Global Bond ‘Carnival’ Sets Stage for Record Two Months; Apple SmartWatch Time
On today's podcast:
1) The world’s debt market is on track to post its biggest two-month gain on record as traders ramp up expectations that central banks everywhere will slash interest rates next year.
2) Apple Inc. said it would put its latest smartwatch models back on sale in its US retail stores Wednesday after it won a court ruling in a patent fight, providing a quick reprieve for its $17 billion business.
3) One of Cathie Wood’s exchange-traded funds has executed a massive shake-up in its Bitcoin-related holdings as the cryptocurrency rounds out a blockbuster year.
Full transcript:
Good morning. I'm John Tucker and I'm Karen Moscow. Here are the stories we're following today, the massive year and rally in bonds. In fact, the world's debt market on track to post its biggest two month gain on record. Bloomberg's Cretigoda has more other reasons behind the move. It's a complete when eighty in the markets. As investors around the world become more and more confident that inflation is actually in the rare view mirror, it's creating a massive bet in the bond market that is really unseen historically. The momentum that you're seeing in just the last two months has really created this idea that maybe you might see rates go even lower in twenty twenty four, not just from the Federal Reserve, but from market participants as well. Swaps, the measure through which traders make bets on the Federal Reserve and other central banks around the world, well, they're pricing about one hundred and fifty basis points of rate cuts right here in the United States and the UK next year. It's almost one hundred and seventy five basis points in the Eurozone. As investor confidence bills, the central banks have done their job, RIGHTO brigs Quitty Goop, who says the Bloomberg Global Aggregate Total return indexes risen nearly ten percent over November and December. Well, we turned to equities now, John, and European stocks are hovering near a two year high after the rally seen across Wall Street in Asian markets, and we go to London and get the latest with daybreak, europe banker Stephen Carroll, Stephen, thanks, Karen and John. European markets started out the day with gains, but that positive sentiment has petered out for now. The stock six hundred has dipped into the red, along with the benchmarks in London, Paris and Frankfurt. Energy among the worst performing sectors, Oil majors falling as crude prices retreat. Now, trading volumes across Europe are less than half their thirty day average, but the European benchmark is up almost thirteen percent this year, and it's still hovering at its highest level since January twenty twenty two. In London, Stephen Carrol Bloomberg Radio, all right, thanks Steven. Oil retreating from a one month high. Traders say key technical gauges their flashing weakness amid thin holiday trading, supply risk posed by Yemen based hoothy rebels haven't abated, even as incidents in the Red Seas start to slow down. The shipping giant hapag Lloyd says it will keep its vessels away from the Red Sea, despite the launch of a US led task force to protect the key trade route. Sylvia Westall is Bloomberg's managing editor in the Middle East. This idea of having a protection for shipping in this region, it actually already exists, as actually already forces based there. So I think some of the companies are a bit confused as to what it will really entail. Bloomberg's managing editor, Sylvia Westall says spot rates for a container shipping have jumped twenty six percent over the past four weeks. As we check Brent Crue, the international benchmark, it is down thirty one cents at seventy nine thirty four a barrel, and John Bitcoin is about forty three thousand dollars. It's been quite a run for the cryptocurrency we get more with the Bloomberg's Eddie Vanderwald prices went up from about sixteen thousand in the end of last year to more than forty three thousand at the moment. That's a rally of one hundred sixty percent, which you know, in bitcoin land is not uncommon. We do see these big up moves, but usually that is you know, associated with a lot of excitement and a lot of media attention and so on. We haven't seen that this year. What we are seeing though, is as the expectation of lower rates in the US and elsewhere probably comes to fruition. Next year, money becomes cheaper and there's more speculative money around, and some of that can flow into into assets like bitcoin, and Bloombergy Eddy Vanderwald says optimism over our possible sec approved bitcoin ETF is also helping fuel gains. Meanwhile, Caaren Well Kathy Woods Exchange Traded Funds has executed a massive shakeup in its bitcoin related holdings. More from Bloomberg's Jeff Bellinger. The Arc Next Generation Internet ETF sold all of its remaining shares of the Grayscale Bitcoin Trust, according to data compiled by Bloomberg, and on the same day, our investment management data show that it bought more than four point three million shares of pro Shares Bitcoin Strategy ETF, making it the fund's