G-7 Puts Pressure on Russia; Trump's Tax Cut Plans

Bloomberg Audio Studios, podcasts, radio news. 0:00:09.280 --> 0:00:12.440 Good morning, I'm Nathan Hagen and now I'm link Simiteo. 0:00:12.880 --> 0:00:15.600 We begin in Bari, Italy for day two of the 0:00:15.640 --> 0:00:19.119 three day G seven Leader's Summit. Support for Ukraine is 0:00:19.120 --> 0:00:21.760 a key theme of this gathering. Today, the leaders plan 0:00:21.880 --> 0:00:24.919 to send another message to Russia. Bloomberg News has learned 0:00:24.920 --> 0:00:27.920 they'll issue a statement pledging to titan enforcement of their 0:00:27.960 --> 0:00:31.680 existing price camp on Russian oil, choke off future Russian 0:00:31.760 --> 0:00:36.280 energy projects, and cut Moscow's revenues from medals. President Biden's 0:00:36.280 --> 0:00:38.920 delivered his own show of support for Ukraine. He signed 0:00:38.920 --> 0:00:42.640 a ten year bilateral security agreement with President Vladimir Zelenski. 0:00:43.040 --> 0:00:46.840 A lasting piece for Ukraine must be underwritten by Ukraine's 0:00:46.880 --> 0:00:50.680 own ability to defend itself now and to deter future 0:00:50.680 --> 0:00:53.400 aggression anytime in the future. 0:00:53.880 --> 0:00:56.120 The President says, the US and its allies will be 0:00:56.160 --> 0:00:59.320 with Ukraine quote until they prevail in this war. At 0:00:59.320 --> 0:01:01.880 the same time, says he's standing by his decision not 0:01:02.000 --> 0:01:05.240 to send US troops into Ukraine or to allow US 0:01:05.319 --> 0:01:07.759 weapons to strike farther into Russian territory. 0:01:07.880 --> 0:01:11.039 Meanwhile, Nathan, President Biden may be ready to take executive 0:01:11.040 --> 0:01:14.520 action to protect more undocumented migrants in this country. We 0:01:14.560 --> 0:01:18.160 get the details from Bloomberg Steve Potisk in Washington. 0:01:17.760 --> 0:01:21.360 Bloomberg News has learned Biden is planning an executive action 0:01:21.480 --> 0:01:24.920 as soon as next week that would protect certain undocumented 0:01:24.920 --> 0:01:28.800 immigrants from deportation. Sources say the new measure would allow 0:01:28.920 --> 0:01:32.880 spouses of US citizens who lack legal status to remain 0:01:32.920 --> 0:01:36.040 in the country and seek authorization to work. Some who 0:01:36.080 --> 0:01:39.600 receive relief could eventually gain a path to US citizenship. 0:01:39.959 --> 0:01:43.480 Biden is considering an announcement as early as next Tuesday. 0:01:43.560 --> 0:01:46.080 On that day, the White House is planning to celebrate 0:01:46.120 --> 0:01:49.840 the anniversary of the Obama era program known as DAKA. 0:01:49.920 --> 0:01:54.200 That program provided deportation reprieves and work permits to hundreds 0:01:54.280 --> 0:01:56.880 of thousands of migrants who were brought to the US 0:01:56.960 --> 0:02:01.720 illegally as miners. In Washington, Podusk Bloomberg Daybreak. 0:02:01.960 --> 0:02:06.000 Okay, Steve, thanks, So, President Biden's presumptive opponent, former President 0:02:06.040 --> 0:02:09.120 Donald Trump, is making a big promise to the business community. 0:02:09.440 --> 0:02:11.520 He says he's going to cut the corporate tax rate 0:02:11.600 --> 0:02:14.919 to twenty percent. Bloomberg's Ed Baxter has that story. 0:02:16.480 --> 0:02:19.200 This is a pitch to corporate CEOs, about one hundred 0:02:19.200 --> 0:02:21.800 of them, as well as House Republicans. He said a 0:02:21.840 --> 0:02:25.120 cut from twenty one to twenty percent. He says it'd 0:02:25.160 --> 0:02:28.280 be offset by future tariffs, and even a small reduction, 0:02:28.400 --> 0:02:31.960 of course, means billions of dollars or profitable companies. He 0:02:32.040 --> 0:02:35.760 also vowed to make permanent the sweeping twenty seventeen tax law. 0:02:36.160 --> 0:02:39.160 As for the GOP itself, his theme we have. 0:02:39.080 --> 0:02:41.400 Great unity, we have great common sense. 