1 00:00:02,120 --> 00:00:04,840 Speaker 1: This is Bloomberg Daybreak Weekend, our global look at the 2 00:00:04,840 --> 00:00:07,760 Speaker 1: top stories in the coming week from our Daybreak anchors 3 00:00:07,800 --> 00:00:10,360 Speaker 1: all around the world, and straight ahead on the program, 4 00:00:10,400 --> 00:00:13,039 Speaker 1: A huge week ahead for tech earnings. 5 00:00:13,440 --> 00:00:15,120 Speaker 2: I'm Tom Busby in New York. 6 00:00:15,200 --> 00:00:17,880 Speaker 3: I'm Kroin Heager here in London, where we're looking ahead 7 00:00:17,920 --> 00:00:19,200 Speaker 3: to European bank earnings. 8 00:00:19,440 --> 00:00:22,440 Speaker 4: I'm Bryan Curtis in Hong Kong. Is the coast clear 9 00:00:22,520 --> 00:00:25,599 Speaker 4: now for a big uptick in tourism into Japan? 10 00:00:26,079 --> 00:00:28,760 Speaker 5: I'm Kaylee Lyons in Washington. As the fight over the 11 00:00:28,800 --> 00:00:32,400 Speaker 5: debt ceiling intensifies. How Speaker McCarthy pushes for a vote 12 00:00:32,400 --> 00:00:35,000 Speaker 5: next week the White House Still Bloomberg. 13 00:00:35,440 --> 00:00:38,720 Speaker 6: That's all straight ahead on Bloomberg day Break Weekend on 14 00:00:38,880 --> 00:00:41,959 Speaker 6: Bloomberg eleve on three Own, New York, Bloomberg ninety nine 15 00:00:42,000 --> 00:00:45,400 Speaker 6: to one, Washington, DC, Bloomberg one O six one, Boston, 16 00:00:45,440 --> 00:00:50,240 Speaker 6: Bloomberg nine sixty, San Francisco, DAB Digital Radio London, Sirius 17 00:00:50,400 --> 00:00:53,640 Speaker 6: XM one nineteen and around the world on Bloomberg Radio 18 00:00:53,720 --> 00:00:56,240 Speaker 6: dot com and via the Bloomberg Business app. 19 00:01:00,320 --> 00:01:00,400 Speaker 7: You. 20 00:01:00,480 --> 00:01:01,320 Speaker 2: I'm Tom Busby. 21 00:01:01,360 --> 00:01:03,880 Speaker 1: We begin today's program with a look at the tech 22 00:01:03,960 --> 00:01:06,720 Speaker 1: sector ahead of a cavalcade of big name tech earnings 23 00:01:06,760 --> 00:01:11,720 Speaker 1: coming our way this week, names like Alphabet, Microsoft, Meta Platforms, Intel, 24 00:01:11,800 --> 00:01:14,679 Speaker 1: and Snap. And joining us now to talk about all 25 00:01:14,800 --> 00:01:20,280 Speaker 1: that and more is Bloomberg Technology co host Caroline High. Caroline, welcome, thanks. 26 00:01:20,040 --> 00:01:20,560 Speaker 2: For being here. 27 00:01:20,600 --> 00:01:21,520 Speaker 8: What a joy to be with you. 28 00:01:22,080 --> 00:01:25,039 Speaker 1: Well, it looks like overall tech stocks have outperformed the 29 00:01:25,040 --> 00:01:27,320 Speaker 1: rest of Wall Street, in the least in the first quarter, 30 00:01:27,440 --> 00:01:30,640 Speaker 1: coming off of pretty dismal lows from before that. As 31 00:01:30,680 --> 00:01:32,520 Speaker 1: a sector, how do you think tech did in the 32 00:01:32,560 --> 00:01:35,080 Speaker 1: first three months of this year and is that growth 33 00:01:35,160 --> 00:01:37,240 Speaker 1: extending into the current quarter. 34 00:01:37,319 --> 00:01:38,000 Speaker 2: Do you think we. 35 00:01:38,000 --> 00:01:40,839 Speaker 8: Are starting to question that growth? Certainly from a stock 36 00:01:40,920 --> 00:01:44,280 Speaker 8: price perspective. From a valuation perspective, we've got to remember 37 00:01:44,280 --> 00:01:47,360 Speaker 8: the Nasdaq one hundred, the key benchmark for big tech, 38 00:01:47,760 --> 00:01:50,440 Speaker 8: is back in bull market territory. It managed to escalate 39 00:01:50,600 --> 00:01:53,200 Speaker 8: twenty percent off of its lows that we hit last year, 40 00:01:53,720 --> 00:01:56,720 Speaker 8: and this is around perhaps not that much more fundamental 41 00:01:56,840 --> 00:01:59,160 Speaker 8: change in news. Yes, there's hopes that the Federal Reserve 42 00:01:59,200 --> 00:02:02,440 Speaker 8: perhaps cool its intentions on where interest rates go. But 43 00:02:02,520 --> 00:02:05,320 Speaker 8: as Gina Martin Adams over at Bloomberg Intelligence will point out, 44 00:02:05,360 --> 00:02:07,920 Speaker 8: the valuations are still way out of whack unless we 45 00:02:07,960 --> 00:02:10,560 Speaker 8: start to see the FED actually cutting rates. At the moment, 46 00:02:10,600 --> 00:02:13,160 Speaker 8: no one's anticipating that. We're just anticipating as slowing in 47 00:02:13,200 --> 00:02:15,600 Speaker 8: those rate hikes. So at the moment, it feels that 48 00:02:15,639 --> 00:02:18,760 Speaker 8: the growth potential just isn't there to substantiate what has 49 00:02:18,800 --> 00:02:21,360 Speaker 8: been maybe a move to safety amidst some of the 50 00:02:21,360 --> 00:02:23,160 Speaker 8: concerns around the US banking system. 51 00:02:23,320 --> 00:02:26,240 Speaker 1: Now, before we dive deeper into the individual earnings and 52 00:02:26,280 --> 00:02:28,320 Speaker 1: the impact on the rates and the impact of what 53 00:02:28,360 --> 00:02:30,760 Speaker 1: the FED is going to do, let's talk about probably 54 00:02:30,800 --> 00:02:34,400 Speaker 1: the biggest game changer in tech since I don't know 55 00:02:34,720 --> 00:02:39,880 Speaker 1: the search engine. It's artificial intelligence chatbots like open AI's 56 00:02:40,160 --> 00:02:43,960 Speaker 1: chat GPT. They've changed everything since debuwing just in November, 57 00:02:44,520 --> 00:02:48,400 Speaker 1: and Microsoft's also ran search engine bing now gaining traction 58 00:02:48,480 --> 00:02:52,240 Speaker 1: after how many years? About fourteen years? Google racing to 59 00:02:52,280 --> 00:02:55,840 Speaker 1: develop its own search engine powered by AI meta platforms, 60 00:02:55,919 --> 00:02:58,560 Speaker 1: changing its name from Facebook to focus on the metaverse, 61 00:02:59,160 --> 00:03:03,160 Speaker 1: now downplaying to focus on AI. How has this changed 62 00:03:03,520 --> 00:03:05,519 Speaker 1: everything in tech and every company? 63 00:03:05,880 --> 00:03:06,359 Speaker 5: So funny. 64 00:03:06,400 --> 00:03:08,680 Speaker 8: I just got off a call with the CEO of 65 00:03:08,720 --> 00:03:10,600 Speaker 8: AMEX and he said, look, a couple of years ago, 66 00:03:10,680 --> 00:03:13,120 Speaker 8: the new technology was all about blockchain. Now the new 67 00:03:13,120 --> 00:03:16,320 Speaker 8: technology is all about artificial intelligence. But as he will say, 68 00:03:16,560 --> 00:03:17,160 Speaker 8: look they've been. 69 00:03:17,040 --> 00:03:17,639 Speaker 2: Doing it for years. 