second biggest holder. Wood has been trimming her holdings in the Grayscale Bitcoin Trust in recent months, even as bitcoin rose to its highest levels since April of twenty twenty two. Jeff Bellinger Bloomberg Radio, All right, Jeff, thanks well. Apple putting its latest smart watch models back on sale and its US retail stores a's after it went accord ruling pausing a US sales ban on its newest models. Mark German covers Apple for Bloomberg in California and sin So, what happens now the Apple stores in the US did, about two hundred and seventy of them began resuming sales of the Series nine and Ultra TiO that are at the very center of this patent dispute with Massoow Thursday about noon Pacific time, the Apple Watch Ultra TiO in series line will return to the online stores. You could buy the model that you'd like from their online store and then staring on Saturday, all Apple stores in the US nationwide will begin car the alteratt series sign again, and Bloomberg's Mark German says the ruling now buys the company sometime and it's ongoing patent dispute with medical device maker Massimo. In geopolitical news, the Biden administration that is announced to another aid package for Ukraine. Bloomberg's Baxter has the story. It is two hundred and fifty million dollars in weapons and equipment and the final package of the year. It's drawn from Pentagon stocks, including ammunition for artillery and air defense systems, as well as anti armor munitions and more than fifteen million rounds of small arms ammunition. The DoD as well says that Javelin anti tank systems and Stinger Ata aircraft missiles will be offered. Secretary of State Anthony Blinken, in a statement, said it is imperative the Congress act swiftly to advance our the US national security interests by helping Ukraine defend itself. Ed Baxter Bloomberg Radio. All right, John, thanks time now for a look at some of the other stories making new around the world. And from that we're joined by Bloomberg's Amy Morris Samy. Good morning, Good morning, Karen. A coalition of mayors is asking the federal government to provide more support to manage the influx of migrants arriving by bus or plane from Texas. Mayors from New York City, Denver, and Chicago all say they need help as Texas Governor Greg Abbott sends more migrants to Democratic led cities. Chicago Mayor Brandon Johnson all of our cities have reached a point where we are either close to capacity or nearly out of room. Without significant intervention from the federal government, this mission will not be sustained. In addition, New York City Mayor Eric Adams has issued an executive order which requires thirty two hours notice from charter bus companies transporting migrants to the city. President Biden is justifying US attacks on targets in Iraq. Bloomberg's Nancy Lyons reports. In a letter to congressional leaders, President Biden says that Christmas Day attacks on three installations linked to an Iran backed insurgent group were necessary to prevent further attacks on US military personnel. Biden writes that the strikes were intended to quote degrade, and disrupt attacks on the US and its partners, and to deter Tehran's proxy forces from conducting further attacks. The US and its allies are trying to keep the Israel Hamas conflict from escalating into a broader war. In Washington, Nancy lyons Bloomberg Radio residential candidate Nikki Haley is refusing to say that slavery led to the Civil War. During a New Hampshire town hall yesterday, a voter asked Haley what was the cause of the Civil War, and the former South Carolina governor and ambassador to the UN gave a lengthy response about the role of government and the rights of the people, but she never mentioned slavery. What do you want me to say about slavery? I love, argued my question. Next question, the voter who asked the questions that he found it astonishing slavery wasn't even mentioned. US Representative Lauren Bobert says she's changing districts in Colorado. It's the right move for me personally, and it's the right decision for those who support our conservative movements. Alberta Republican announced on Facebook she'll move to the fourth congressional district, trying for the seat vacated by Ken Buck, who won't be seeking reelection. Global News twenty four hours a day and whenever you want it with Bloomberg News. Now, I'm Ami Morris. This is Bloomberg Karen right Amy, thank you. What we do bring you news throughout the day right here on Bloomberg Radio. But now, as Amy said, you can get the latest news on demand, and that means whenever you want it. Just subscribe to Bloomberg News Now to get the latest headlines at a click of a button. Get informed on your schedule. You can listen and subscribe to Bloomberg News Now on the Bloomberg Business app, Bloomberg dot com plus apples, Spotify, and anywhere else you get your podcasts. Time now for the Bloomberg Sports Update. Here's Dan Schwartzman. Dan, Good morning, Karen Stunner in Denver. As the Broncos have decided that nine time Pro Bowl quarterback Russell Wilson will be benched starting a Sunday's game