Transcripts For BLOOMBERG Bloomberg Daybreak Americas 202407

Transcripts For BLOOMBERG Bloomberg Daybreak Americas 20240713

World, from vienna to london, frankfurt to washington come our bloomberg roses are on the ground with all the top stories. In vienna, opec is said to reduce its target as a rock promises to comply. Joining me for more is bloombergs annmarie hordern. But do we know so far . Annmarie good morning. What we know is theyve agreed at the opec allies meeting today to cut by the hundred thousand barrels a day, but the devil is in the details. Brent and wti are both lower. This cut is basically cosmetic. We are still waiting for more details because it just brings the figures on paper to what theyve been producing throughout the year. Some members, including saudi arabia, have been cutting well below their target. That was the message from ben salman thisfrom bin morning, and his first meeting is energy minister. He said further compliance is needed. Everyone in the room knew he was talking about, even though he didnt name and shame. The message was simple. Stop cheating. Alix indeed. Thank you very much. Saudi aramco is delivering the worlds biggest ipo ever. Pricing 8. 25 a share, valuing the company at 1. 7 trillion. Joining me from london is stuart wallace. We got that out of the way now. The hard part really begins. Stuart it does. They got it at the top end of the range, so on paper, it looks like theyve got the worlds biggest ipo, but we all have to remove the context to remember the context. This valuation is significantly lower than they were hoping for. They were originally setting it to 2 trillion or more. Secondly, they are basically selling to the saudi population. Finally, there will be no International Listing yet. It will list in riyadh stocks next wednesday. We do think that the share price has a good chance of pricing of rising, largely because this will be included in so many indexes, and that will force funds to go into a market where there is a tiny free flow. Investors are basically tied up while they wait for a bonus for tying into the ipo. All of that will combine into the Worlds Largest ipo, but it doesnt get saudi arabia the funds it is looking for to transform its economy. So that problem remains. Alix great reporting. Thank you so much. Now we go to germany, where Industrial Production fell 5. 3 in october, the worst output drop in a decade. Go to me from frank for is bloombergs daniel schaefer. Does this but the story that we had stabilization in manufacturing out the window . Doesl yes, anyway, it renew fears that we are going to see an even deeper manufacturing slump in germany. In the third quarter, germany narrowly avoided a recession, and now this surprising drop in factory output is going to revive fears that the Fourth Quarter is going to be a pretty bad one. It is also going to revive the demands for fiscal stimulus coming out of germany. So far, the German Government has resisted these claims, and said there is no crisis in the sector, but obviously there will be renewed calls, and as we seen , one of the parties and the Ruling Coalition has new leadership today. Convention has demanded more investments from the government, and threatened to otherwise pull out of the government if theres not a bigger spending plan coming out of germany. Alix thank you so much. Now in the u. S. , investors focusing on the latest jobs report. Analysts are expecting a rise of nonfarm payrolls of 183 thousand jobs. Michael mckee joins us. Give us a look ahead on what to watch out for. Michael this was supposed to be a boring payrolls report. The fed is on hold, markets say, and not much would change that. Then came the adp report earlier this year earlier this week. Now investors have something to watch for. , as you is still high saw. 183,000, although its come down a little bit. The reason is we are going to see a gain of 46,000 jobs premuch already baked in because the auto workers who were on strike against gm last month has gone back onto the payrolls. You can see the impact they had there. Even though they are still declining, they did not payrolls down. Workers, analysts are thinking we will get a big bump. However, should adp come through and be correct, that could have a major impact on markets. We saw it in may, when there was a big drop in payrolls unexpectedly, and that sent both stocks and bonds tumbling. If you can see the effect. Watch out if the number is low this morning. Alix thanks so much. Stay with bloomberg tv. We are going to speak with larry kudlow, u. S. As no Economic Council director, coming up at 9 30 a. M. Eastern time in new york. Mage ability stepped up the timetable for impeaching President Trump, putting the house and motioned towards a historic vote. Rep. Pelosi the president leaves us no choice but to act because he is trying to corrupt, once again, the elections for his own benefit. The president has engaged in abuse of power, undermining our National Security and jeopardizing the integrity of our elections. Alix go to me from the white house is kevin cirilli, bloombergs chief washington correspondent. What happens now . Kevin what happens next, in the next couple of weeks, we are anticipating that the committee that Speaker Pelosi instructed to begin drafting those articles of impeachment will finally put them forward. That will likely lead to an Impeachment Vote by the end of the year. Now focus turns to the republicancontrolled senate, where behind the scenes Senate Officials in the republican are essentially saying, bring it on. They view this as an opportunity to tell the other side of this story and be able to call the witnesses that democrats in the house were not able to call. Senate Majority Leader Mitch Mcconnell has signaled that the senate trial would likely last about six to eight weeks. Both sides are completely dug in , and a new poll this morning suggests that the impeachment isue is actually what driving the basis