0:02:42.240 --> 0:02:44.000 A lot of very smart people in this room, and 0:02:44.000 --> 0:02:46.079 a lot of people that love our country. 0:02:46.320 --> 0:02:50.359 Also promised to again slash regulations. Put on business head 0:02:50.400 --> 0:02:51.680 Baxter Bloomberg Radio. 0:02:52.000 --> 0:02:53.799 Turning to the markets now, the S and P five 0:02:53.880 --> 0:02:57.320 hundred coming off a fourth consecutive record close this week. 0:02:57.639 --> 0:03:00.359 In fact, the index reached its twenty ninth record of 0:03:00.400 --> 0:03:02.960 the year on BET's the Federal Reserve will cut interest 0:03:03.040 --> 0:03:06.080 rates before the years out. Stuart Kaiser is head of 0:03:06.160 --> 0:03:09.600 US equity trading strategy at City Haith House Bloomberg. He's 0:03:09.639 --> 0:03:12.000 bullish on equities for the foreseeable future. 0:03:12.320 --> 0:03:16.119 You have an economy that for now is holding in solidly. 0:03:16.400 --> 0:03:19.560 You've got double digit EPs growth, and I think those 0:03:19.560 --> 0:03:22.160 two things in Generally speaking, you'd want high or you 0:03:22.160 --> 0:03:25.120 would expect higher equity markets in that environment. And I 0:03:25.160 --> 0:03:27.600 think that's just sort of the situation we're in. I mean, 0:03:27.600 --> 0:03:30.000 our base case view is higher until and unless the 0:03:30.080 --> 0:03:32.280 labor market really comes under significant pressure. 0:03:32.400 --> 0:03:35.720 The City Stuart Kaiser believes this week's CPI reading, combined 0:03:35.720 --> 0:03:38.720 with last week's strong jobs figure, will ease fears of 0:03:38.760 --> 0:03:41.200 a recession even with higher for longer rates. 0:03:41.480 --> 0:03:44.840 Speaking of higher Lisa, let's talk about Apple. That stock 0:03:45.000 --> 0:03:47.880 just registered its biggest three day advance since August of 0:03:47.960 --> 0:03:50.600 twenty twenty. The three day jump of about eleven percent 0:03:51.000 --> 0:03:53.720 added almost three hundred and twenty four billion dollars to 0:03:53.760 --> 0:03:56.520 the iPhone maker's market value. That is more than all 0:03:56.640 --> 0:03:58.400 but a handful of components in the S and P 0:03:58.520 --> 0:04:01.720 five hundred and Apple is now back above Microsoft as 0:04:01.760 --> 0:04:04.000 the world's most valuable company, and. 0:04:04.080 --> 0:04:06.760 Tech well once again be in focused today. Nathan. Adobe 0:04:06.800 --> 0:04:09.960 shares are up fourteen percent in early trading after the bell. 0:04:10.040 --> 0:04:13.760 Adobe raises annual profit outlook and projected strong future sales 0:04:13.760 --> 0:04:17.440 for its creative products. We get details from Bloomberg's Charlie Pellett. 0:04:17.800 --> 0:04:21.960 It suggests its customers are adopting the company's new artificial 0:04:22.200 --> 0:04:26.640 intelligence based tools. Adobe said profit excluding some items will 0:04:26.640 --> 0:04:28.720 be as much as eighteen twenty a share in the 0:04:28.760 --> 0:04:33.480 fiscal year ending in January. Analysts, on average estimated eighteen 0:04:33.560 --> 0:04:37.440 oh two. CFO Dan Durm says the company expects an 0:04:37.440 --> 0:04:41.039 acceleration in new creative business through the rest of the 0:04:41.080 --> 0:04:45.200 fiscal year. In New York, Charlie Pellette Bloomberg Radio. 0:04:45.120 --> 0:04:48.560 Thank you, Charlie, sticking with company news. Tesla shareholders have 0:04:48.680 --> 0:04:52.680 fact two resolutions sought by CEO Elon Musk. More on 0:04:52.720 --> 0:04:54.200 that from Bloomberg's Doug Prisner. 0:04:54.880 --> 0:04:58.800 The shareholders voted in favor of CEO Elon Musk's pay package. 