against the LA Chargers, Jared Stidham will get the start. Head coach Sean Payton says it's all about getting a spark on offense, rather than get into the specifics, because I think that would be unfair today. It's more about what we're We weren't doing effectively enough offensively, and you know, when we were getting two or three turnovers. It's one thing, but you know. Ultimately our job is to get the ball in the end zone, and we've got to be more efficient doing that, all of us. That's Curtisyebroncos dot Com. Wilson starts the first year of a five year, two hundred and forty two point six million dollar extension next year at thirty nine million bit guaranteed for twenty twenty four. If Wilson can't pass a physical in early March, thirty seven million more will be guaranteed. Week seventeen of the NFL season gets under way, the Jets on the road in Cleveland facing the Browns. Cleveland is ten and five, Jets come in at six and nine. Trevor Simeon gets a star for New York Joe Flaco. He is a quarterback for the Browns. The finalist for the Pro Football Hall of Fame class at twenty twenty four half in announced. First time candidates include Julius Peppers and Antonio Gates. In the NBA, the Philadelphia seventy six ers remain hot. They knock off the Magic in Orlando one twelve to ninety two. Meanwhile, Milwaukee a big one forty four to one twenty two win over the Brooklyn Netsianna Santa Tocompo thirty two points, ten rebounds and eight assists. That's your Bloomberg Sports Update. I'm Dan Schwartzman from coast to coast, from New York to San Francisco, Boston to Washington, DC, nationwide on Syrias, exam, the Bloomberg Business app and Bloomberg dot Com. This is Bloomberg day Break, and I'm John Tucker. Good morning. The world's bomb market on track to post its biggest two month game on record. Meantime, SMP five hundred flirting with a record. Let's get you set up for the trading day ahead. We're joined now by Tim Craighead Bloomberg Intelligence Senior equities strategists. Hey, equities guy, Let's start off with Yeah, the debt market. Investors seem convinced central banks have won their battle against inflation. What could possibly go wrong? Tim, Well, I'll tell you it's very apropos to start off with a bond market if you're talking talking about stocks, because that's what striving stocks right now. There is no doubt about it. To the degree that we've seen, whether it's US, whether it's Europe, around the globe, a big rally since late October he had equities. It's all about bond markets. And if you look at expectations of central bank policy and use the FED as the bell weather, we've gone from expecting no rate cuts over the course of the next six to twelve months to where now you're looking at fifty basis points in six months and one hundred basis points in a year. And this is the issue. John. If this doesn't play through, if we have a change in reference for some inflation spike or something along those lines over the course in the next month or two, then this run we've had into year end across all asset classes is due for one of these abrupt, volatile changes like we saw a couple of times in twenty twenty three. That's the risk. Hey, looking back on history, how unusual is it to see bonds and equities rally at the same time and what does that indicate. It is interesting in that if you look whether it's in the post pandemic period where you can really dig into this microscopically over or longer term, quite often you do see one versus the other. And it's the same in the equities market, where you see either earnings driving equities, or you see valuation driving equities, and you know the corollary there is valuations quite often in stocks are driven by what's transpiring and interest rates. And you know the point that you're making here, it is unusual. We've seen stocks and bonds rip over the course of the past two months, and granted we're from a depressed level where you remember back into the depths of the cell off in October, it was all about uh longer for a higher for longer from a from a policy rate standpoint, and then all of a sudden we started seeing better inflation prints and that whole psychology changed, which allowed the run up in bonds, which allowed the run up and valuation. You look at the pe on either US or European markets and they've they've ramped up a couple of points. That's a big move, and it's all because of the change in bonds. So I think you can find narrow points of time like this where you see a big swing and interest rates that does have an immediate impact in the equities market. And it's all about the valuation connection, all right, specific to equities, what right now is the bar for earnings moving forward? It's a pretty low barrow, I would imagine in the US. Yeah, and I think you're right, and it is a difference between the US and the European markets. From a US perspective, we had an earnings recession through late twenty two into first half of twenty three, and we've started to see positive revisions coming over the last six months as we went through the mid year earning season