On today's podcast:

1) New York City and Boston are straddling the line between what could be a snowy weekend or just a lot of rainhttps://www.bloomberg.com/news/articles/2024-01-04/us-east-coast-braces-for-weekend-snow-or-rain-weather-watch from a system sweeping up the US East Coast this weekend.

2) A monthly US jobs report due Friday will probably show many industries refrained from hiring as employment gains increasingly concentrated in a handful of sectors, according to Bloomberg Economics.

3) The options market for US Treasuries was abuzz Thursday following the emergence of a large bearish wager that Friday’s jobs report will trigger the biggest backup in benchmark yields in more than nine months.

4) Secretary of State Antony Blinken left for his fourth trip to the Middle East since the Oct. 7 attack on Israel, as part of US efforts to counter growing risks of a broader regional conflict.

Full Transcript:

Good morning. I'm Nathan Hager and I'm Karen Moscow. Here are the stories we're following today. We begin with the first major winter storm to hit the East Coast so far this season. Let's get the very latest on that with Bloomberg meteorologist Rob Carol and Rob Nathan. The weekend storm is going to be worse to the north and west of the district in Baltimore, and also north and west of New York City and north and west of Boston. The major cities are going to see some mixing with rain that that's going to hold down the accumulations. But it's the areas to the north and west that are going to do quite well where it stays all snow. Three to five inches possible north and west of the district in Baltimore, while north and west of New York City as much as five to eight inches will fall. We could see as much as five to ten inches of snow north and west of Boston during the storm. Okay, Rob, So when do you expect this wintry weather is going to end. Storm's going to wind down during the evening and overnight hours in the district in Baltimore. In New York city. It comes to an end Sunday afternoon the Boston area. I will see it ending late Sunday night early Monday morning, and we should see quite a bit of an improvement weatherwise into Monday of next week. Okay, Rob, Carolyn, thanks for that. We'll be checking back with you for more on this East coast winter storm throughout the day. Mowe now turned to the crucial jobs are poored for the month of December. Nathan It's forecast a show one hundred and seventy five thousand jobs were added a last month, and we get more from Bloomberg's Michael McKee. Wall Street goes into today's jobs report expecting strength in hiring and wages. That was not what the Fed was expecting a few months ago. The central bankers want job growth of about one hundred thousand a month and unemployment in the fours to signal an easing of labor market inflation pressures. Instead, they're likely to get a continuing conundrum, a strong labor market but falling inflation, making it hard to know the best path for interest rates. They will probably focus on the composition of jobs. Some analysts say job growth should be concentrated in low wage sectors like healthcare, assistants and restaurants, and that will be the sign the Fed wants that the economy is slowing. McKee, Bloomberg Radio. All right, Mike, thanks for the options market. It's been a buzz ahead of the jobs report. There is a large parish wager underway on yields rising to four point one five percent by the end of the day. That would mark the biggest one day rise in tenure yields since late March. It would be a further retrenchment for treasuries following last year's furious two month rally. In checking the tenure right now, it is at four point zero three percent. Well, Nathan. Rates are also in focus overseas. Traders are pairing bets on cuts from the European Central Bank. Let's go to London and get the latest from Bloomberg's Ewen pots Hore Youwen, Karen, and Nathan. It's the first time since mid December that traders are betting on fewer than six quarter point rate reductions from the ECB. At the end of last year, the market was pricing as much as one hundred and seventy four basis points of cuts. That number has now slipped blow one hundred and fifty basis points and key data this morning, shining more lights on the inflation pitcher. You're area CPI coming in at two point nine percent in the year to December. That's a higher number than the previous month as energy subsidies expire in a number of countries. In London, you and pot Splomberg Radio, all right, you and thank you. Now we turned to the latest developments in the Middle East. Secretary of State Antony Blincoln is returning to the region, his fourth trip since the October seventh attack on Israel. Bloomberg Zamie Morris reports from Washington, there is a risk the war between Israel and Hamas can spread into a broader regional conflict. This trip is part of US efforts to prevent that. Secretary Blincoln will travel to Turkey, Jordan, Cotter, the United Arab Emirates, Saudi Arabia, Egypt, and Israel. State Department spokesman Matthew Miller says they don't expect some of these conversations to be easy. We want to prevent the conflict from spreading, but part of that means that people need to stop taking strikes against our soldiers, and if they take strikes against our soldiers, we're going to do what we need to protect ourselves. Groups backed by Iran have escalated attacks across Iraq, Syria, Lebanon, and Yemen and armed forces in a rocker also warning of a quote dangerous escalation after a US right killed a senior commander in an Iran backed militia in Washington, Amy Morris, Bloomberg Radio, all right, Amy, thanks. Meanwhile, the Islamic State group has claimed responsibility for the two explosions that killed almost one hundred people in Iran. The attacks risked inflaming tensions further in the Middle East, with Iran saying it had been targeted because of its stands