70 00:03:17,639 --> 00:03:20,240 Speaker 8: They've got AI, they got machine learning, and actually all 71 00:03:20,320 --> 00:03:22,480 Speaker 8: these other companies are racing to say the same thing. 72 00:03:22,480 --> 00:03:25,440 Speaker 8: We heard Andy Jasse from Amazon in his letter to 73 00:03:25,560 --> 00:03:28,720 Speaker 8: investors saying we've been busy on machine learning and AI 74 00:03:28,919 --> 00:03:31,520 Speaker 8: for a couple of decades. Now we know that Google 75 00:03:31,600 --> 00:03:35,120 Speaker 8: was almost synonymous with artificial intelligence after it bought a 76 00:03:35,280 --> 00:03:37,760 Speaker 8: UK pin up and the tech sector which was deep Mind. 77 00:03:38,280 --> 00:03:38,920 Speaker 5: But now it. 78 00:03:38,880 --> 00:03:41,920 Speaker 8: Seems to have changed the game from a consumer perspective 79 00:03:41,920 --> 00:03:44,520 Speaker 8: because we all get to play with it. The open 80 00:03:44,560 --> 00:03:48,800 Speaker 8: AI revelation, the chatchept now released into version four. It 81 00:03:48,840 --> 00:03:50,120 Speaker 8: is the fact that you and I can now just 82 00:03:50,120 --> 00:03:52,920 Speaker 8: see how powerful it has become. People now worrying that 83 00:03:52,960 --> 00:03:55,720 Speaker 8: AI is developing at too fast rate, But it really 84 00:03:55,760 --> 00:03:58,080 Speaker 8: is the consumer interaction with it that I think has 85 00:03:58,080 --> 00:04:01,080 Speaker 8: made us sit up and understand that, yes, the way 86 00:04:01,120 --> 00:04:03,720 Speaker 8: in which search certainly could happen is going to be 87 00:04:03,760 --> 00:04:06,200 Speaker 8: far more efficient, the way in which we could see 88 00:04:06,240 --> 00:04:10,680 Speaker 8: the way you and I react and our productivity levels increase. 89 00:04:11,080 --> 00:04:13,680 Speaker 8: But I wonder if this is also slightly a tech 90 00:04:13,760 --> 00:04:15,880 Speaker 8: sect to trestplately trying to look for some sort of 91 00:04:15,880 --> 00:04:18,599 Speaker 8: silver lining amid macroheadwinds that are still there. 92 00:04:18,800 --> 00:04:21,320 Speaker 1: And you talked about the consumers, and here's a perfect 93 00:04:21,360 --> 00:04:25,480 Speaker 1: example of how consumers are interacting. Snapchat has seen huge 94 00:04:25,480 --> 00:04:28,839 Speaker 1: growth in their four dollars a month Snapchat plus and 95 00:04:28,880 --> 00:04:33,640 Speaker 1: it's because they added AI from open Ai, and everybody 96 00:04:33,640 --> 00:04:35,839 Speaker 1: wants to play with it. You know, they want to 97 00:04:35,839 --> 00:04:39,680 Speaker 1: write poems and essays and whatever. So yeah, I see 98 00:04:39,720 --> 00:04:44,279 Speaker 1: what you mean. It has really taken the consumer to 99 00:04:44,320 --> 00:04:44,919 Speaker 1: a new place. 100 00:04:45,400 --> 00:04:48,400 Speaker 8: It has, But has it taken the actual revenues of 101 00:04:48,440 --> 00:04:50,640 Speaker 8: the business to a new place? Many would argue say 102 00:04:50,680 --> 00:04:54,040 Speaker 8: with Microsoft, no, actually, Microsoft's future quarter that we're all 103 00:04:54,080 --> 00:04:57,320 Speaker 8: anticipating this fiscal third quarter is likely to be well 104 00:04:57,320 --> 00:04:59,760 Speaker 8: an underperformance one. We're still thinking about where the businesses 105 00:04:59,800 --> 00:05:03,039 Speaker 8: are investing, rather than in their azure, rather than actually 106 00:05:03,120 --> 00:05:07,160 Speaker 8: whether practically the integration of open AI's Chat GPT into 107 00:05:07,160 --> 00:05:10,720 Speaker 8: being is really changing up their own dollars in terms 108 00:05:10,760 --> 00:05:12,760 Speaker 8: of revenue. It's not in the short term. In the 109 00:05:12,800 --> 00:05:15,520 Speaker 8: longer term, yes, we could start to advertise against that, 110 00:05:15,600 --> 00:05:18,280 Speaker 8: and yes, our productivity levels could go through the roof 111 00:05:18,320 --> 00:05:21,520 Speaker 8: and it makes their own offerings that much more in demand. 112 00:05:22,160 --> 00:05:25,000 Speaker 1: Well, you bring us to a great transition to talk 113 00:05:25,000 --> 00:05:29,040 Speaker 1: about individual companies and it's not all just chat GPT, 114 00:05:29,720 --> 00:05:31,400 Speaker 1: but let's go through some of them one by one, 115 00:05:31,400 --> 00:05:32,960 Speaker 1: and we're going to start with the Alphabit, which is 116 00:05:33,000 --> 00:05:35,479 Speaker 1: out on Tuesday. What do we and now this is 117 00:05:35,640 --> 00:05:40,640 Speaker 1: an advertising driven company, Yeah, but advertising is in a slump, 118 00:05:40,800 --> 00:05:43,240 Speaker 1: it is, and. 119 00:05:42,839 --> 00:05:44,240 Speaker 2: What do you see for this company? 120 00:05:44,240 --> 00:05:47,279 Speaker 1: There is also the search engine in cloud computing and YouTube, 121 00:05:47,320 --> 00:05:49,839 Speaker 1: but they have a lot of revenue generators, But what 122 00:05:49,880 --> 00:05:50,440 Speaker 1: do you expect? 123 00:05:50,440 --> 00:05:52,040 Speaker 8: And YouTube could be a bit of a silver lining 124 00:05:52,080 --> 00:05:54,920 Speaker 8: once again here they've had some price increases that really 125 00:05:54,960 --> 00:05:58,440 Speaker 8: could bolster performance for that particular segment. But we know 126 00:05:58,520 --> 00:06:01,840 Speaker 8: that actually growth expectations for YouTube for advertising in general 127 00:06:01,920 --> 00:06:05,279 Speaker 8: have come down of late, so cloud could at least 128 00:06:05,279 --> 00:06:07,599 Speaker 8: break even. Remember in a moment, they are a little 129 00:06:07,600 --> 00:06:11,240 Speaker 8: bit of an also ran against Amazon's AWS and Microsoft's 130 00:06:11,240 --> 00:06:13,680 Speaker 8: as you're but they are trying to boost profitability in 131 00:06:13,680 --> 00:06:16,440 Speaker 8: their cloud segment. Overall, Alphbet it's likely to see revenue 132 00:06:16,440 --> 00:06:19,560 