into the third quarter reporting season, and estimates are still ticking up in the US. If you look over here where I'm at in London and Europe, we actually had much better earnings performance over the course of twenty two into the first half of twenty three. You'd be surprised. If you look to the chart on forward earnings expectations for Europe versus the US. Europe far outperformed over the course of the last eighteen months, but the last three months it started to change. We've had negative estimate revisions here in Europe and that's likely to continue into the next year. We think that's a big risk factor for the first half of the year where we are seeing a tick up in the US, and a lot of that's because of the TMT space, which was really the cause of the earnings, recession in the US starting to actually come alive, and we don't have that crutch. Here. You're listening to Bloomberg Daybreak today, your morning brief. The story is making news from Wall Street to watch Hington and beyond. Look for us on your podcast feed at six am Eastern each morning, on Apple, Spotify, and anywhere else you get your podcasts. You can also listen live each morning starting at five am Wall Street time on Bloomberg eleven three to zero in New York, Bloomberg ninety nine one in Washington, Bloomberg one O six one in Boston, and Bloomberg nine sixty in San Francisco. Our flagship New York station is also available on your Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty plus. Listen coast to coast on the Bloomberg Business app, serious XM, thee iHeartRadio app, and on Bloomberg dot Com. I'm John Tucker and I'm Karen Moscow. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak. He
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Good morning. 0:00:03.000 --> 0:00:05.640 I'm John Tucker and I'm Karen Moscow. Here are the 0:00:05.680 --> 0:00:07.760 stories we're following today, the. 0:00:07.760 --> 0:00:10.799 Massive year and rally in bonds. In fact, the world's 0:00:10.840 --> 0:00:13.960 debt market on track to post its biggest two month 0:00:14.000 --> 0:00:18.160 gain on record. Bloomberg's Cretigoda has more other reasons behind 0:00:18.160 --> 0:00:18.520 the move. 0:00:18.920 --> 0:00:20.960 It's a complete when eighty in the markets. As investors 0:00:20.960 --> 0:00:24.040 around the world become more and more confident that inflation 0:00:24.360 --> 0:00:26.680 is actually in the rare view mirror, it's creating a 0:00:26.760 --> 0:00:30.600 massive bet in the bond market that is really unseen historically. 0:00:30.600 --> 0:00:32.640 The momentum that you're seeing in just the last two 0:00:32.640 --> 0:00:35.879 months has really created this idea that maybe you might 0:00:35.880 --> 0:00:39.159 see rates go even lower in twenty twenty four, not 0:00:39.240 --> 0:00:42.479 just from the Federal Reserve, but from market participants as well. Swaps, 0:00:42.520 --> 0:00:44.800 the measure through which traders make bets on the Federal 0:00:44.800 --> 0:00:47.120 Reserve and other central banks around the world, well, they're 0:00:47.120 --> 0:00:49.519 pricing about one hundred and fifty basis points of rate 0:00:49.560 --> 0:00:51.920 cuts right here in the United States and the UK 0:00:52.040 --> 0:00:54.840 next year. It's almost one hundred and seventy five basis 0:00:54.840 --> 0:00:57.840 points in the Eurozone. As investor confidence bills, the central 0:00:57.840 --> 0:01:00.400 banks have done their job, RIGHTO. 0:01:00.000 --> 0:01:03.040 Brigs Quitty Goop, who says the Bloomberg Global Aggregate Total 0:01:03.080 --> 0:01:07.560 return indexes risen nearly ten percent over November and December. 0:01:07.920 --> 0:01:10.600 Well, we turned to equities now, John, and European stocks 0:01:10.600 --> 0:01:13.119 are hovering near a two year high after the rally 0:01:13.200 --> 0:01:15.640 seen across Wall Street in Asian markets, and we go 0:01:15.680 --> 0:01:18.200 to London and get the latest with daybreak, europe banker 0:01:18.280 --> 0:01:19.840 Stephen Carroll, Stephen. 0:01:19.959 --> 0:01:22.880 Thanks, Karen and John. European markets started out the day 0:01:22.880 --> 0:01:26.040 with gains, but that positive sentiment has petered out for now. 0:01:26.120 --> 0:01:28.160 The stock six hundred has dipped into the red, along 0:01:28.200 --> 0:01:31.640 with the benchmarks in London, Paris and Frankfurt. Energy among 0:01:31.640 --> 0:01:36.399 the worst performing sectors, Oil majors falling as crude prices retreat. Now, 0:01:36.440 --> 0:01:39.080 trading volumes across Europe are less than half their thirty 0:01:39.160 --> 0:01:42.399 day average, but the European benchmark is up almost thirteen 0:01:42.440 --> 0:01:44.840 percent this year, and it's still hovering at its highest 0:01:44.920 --> 0:01:48.000 level since January twenty twenty two. In London, Stephen Carrol 0:01:48.000 --> 0:01:48.920 Bloomberg Radio. 