0:04:58.880 --> 0:05:02.279 They also approved mo moving Tesla's state of incorporation to 0:05:02.400 --> 0:05:06.039 Texas from Delaware. Here's the thing, the pay vote is 0:05:06.080 --> 0:05:09.279 only advisory. It doesn't guarantee Musk will get his comp 0:05:09.440 --> 0:05:13.320 He negotiated a package in twenty eighteen and became eligible 0:05:13.360 --> 0:05:17.880 for stock options if Tesla hit certain milestones. He succeeded, 0:05:17.880 --> 0:05:21.000 but back in January, a Delaware judge nullified the plan. 0:05:21.480 --> 0:05:24.159 The current value is more than forty eight billion dollars. 0:05:24.400 --> 0:05:27.800 Tesla is expected to appeal if it fails, moving the 0:05:27.920 --> 0:05:30.440 legal home to Texas would allow the board to revive 0:05:30.520 --> 0:05:34.160 the package in a new state with potentially more favorable 0:05:34.200 --> 0:05:36.960 courts in New York. I'm Doug Prisoner, Bloomberg Radio. 0:05:37.200 --> 0:05:39.880 Thank you, Doug. Turning to Asia, the yen is slumping 0:05:39.920 --> 0:05:42.440 against the dollar after the Bank of Japan delayed a 0:05:42.480 --> 0:05:45.160 decision on its bond buying plan. We get the details 0:05:45.200 --> 0:05:48.599 from Bloomberg Daybreak Asia anchor Ryan Curtis in Hong Kong. 0:05:48.800 --> 0:05:52.480 The Bank of Japan has decided to reduce its bond purchases, 0:05:52.520 --> 0:05:55.200 but it has left the market guessing as to the amount. 0:05:55.640 --> 0:05:58.960 He will not specify amounts until the next meeting in July. 0:06:00.000 --> 0:06:02.800 Decision led to selling of the en as investors who 0:06:02.800 --> 0:06:06.720 were primed for details at this meeting. The boj stood 0:06:06.720 --> 0:06:10.000 pat on other policies. It kept the overnight call rate 0:06:10.080 --> 0:06:14.160 between zero and zero point one percent. The nick posted 0:06:14.200 --> 0:06:16.760 modest gains. Brian Curtis, Bloomberg Radio. 0:06:16.920 --> 0:06:19.039 Okay, Brian, thank you. One more corporate note back in 0:06:19.040 --> 0:06:21.520 this country. A federal judge in Brooklyn is indicating she 0:06:21.600 --> 0:06:24.640 is likely to reject a thirty billion dollars settlement between 0:06:24.720 --> 0:06:28.800 Visa MasterCard and retailers to cap credit card swipe fees. 0:06:29.040 --> 0:06:31.920 And retailers have fought for decades to slash their share 0:06:31.960 --> 0:06:34.240 of the cost for accepting card payments, also known as 0:06:34.520 --> 0:06:37.800 interchange fees. The deal was announced in March. It wouldn't 0:06:37.880 --> 0:06:42.360 let merchants charge consumers more for transactions involving Visa or MasterCard. 0:06:46.400 --> 0:06:47.560 Time now for a look at some of the other 0:06:47.640 --> 0:06:50.080 stories making news in New York and around the world. 0:06:50.160 --> 0:06:53.599 For that, we're joined by Bloomberg's Michael bar Good morning, Michael. 0:06:53.360 --> 0:06:56.760 Good morning Lisa. Still no deal. The US State Department 0:06:56.839 --> 0:06:59.720 is encouraging a mosque to stop aggling on a propose 0:07:00.000 --> 0:07:04.719 East fire hostage deal with Israel. State Department spokesman Matthew 0:07:04.760 --> 0:07:07.800 Miller would not go into details on the sticking points, 0:07:08.040 --> 0:07:11.200 but dismissed the idea that AMAS should need assurances for 0:07:11.400 --> 0:07:12.320 elasting peace. 0:07:12.680 --> 0:07:15.400 We were disappointed both that it took so long to 0:07:15.440 --> 0:07:17.920 get a response and that the response had a number 0:07:17.960 --> 0:07:20.400 of changes that could drag the negotiations out further. 