Speaker 8: actually climb about two percent. Remember they're raking in more 133 00:06:19,600 --> 00:06:23,200 Speaker 8: than fifty billion dollars on a quarterly basis. But you're right, 134 00:06:23,240 --> 00:06:25,839 Speaker 8: this top nine growth is likely to remain pretty muted 135 00:06:25,880 --> 00:06:30,560 Speaker 8: because search network segments that they're exposed economic challenges. We've 136 00:06:30,560 --> 00:06:32,440 Speaker 8: got to worry about how much people want to pay 137 00:06:32,440 --> 00:06:37,560 Speaker 8: for advertising. And also I wonder whether this Chatchypt excitement 138 00:06:37,720 --> 00:06:39,880 Speaker 8: means you and I are using Google a little less. 139 00:06:39,880 --> 00:06:42,279 Speaker 8: I know, for one, my husband won't do anything unless 140 00:06:42,279 --> 00:06:44,839 Speaker 8: it's on Chatchypt in some way, So I do wonder 141 00:06:44,880 --> 00:06:48,160 Speaker 8: whether we might see a little tiny sliverer of evidence 142 00:06:48,160 --> 00:06:50,320 Speaker 8: that people are turning away from Google Search to use 143 00:06:50,400 --> 00:06:51,360 Speaker 8: chatchipt instead. 144 00:06:51,560 --> 00:06:54,560 Speaker 1: What did we expect from Microsoft, also out on Tuesday. 145 00:06:54,720 --> 00:06:56,800 Speaker 8: Probably quite sad when you think that more than thirty 146 00:06:56,800 --> 00:06:59,600 Speaker 8: percent growth isn't up to enough. But as you're is 147 00:06:59,680 --> 00:07:02,560 Speaker 8: likely to see thirty one percent sales growth on a 148 00:07:02,600 --> 00:07:05,120 Speaker 8: constant currency basis, but that isn't the sort of growth 149 00:07:05,200 --> 00:07:08,400 Speaker 8: we've got oh so used to. Microsoft likely to see 150 00:07:08,520 --> 00:07:11,440 Speaker 8: maybe revenue climb about four percent. We've seen fifty one 151 00:07:11,480 --> 00:07:13,960 Speaker 8: billion per quarter on its fiscal third quarter, but we 152 00:07:14,160 --> 00:07:16,800 Speaker 8: like to see evidence of this pullback in PC spending. 153 00:07:16,840 --> 00:07:19,440 Speaker 8: You and I haven't been spending so much on hardware, 154 00:07:19,600 --> 00:07:22,640 Speaker 8: on on going out and buying our computers because we 155 00:07:22,680 --> 00:07:25,120 Speaker 8: bought them all in the pandemic, so that PC weakness 156 00:07:25,240 --> 00:07:27,040 Speaker 8: is likely to take them as is also a bit 157 00:07:27,080 --> 00:07:29,840 Speaker 8: of infrastructure. Software results likely to be pulled back a 158 00:07:29,840 --> 00:07:32,240 Speaker 8: little bit as companies try and curtail they spending, so 159 00:07:32,640 --> 00:07:35,240 Speaker 8: could see some slowing down Microsoft though instead they're all 160 00:07:35,240 --> 00:07:38,280 Speaker 8: about marketing, aren't they. They're AI. They're all about showing 161 00:07:38,360 --> 00:07:40,640 Speaker 8: the enhancements over the last couple of months, but there 162 00:07:40,680 --> 00:07:42,800 Speaker 8: isn't going to be any near term sales growth because 163 00:07:42,800 --> 00:07:43,160 Speaker 8: of that. 164 00:07:43,480 --> 00:07:47,720 Speaker 2: Got it Meta of course, another big one. We've seen massive. 165 00:07:47,440 --> 00:07:51,880 Speaker 1: Job cuts there talks about more what does this earnings look. 166 00:07:51,760 --> 00:07:55,280 Speaker 8: Like for I mean, unsurprisingly profit under pressure in a 167 00:07:55,320 --> 00:07:57,480 Speaker 8: big way. We're likely to see revenues actually only down 168 00:07:57,520 --> 00:07:59,680 Speaker 8: about one percent, but it really is the profitability. This 169 00:07:59,760 --> 00:08:02,239 Speaker 8: is why Mark Zuckerberg talks time and time again about 170 00:08:02,280 --> 00:08:04,880 Speaker 8: the focus on efficiency. For this year, you're going to 171 00:08:04,960 --> 00:08:07,280 Speaker 8: see perhaps a bit of a drag and engagement on 172 00:08:07,520 --> 00:08:09,640 Speaker 8: the old blue Facebook, but there's going to be an 173 00:08:09,720 --> 00:08:11,520 Speaker 8: uptick perhaps in the way and you and I are 174 00:08:11,560 --> 00:08:15,360 Speaker 8: interacting with reels, with WhatsApp, with messaging ads, but they 175 00:08:15,400 --> 00:08:17,520 Speaker 8: have been hampered by the fact that Apple doesn't want 176 00:08:17,560 --> 00:08:19,160 Speaker 8: to build in of course, the way in which we 177 00:08:19,240 --> 00:08:21,480 Speaker 8: track our data, so that's overall been a bit of 178 00:08:21,520 --> 00:08:24,600 Speaker 8: a headwind. We're likely to see challenges once again, a 179 00:08:24,640 --> 00:08:26,840 Speaker 8: second round of layoffs. At least they're going to help 180 00:08:26,920 --> 00:08:28,720 Speaker 8: with their expenditures to a certain degree. 181 00:08:29,200 --> 00:08:30,000 Speaker 2: Got it. 182 00:08:30,120 --> 00:08:33,480 Speaker 1: Snap also the owner of Snapchat reporting, and we talked 183 00:08:33,520 --> 00:08:38,000 Speaker 1: briefly about that before. How they've embraced AI and the 184 00:08:38,080 --> 00:08:40,200 Speaker 1: chatbot and how is it looking for them. They have 185 00:08:40,280 --> 00:08:43,360 Speaker 1: suffered kind of it also ran as well, Yeah. 186 00:08:43,240 --> 00:08:45,640 Speaker 8: Oh boy, their share price has suffered. It's languished at 187 00:08:45,640 --> 00:08:49,480 Speaker 8: at about ten for what the last end of twenty 188 00:08:49,520 --> 00:08:52,439 Speaker 8: twenty two. Really we started to see Snap I think 189 00:08:52,520 --> 00:08:54,960 Speaker 8: last year become the canaryan the coal mine. They come 190 00:08:54,960 --> 00:08:57,160 Speaker 8: out with their ownings first and they then set the 191 00:08:57,160 --> 00:08:59,240 Speaker 8: tone for how the rest of the advertising market was 192 00:08:59,280 --> 00:09:01,880 Speaker 8: going to really look. And snaps growth expectations have come 193 00:09:01,920 --> 00:09:04,800 Speaker 8: down sharply in the first half of the year. Six 194 00:09:04,840 --> 00:09:08,760 Speaker 8: percent likely drop in top line overall revision the company. 