0:01:48.720 --> 0:01:51.880 All right, thanks Steven. Oil retreating from a one month high. 0:01:51.960 --> 0:01:55.520 Traders say key technical gauges their flashing weakness amid thin 0:01:55.640 --> 0:01:59.760 holiday trading, supply risk posed by Yemen based hoothy rebels 0:02:00.360 --> 0:02:03.400 haven't abated, even as incidents in the Red Seas start 0:02:03.400 --> 0:02:06.360 to slow down. The shipping giant hapag Lloyd says it 0:02:06.400 --> 0:02:08.800 will keep its vessels away from the Red Sea, despite 0:02:08.880 --> 0:02:11.360 the launch of a US led task force to protect 0:02:11.360 --> 0:02:15.400 the key trade route. Sylvia Westall is Bloomberg's managing editor 0:02:15.520 --> 0:02:16.320 in the Middle East. 0:02:16.560 --> 0:02:20.359 This idea of having a protection for shipping in this region, 0:02:20.520 --> 0:02:23.840 it actually already exists, as actually already forces based there. 0:02:24.280 --> 0:02:26.240 So I think some of the companies are a bit 0:02:26.320 --> 0:02:28.440 confused as to what it will really entail. 0:02:28.600 --> 0:02:31.760 Bloomberg's managing editor, Sylvia Westall says spot rates for a 0:02:31.760 --> 0:02:35.080 container shipping have jumped twenty six percent over the past 0:02:35.120 --> 0:02:38.720 four weeks. As we check Brent Crue, the international benchmark, 0:02:38.919 --> 0:02:42.320 it is down thirty one cents at seventy nine thirty 0:02:42.360 --> 0:02:43.640 four a barrel. 0:02:43.639 --> 0:02:46.560 And John Bitcoin is about forty three thousand dollars. It's 0:02:46.600 --> 0:02:49.079 been quite a run for the cryptocurrency we get more 0:02:49.120 --> 0:02:50.239 with the Bloomberg's Eddie. 0:02:50.160 --> 0:02:54.320 Vanderwald prices went up from about sixteen thousand in the 0:02:54.400 --> 0:02:57.600 end of last year to more than forty three thousand 0:02:57.919 --> 0:03:01.239 at the moment. That's a rally of one hundred sixty percent, 0:03:01.560 --> 0:03:04.600 which you know, in bitcoin land is not uncommon. We 0:03:04.680 --> 0:03:07.760 do see these big up moves, but usually that is 0:03:08.120 --> 0:03:10.640 you know, associated with a lot of excitement and a 0:03:10.639 --> 0:03:12.240 lot of media attention and so on. 0:03:12.480 --> 0:03:13.880 We haven't seen that this year. 0:03:14.040 --> 0:03:16.800 What we are seeing though, is as the expectation of 0:03:16.919 --> 0:03:20.360 lower rates in the US and elsewhere probably comes to fruition. 0:03:20.480 --> 0:03:24.519 Next year, money becomes cheaper and there's more speculative money around, 0:03:24.680 --> 0:03:28.320 and some of that can flow into into assets like bitcoin. 0:03:28.040 --> 0:03:31.400 And Bloombergy Eddy Vanderwald says optimism over our possible sec 0:03:31.520 --> 0:03:34.800 approved bitcoin ETF is also helping fuel gains. 0:03:35.200 --> 0:03:39.120 Meanwhile, Caaren Well Kathy Woods Exchange Traded Funds has executed 0:03:39.200 --> 0:03:43.240 a massive shakeup in its bitcoin related holdings. More from 0:03:43.240 --> 0:03:44.480 Bloomberg's Jeff Bellinger. 0:03:45.040 --> 0:03:48.560 The Arc Next Generation Internet ETF sold all of its 0:03:48.600 --> 0:03:52.280 remaining shares of the Grayscale Bitcoin Trust, according to data 0:03:52.320 --> 0:03:55.920 compiled by Bloomberg, and on the same day, our investment 0:03:55.960 --> 0:03:58.760 management data show that it bought more than four point 0:03:58.800 --> 0:04:03.280 three million shares of pro Shares Bitcoin Strategy ETF, making 0:04:03.320 --> 0:04:06.520 it the fund's second biggest holder. Wood has been trimming 0:04:06.520 --> 0:04:09.720 her holdings in the Grayscale Bitcoin Trust in recent months, 0:04:09.920 --> 0:04:13.240 even as bitcoin rose to its highest levels since April 0:04:13.280 --> 0:04:17.240 of twenty twenty two. Jeff Bellinger Bloomberg Radio. 0:04:17.080 --> 0:04:18.040 All right, Jeff, thanks well. 0:04:18.040 --> 0:04:21.880 Apple putting its latest smart watch models back on sale 0:04:21.880 --> 0:04:24.720 and its US retail stores a's after it went accord 0:04:24.800 --> 0:04:27.920 ruling pausing a US sales ban on its newest models. 0:04:28.240 --> 0:04:31.640 Mark German covers Apple for Bloomberg in California. 0:04:31.320 --> 0:04:34.000 And sin So, what happens now the Apple stores in 0:04:34.040 --> 0:04:36.159 the US did, about two hundred and seventy of them 0:04:36.360 --> 0:04:39.640 began resuming sales of the Series nine and Ultra TiO 0:04:40.040 --> 0:04:43.240 that are at the very center of this patent dispute 0:04:43.279 --> 0:04:48.080 with Massoow Thursday about noon Pacific time, the Apple Watch 0:04:48.200 --> 0:04:51.440 Ultra TiO in series line will return to the online stores. 0:04:51.560 --> 0:04:54.040 You could buy the model that you'd like from their 0:04:54.080 --> 0:04:57.880 online store and then staring on Saturday, all Apple stores 0:04:57.920 --> 0:05:00.960 in the US nationwide will begin car the alteratt series 0:05:00.960 --> 0:05:01.640 sign again. 0:05:01.720 --> 0:05:04.080 And Bloomberg's Mark German says the ruling now buys the 0:05:04.080 --> 0:05:07.480 company sometime and it's ongoing patent dispute with medical device 0:05:07.520 --> 0:05:08.360 maker Massimo. 