0:07:20.760 --> 0:07:24.400 Memile. The US built pier to bring food to gazes, 0:07:24.440 --> 0:07:28.160 Facing one of its most serious challenges yet, the United 0:07:28.240 --> 0:07:31.920 Nations is deciding if it can keep safely delivering supplies 0:07:32.200 --> 0:07:36.360 from the USC route to starving Palestinians. The UN has 0:07:36.400 --> 0:07:39.760 paused its work with the pier since June eighth. That's 0:07:39.840 --> 0:07:44.000 when in operation by Israeli security forces rescued for Israeli 0:07:44.040 --> 0:07:48.280 hostages and killed more than two hundred and seventy Palestinians. 0:07:48.600 --> 0:07:50.880 The US and Israel say no part of the PEER 0:07:51.040 --> 0:07:53.960 was used in the raid, but in Israeli helicopter used 0:07:54.200 --> 0:07:58.000 a spot near the pier. The UN and aid groups 0:07:58.000 --> 0:08:01.480 say they fear relief workers operating with the PEER are 0:08:01.520 --> 0:08:04.400 being seen as a line with Israel and becoming targets. 0:08:04.520 --> 0:08:07.880 The PEER has also been subjected to repairs because of 0:08:07.960 --> 0:08:11.840 rough seas. The NYPD continues to search for protesters who 0:08:11.960 --> 0:08:16.000 cause disruption on a subway train. It comes amid vandalism 0:08:16.080 --> 0:08:20.040 during several pro Palestinian demonstrations in New York this week. 0:08:20.400 --> 0:08:23.560 State lawmakers are now looking to ban protesters from covering 0:08:23.600 --> 0:08:28.040 their face during demonstrations. At the G seventh summit in Italy, 0:08:28.080 --> 0:08:31.520 President Biden was asked about his son, Hunter Biden's recent 0:08:31.560 --> 0:08:32.240 gun conviction. 0:08:32.679 --> 0:08:36.160 I'm extremely proud of my son Hunter. He has overcome 0:08:36.200 --> 0:08:40.439 an addiction. He's one of the greatest, most decent men 0:08:40.520 --> 0:08:44.760 I know, and I am satisfied that I'm not going 0:08:44.840 --> 0:08:47.920 to do anything. I said, I adviye by the jury decision, 0:08:48.240 --> 0:08:50.560 and I will do that and I will not partner him. 0:08:50.800 --> 0:08:53.920 When asked if he would commute his son's sentenced to 0:08:53.960 --> 0:08:58.920 reduce it, the President replied no. Forecasters have warned Floridians 0:08:58.960 --> 0:09:02.760 to prepare for addition flash flooding after a tropical disturbance 0:09:02.840 --> 0:09:06.800 dumped as much as twenty inches of rainfall in the 0:09:06.840 --> 0:09:09.800 southern parts of the state earlier this week. This resident 0:09:09.880 --> 0:09:12.480 in Hollandale Beach says his home is okay, but his 0:09:12.520 --> 0:09:13.439 car is underwater. 0:09:13.880 --> 0:09:15.880 It was just coming up to the house. 0:09:16.520 --> 0:09:18.959 We were on high ground, but the other houses are 0:09:18.960 --> 0:09:19.959 just destroyed around here. 0:09:20.120 --> 0:09:23.760 Conditions are expected to worsen. Today Global News twenty four 0:09:23.760 --> 0:09:26.360 hours a day and whatever you want it with Bloomberg 0:09:26.400 --> 0:09:28.680 News Now. I'm Michael Barr. This is Bloomberg Lears. 0:09:28.960 --> 0:09:36.439 Thank you, Michael. Time now for a Bloomberg Sports update. 0:09:36.440 --> 0:09:38.040 For that, we bring in Dan Schwartzman. 0:09:38.760 --> 0:09:42.360 Good morning. Nathan Rory McCrory finishing his last three holes 0:09:42.360 --> 0:09:45.520 with two birdies to ty Patrick Canley atop the leaderboard 0:09:45.559 --> 0:09:47.880 at five under par. After the first round of the 0:09:48.000 --> 0:09:51.000 US Open at Pinehurst, North Carolina, Rory talked about the 0:09:51.000 --> 0:09:52.439 final holes of his round. 