195 00:09:09,360 --> 00:09:12,480 Speaker 8: We're likely to see a twenty percent cut and fixed costs. Again, 196 00:09:12,520 --> 00:09:15,520 Speaker 8: this is more about how they can preserve profitability rather 197 00:09:15,640 --> 00:09:18,880 Speaker 8: than drive it. So this is again being cautious, as 198 00:09:18,920 --> 00:09:21,560 Speaker 8: we likely to see advertisers be cautious with their budgets. Remember, 199 00:09:21,760 --> 00:09:23,280 Speaker 8: if you're thinking about, oh, where shall I put my 200 00:09:23,320 --> 00:09:27,240 Speaker 8: advertising dollars to work? You're probably gonna stick with Facebook's Instagram. 201 00:09:27,320 --> 00:09:30,280 Speaker 8: You might be sticking with Google's YouTube. You might cut 202 00:09:30,320 --> 00:09:31,839 Speaker 8: back on a snap because it is a bit of 203 00:09:31,840 --> 00:09:33,920 Speaker 8: an also around, as you say, although they are always 204 00:09:34,200 --> 00:09:36,920 Speaker 8: a creative way to perhaps get some bang for your 205 00:09:36,920 --> 00:09:39,239 Speaker 8: buck with the AI focus. 206 00:09:39,240 --> 00:09:42,520 Speaker 1: Intel also reporting now this is hardware, the chip maker. 207 00:09:43,120 --> 00:09:46,400 Speaker 1: They are fresh concerns about chip makers. Now Washington sanctions 208 00:09:46,600 --> 00:09:50,240 Speaker 1: hamstringing China's ambitions there. What do you see for Intel? 209 00:09:50,280 --> 00:09:50,520 Speaker 2: Though? 210 00:09:50,679 --> 00:09:53,640 Speaker 8: And we're back to boombust. They all told us in 211 00:09:53,679 --> 00:09:56,520 Speaker 8: COVID and in the post pandemic era that we were 212 00:09:56,559 --> 00:09:59,600 Speaker 8: gone out of boom bus cycles for chips because we 213 00:09:59,640 --> 00:10:02,920 Speaker 8: all move to automated devices, the fact that we're going 214 00:10:02,960 --> 00:10:06,440 Speaker 8: to have every connected device Internet of things, the industry 215 00:10:06,480 --> 00:10:09,319 Speaker 8: would be changed. And it doesn't happen that quickly, it 216 00:10:09,360 --> 00:10:11,319 Speaker 8: would seem. And so for Intel, I'd like to see 217 00:10:11,320 --> 00:10:14,079 Speaker 8: actually a forty percent sales drop. We're likely to see, 218 00:10:14,120 --> 00:10:17,079 Speaker 8: of course again the PC slow down that's affecting Microsoft 219 00:10:17,120 --> 00:10:20,640 Speaker 8: it's going to impact Intel as well. Slumping comsumer demand 220 00:10:20,679 --> 00:10:22,880 Speaker 8: means look, they're not going to have as many chips 221 00:10:22,920 --> 00:10:25,080 Speaker 8: in the devices that we're buying. So we know the 222 00:10:25,120 --> 00:10:27,240 Speaker 8: headwinds are there for PC. We know that actually they're 223 00:10:27,280 --> 00:10:29,600 Speaker 8: losing some market share in terms of data centers as well. 224 00:10:29,679 --> 00:10:33,040 Speaker 8: AMD they're buy females. Executives just been doing phenomenal work 225 00:10:33,040 --> 00:10:36,400 Speaker 8: there at catching some market and this is a market 226 00:10:36,480 --> 00:10:38,520 Speaker 8: that we want to hear from. The CEO, Pat Gelsinger 227 00:10:38,559 --> 00:10:41,880 Speaker 8: has been very upfront with the challenges he faces, his 228 00:10:42,120 --> 00:10:44,720 Speaker 8: entire sector faces. And remember they are trying to build 229 00:10:44,720 --> 00:10:46,840 Speaker 8: a new, more resilient global supply chain at the moment, 230 00:10:46,880 --> 00:10:49,680 Speaker 8: so we has to invest in future fabs here in 231 00:10:49,720 --> 00:10:52,280 Speaker 8: America and in Europe, and that's more expensive. We're still 232 00:10:52,320 --> 00:10:53,439 Speaker 8: trying to see where they end up. 233 00:10:53,520 --> 00:10:56,120 Speaker 1: Caroline, thank you so much. Caroline Hyde is the co 234 00:10:56,200 --> 00:10:58,760 Speaker 1: host of Bloomberg Technology. Great to have you with us. 235 00:10:58,920 --> 00:10:59,520 Speaker 2: Coming up on. 236 00:10:59,480 --> 00:11:03,640 Speaker 1: Bloomberg day Break weekend, earning season for European banks as well. 237 00:11:03,679 --> 00:11:16,200 Speaker 1: I'm Tom Busby and this is Bloombergo. This is Bloomberg 238 00:11:16,280 --> 00:11:19,000 Speaker 1: Daybreak Weekend, our global look ahead at the top stories 239 00:11:19,000 --> 00:11:20,360 Speaker 1: for investors in the coming week. 240 00:11:20,480 --> 00:11:22,120 Speaker 2: I'm Tom Busby in New York. 241 00:11:22,400 --> 00:11:24,880 Speaker 1: Up later in our program, the fight over the dead 242 00:11:24,920 --> 00:11:28,840 Speaker 1: ceiling heating up even more. But first, European banks from 243 00:11:28,960 --> 00:11:33,120 Speaker 1: Ubs and Credit Sweee to Deutsche Bank, Barclay's and Santandar 244 00:11:33,679 --> 00:11:36,880 Speaker 1: reporting first quarter results next week. But it's not going 245 00:11:36,920 --> 00:11:38,800 Speaker 1: to be a simple quarter. For more, Let's head to 246 00:11:38,880 --> 00:11:42,120 Speaker 1: London and bring in Bloomberg Daybreak anchor Caroline Hepgar. 247 00:11:42,440 --> 00:11:42,760 Speaker 9: Tom. 248 00:11:42,800 --> 00:11:45,760 Speaker 3: After the tremor of the demise of Credit Sweee, we 249 00:11:45,840 --> 00:11:50,040 Speaker 3: turn to bank earnings, and many European names face individual 250 00:11:50,160 --> 00:11:53,360 Speaker 3: issues as well as the broader themes around trading revenue 251 00:11:53,559 --> 00:11:56,719 Speaker 3: and net interest income that will be key to this 252 00:11:56,840 --> 00:12:00,480 Speaker 3: set of earnings. For More, I'm joined by Bloomberg's final editor, 253 00:12:00,559 --> 00:12:03,920 Speaker 3: Tom Metcalf. Tom, there are going to be a lot 254 00:12:03,960 --> 00:12:06,520 Speaker 3: of issues I think in this set of results, aren't there. 255 00:12:06,760 --> 00:12:08,800 Speaker 3: What do you think though, First of all, the US 256 00:12:08,960 --> 00:12:12,720 Speaker 3: bank results show about what we can expect from Europe. 