 0:09:39.400 of the Masters opening round in. There are some golfers, 0:09:39.440 --> 0:09:41.600 including Tiger Woods. You need to come back early this 0:09:41.640 --> 0:09:43.920 morning to finish it up before playing round two, Tiger 0:09:44.000 --> 0:09:47.240 was steady one under part through thirteen holes, the leader 0:09:47.280 --> 0:09:50.240 with a seven hundred and sixty five racing Deshambo. 0:09:50.960 --> 0:09:53.320 It's always great getting off the hot start three under 0:09:53.440 --> 0:09:55.880 through first three holes, kind of get you settled. I 0:09:55.920 --> 0:09:57.160 knew it was going to be a tough day today 0:09:57.200 --> 0:09:59.680 with the wind and even tomorrow, so a lot of 0:09:59.679 --> 0:10:02.800 patient this is required around this golf course and making 0:10:02.840 --> 0:10:04.599 sure you're just stroking it on your line, putting a 0:10:04.679 --> 0:10:07.400 good hitting good iron shots and driving it well. 0:10:07.480 --> 0:10:09.880 And he drives it farther than pretty much anyone. World 0:10:09.960 --> 0:10:12.839 number one. Scottie Scheffler never seems to have a bad round. 0:10:12.880 --> 0:10:16.000 He's one shot behind Rory McElroy, shot one under defending 0:10:16.080 --> 0:10:19.560 champ John Rahm one over the Knicks in Boston, meaningless 0:10:19.559 --> 0:10:21.679 game for the Celtics. They've clinched home court in the playoffs, 0:10:21.679 --> 0:10:24.199 but they did use all their guys and the next 0:10:24.240 --> 0:10:26.319 beat him easily, up by twenty nine going to the 0:10:26.320 --> 0:10:28.520 fourth quarter of the final was one eighteen to one 0:10:28.520 --> 0:10:32.720 oh nine. Jalen Brunson continues his scoring taar thirty nine points. 0:10:32.960 --> 0:10:34.760 He scored thirty five or more and each to the 0:10:34.800 --> 0:10:37.360 last five at the Garden in Philadelphia beat the Rangers 0:10:37.360 --> 0:10:37.839 four to one. 0:10:37.840 --> 0:10:38.400 At Ubs. 0:10:38.440 --> 0:10:41.199 The Islanders now on the verge of making the playoffs 0:10:41.240 --> 0:10:42.760 with a six win in a row, three two in 0:10:42.800 --> 0:10:45.240 overtime over Montreal. Kyle Palmery the game when You Go 0:10:45.559 --> 0:10:48.319 The Devil's won the Capitol's lost Day game for the Mets, 0:10:48.320 --> 0:10:51.120 and in Atlanta, they scored seven runs in the first 0:10:51.120 --> 0:10:53.480 three innings and nine more in the last three a 0:10:53.600 --> 0:10:55.880 sixteen to four ro out of the Braves. Metsri five 0:10:55.920 --> 0:10:58.480 and two. Since that zero to five started, Fenway the 0:10:58.480 --> 0:11:01.200 Orioles with a six ron tenth Denny and Fit used 0:11:01.200 --> 0:11:03.240 a sweep with the Red Sox nine to four. College 0:11:03.280 --> 0:11:07.840 Hockey's frozen four semifinals saw BC shout out Michigan bu 0:11:08.200 --> 0:11:12.040 who's an overtime with Denver BYU basketball coach Mark Pope, 0:11:12.280 --> 0:11:14.280 who with a new coach at Kentucky who we played 0:11:14.320 --> 0:11:17.600 for in the mid nineteen nineties, replaces John Calipari who 0:11:17.640 --> 0:11:22.000 made the surprising move to Arkansas. John Stashedwer Bloomberg Sports, Karen. 0:11:21.880 --> 0:11:24.680 Nathan all Right, John, thank you, and futures are mixed 0:11:24.760 --> 0:11:26.680 s and p futures down a tenth of up percent 0:11:26.720 --> 0:11:29.079 down futures up a tenth of up percent, Naw's day 0:11:29.160 --> 0:11:31.400 futures down three tenths of up percent, and the ten 0:11:31.440 --> 0:11:34.040 year treasury yield four point five four percent. 0:11:37.920 --> 0:11:42.280 Coast to coast on Bloomberg Radio, nationwide on Sirius XM, and. 0:11:42.320 --> 0:11:45.640 Around the world on Bloomberg dot Com and the Bloomberg 0:11:45.679 --> 0:11:46.280 Business app. 0:11:46.520 --> 0:11:48.480 This is Bloomberg Daybreak. 