0:09:52.280 --> 0:09:54.400 And I was just on this on this run of 0:09:54.440 --> 0:09:57.880 hitting at the twenty feet and two putting. Actually had 0:09:57.920 --> 0:10:00.600 a good two put on fifteen, But I just felt 0:10:00.679 --> 0:10:02.880 like my patients, I could have gone a little impatient, 0:10:02.920 --> 0:10:04.840 but I felt like my patients was rewarded there with 0:10:04.920 --> 0:10:08.040 the parties, you know, into the last three holes. So 0:10:09.000 --> 0:10:10.480 you know, it was really nice to finish like that, 0:10:10.720 --> 0:10:12.600 and you know, as I said, you know, a nice 0:10:12.600 --> 0:10:14.480 better momentum going into the morning runs. 0:10:14.640 --> 0:10:17.800 That's courtesy of ESPN dot Com. Meanwhile, rough round for 0:10:17.840 --> 0:10:21.080 Tiger Woods as he finishes four over par. Tiger will 0:10:21.120 --> 0:10:23.840 be teeing off a little after one fourteen this afternoon. 0:10:24.200 --> 0:10:26.599 In Major League Baseball, the Yankees can't finish off a 0:10:26.640 --> 0:10:29.080 sweep of the Royals as Kansas City wins it on 0:10:29.120 --> 0:10:32.600 a walkoff, two run double off Clay Holmes. Coming up tonight, 0:10:32.640 --> 0:10:34.400 the Yankees are on the road in Boston to open 0:10:34.480 --> 0:10:36.839 up a three game weekend set. Luis Heel on the 0:10:36.880 --> 0:10:39.680 hill for the Yankees, Brian Bellow for the Red Sox. 0:10:39.960 --> 0:10:40.400 The Mets. 0:10:40.400 --> 0:10:43.319 Meanwhile, they win on a walkoff from j D. Martinez. 0:10:44.400 --> 0:10:44.640 G D. 0:10:44.880 --> 0:10:48.320 Rocketts went out to white center back at the capos chisel. 0:10:48.040 --> 0:10:50.720 Looking up head it on the hair. JD. 0:10:50.960 --> 0:10:54.840 By Tinez wins it hold up to run opposite field 0:10:54.960 --> 0:10:58.560 over road. That's courtesy of Mets dot Com. The Mets 0:10:58.640 --> 0:11:01.760 knocking off the Marlins three two. Mets are home for 0:11:01.880 --> 0:11:04.200 the San Diego Padres as they open up the first 0:11:04.240 --> 0:11:06.440 game of a three game set. On the mound for 0:11:06.440 --> 0:11:09.120 the Mets is Shan Manyah that Matt Waldron taking the 0:11:09.160 --> 0:11:12.040 mound for the Padres. In the Stanley Cup Final, the 0:11:12.040 --> 0:11:14.880 Florida Panthers, now one, went away from sweeping the series 0:11:15.160 --> 0:11:18.240 as they win ad Edmondson over the Oilers four to three. 0:11:18.400 --> 0:11:21.800 Game number four comes on Saturday north of the border. Finally, 0:11:21.840 --> 0:11:25.200 in the NFL, the Jacksonville Jaguars and quarterback Trevor Lawrence 0:11:25.440 --> 0:11:27.719 have agreed to a massive five year, two hundred and 0:11:27.760 --> 0:11:31.319 seventy five million dollar contract extension that includes two hundred 0:11:31.320 --> 0:11:34.120 million dollars guaranteed and one hundred and forty two million 0:11:34.120 --> 0:11:37.880 at signing. Batchel Bloomberg Sports update on Dan Schwarzman, Nathan 0:11:37.920 --> 0:11:38.839 and Lisa. 0:11:40.960 --> 0:11:45.360 Coast to coast on Bloomberg Radio, nationwide on Sirius XM, and. 0:11:45.360 --> 0:11:48.679 Around the world on Bloomberg dot Com and the Bloomberg 0:11:48.720 --> 0:11:49.320 Business app. 0:11:49.559 --> 0:11:51.559 This is Bloomberg Daybreak. 0:11:51.800 --> 0:11:54.600 Good morning. I'm Nathan Hagar, and the bulls just keep 0:11:54.800 --> 0:11:57.600 on running. The SMP five hundred has notched all time 0:11:57.640 --> 0:12:00.240 highs every day this week. Actually, even with the FED 0:12:00.360 --> 0:12:03.439 dialing back its own rate cut expectations, these new signs 0:12:03.440 --> 0:12:06.120 of disinflation that we saw this week seem to have 0:12:06.160 --> 0:12:08.480 the markets making bets of its own. So let's get 0:12:08.520 --> 0:12:10.560 more on what is happening in this market. For that, 0:12:10.600 --> 0:12:12.839 we are joined by Gina Martin Adams this morning, the 0:12:12.920 --> 0:12:17.120 chief equity strategist at Bloomberg Intelligence. Gina, good morning, Thanks 0:12:17.160 --> 0:12:19.920 so much for being with us. Can this rally sustain? 