257 00:12:12,960 --> 00:12:14,800 Speaker 7: Yeah, I think you're absolutely right. There'll be a lot 258 00:12:14,880 --> 00:12:17,880 Speaker 7: of different things for investors to digest, and you know 259 00:12:17,920 --> 00:12:21,160 Speaker 7: that sort of exemplifiber what's happened in the US, So 260 00:12:21,559 --> 00:12:23,320 Speaker 7: you know a couple of points to pull out of that. 261 00:12:23,440 --> 00:12:25,560 Speaker 7: First of all, one of the big things we saw 262 00:12:25,720 --> 00:12:28,720 Speaker 7: was effectively a flight to safety by some customers. So 263 00:12:28,760 --> 00:12:31,400 Speaker 7: you had JP Morgan, the biggest bank, seeing a lot 264 00:12:31,440 --> 00:12:34,240 Speaker 7: of deposits come its way after the term oil of 265 00:12:34,480 --> 00:12:36,920 Speaker 7: you know, Silicon Valley Bank, and on all the regional 266 00:12:36,960 --> 00:12:39,160 Speaker 7: lenders out in the US there too, So I think 267 00:12:39,480 --> 00:12:41,920 Speaker 7: that will be very very interesting to see. You know, 268 00:12:42,000 --> 00:12:44,520 Speaker 7: how much do the big banks in Europe benefit from 269 00:12:44,520 --> 00:12:46,840 Speaker 7: that kind of trend or was it sort of you know, 270 00:12:46,960 --> 00:12:50,319 Speaker 7: unique to the US. And then at the same time 271 00:12:50,400 --> 00:12:53,680 Speaker 7: you've also got net interest margins, so you saw across 272 00:12:53,679 --> 00:12:55,400 Speaker 7: a lot of the US lenders, you know, the big 273 00:12:55,440 --> 00:12:59,520 Speaker 7: retail lenders, they're still benefiting from that. And again it's 274 00:12:59,559 --> 00:13:01,199 Speaker 7: just a case of you know, how good is the 275 00:13:01,240 --> 00:13:04,920 Speaker 7: outlook there going forward? And then finally for me, you know, 276 00:13:05,520 --> 00:13:07,960 Speaker 7: it's the high finance side of things. It's those traders, 277 00:13:07,960 --> 00:13:10,000 Speaker 7: how are they doing? And the US painted a very 278 00:13:10,000 --> 00:13:12,559 Speaker 7: mixed picture. So you had Golden Sacks typically a bellweather 279 00:13:12,640 --> 00:13:15,520 Speaker 7: for this kind of thing, but actually its traders didn't 280 00:13:15,520 --> 00:13:18,040 Speaker 7: do so well this quarter. That really hurt the shares. 281 00:13:18,640 --> 00:13:21,199 Speaker 7: But in contrast, Bank of America normally a bit more 282 00:13:21,240 --> 00:13:23,439 Speaker 7: scayed than Golden Sacks actually did very very well like 283 00:13:23,480 --> 00:13:26,520 Speaker 7: blue past estimates, so you know, not quite sure whether 284 00:13:26,520 --> 00:13:29,800 Speaker 7: European lenders will land between those two, which just means 285 00:13:29,840 --> 00:13:31,360 Speaker 7: to me that I think it's going to be a 286 00:13:31,480 --> 00:13:34,440 Speaker 7: very interesting, kind of difficult to unpick set of earnings 287 00:13:34,440 --> 00:13:36,320 Speaker 7: and it'll be intriguing to see how sort of various 288 00:13:36,360 --> 00:13:37,720 Speaker 7: banks sort of come out of it. 289 00:13:38,400 --> 00:13:41,680 Speaker 3: Yeah, and on the specifics, of course, we're only just 290 00:13:41,720 --> 00:13:45,000 Speaker 3: about a month or so out from the demand is 291 00:13:45,040 --> 00:13:47,800 Speaker 3: of Credit Sweee, and you've got results both from UBS 292 00:13:47,840 --> 00:13:51,439 Speaker 3: and Credit Sweee, so bank regulation and all the issues 293 00:13:51,480 --> 00:13:54,160 Speaker 3: around this merger are going to be at the four too. 294 00:13:54,880 --> 00:13:55,080 Speaker 2: Yeah. 295 00:13:55,080 --> 00:13:57,280 Speaker 7: Absolutely, it look for me, the Credit Swiss UBS story 296 00:13:57,320 --> 00:13:59,640 Speaker 7: probably the one that continues to dominate the headlines for 297 00:13:59,640 --> 00:14:02,480 Speaker 7: obviously reasons. You know, I think it will be Credit 298 00:14:02,480 --> 00:14:05,840 Speaker 7: Swiss's last set of results as an independent bank, so 299 00:14:05,960 --> 00:14:08,560 Speaker 7: plenty of reasons to look closely at that. But I 300 00:14:08,559 --> 00:14:10,920 Speaker 7: suspect most of the grillin will be on the h 301 00:14:11,120 --> 00:14:14,680 Speaker 7: UBS executives, who will presumably be asked, you know, how 302 00:14:14,800 --> 00:14:17,040 Speaker 7: is the sort of merger proceeding? You know, what are 303 00:14:17,080 --> 00:14:20,120 Speaker 7: your long term plans? Is this really good for UBS? 304 00:14:20,120 --> 00:14:23,280 Speaker 7: Et cetera, et cetera, And it's just an absolutely enormous story. 305 00:14:23,320 --> 00:14:25,560 Speaker 7: There's so many different kind of stakeholders here. We've seen 306 00:14:25,600 --> 00:14:27,960 Speaker 7: a lot of sort of agro from the Swiss side, 307 00:14:27,960 --> 00:14:29,680 Speaker 7: so we'll be curious see if on the political side 308 00:14:29,680 --> 00:14:32,880 Speaker 7: there's kind of pressure there. And ultimately, obviously what UBS 309 00:14:32,960 --> 00:14:34,800 Speaker 7: want to do is show you know, a really good 310 00:14:34,800 --> 00:14:37,160 Speaker 7: set of results and kind of a path forward to 311 00:14:37,200 --> 00:14:41,000 Speaker 7: make sure this sort of very difficult merger can kind 312 00:14:41,040 --> 00:14:43,440 Speaker 7: of proceed. So that for me will probably be the 313 00:14:43,480 --> 00:14:46,160 Speaker 7: dominant story, certainly, at least in the use side of things. 314 00:14:46,440 --> 00:14:50,280 Speaker 3: Okay, what about the UK? How resilient are the balance 315 00:14:50,320 --> 00:14:52,200 Speaker 3: sheets of the big UK banks? 316 00:14:52,720 --> 00:14:54,720 Speaker 7: Yeah, I think it'd be similar questions to what I 317 00:14:54,760 --> 00:14:57,320 Speaker 7: was saying about the US. So are they benefiting from 318 00:14:57,320 --> 00:14:59,920 Speaker 7: the net interest margin? And if so, you know, toward extent? 