0:05:08.800 --> 0:05:12.000 In geopolitical news, the Biden administration that is announced to 0:05:12.040 --> 0:05:16.360 another aid package for Ukraine. Bloomberg's Baxter has the story. 0:05:16.680 --> 0:05:19.080 It is two hundred and fifty million dollars in weapons 0:05:19.080 --> 0:05:22.760 and equipment and the final package of the year. It's 0:05:22.839 --> 0:05:26.200 drawn from Pentagon stocks, including ammunition for artillery and air 0:05:26.240 --> 0:05:29.560 defense systems, as well as anti armor munitions and more 0:05:29.600 --> 0:05:34.599 than fifteen million rounds of small arms ammunition. The DoD 0:05:34.720 --> 0:05:37.840 as well says that Javelin anti tank systems and Stinger 0:05:37.880 --> 0:05:42.560 Ata aircraft missiles will be offered. Secretary of State Anthony Blinken, 0:05:42.560 --> 0:05:45.360 in a statement, said it is imperative the Congress act 0:05:45.480 --> 0:05:50.200 swiftly to advance our the US national security interests by 0:05:50.200 --> 0:05:56.240 helping Ukraine defend itself. Ed Baxter Bloomberg Radio. 0:05:57.000 --> 0:05:58.680 All right, John, thanks time now for a look at 0:05:58.680 --> 0:06:00.800 some of the other stories making new around the world. 0:06:00.839 --> 0:06:03.279 And from that we're joined by Bloomberg's Amy Morris Samy. 0:06:03.320 --> 0:06:05.159 Good morning, Good morning, Karen. 0:06:05.240 --> 0:06:07.960 A coalition of mayors is asking the federal government to 0:06:07.960 --> 0:06:12.200 provide more support to manage the influx of migrants arriving 0:06:12.240 --> 0:06:16.360 by bus or plane from Texas. Mayors from New York City, Denver, 0:06:16.440 --> 0:06:19.640 and Chicago all say they need help as Texas Governor 0:06:19.680 --> 0:06:22.720 Greg Abbott sends more migrants to Democratic led cities. 0:06:23.000 --> 0:06:25.760 Chicago Mayor Brandon Johnson all of. 0:06:25.720 --> 0:06:29.760 Our cities have reached a point where we are either 0:06:29.839 --> 0:06:35.279 close to capacity or nearly out of room. Without significant 0:06:35.279 --> 0:06:41.040 intervention from the federal government, this mission will not be sustained. 0:06:41.080 --> 0:06:44.159 In addition, New York City Mayor Eric Adams has issued 0:06:44.200 --> 0:06:47.760 an executive order which requires thirty two hours notice from 0:06:47.839 --> 0:06:51.840 charter bus companies transporting migrants to the city. President Biden 0:06:51.920 --> 0:06:54.679 is justifying US attacks on targets in Iraq. 0:06:55.000 --> 0:06:57.120 Bloomberg's Nancy Lyons reports. 0:06:57.200 --> 0:06:59.960 In a letter to congressional leaders, President Biden says that 0:07:00.160 --> 0:07:03.200 Christmas Day attacks on three installations linked to an Iran 0:07:03.279 --> 0:07:07.160 backed insurgent group were necessary to prevent further attacks on 0:07:07.320 --> 0:07:11.360 US military personnel. Biden writes that the strikes were intended 0:07:11.360 --> 0:07:14.440 to quote degrade, and disrupt attacks on the US and 0:07:14.440 --> 0:07:18.400 its partners, and to deter Tehran's proxy forces from conducting 0:07:18.440 --> 0:07:21.440 further attacks. The US and its allies are trying to 0:07:21.520 --> 0:07:25.160 keep the Israel Hamas conflict from escalating into a broader war. 0:07:25.720 --> 0:07:28.360 In Washington, Nancy lyons Bloomberg Radio. 0:07:28.240 --> 0:07:32.360 Residential candidate Nikki Haley is refusing to say that slavery 0:07:32.520 --> 0:07:35.480 led to the Civil War. During a New Hampshire town 0:07:35.520 --> 0:07:38.920 hall yesterday, a voter asked Haley what was the cause 0:07:38.960 --> 0:07:41.840 of the Civil War, and the former South Carolina governor 0:07:41.880 --> 0:07:44.680 and ambassador to the UN gave a lengthy response about 0:07:44.680 --> 0:07:46.480 the role of government and the rights of the people, 0:07:47.000 --> 0:07:48.680 but she never mentioned slavery. 0:07:48.760 --> 0:07:50.400 What do you want me to say about slavery? 0:07:50.720 --> 0:07:52.760 I love, argued my question. 0:07:55.160 --> 0:07:57.520 Next question, the voter who asked the questions that he 0:07:57.520 --> 0:08:01.720 found it astonishing slavery wasn't even mentioned. US Representative Lauren 0:08:01.760 --> 0:08:05.520 Bobert says she's changing districts in Colorado. It's the right 0:08:05.600 --> 0:08:08.720 move for me personally, and it's the right decision for 0:08:08.720 --> 0:08:12.560 those who support our conservative movements. Alberta Republican announced on 0:08:12.600 --> 0:08:15.600 Facebook she'll move to the fourth congressional district, trying for 0:08:15.640 --> 0:08:17.120 the seat vacated by Ken. 0:08:16.920 --> 0:08:18.560 Buck, who won't be seeking reelection. 0:08:19.080 --> 0:08:21.240 Global News twenty four hours a day and whenever you 0:08:21.280 --> 0:08:22.480 want it with Bloomberg News. 0:08:22.520 --> 0:08:25.800 Now, I'm Ami Morris. This is Bloomberg Karen right Amy, 0:08:25.880 --> 0:08:26.240 thank you. 0:08:26.280 --> 0:08:28.080 What we do bring you news throughout the day right 0:08:28.080 --> 0:08:31.040 here on Bloomberg Radio. But now, as Amy said, you 0:08:31.080 --> 0:08:33.160 can get the latest news on demand, and that means 0:08:33.160 --> 0:08:36.680 whenever you want it. Just subscribe to Bloomberg News Now 0:08:36.720 --> 0:08:39.160 to get the latest headlines at a click of a button. 