0:12:21.600 --> 0:12:23.679 You know, I think that what was interesting is coming 0:12:23.679 --> 0:12:25.880 out of the earning season, we sort of lost a 0:12:25.880 --> 0:12:29.800 little bit of momentum on equities as earning seasons, especially 0:12:29.880 --> 0:12:32.840 this year, have proven to be big catalysts for optimism 0:12:33.320 --> 0:12:36.920 given low expectations that companies were able to be pretty easily. 0:12:37.600 --> 0:12:40.400 You know, after earning season, you generally do see some 0:12:40.520 --> 0:12:43.199 deterioration in price momentum in the s and P five 0:12:43.280 --> 0:12:47.360 hundred emerge. But fortunately the economic data has come into 0:12:47.400 --> 0:12:49.599 kind of save the day, especially over the course of 0:12:49.600 --> 0:12:54.400 the last few days, be easing and inflation in particular, 0:12:54.520 --> 0:12:58.280 the continued positive spread between CPI and PPI but generally 0:12:58.320 --> 0:13:02.959 the downward trajectory of inflation has helped ease some concerns. 0:13:03.880 --> 0:13:08.440 At the same time, you know, economic expectations are relatively stable, 0:13:09.200 --> 0:13:12.440 and that's creating a pretty good a pretty good backdrop 0:13:12.440 --> 0:13:13.800 for risk taking for the index. 0:13:14.200 --> 0:13:16.040 Well, there is there a risk, though, Gina, that the 0:13:16.080 --> 0:13:19.559 market could be getting a little over excited about this disinflation. 0:13:19.600 --> 0:13:22.280 I mean, it is one month's data, right. 0:13:22.320 --> 0:13:25.480 Yeah, there always is a risk. But we have had 0:13:25.840 --> 0:13:29.760 persistence and disinflation really since the beginning of twenty twenty three. 0:13:30.800 --> 0:13:34.040 It paused somewhat earlier this year, but the fact that 0:13:34.080 --> 0:13:37.880 we have had general persistence in the disinflationary trend since 0:13:37.880 --> 0:13:40.280 the end of twenty twenty two early twenty twenty three, 0:13:40.360 --> 0:13:42.079 I think is the bigger story that we need to 0:13:42.160 --> 0:13:45.000 keep in mind, and we do find in particular, you 0:13:45.000 --> 0:13:47.160 want to look at the details of inflation. So I 0:13:48.040 --> 0:13:50.719 understand that the market is somewhat captivated right now by 0:13:50.720 --> 0:13:53.560 what's happening with CPI, but probably what's even more important 0:13:53.600 --> 0:13:57.880 for stock prices at large is how the interplay between 0:13:57.960 --> 0:14:02.680 CPI and PPI, or consumer prices and producer prices plays out. 0:14:02.760 --> 0:14:04.800 This is a proxy for margins on the S and 0:14:04.840 --> 0:14:07.840 P five hundred, and as long as consumer prices are 0:14:07.920 --> 0:14:11.480 rising faster than producer prices, and as long as producer 0:14:11.520 --> 0:14:15.080 prices are not rising too quickly, generally rising below a 0:14:15.080 --> 0:14:17.720 pace of three percent year over year, we tend to 0:14:17.840 --> 0:14:20.360 see margins continue to rise on the S and P 0:14:20.520 --> 0:14:24.280 five hundred. This is particularly consequential in an environment where 0:14:24.520 --> 0:14:27.920 you know economic uncertainty is still somewhat high given higher 0:14:27.960 --> 0:14:31.960 interest rates. If company margins continue to inflate because of 0:14:32.000 --> 0:14:36.240 the inflate because of the broader inflation backdrop, generally, that's 0:14:36.240 --> 0:14:38.560 pretty good news for earning's growth, which tends to power 0:14:38.600 --> 0:14:39.880 stock prices well. 0:14:39.880 --> 0:14:43.360 With the betting that this trend in the economic data 0:14:43.440 --> 0:14:45.880 could continue. We've seen a lot of attention as well 0:14:46.000 --> 0:14:49.800 on the tech stocks really being a beneficiary of where 0:14:49.920 --> 0:14:52.120 the rate environment is right now. Do you see that 0:14:52.240 --> 0:14:55.120 continuing tech leading the way or can other sectors start 0:14:55.120 --> 0:14:55.640 to benefit. 