319 00:15:00,040 --> 00:15:02,440 Speaker 7: And what is their guidance? What are they saying is 320 00:15:02,520 --> 00:15:05,040 Speaker 7: likely to happen in the coming months. So it does 321 00:15:05,120 --> 00:15:07,080 Speaker 7: seem that the Bank of England's likely to raise interest 322 00:15:07,160 --> 00:15:10,040 Speaker 7: rates again, so maybe that will be a positive. But 323 00:15:10,120 --> 00:15:11,920 Speaker 7: you know, what we have seen is even after you know, 324 00:15:12,280 --> 00:15:14,760 Speaker 7: right in the midst of these interest rates rate rises, 325 00:15:14,920 --> 00:15:17,400 Speaker 7: investors are already looking ahead and going, well, how long 326 00:15:17,440 --> 00:15:20,240 Speaker 7: will these good times last for the banks? So there's 327 00:15:20,280 --> 00:15:23,320 Speaker 7: that question. I think, you know, this is fair to say. 328 00:15:23,360 --> 00:15:25,600 Speaker 7: I think the UK banks have largely dodged, you know, 329 00:15:25,720 --> 00:15:27,280 Speaker 7: some of the term what you saw in the US. 330 00:15:27,320 --> 00:15:30,240 Speaker 7: Obviously they have been rocked by it somewhat, but you know, 331 00:15:30,280 --> 00:15:33,200 Speaker 7: that does seem like a pretty specific issue to the US. 332 00:15:33,280 --> 00:15:35,440 Speaker 7: So I think the focus will be on kind of 333 00:15:35,480 --> 00:15:37,920 Speaker 7: how well they executed this quarter, how well these interest 334 00:15:38,000 --> 00:15:40,520 Speaker 7: rates are coming through. But again, and this is what 335 00:15:40,560 --> 00:15:42,840 Speaker 7: makes this particular earnescis and really interesting. I think there's 336 00:15:42,840 --> 00:15:45,520 Speaker 7: just lots of idiosyncratic issues for each bank, so kind 337 00:15:45,520 --> 00:15:47,120 Speaker 7: of for almost every bank, you're going to be looking 338 00:15:47,160 --> 00:15:48,120 Speaker 7: at different things. 339 00:15:48,560 --> 00:15:52,120 Speaker 3: Yeah, one of which, of course, has come to the 340 00:15:52,160 --> 00:15:55,800 Speaker 3: four again this week, which is HSBC and the battle 341 00:15:55,840 --> 00:15:59,600 Speaker 3: with their big shareholder ping Ann about whether the business 342 00:15:59,600 --> 00:16:00,000 Speaker 3: is split. 343 00:16:00,760 --> 00:16:02,840 Speaker 7: Yeah, exactly, really heating up. So it's kind of being 344 00:16:02,840 --> 00:16:05,040 Speaker 7: almost like a phony war for the last year or so, 345 00:16:05,200 --> 00:16:07,520 Speaker 7: where we knew ping An were pushing for this, but 346 00:16:07,840 --> 00:16:10,480 Speaker 7: it was perpetually kind of they won't send anything on 347 00:16:10,480 --> 00:16:12,800 Speaker 7: the record, It was all kind of done through proxies. 348 00:16:13,040 --> 00:16:15,160 Speaker 7: What happened this week is you had a ping An 349 00:16:15,240 --> 00:16:17,520 Speaker 7: unit come out and say, you know, we are deeply 350 00:16:17,520 --> 00:16:21,800 Speaker 7: concerned about HSBC's performance. They sort of slightly tweaked what 351 00:16:21,800 --> 00:16:24,920 Speaker 7: they wanted HSBC to do. It's basically now more of 352 00:16:25,040 --> 00:16:28,920 Speaker 7: listing their Asian units, which is slightly more feasible to achieve. 353 00:16:29,160 --> 00:16:30,600 Speaker 7: But if you read this letter from ping A, it's 354 00:16:30,600 --> 00:16:32,280 Speaker 7: two thousand words and they basically spend most of it 355 00:16:32,360 --> 00:16:35,560 Speaker 7: saying HSBC aren't listening to us. You know, they don't 356 00:16:35,600 --> 00:16:38,160 Speaker 7: seem to take any kind of consideration of our ideas. 357 00:16:38,240 --> 00:16:41,680 Speaker 7: And what's fascinating is, you know, this is HSBC's top shareholder, 358 00:16:41,760 --> 00:16:44,840 Speaker 7: So be really curious to see both of the results, 359 00:16:44,920 --> 00:16:47,080 Speaker 7: which I think are sort of May the second, but 360 00:16:47,120 --> 00:16:49,520 Speaker 7: probably more interesting at the AGM which follows on May 361 00:16:49,520 --> 00:16:53,160 Speaker 7: the fifth, where I'm kind of preparing myself for fireworks there. 362 00:16:53,520 --> 00:16:58,280 Speaker 3: Fireworks. Okay, what about Barclay's then and the issues around 363 00:16:58,440 --> 00:16:58,920 Speaker 3: just Daley. 364 00:16:59,600 --> 00:17:02,800 Speaker 7: Yeah, so that will again probably dominate some of the 365 00:17:02,840 --> 00:17:05,679 Speaker 7: coverage there. And you know, obviously former CEO, you know, 366 00:17:05,720 --> 00:17:08,600 Speaker 7: Barcleays as it is today, has you know, really very 367 00:17:08,600 --> 00:17:11,680 Speaker 7: little to do with this, and you know that that's clear, 368 00:17:11,720 --> 00:17:13,160 Speaker 7: you know, all when to day he was at JP 369 00:17:13,280 --> 00:17:16,000 Speaker 7: Morgan actually, but that doesn't mean sort of the bard 370 00:17:16,000 --> 00:17:18,479 Speaker 7: of Barkleys don't have questions to answer about you know, 371 00:17:18,520 --> 00:17:20,639 Speaker 7: how come they let the bank get into this position 372 00:17:20,720 --> 00:17:23,280 Speaker 7: where even you know, you know, a year or so 373 00:17:23,440 --> 00:17:26,439 Speaker 7: after they knew that the FCA was investigating their CEO, 374 00:17:26,760 --> 00:17:30,040 Speaker 7: they were still standing by him. And I think now 375 00:17:30,080 --> 00:17:32,480 Speaker 7: as more and more kind of these details emerge, that's looking, 376 00:17:32,520 --> 00:17:34,080 Speaker 7: you know, more and more questionable. I think the bank 377 00:17:34,119 --> 00:17:36,960 Speaker 7: has finally come out and said, yes, these new allegations 378 00:17:37,440 --> 00:17:40,159 Speaker 7: are sort of horrific, and you know, we were not 379 00:17:40,200 --> 00:17:43,480 Speaker 7: aware of them at the time, so that will be interesting. 380 00:17:43,520 --> 00:17:45,679 Speaker 7: I think the bank will presumably doing everything it can 381 00:17:45,760 --> 00:17:47,959 Speaker 7: to move the conversation away and you know, look at 382 00:17:47,960 --> 00:17:50,160 Speaker 7: what it can control, you know, which is obviously it's 383 00:17:50,160 --> 00:17:53,200 Speaker 7: business and stuff. But you know, in terms of the story, 384 00:17:53,640 --> 00:17:55,960 Speaker 7: when people think of sort of Barclays right now, that's 385 00:17:56,040 --> 00:17:57,520 Speaker 7: right at the top of the list, I think. 386 00:17:57,440 --> 00:18:00,439 Speaker 3: Yeah, absolutely that they may well be pressed, Yeah, the 387 00:18:00,520 --> 00:18:05,160 Speaker 3: directors about their support for Jess Daily, Yeah, even when 388 00:18:05,200 --> 00:18:08,800 Speaker 3: he was leading that bank. Look, that's an interesting story 389 00:18:09,600 --> 00:18:12,480 Speaker 3: also though Deutsche Bank, I wonder what your view is 390 00:18:12,480 --> 00:18:15,680 Speaker 3: on this last year. Of course, they've managed the highest 391 00:18:15,720 --> 00:18:18,480 Speaker 3: profit in more than a decade, so the benchmark for 392 00:18:18,600 --> 00:18:19,720 Speaker 3: them is enormous. 