0:11:49.520 --> 0:11:51.720 Good morning, I'm Nathan Hager, and we are getting ready 0:11:51.720 --> 0:11:54.280 for the kickoff of first quarter earning season. The biggest 0:11:54.280 --> 0:11:57.000 Wall Street banks start to open their books before the 0:11:57.000 --> 0:12:00.960 opening bell. JP Morgan, Chase, City Group and Wells Fargo 0:12:00.960 --> 0:12:03.520 will be first out the gate. Joining us now with 0:12:03.559 --> 0:12:06.719 a preview is Bloomberg's Charlie Wells. Charlie, good morning, thanks 0:12:06.760 --> 0:12:09.080 for being with us. Good morning, Thank you so much 0:12:09.080 --> 0:12:11.920 for having me. Big day, Yeah, absolutely, it's a big day. 0:12:12.000 --> 0:12:16.120 So much focus on what these higher for longer interest rates, 0:12:16.160 --> 0:12:19.360 this prospect for them, is going to mean for these 0:12:19.440 --> 0:12:21.959 banks net interest income outlook. 0:12:22.000 --> 0:12:25.199 Net interest income, which that you know is the biggest 0:12:25.200 --> 0:12:27.160 source of revenue for these banks, and what a lot 0:12:27.160 --> 0:12:31.080 of executives have been saying late last year was that 0:12:31.120 --> 0:12:33.520 they needed to kind of dampen expectations for the year 0:12:33.559 --> 0:12:36.720 going ahead. But if we enter this world where rates 0:12:36.960 --> 0:12:39.400 are higher for longer, what that could potentially mean is 0:12:39.440 --> 0:12:41.920 that this crucial source of income for these banks could 0:12:41.920 --> 0:12:44.079 be bigger than expected. So what I'm really watching for 0:12:44.200 --> 0:12:47.200 is the potential guidance that some of these executives give. 0:12:47.600 --> 0:12:51.000 Something else that's so important is investment banking revenue. So 0:12:51.040 --> 0:12:53.680 we've heard so much about better news on M and A, 0:12:53.800 --> 0:12:56.720 We've heard so much, you know, about more IPOs. Does 0:12:56.760 --> 0:12:59.040 that translate into these earnings? I think those are two 0:12:59.160 --> 0:13:00.640 key areas to folkocus on today. 0:13:00.679 --> 0:13:02.839 And we did get a little bit of a preview 0:13:03.320 --> 0:13:06.440 from Jamie Diamond, the CEO of JP Morgan Chase the 0:13:06.440 --> 0:13:09.880 annual shareholder letter. A lot of the focus on artificial 0:13:09.960 --> 0:13:13.599 intelligence makes you think about whether efficiencies are going to 0:13:13.679 --> 0:13:16.240 come into play for a lot of these banks. When 0:13:16.360 --> 0:13:19.920 you think about interest rates potentially adding to the costs 0:13:19.960 --> 0:13:22.640 that some of these firms are facing, that's exactly right. 0:13:22.679 --> 0:13:25.160 I mean, they are under so much pressure to show 0:13:25.200 --> 0:13:28.440 that they've got expenses under control. They're under so much pressure, 0:13:28.760 --> 0:13:31.040 you know, to show profitability, and you know, look, a 0:13:31.080 --> 0:13:33.640 lot of the shares for these banks have been performing 0:13:33.679 --> 0:13:37.160 really well. The narrative around them has been really popular. Actually, 0:13:37.240 --> 0:13:39.440 the gains have been outperforming the broader s and P 0:13:39.600 --> 0:13:42.280 five hundred and so if they can keep up that 0:13:42.520 --> 0:13:45.520 story of you know, expenses under check, that could be 0:13:45.559 --> 0:13:48.360 really positive for them. But also, you know, we've been 0:13:48.360 --> 0:13:51.440 hearing some commentary about how AI could kind of dramatically 0:13:51.520 --> 0:13:54.520 change the role of analysts about these banks, making it 0:13:54.559 --> 0:13:57.640 more efficient, but as you say, also potentially less expensive. 