on Israel. Bloomberg Henry Meyer looks at the impact of the Islamic State taking responsibility for the attacks. It's significant in the sense that it reduces the risks of a more confrontation between Israel and Iran. Iran had said that the bloss with the work of people who were trying to punish it for its stance on the Israeli offensive in Gaza. And you know, obviously any suspicion of Israeli involvement could have proved extremely explosive, and Bloomberg Henry Meyer notes US officials said from the start the attacks had the hallmark of a group such as Islamic State. Back here in the US, Karen, there's more fallout over the resignation of former Harvard president Claudine Gay. The Reverend Al sharped and led a protest at Bill Ackman's Manhattan offices yesterday. The civil rights activist says the billionaire investors campaign against Gay is a blow to the diversity, equity and inclusion movement. Gay stepped down as Harvard's first black president this week in a backlash over her handling of campus antisemitism and accusations of plagiarism. Meantime, Nathan Business Insider is reporting Bill Lackman's wife, Nary Auxman, plagiarized multiple sections of her doctoral dissertation at MIT. Acman responded to the report in a post on X, writing, you know you struck a chord when they go after your wife. Time now for a look at some of the other stories making news around the world. For that, we're joined by Bloomberg's Amy Morris. Amy, Good morning, Good morning, Karen. Residents in the small town of Perry, Iowa, held a vigil last night, hours after a gunman opened fire at the local high school, killing a sixth grader and wounding four other students in the school's principal, Andrea Meyer, is a two thousand and four alumna at the school, and she spoke at last night's vigil green rally around our survivors, our community, our teachers, our first responders, and we're going to show them what we've shown them every day for as long as I have known that we appreciate them, enjoy them, respect them, and dare I say love them. The suspect, identified as seventeen year old Dylan Butler, a student at Perry High School, also died of an apparent self inflicted gunshot wound. Classes are canceled throughout the school district for today. Florida Governor Ronda Santis and former UN Ambassador Nicky Haley held back to back CNN town halls in Iowa last night as they fight to be primary GOP presidential challenger to Donald Trump, who already has a huge lead in the polls. DeSantis called Haley a phony who is quote playing for voters who are not even core Republicans. I'm the only one that has a chance to beat Trump and win the general election. Nicki Haley can't get conservative voters. She's the darling of the never trumpers. While in New Hampshire, Nikki Haley said of the primary process, quote, Iowa starts at New Hampshire corrects it. So she responded to criticism about that comment during CNN's town hall in Iowa. We're going to continue to be here. I mean, I've told people get used to this face, and I've been here over and over again. But if I didn't love Iowa, I wouldn't keep coming to Iowa. While they did take jabs at each other, Haley and Desantas also focused their attacks on front runner Donald Trump, and next week will be a busy one for Trump. Bloomberg's Nancy Lyons reports Donald Trump has two major court hearings next week. One of them is in Washington on his claim of immunity from charges he overturned the twenty twenty election that's set for January ninth, Then two days later, planning to attend the closing arguments in Manhattan that's for the New York civil trial against him and his sprawling real estate company. Days after that, the nominating process begins with the January fifteenth Iowa CAUCUSUS. Then a day after that, a civil defamation case against Trump begins in New York in which Ejing Carroll is seeking to million dollars in damages. It's unknown if Trump will be attending that trial in Washington. Nancy lyons Bloomberg Radio Global News twenty four hours a day and whenever you want it with Bloomberg News Now. I'm Amy Morris, and this is Bloomberg Karen. All right, Amy, thanks soby to bring in news throughout the day right here on Bloomberg Radio. But now, as Amy said, you can get the latest news on demand whenever you want it. Subscribe to Bloomberg News Now. You can get the latest headlines right at the 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, but also apples, Spotify, and anywhere else you get your podcasts. Time now for the Bloomberg Sports update. Here's John stash Hour John Karn. What a game in San Francisco, battle of the last two NBA champions. The Warriors had an eighteen point lead on the fourth quarter on the Nuggets, and then Denver closed the game on a twenty five to four run and he won at one thirty to one twenty seven thanks to Kolo Jokins thirty four points, ten assists, nine rebounds. He hit the game tying shot and then after a Steph Curry turnover, he hit the game winner, a forty footer that he banked in at the buzzer. Milwaukee won at San Antonio won twenty five to one twenty one. This was the first time that Jannis, sent to the Compo won against the guy that many field plays like, Giannis Victor Wembinama. Yanna scored forty four points. Wem bin Yama scored twenty seven. Ricky Rubio, retiring at age thirty three, twelve years and the NBA, played for four teams, most recently Cleveland, who bought out his contract. He was a professional player in Spain at the age of fourteen. Bruins lost at home to Pittsburgh six to five. Sydney Crosby wont it for the Penguin the power play goal in the third period. The Red Sox traded Chris Sale to Atlanta. He just got a two year extension with the Braves for thirty eight million dollars, despite all the injuries he's had in recent years. Week eighteen in the NFL starts tomorrow. Nine teams have Clint playoff spots. Five spots still up for