393 00:18:20,119 --> 00:18:20,679 Speaker 2: Yeah, exactly. 394 00:18:20,760 --> 00:18:23,320 Speaker 7: It's one of those sort of almost hoisted by your 395 00:18:23,320 --> 00:18:24,840 Speaker 7: own petar, right, You've got kind of. 396 00:18:25,040 --> 00:18:27,680 Speaker 5: That very nice position to be all well. 397 00:18:27,520 --> 00:18:29,920 Speaker 7: Exactly, Yeah, So that just the comparatives are really tough, 398 00:18:29,960 --> 00:18:31,800 Speaker 7: and that's actually a good thing to remember at all 399 00:18:31,800 --> 00:18:34,080 Speaker 7: the banks. So for example, you know, last year we 400 00:18:34,119 --> 00:18:36,040 Speaker 7: saw a lot of the investment banks doing really well 401 00:18:36,040 --> 00:18:38,240 Speaker 7: on the trading side, and that obviously just makes it 402 00:18:38,280 --> 00:18:40,200 Speaker 7: really harder. So when you see some of these falls, 403 00:18:40,480 --> 00:18:41,960 Speaker 7: it's kind of you've got to kind of put against 404 00:18:41,960 --> 00:18:44,240 Speaker 7: the long term trend rather than just looking back at 405 00:18:44,520 --> 00:18:47,000 Speaker 7: twenty twenty two per se. But yeah, no, I think 406 00:18:47,080 --> 00:18:49,520 Speaker 7: Deutsche Bank another fast, fascinating story. They're come to an 407 00:18:49,600 --> 00:18:52,240 Speaker 7: end of this long, long restruction they've been doing that 408 00:18:52,320 --> 00:18:55,760 Speaker 7: seems to be pursued, okay, but again it's you know, 409 00:18:56,160 --> 00:18:58,720 Speaker 7: has been driven by that investment bank and you know 410 00:18:58,720 --> 00:19:02,199 Speaker 7: that's obviously much more volatile than other revenue streams. So 411 00:19:02,240 --> 00:19:05,160 Speaker 7: I'll be very curious to see how in particular their 412 00:19:05,200 --> 00:19:07,280 Speaker 7: investment bankers do. And I think they report on the 413 00:19:07,320 --> 00:19:08,960 Speaker 7: same day as Barkley, So it's going to be a 414 00:19:08,960 --> 00:19:10,400 Speaker 7: lovely comparison on that day. 415 00:19:10,640 --> 00:19:14,439 Speaker 3: Okay, just lastly on pay or his an issue, the 416 00:19:14,520 --> 00:19:17,440 Speaker 3: kind of war for talent or the war to retain 417 00:19:17,560 --> 00:19:20,679 Speaker 3: talent does seem to have faded a little bit. But 418 00:19:20,760 --> 00:19:22,760 Speaker 3: what about costs and compensation? 419 00:19:23,520 --> 00:19:27,560 Speaker 7: Yeah, those are always top focus for investors. So yeah, 420 00:19:27,560 --> 00:19:29,720 Speaker 7: I think in previous years they were looking at those 421 00:19:29,800 --> 00:19:33,320 Speaker 7: increases and sort of wonderingly, how is that going to 422 00:19:33,320 --> 00:19:36,680 Speaker 7: affect the bottom line, et cetera. You know, a large 423 00:19:36,760 --> 00:19:38,840 Speaker 7: chunk of this is all variable, So you would expect, 424 00:19:38,840 --> 00:19:41,239 Speaker 7: particularly on the investment banking side, where there's really been 425 00:19:41,320 --> 00:19:44,800 Speaker 7: such you know, little deal flows, little activity, that those 426 00:19:44,880 --> 00:19:49,400 Speaker 7: variable conversations should fall quite substantially. And we are seeing 427 00:19:49,480 --> 00:19:53,480 Speaker 7: job cuts again more on the investment banking side. So yeah, 428 00:19:53,520 --> 00:19:56,040 Speaker 7: it's the mood changes is drastic, right. No one is 429 00:19:56,080 --> 00:20:00,080 Speaker 7: now talking about, you know, fantastic pay rises across the 430 00:20:00,119 --> 00:20:02,440 Speaker 7: whole bank, So very different mood and be interesting to 431 00:20:02,440 --> 00:20:03,280 Speaker 7: see what gets said. 432 00:20:03,640 --> 00:20:05,639 Speaker 3: Tom, thank you so much for being with me. That 433 00:20:05,760 --> 00:20:08,840 Speaker 3: is Bloomberg's finance editor, Tom Metcalf, so laying it all 434 00:20:08,880 --> 00:20:11,000 Speaker 3: out for you in the coming days of what to 435 00:20:11,119 --> 00:20:15,360 Speaker 3: expect in terms of European bank earnings. I'm Caroline hepget 436 00:20:15,400 --> 00:20:17,520 Speaker 3: here in London. You can catch us every weekday morning 437 00:20:17,560 --> 00:20:20,240 Speaker 3: for Boomberg Daybreak. You up beginning at six am in London. 438 00:20:20,280 --> 00:20:21,880 Speaker 3: That's one am on Wall Street. 439 00:20:21,920 --> 00:20:22,240 Speaker 2: Tom. 440 00:20:22,560 --> 00:20:25,280 Speaker 1: Thank you Caroline, and coming up on Bloomberg day Break 441 00:20:25,280 --> 00:20:28,680 Speaker 1: weekend watch for the Battle over the dead Ceiling two intensified. 442 00:20:28,960 --> 00:20:32,000 Speaker 2: I'm Tom Buzzby. This is Bloomberg. 443 00:20:36,160 --> 00:20:40,640 Speaker 6: Broadcasting live from the Bloomberg Interactive Brokers Studio in New York. 444 00:20:40,760 --> 00:20:44,400 Speaker 6: Bloomberg eleven three oh to Washington, DC, Bloomberg ninety nine 445 00:20:44,400 --> 00:20:47,320 Speaker 6: to one to Boston, Bloomberg one O six one to 446 00:20:47,400 --> 00:20:51,040 Speaker 6: San Francisco, Bloomberg nine sixteen to the country, Serrius XM 447 00:20:51,119 --> 00:20:55,119 Speaker 6: Channel one nineteen to London, DAB Digital Radio, and around 448 00:20:55,119 --> 00:20:58,960 Speaker 6: the globe the Bloomberg Business app in Bloomberg Radio dot Com. 449 00:20:59,000 --> 00:21:00,720 Speaker 6: This is bloom Bird Daybreak. 450 00:21:00,880 --> 00:21:01,399 Speaker 4: We can. 451 00:21:07,400 --> 00:21:09,720 Speaker 1: Hi'm Tom Busby in New York with your global look 452 00:21:09,720 --> 00:21:12,240 Speaker 1: ahead at the top stories for investors in the coming week, 453 00:21:12,480 --> 00:21:15,880 Speaker 1: The fight over the debt ceiling getting more intense. For more, 454 00:21:15,960 --> 00:21:18,399 Speaker 1: let's add to our Bloomberg ninety nine one newsroom in 455 00:21:18,480 --> 00:21:21,800 Speaker 1: Washington and sound on co host Kaylee. 