of not just republicans, but also democrats. Whether it is changing the minds of independent voters right now remains unseen. Alix thank you so much. Something else i am keeping my eye on is the year of protests that have really led to change from all around the globe. Demonstrators took to the streets and demanded change, and many of them actually got it. Theres a great map that shows the countries marked and dark orange are the ones where protests actually lead to a leader being ousted. Particularly you see that in latin america, as well as africa. Light orange marks as africa. Light rns marks light rns marks a policy change. And that light blue is a surprise, russia. Russia marks the biggest demonstrations in years. This is bloomberg. Alix time for bloomberg first take. We are going to give you the news. And analysisrade of the markets. Joining us is vincent cignarella, damian sassower, and with us, lara rhame, Fs Investments chief u. S. Economist. It is jobs day. Whats the trade into the number . Vincent the trader whisper number is 180,000. A lot of opportunities for asymmetric surprises. If you are an adp follower and you like the way it goes, youre going to see a Downside Risk to this. If you want to blow the adp off, which a lot of people do because it doesnt always really track the regular jobs data, you stick 83 and keep your fingers crossed. Lara dont you think we will see a recalibration in expectations down around payrolls . Alix havent we been looking for that all year . [laughter] lara but this is going to be the year. Instead of clocking 200,000 jobs every single month, we are actually going to have to start getting used to and hundred 20,000, 100,000, and i think it is going to be a little painful for markets. 3. 5 unemployment is a good jobs market out there. Damian its that labor scarcity betweenhe decoupling the figures. It is a big disconnect. But for me, if we see the bi number that Carl Riccadonna is calling for, we should see unlimited come back down to a 50 year low. See unemployment come back down to a 50 year low. It is interesting to see where the price action is right now heading into the number. Vincent at the end of the day, it is one number. This is not going to move the needle for the fed. Lgos in aet the a tizzy, but everyone else is taking jobs in stride. Inflation is really where they are looking. Jobs are really in a nice trend. Its not what moves the needle. Inflation is what moves the needle. Lara lara if you look at this week of data, we havent had great data this week. We had the downside surprise on both the pmis. I think the market would have liked to get a number more in line with expectations. I think if we get a bigger downside surprise given the context of the data weve had this week, there could be some concern. Damian and yesterdays trade data, that did not give any confidence as we are putting out here. Any confidence that we are bottoming out here. Ofhave trade data coming out china sunday. Trade is going to be an interesting topic into next week. Alix i wonder if that is where the jobs intersect because there is rhetoric that the only way you get President Trump to move on trade is if the data starts to fall out from underneath the u. S. Economy, and a bad number could fuel that narrative. Vincent the bad number i am looking at his south korean exports. You can look at china exports all you want. South korea is the gauge for asia. We look at china data and take it tongueincheek. , ait edged up a little bit little bit around the back end of it . But south korean data is pointing to a continuation of slower Global Growth. Alix is it japan, too . Capent yeah, but it salutes the sentiment of what asia is doing. Overall it encapsulates the sentiment of what asia is doing. Overall numbers in the United States, we will talk about that more later. Capex continue to decline. Confidence in the economy from industry is still not there. Lara i think that is where it and globally. A lot of the big moves weve had where it wraps in globally. A lot of the big moves weve had, weve actually seen a lot of data around this leak. It is very unclear whether weve actually been able to hit any sort of bottoming in manufacturing. It looks like it is still enduring some pain. Romaine and theres barely 1 damian and theres barely one cut price did next year. If congress and President Trump can get some fiscal stimulus going, but i am not holding their breath. Lara me either. Alix i feel like the conversation is the handoff from qe to stimulus. Japan leading the way on that. Sdp lining up their demand on infrastructure. Anyone buying that on the market . Vincent no, not on the street. It doesnt play well for germany at all. German gdp and Industrial Production correlation is amazing. You see these idp numbers out of germany and you have to start to believe that fourthquarter German Growth could turn negative. Does that get fiscal stimulus in gear for germany . Potentially, but you have to look at what the United States will potentially impose. Spending between france, italy, and germany. U. S. Now turned toward oil tariffs and germany . If using about it, hes kind of got them where he wants them. If the situation in the economy deteriorates there, he can hold them over a barrel saying if you dont comply, we put the tariffs on unannounced to sever another drop in Industrial Production. Lara when i look at the equity markets, i see it basically is a referendum on trade right now. Weve seen the fundamentals deteriorate, the earnings deteriorate. What is holding it up is this miniof a many deal of a deal. We need to thing about how equity markets are really now, a is basede positivity on the hope we will get some resolution. I agree that i think youre dealing with a situation where the economics speak to higher volatility given the desire to have more trade in there. Damian when i was a kid, i used to read more comic books, and to me, this is a joke. The equity markets think we are going to see this phase i deal and it is going to lift all boats. Alix a perfect example is today, when you get those waivers from companies to buy more u. S. Soybeans and pork, but we had that for months. We literally got net every month and eight hasnt delivered a phase i trade deal. Vincent we are nowhere close to where the u. S. Wants china to be. Michael mckee pointed out a few months ago, china had imported more slowly two years ago than two are now more soy years ago than they are now. So we are asking them to do something that they probably cant do. Alix which also begs the question overall in talking to 2020 outlooks, what is priced in . It feels like everyone agrees we are in a 1. 