0:08:39.480 --> 0:08:41.080 Get informed on your schedule. 0:08:41.320 --> 0:08:44.000 You can listen and subscribe to Bloomberg News Now on 0:08:44.000 --> 0:08:47.880 the Bloomberg Business app, Bloomberg dot com plus apples, Spotify, 0:08:48.000 --> 0:08:55.240 and anywhere else you get your podcasts. Time now for 0:08:55.280 --> 0:08:59.600 the Bloomberg Sports Update. Here's Dan Schwartzman. Dan, Good morning, 0:08:59.640 --> 0:09:00.959 Karen Stunner in Denver. 0:09:01.040 --> 0:09:03.360 As the Broncos have decided that nine time Pro Bowl 0:09:03.400 --> 0:09:06.680 quarterback Russell Wilson will be benched starting a Sunday's game 0:09:06.679 --> 0:09:09.600 against the LA Chargers, Jared Stidham will get the start. 0:09:09.880 --> 0:09:10.760 Head coach Sean. 0:09:10.559 --> 0:09:13.480 Payton says it's all about getting a spark on offense. 0:09:13.480 --> 0:09:16.800 Rather than get into the specifics, because I think that 0:09:16.840 --> 0:09:18.040 would be unfair today. 0:09:18.559 --> 0:09:23.440 It's more about what we're We weren't doing effectively enough offensively, 0:09:24.080 --> 0:09:28.319 and you know, when we were getting two or three turnovers. 0:09:28.440 --> 0:09:29.280 It's one thing, but. 0:09:30.720 --> 0:09:30.880 You know. 0:09:30.960 --> 0:09:33.080 Ultimately our job is to get the ball in the 0:09:33.160 --> 0:09:35.439 end zone, and we've got to be more efficient doing that, 0:09:35.600 --> 0:09:36.080 all of us. 0:09:36.320 --> 0:09:39.600 That's Curtisyebroncos dot Com. Wilson starts the first year of 0:09:39.600 --> 0:09:41.400 a five year, two hundred and forty two point six 0:09:41.440 --> 0:09:44.240 million dollar extension next year at thirty nine million bit 0:09:44.280 --> 0:09:47.520 guaranteed for twenty twenty four. If Wilson can't pass a 0:09:47.520 --> 0:09:49.880 physical in early March, thirty seven. 0:09:49.600 --> 0:09:51.160 Million more will be guaranteed. 0:09:51.520 --> 0:09:53.960 Week seventeen of the NFL season gets under way, the 0:09:54.040 --> 0:09:57.120 Jets on the road in Cleveland facing the Browns. Cleveland 0:09:57.200 --> 0:09:59.880 is ten and five, Jets come in at six and nine. 0:10:00.120 --> 0:10:02.439 Trevor Simeon gets a star for New York Joe Flaco. 0:10:02.800 --> 0:10:05.200 He is a quarterback for the Browns. The finalist for 0:10:05.240 --> 0:10:07.640 the Pro Football Hall of Fame class at twenty twenty 0:10:07.640 --> 0:10:10.840 four half in announced. First time candidates include Julius Peppers 0:10:11.120 --> 0:10:14.760 and Antonio Gates. In the NBA, the Philadelphia seventy six 0:10:14.840 --> 0:10:17.040 ers remain hot. They knock off the Magic in Orlando 0:10:17.120 --> 0:10:20.120 one twelve to ninety two. Meanwhile, Milwaukee a big one 0:10:20.200 --> 0:10:22.920 forty four to one twenty two win over the Brooklyn 0:10:22.920 --> 0:10:27.040 Netsianna Santa Tocompo thirty two points, ten rebounds and eight assists. 0:10:27.320 --> 0:10:28.720 That's your Bloomberg Sports Update. 0:10:28.960 --> 0:10:30.360 I'm Dan Schwartzman. 0:10:32.920 --> 0:10:35.920 From coast to coast, from New York to San Francisco, 0:10:36.240 --> 0:10:40.880 Boston to Washington, DC, nationwide on Syrias, exam, the Bloomberg 0:10:40.920 --> 0:10:46.520 Business app and Bloomberg dot Com. This is Bloomberg day Break, and. 0:10:46.720 --> 0:10:49.920 I'm John Tucker. Good morning. The world's bomb market on 0:10:49.960 --> 0:10:53.440 track to post its biggest two month game on record. Meantime, 0:10:53.600 --> 0:10:56.320 SMP five hundred flirting with a record. Let's get you 0:10:56.559 --> 0:10:59.040 set up for the trading day ahead. We're joined now 0:10:59.080 --> 0:11:04.400 by Tim Craighead Bloomberg Intelligence Senior equities strategists. Hey, equities guy, 0:11:04.480 --> 0:11:07.560 Let's start off with Yeah, the debt market. Investors seem 0:11:07.640 --> 0:11:11.920 convinced central banks have won their battle against inflation. What 0:11:12.000 --> 0:11:13.280 could possibly go wrong? 0:11:13.360 --> 0:11:18.360 Tim, Well, I'll tell you it's very apropos to start 0:11:18.400 --> 0:11:21.800 off with a bond market if you're talking talking about stocks, 0:11:22.480 --> 0:11:25.120 because that's what striving stocks right now. There is no 0:11:25.160 --> 0:11:29.320 doubt about it. To the degree that we've seen, whether 0:11:29.360 --> 0:11:34.200 it's US, whether it's Europe, around the globe, a big 0:11:34.280 --> 0:11:37.800 rally since late October he had equities. It's all about 0:11:37.840 --> 0:11:43.760 bond markets. And if you look at expectations of central 0:11:43.800 --> 0:11:48.199 bank policy and use the FED as the bell weather, 0:11:49.440 --> 0:11:54.800 we've gone from expecting no rate cuts over the course 0:11:54.800 --> 0:11:57.000 of the next six to twelve months to where