drafts. Buffalo, Jacksonville, Tampa Bay, and Green Bay are in with Week eighteen victories. The winner tomorrow night, patried Houston, and Indianapolis is in the playoffs. Pittsburgh tomorrow needs a win and then a Buffalo loss on Sunday night. John Stashwer Bloomberg Sports 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 Daybreak. Good morning, I'm Nathan Hager. Well. The first weekend of twenty twenty four is going to bring the East Coast the first major winter storm we've seen in quite a while, actually, so let's bring in Bloomberg beedrologist Rob Carolyn to help us get set for what's coming. What you're looking at, Rob, the first accumulating snow of the season for lots of us. It's taken a time for winter to get going, but it's going to get going now with Gangbusters Nathan storm coming out of the lower Mississippi River Valley is going to come up the along the East coast during the weekend, and it's going to bring us eisenble snowfall to many of the suburban locations around the major cities in the mid Atlantic and Northeast. This isn't a huge snowstorm for the District of Baltimore, for New York City or Boston because the ocean is still fairly warm water temperatures than in the forties. That influence is going to mean that we see Boston and New York City, and especially Washington and Baltimore mixing with and changing the rain at times. But once you get inland away from that influence to the ocean, there's going to be some sizeable snowfalls from say Frederick, Maryland, all the way on up through the suburbs north and west of New York City, and then well north and west of Boston. There could be some spots to get over ten inches of snow from this storm, no kidding. So, like you said, it's been a while since we've had a major winter storm along the East coast. I mean, or are we ready for this? I think we're ready. I mean we've had a lot of practice. Anybody over the age of fifteen has seen, you know, a number of snowstorms in their lifetime. But yeah, last winter, I think the deepest snow we saw in the Boston area was like three and a half inches in February. So I think the big problem is going to be pe will not used to driving in it because it's been over a year. The good news is it's falling on a Saturday night and a Sunday in many areas, so their traffic won't be as bad. We don't have school in session, so that'll be helpful. But people are definitely going to have to take some time, particularly in those areas where there's going to be that transition from a mixture of rain and snow to snow, because that snow will be heavier and wetter. Therefore it's more slippery, it's greasy. So those areas just north and west of Boston, New York City, Washington, and Baltimore really need to be careful when the precipitation's falling during Saturday afternoon through Sunday. Well, a lot of people who live along the Interstate ninety five quarriter know that that freeway is often right along the boundary between where rain and snow happens. I mean, if this system sticks around for a little bit longer than expected, could we be in for a pretty dicey Monday morning commute. I think Monday morning is going to be okay, particularly in the district in Baltimore, because it dries out Sunday afternoon, So I think the roadways are going to be okay. York City Boston different story. Those areas where they don't get a chance to clean up the slush along the I ninety five corridor. Temperatures are going to be going down Sunday night, and that's going to have the tendency allow those surfaces to refree. So it could be a little bit more dicey New York City on up in the Boston Monday than it is around the district in Baltimore since it is on the weekend. We think in good skiing, well, you know, the ski areas in northern New England and northern New York State really aren't going to see much from this storm. At all too far out to see. It'll be cold enough so they can make some snow. Where this is going to help out is the resorts in West Virginia and on up into Pennsylvania. They'll do fairly well. The Poconos are going to do great. This is going to be their best snowfall in a while, and they'll have real good conditions come Monday and Tuesday in the Poconos. But for northern New England northern New York State, I think the snowfall amounts are probably going to be under two inches. Well anyway, I guess this couldn't have come in a better time, happening on the weekend. But thanks for this, Rob. Again, that was Bloomberg meteorologist Rob Carolyn getting us ready for the first winter storm for the East Coast of twenty twenty four. Well, let's move on from watching the weather to watching the data. Investors have their eyes out for the last look at the US labor market in twenty twenty three with the December non farm payrolls report. Do out an eight thirty am Wall Street time here to get a set for those numbers. Simon French, chief economist at panmir Gordon Simon. Great to speak with you this morning. Now, the consensus on the Bloomberg terminal, it calls for more moderation, one hundred and seventy five thousand new jobs expected, a tick up for the unemployment rate to three point eight percent. What's your expectation, I think a little bit stronger. Good morning, Nathan. I think the big question for me is US labor market participation appeared to peak during the summer and come back down, but there's conflicting data points as to whether that labor supply pictures is true. And if we start a season more people coming back into the labor market, I think there's potential to still add more jobs than than that estimate. Yes, I think the big influence though for futures on interest rate expectations will be the unemployment rate rather than the number of jobs added, and that I think when you're looking at the kind of rules of thumb we sort of saw the Federal Reserve and moved to in their recent minutes, anything three point eight three point