5 , 2 growth world. Is the good news priced in, or is the bad news preston . No one seems to agree on that. Lara i dont think the uncertainty is priced in. To me, you look at the uncertainty coming from trade, i think even if we get a select resolution, you wrote that right over to the 2020 elections, where policy uncertainty keeps coming at you left, right and center. Im on the side of the fence that says not enough is priced in. Damian i was going to say the upside would come from emerging markets. Philippines might even move as well. Theres more of that to come, but it is all artificial stimulus. The policy transmission mechanism suits to be somewhat broken. Vincent if you look at the markets, the way it is traded, thats the answer to the question. Markets dip, but come back very slightly. Markets are pricing in better news, good news. And mored news hits uncertainty comes off come the markets are not priced in for that. Alix so do you fade the rallies, then . We talked about emergingmarket affects. It was really bad, and now it is so much better. This week they had a nice rally. That cant be real if a trade deal is not real. Damian theres key levels. Real, we broken below that. For me, right now it is about eurou. S. Right now. Its not necessarily a good thing for em assets. Vincent i wouldnt recommend that trade tomorrow. [laughter] vincent i think when you look at em going forward, seeing the dollar and spoken about this for weeks, singing its peaked and had its nice run for 23 years, heres the trade deal with china. If that works, you see emerging markets rally. Chinadoesnt, you see going into the supply chain they did get in the United States, brazil and argentina. The u. S. And europe are just in really bad shape. Lara and i think you continue to get this dichotomy between fairly lofty equities and they bond market still sending off a lot of signals of caution. I think about the next years forecast for the yield curve to stay very flat. Fed decide that they may want to cut again, i think that is going to coincide with a 10 year following. You had this trend now for so long, and i think you cant ignore the fact that valuations in the equity markets remain high. Is not seeingt everything is fine. The which also goes to 2020 outlook in terms of what kind of returns can you and whatally expect, we have the same 6040 performance we had this year . Has the market adjusted to that new world . It feels like the answer is no. Lara i just called it the zombie 6040. Alix there you go. Lara it is dead. It just doesnt know it yet. Arching into 2020, we have another outstanding performance based on the fed cutting rates, based on these valuations that are very high, but looking forward at the earnings picture, the fact that you are probably not going to get another 20 basis point decline in yields. I just dont see where it comes from. Vincent i agree. The fed is on hold. They make in late 20, but they are going to cut for they may cut in 2020, but they are going to cut for bad reasons. It will be because the economy is underperforming. Whether regrow from there is a different story, but it is a real zombie trade. It doesnt exist. Alix thank you very much. Lara rhame of Fs Investments will be sticking with me. Find all the charts we are using throughout the next two hours on gtv on the terminal. Check them out. This is bloomberg. Viviana youre watching bloomberg daybreak. Investors in glencore will sue the Worlds Largest commodity trader over a bribery investigation. The law firm saying the suit is expected to demand billions from share price declines. It is being investigated by the u. K. Serious fraud office. Glencore falling 9 on the back of other probes in the u. S. And canada. U. S. Regulators taking a small etep towards returning th grounded 737 max to service. Is finalizing changes to. Flight control assembly and some final advice as he shuts down his daily newsletter. Artman says Donald Trumps multiple trade wars and others mean it is time to raise cash. Last week, his gartman letter ended publication. Alix thanks so much. Here is Something Else everyone is talking about, and that is uber come out with their longawaited safety review. It is the first time the right hail co. Has done Something Like this, and some of the steps were pretty interesting. Last year there were more than 3000 allegations of Sexual Assault involving drivers or passengers. There were also 50 eight rd deaths and 1. 3 billion trips. Of assaultse number was 16 decrease. That, some people will be surprised at how where the incidents are. Some people will think there are still to come in. Coming up, gary roskam, black Gold Investors ceo, will be joining. This is bloomberg. When it comes to using data, everyone is different. Which is why Xfinity Mobile is a different kind of Wireless Network that lets you design your own data. Choose unlimited, shared data, or mix lines of each and switch any line, anytime. Giving you more choice and control compared to other top wireless carriers. And now get 250 off when you buy a new Samsung Phone during Xfinity Mobile beyond black friday. Plus, you can save up to 400 a year. Click, call or visit a store today. Alix this is bloomberg daybreak. Awaiting

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