Episode summary
Daybreak Weekend: US Bank Earnings, Brussels Summit, Japan Sports Day | Bloomberg Daybreak: US...
Bloomberg Daybreak: US Edition
· · 40 min · Hosts: Nathan Hager
Summary
The program previewed a busy week for markets, centered on U.S. inflation data and the start of third-quarter bank earnings. In the U.S., the guest said September CPI and Thursday’s PPI will matter mainly as a last read on whether the Fed can justify another rate move this month, with energy and transportation costs the key areas to watch. The guest argued that even if prices keep rising, the market may still see any move pushed to December unless CPI surprises sharply higher.
Bank earnings are expected to show a wide split within the group. Herman Chan said JPMorgan Chase should set a high bar with mid-teen to upper-teen growth in trading and investment banking, while Goldman Sachs should also post strong results but with higher expenses. Bank of America, by contrast, was expected to show choppier trading and softer investment banking, even as loan growth across the industry stays supported by commercial lending.
The European segment focused on leaders meeting in Brussels amid French fiscal stress, Spanish political uncertainty, and renewed contagion worries in bond markets. Simona Deakay said ECB intervention thresholds remain high unless market dysfunction becomes systemic. The Asia segment then turned to Japan’s Sports Day, using the holiday to discuss public health, aging demographics, and consumer pressure from inflation and yen कमजोरी.
Key takeaways
- Michael McKe said September CPI is a key but not निर्णative data point for an October Fed move, unless it is a major upside surprise.
- McKe warned transportation and diesel costs could start feeding broader inflation through trucked goods like vegetables and clothing.
- Herman Chan said JPMorgan Chase should set the earnings bar high, with mid-teen to upper-teen growth in trading and investment banking.
- Chan expects Goldman Sachs to post solid equity-trading-driven results, but with higher expenses tied in part to compensation.
- Chan said Bank of America is likely to lag peers, with investment banking down about 12% to 22% and trading results choppier.
- Simona Deakay said ECB intervention on French or Italian spreads would require evidence of market dysfunction, not just wider yields.
Notable quotes
“the market is operating from the point of view that unless we get a really big surprise in CPI, just a normal rise won't do it”
“we do think JP Morgan's going to set the bar pretty high for the group”
“The key question is why spread are widening and as yet the bar for intervention remains high”
“This Monday, Japan celebrates sports day, a holiday that's used to promote active lifestyles and physical health”
“prices at supermarkets don't seem to be going down anytime soon”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. This is Bloomberg Daybreak Weekend, our global look at the top stories in the coming week from our Daybreak anchors all around the world. Straight ahead on the program, we look to some key inflation data along with bank earnings in the US. I'm Nathan Hager in Washington. I'm Caroline Heepker in London where we're asking if Europe's leaders can steer the region through political and economic turbulence.
I'm Doug Krer looking at Japan's sports day holiday and how it's used to promote health and wellness for the Japanese population. That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 1130 New York, Bloomberg 991 Washington DC, Bloomberg 929 Boston, DAB Digital Radio London, SiriusXM121, and around the world on Bloombergradio.com and the Bloomberg Business App.
Good day to you. I'm Nathan Hager. We begin today's program with some key inflation data in the US.
The consumer price index for the month of September is due out this Wednesday, followed by producer prices Thursday. A key piece of the inflation story before the Federal Reserve's next policy meeting at the end of this month. For more, we're joined by Michael McKe, international economics and policy correspondent for Bloomberg Radio and Television.
Correct me if I'm wrong, Mike, but I think this is some of the last inflation data we're going to see before the next decision. Is it going to be make or break for an October move from the Fed?
It is to a certain extent. Not as much as the September numbers were. They we had two two two monthly CPI reports before the last Fed meeting and only one this time. And basically everybody knows that prices are going to go up because uh energy prices rose over the interim period.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- us cpi
- us ppi
- us bank earnings
- brussels summit
- japan sports day
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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