now 0:11:57.040 --> 0:12:00.440 you're looking at fifty basis points in six months and 0:12:00.679 --> 0:12:03.680 one hundred basis points in a year. And this is 0:12:03.720 --> 0:12:07.840 the issue. John. If this doesn't play through, if we 0:12:08.000 --> 0:12:12.360 have a change in reference for some inflation spike or 0:12:12.400 --> 0:12:14.600 something along those lines over the course in the next 0:12:14.679 --> 0:12:18.520 month or two, then this run we've had into year 0:12:18.679 --> 0:12:22.920 end across all asset classes is due for one of 0:12:22.960 --> 0:12:27.400 these abrupt, volatile changes like we saw a couple of 0:12:27.440 --> 0:12:30.360 times in twenty twenty three. That's the risk. 0:12:30.840 --> 0:12:33.960 Hey, looking back on history, how unusual is it to 0:12:34.000 --> 0:12:38.160 see bonds and equities rally at the same time and 0:12:38.160 --> 0:12:39.080 what does that indicate. 0:12:41.679 --> 0:12:45.480 It is interesting in that if you look whether it's 0:12:45.640 --> 0:12:49.080 in the post pandemic period where you can really dig 0:12:49.120 --> 0:12:53.560 into this microscopically over or longer term, quite often you 0:12:53.640 --> 0:12:57.160 do see one versus the other. And it's the same 0:12:57.200 --> 0:13:02.880 in the equities market, where you see either earnings driving equities, 0:13:03.080 --> 0:13:06.800 or you see valuation driving equities, and you know the 0:13:06.840 --> 0:13:11.000 corollary there is valuations quite often in stocks are driven 0:13:11.080 --> 0:13:14.480 by what's transpiring and interest rates. And you know the 0:13:14.520 --> 0:13:19.040 point that you're making here, it is unusual. We've seen 0:13:19.800 --> 0:13:23.199 stocks and bonds rip over the course of the past 0:13:23.240 --> 0:13:27.439 two months, and granted we're from a depressed level where 0:13:28.000 --> 0:13:32.120 you remember back into the depths of the cell off 0:13:32.200 --> 0:13:36.360 in October, it was all about uh longer for a 0:13:36.840 --> 0:13:40.800 higher for longer from a from a policy rate standpoint, 0:13:41.960 --> 0:13:44.679 and then all of a sudden we started seeing better 0:13:44.760 --> 0:13:50.280 inflation prints and that whole psychology changed, which allowed the 0:13:50.360 --> 0:13:53.280 run up in bonds, which allowed the run up and valuation. 0:13:53.440 --> 0:13:57.040 You look at the pe on either US or European 0:13:57.160 --> 0:14:03.199 markets and they've they've ramped up a couple of points. 0:14:03.600 --> 0:14:05.480 That's a big move, and it's all because of the 0:14:05.600 --> 0:14:08.920 change in bonds. So I think you can find narrow 0:14:09.000 --> 0:14:11.800 points of time like this where you see a big 0:14:11.880 --> 0:14:16.800 swing and interest rates that does have an immediate impact 0:14:17.000 --> 0:14:20.920 in the equities market. And it's all about the valuation connection. 0:14:20.760 --> 0:14:24.080 All right, specific to equities, what right now is the 0:14:24.080 --> 0:14:27.960 bar for earnings moving forward? It's a pretty low barrow, 0:14:28.000 --> 0:14:30.280 I would imagine in the US. 0:14:30.440 --> 0:14:33.880 Yeah, and I think you're right, and it is a 0:14:34.000 --> 0:14:38.600 difference between the US and the European markets. From a 0:14:38.760 --> 0:14:43.320 US perspective, we had an earnings recession through late twenty 0:14:43.360 --> 0:14:47.400 two into first half of twenty three, and we've started 0:14:47.400 --> 0:14:51.680 to see positive revisions coming over the last six months 0:14:51.680 --> 0:14:54.440 as we went through the mid year earning season into 0:14:54.680 --> 0:14:58.080 the third quarter reporting season, and estimates are still ticking 0:14:58.160 --> 0:15:00.720 up in the US. If you look over here where 0:15:00.760 --> 0:15:06.440 I'm at in London and Europe, we actually had much 0:15:06.440 --> 0:15:10.440 better earnings performance over the course of twenty two into 0:15:10.480 --> 0:15:12.960 the first half of twenty three. You'd be surprised. If 0:15:13.000 --> 0:15:16.520 you look to the chart on forward earnings expectations for 0:15:16.560 --> 0:15:21.240 Europe versus the US. Europe far outperformed over the course 0:15:21.320 --> 0:15:24.960 of the last eighteen months, but the last three months 0:15:25.520 --> 0:15:28.840 it started to change. We've had negative estimate revisions here 0:15:28.880 --> 0:15:32.600 in Europe and that's likely to continue into the next year. 0:15:32.640 --> 0:15:35.160 We think that's a big risk factor for the first 0:15:35.160 --> 0:15:38.200 half of the year where we are seeing a tick 0:15:38.280 --> 0:15:40.720 up in the US, and a lot of that's because 0:15:40.760 --> 0:15:44.440 of the TMT space, which was really the cause of 0:15:44.480 --> 0:15:49.480 the earnings, recession in the US starting to actually come alive, 0:15:50.120 --> 0:15:52.600 and we don't have that crutch. Here. 0:15:54.600 --> 0:15:57.760 You're listening to Bloomberg Daybreak today, your morning brief. 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