0:14:56.440 --> 0:14:58.640 Yeah, I think that actually the reason Tech has led 0:14:58.680 --> 0:15:00.920 the way is not necessarily be because of interest rates, 0:15:00.920 --> 0:15:02.920 but really because of what's going on in the earnings. 0:15:03.760 --> 0:15:07.640 Tech companies have powered significantly faster earnings growth than the 0:15:07.680 --> 0:15:09.280 rest of the market over the course of the last 0:15:09.280 --> 0:15:12.240 several quarters, really leading the way in a cycle recovery 0:15:12.760 --> 0:15:16.200 that started about this time last year. And what we 0:15:16.240 --> 0:15:18.320 should see over the second half of this year and 0:15:18.360 --> 0:15:20.800 into twenty twenty five is the emergence of growth in 0:15:20.840 --> 0:15:22.920 some of the rest of the S and P five hundred, 0:15:23.280 --> 0:15:25.800 which may of course spark resk tolerance and interest and 0:15:25.840 --> 0:15:29.560 investment in those segments of the index that's really been lacking. 0:15:30.080 --> 0:15:32.320 Over the course of the last several quarters. We've had 0:15:32.480 --> 0:15:34.840 double digit and even greater than twenty percent declines in 0:15:34.880 --> 0:15:39.200 earnings growth year every year for several sectors, including energy, materials, 0:15:39.200 --> 0:15:41.640 and healthcare on the S and P five hundred. That 0:15:41.720 --> 0:15:44.080 has really created a strong divergence in in rest or 0:15:44.160 --> 0:15:48.040 risk appetite for sector level investing. It's favored Tech and 0:15:48.080 --> 0:15:52.160 disfavored several other segments. Obviously, but as we move into 0:15:52.200 --> 0:15:54.560 the second half of the year and into twenty twenty five, 0:15:54.680 --> 0:15:59.000 that divergence should close. We should see almost every sector 0:15:59.040 --> 0:16:01.400 on the index start to host EPs growth at the 0:16:01.400 --> 0:16:03.840 course of the next quarter in the July reporting season, 0:16:04.360 --> 0:16:08.280 and then by the October reporting season, every sector in 0:16:08.320 --> 0:16:11.040 the index is expected to post here every year earnings growth. 0:16:11.400 --> 0:16:14.800 By early twenty twenty five, Tech earnings growth should be 0:16:14.800 --> 0:16:18.160 equivalent to or roughly equivalent to ex tech earnings growth 0:16:18.160 --> 0:16:20.200 on the S and P five hundred, which should create 0:16:20.240 --> 0:16:22.360 some very different trends on the index at large. 0:16:22.440 --> 0:16:25.320 This is Bloomberg day Break Today, your morning brief on 0:16:25.400 --> 0:16:28.920 the stories making news from Wall Street to Washington and beyond. 0:16:28.960 --> 0:16:31.760 Look for us on your podcast feedby six am Eastern 0:16:31.800 --> 0:16:35.120 each morning, on Apple, Spotify, and anywhere else you get 0:16:35.120 --> 0:16:35.960 your podcasts. 0:16:36.200 --> 0:16:38.880 You can also listen live each morning starting at five 0:16:38.920 --> 0:16:41.520 am Wall Street time on Bloomberg eleven three to zero 0:16:41.560 --> 0:16:44.440 in New York, Bloomberg ninety nine to one in Washington, 0:16:44.520 --> 0:16:47.680 Bloomberg one oh six' one in Boston, and Bloomberg nine 0:16:47.760 --> 0:16:49.160 sixty in San Francisco. 0:16:49.480 --> 0:16:52.040 Our flagship New York station is also available on your 0:16:52.080 --> 0:16:57.120 Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty. 0:16:56.960 --> 0:16:59.880 Plus listen coast to coast on the Bloomberg Business apps 0:17:00.000 --> 0:17:03.760 areious XM Channel one nineteen, the iHeartRadio app, and on 0:17:03.880 --> 0:17:05.080 Bloomberg dot Com. 0:17:05.119 --> 0:17:08.560 I'm Nathanhager and I'm Lisa Mateo. Join us again tomorrow 0:17:08.560 --> 0:17:10.600 morning for all the news you need to start your 0:17:10.640 --> 0:17:12.720 day right here on Bloomberg Daybreak