0:13:58.360 --> 0:14:01.840 And I got to wonder how much attention is going 0:14:01.880 --> 0:14:04.920 to be later on this week on Morgan Stanley with 0:14:05.000 --> 0:14:10.160 this report that its wealth unit is under federal regulatory investigation. 0:14:10.679 --> 0:14:12.520 This is not the sort of news that they wanted 0:14:12.600 --> 0:14:16.400 going into their earnings report. And so what we got 0:14:16.480 --> 0:14:20.320 yesterday from a report in the Wall Street Journal was that, 0:14:20.680 --> 0:14:25.000 you know, a broadening caudra of federal agencies are looking 0:14:25.080 --> 0:14:28.760 into controls to prevent money laundering at Morgan Stanley. And 0:14:28.840 --> 0:14:31.160 so we knew that the FED was looking into this, 0:14:31.680 --> 0:14:34.360 but we what we have been learning is that, you know, 0:14:34.360 --> 0:14:37.040 it is enough. It is a larger group of organizations, 0:14:37.080 --> 0:14:40.440 including the SEC, the Office for the Comptroller, and several 0:14:40.720 --> 0:14:44.600 Treasury offices. And the key question is did Morgan Stanley 0:14:44.680 --> 0:14:48.800 do enough to investigate potentially risky clients. And you know, 0:14:49.040 --> 0:14:52.880 wealth management has become a really important unit for not 0:14:52.920 --> 0:14:55.400 just Morgan Stanley, but for all of these Wall Street banks. 0:14:55.400 --> 0:14:57.960 And one of the big risks is how are you 0:14:58.080 --> 0:15:00.800 looking after who you're letting in to do business with. 0:15:01.560 --> 0:15:04.160 Got about thirty seconds left in terms of the banks 0:15:04.200 --> 0:15:06.960 that are going to be reporting this morning. What is 0:15:07.200 --> 0:15:10.000 the main focus that investors are looking at? 0:15:10.480 --> 0:15:13.280 Yeah, so, you know, definitely net interest income, but also 0:15:13.360 --> 0:15:16.960 investment banking. So we've got JP Morgan coming up, and 0:15:17.200 --> 0:15:19.640 City Group and Wells Fargo, and I think another thing 0:15:19.680 --> 0:15:22.120 that we should really watch out for huge story has 0:15:22.160 --> 0:15:26.640 been commercial real estate. Now sixteen percent of Wells Fargo's 0:15:26.960 --> 0:15:29.960 loan book is commercial real estate, So it'll be really 0:15:30.040 --> 0:15:33.120 really telling to see how they report on that commercial 0:15:33.120 --> 0:15:36.200 real estate front, which has been under so much stress lately. 0:15:36.880 --> 0:15:39.800 This is Bloomberg day Break Today, your morning brief on 0:15:39.840 --> 0:15:43.400 the stories making news from Wall Street to Washington and beyond. 0:15:43.680 --> 0:15:46.440 Look for us on your podcast feed at six am 0:15:46.520 --> 0:15:50.200 Eastern each morning on Apple, Spotify, and anywhere else you 0:15:50.240 --> 0:15:51.360 get your podcasts. 0:15:51.520 --> 0:15:54.240 You can also listen live each morning starting at five 0:15:54.280 --> 0:15:56.920 Am Wall Street Time on Bloomberg eleven three to zero 0:15:56.920 --> 0:16:00.400 in New York, Bloomberg ninety nine to one in Washingtonloomberg 0:16:00.440 --> 0:16:03.400 one oh sixty one in Boston, and Bloomberg nine sixty 0:16:03.560 --> 0:16:04.520 in San Francisco. 0:16:04.880 --> 0:16:08.040 Our flagship New York station is also available on your 0:16:08.080 --> 0:16:13.520 Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty plus. 0:16:13.560 --> 0:16:16.960 Listen coast to coast on the Bloomberg Business app, SERIUSXM, 0:16:17.080 --> 0:16:21.360 the iHeartRadio app, and on Bloomberg dot Com. I'm Nathan Hager. 0:16:21.120 --> 0:16:24.240 And I'm Karen Moscow. Join us again tomorrow morning for 0:16:24.400 --> 0:16:26.880 all the news you need to start your day right 0:16:26.920 --> 0:16:28.600 here on Bloomberg Daybreak