nine will start to firm expectations of the rate cutting cycle this side of the mid year. There's been a lot of talk about four percent potentially being the trigger point for the Federal Reserve to think about cutting interest rates further. Could we see an upside surprise? What's the potential for that? Well, I think four percent is being focused in on by a lot of analysts because of the Palm rule. This is the if you like, the equivalent in the labor market for what we know in the bondom market from a Yeald curb and version is a decent signal of a recession. The Psalm rule looking at er point five five percent increase on the twelve month low point for unemployment, and that would something like four percent would take you there, But you have to get there on a three month average, and we're not going to get that even if we get that print today. But what it would do is it would suggest that by February, the time of the February report, you potentially hit that farm or threshold, which could prepare the ground for rate cutting cycling Q two. So that is why I think analysts are focusing on four percent. Of course, we're going to be keeping an eye out for average hourly earnings as well. Labor force participation feeds into that as well. Where do you see wages going If we find evidence that companies are holding on to employees, or perhaps more people are coming off the sidelines. Yeah, so I think there's I think one of the failures actually of the economics profession in the last couple of years, it's been an inability to recognize that nominal pay awards take their queue from overall price inflation, and therefore I think the helpful price dynamics from gasoline prices, from overall prices coming down in the US economy or the rate of increase coming down, should ever a spillover effect into nominal wage awards. I think there's an over focus, perhaps two model driven from the way central banks model this stuff to look purely at participation in capacity rather than the signals coming from the overall price level. So I actually expect a continued moderation in nominal pay awards with the quits rate and job openings falling as well. What does that tell us, Simon about the state of the US economy. Are you still thinking that we could be in for a soft landing given where labor dynamics are right now? Nathan, I think you know I'm not a fan particularly of the soft landing hard landing descriptor, mainly because lists. Economists, they tend to define it that they see fits reverse fit their narrative. But if you're looking at a moderation of those jolt data points on quits on hires from some very very extreme levels and a moderation without overshooting, then actually that's the message we got from the Joltz data I felt, which is you are starting to hone in on more normalized levels of labor market churn, and that has to be a positive thing, whether it's a soft landing or hard landing in terms of the hard data of economic activity pass but on those metrics, it's quite encouraging. From the Federal Reserve, they've been able to engineer this. We've seen a lot of activity in the options market ahead of this report, a pretty big bet that we could see ten year yields rise more than ten basis points by the end of the day. What kind of volatility are you expecting off the back of this jobs report in the bond mar So, I think that's that would be my whether it's an hourly end of day expectation, some more medium term view from my perspective is the bomb mark has got over excited by the pace of potential rate cups. In my view, I think pricing in five to six for the year when it's unlikely the first pirmacy you're going to have enough data to start cutting before the middle towards the back end of Q two, that becomes a really difficult thing to do with only four better reserve meetings in the second half of the year. So I think that expectation that you allude to of slightly firming yield is consistent with perhaps a reassessment of quite how aggressive the FED can be in the data have in front of them. Got about a minute left here, Simon. Not only is the FED going to be focused on the labor market, but we've got inflation data, more inflation data coming out next week as well. Well. What's your expectation on where we could see consumer prices headed. Well, a lot of the base effects that have been driving US inflation lower over the last twelve months, and this is simply some very exceptional numbers leaving leaving the annual comparison. That does mean we're in for a period where the data is going to bounce around in a sort of stubborn stubborn range around three percent. And the question, I guess the Federal Reserve need to ask themselves not all just based on the data, but their understanding of how price setting is going on at district level as well. Is the degree to which that can over an eighteen month two year of you moderate back towards two percent of their central forecast suggest But actually the real economy is not necessarily showing those signs. So I think we're in for a period where month to month will dot around very uncomfortably higher levels than the two percent targets, and is consistently all be seeing in terms of commodity imple prices shipping rates providing less of a down with base effect push than the single last one month. This is Bloomberg day Break Today, your morning brief on the stories making news from Wall Street to Washington 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 to one in Washington, Bloomberg one oh six to one in Boston, and Bloomberg ninety 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, SERIUSXM, the iHeartRadio app, and on Bloomberg dot Com. I'm Nathan Hager 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

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Winter Snowstorm Ahead; Wall Street Braces for Jobs Report; Blinken to Visit Middle East

Bloomberg Daybreak: US Edition