456 00:21:21,480 --> 00:21:24,800 Speaker 5: Lines, thanks Tom. Yeah, this clock toward the X status 457 00:21:24,920 --> 00:21:28,360 Speaker 5: ticking and potentially ticking louder and faster. The X state, 458 00:21:28,400 --> 00:21:30,639 Speaker 5: of course, is when the Treasury could hit the wall 459 00:21:30,680 --> 00:21:32,879 Speaker 5: and run out of money to pay the bills of 460 00:21:32,880 --> 00:21:36,119 Speaker 5: the United States, and progress on raising the debt sealing 461 00:21:36,160 --> 00:21:39,280 Speaker 5: to avoid a potential default has been hard to find 462 00:21:39,440 --> 00:21:42,200 Speaker 5: to this point, but this past week, House Speaker Kevin 463 00:21:42,280 --> 00:21:45,639 Speaker 5: McCarthy put a proposal on the table, a three hundred 464 00:21:45,640 --> 00:21:48,679 Speaker 5: and twenty page plan that would raise the debt ceiling 465 00:21:48,760 --> 00:21:51,639 Speaker 5: by one and a half trillion dollars, which could be 466 00:21:51,840 --> 00:21:55,400 Speaker 5: enough to stave off a default until March of next year. 467 00:21:55,920 --> 00:21:58,000 Speaker 5: He hopes the plan will get the White House to 468 00:21:58,080 --> 00:22:01,359 Speaker 5: start playing ball. Here's what he said Wednesday while introducing 469 00:22:01,400 --> 00:22:04,119 Speaker 5: the Limit Save Grow Act on the House floor. 470 00:22:04,440 --> 00:22:09,479 Speaker 9: President Biden has a choice come to the table and 471 00:22:09,560 --> 00:22:17,000 Speaker 9: stop playing partisan political games, or cover his ears, refuse 472 00:22:17,080 --> 00:22:22,399 Speaker 9: to negotiate, and risk bumbling his way into the first 473 00:22:22,480 --> 00:22:24,720 Speaker 9: default in our nation's history. 474 00:22:26,080 --> 00:22:29,000 Speaker 5: The White House, though, has accused him and House Republicans 475 00:22:29,000 --> 00:22:32,800 Speaker 5: of holding the American economy hostage, and the President himself 476 00:22:32,840 --> 00:22:36,000 Speaker 5: pushed back on the spending cuts that come with Speaker 477 00:22:36,040 --> 00:22:36,800 Speaker 5: McCarthy's plan. 478 00:22:37,200 --> 00:22:40,240 Speaker 10: You and the American people should know about the competing 479 00:22:40,320 --> 00:22:43,240 Speaker 10: economic visions of the country that are really at stake 480 00:22:43,320 --> 00:22:47,160 Speaker 10: right now. Massive cuts and programs you count on massive 481 00:22:47,480 --> 00:22:51,040 Speaker 10: benefit protected for those at the top, a lot of 482 00:22:51,560 --> 00:22:53,480 Speaker 10: you know, all the tax cuts go to the top, 483 00:22:53,560 --> 00:22:55,440 Speaker 10: none to the bottom. And who do you think will 484 00:22:55,520 --> 00:23:00,440 Speaker 10: hurt the most, you hard working people in the middle class. 485 00:23:00,920 --> 00:23:05,040 Speaker 5: So how are these two ever going to compromise? Joining 486 00:23:05,119 --> 00:23:07,960 Speaker 5: us now to discuss are Eric Wawson, congressional reporter for 487 00:23:08,000 --> 00:23:11,480 Speaker 5: Bloomberg News, and Jordan Fabian, who covers the White House 488 00:23:11,560 --> 00:23:14,040 Speaker 5: for US. So Eric, let's first start with you, because 489 00:23:14,119 --> 00:23:17,960 Speaker 5: McCarthy put the plan out on the table this past week. 490 00:23:18,280 --> 00:23:22,480 Speaker 5: He also, though, has to get his entire caucus in line. 491 00:23:22,560 --> 00:23:25,320 Speaker 5: How hard is that job getting all the different factions 492 00:23:25,800 --> 00:23:27,640 Speaker 5: of House Republicans with him here? 493 00:23:27,800 --> 00:23:30,080 Speaker 11: You know, it's very tricky because he only has a margin. 494 00:23:30,240 --> 00:23:33,040 Speaker 11: You only lose four of his members and still passes 495 00:23:33,040 --> 00:23:36,080 Speaker 11: since all Democrats will be united against it. And we 496 00:23:36,119 --> 00:23:38,080 Speaker 11: talked to a lot of the members up on the 497 00:23:38,160 --> 00:23:41,240 Speaker 11: hill and there are more members they were saying they're 498 00:23:41,280 --> 00:23:43,560 Speaker 11: undersized or not committed than four. I mean, we were 499 00:23:43,640 --> 00:23:46,199 Speaker 11: talking about a dozen or more who are saying on 500 00:23:46,240 --> 00:23:48,679 Speaker 11: the conservative side that the work requirements in the builds, 501 00:23:48,960 --> 00:23:51,440 Speaker 11: there are new work requirements requiring twenty hours a week 502 00:23:51,840 --> 00:23:55,600 Speaker 11: of labor from Medicaid and food stamp recipients who do 503 00:23:55,640 --> 00:23:59,240 Speaker 11: not have children. They want that to thirty hours. So 504 00:23:59,280 --> 00:24:02,000 Speaker 11: they're pushing for that change, and then that kind of 505 00:24:02,359 --> 00:24:05,240 Speaker 11: maneuvering as moderate saying they won't go along. So there's 506 00:24:05,280 --> 00:24:08,520 Speaker 11: still a lot of wrangling at this point. I think 507 00:24:08,520 --> 00:24:10,440 Speaker 11: they're not going to change the text because this one 508 00:24:10,440 --> 00:24:12,600 Speaker 11: member said, it's a game of whack a mole. Once 509 00:24:12,680 --> 00:24:14,640 Speaker 11: you start changing it for one group, the other group 510 00:24:14,760 --> 00:24:17,639 Speaker 11: gets angry. So it's not a done deal at all 511 00:24:17,680 --> 00:24:19,040 Speaker 11: that he can get two hundred and eighteen and it 512 00:24:19,080 --> 00:24:21,440 Speaker 11: would be a major belly flop if he doesn't. If 513 00:24:21,440 --> 00:24:23,679 Speaker 11: he does get it, then they're hoping at least from 514 00:24:23,720 --> 00:24:26,320 Speaker 11: the McCarthy said, this is something that would put pressure 515 00:24:26,359 --> 00:24:28,280 Speaker 11: on the White House and Democrats to come to the 516 00:24:28,280 --> 00:24:30,080 Speaker 11: table and do a deal. 517 00:24:30,280 --> 00:24:33,080 Speaker 5: So Jordan to that exact point, what is it going 518 00:24:33,119 --> 00:24:36,119 Speaker 5: to take for the White House to come to the table. 519 00:24:36,160 --> 00:24:38,399 Speaker 5: Do they have to see that this gets two hundred 520 00:24:38,400 --> 00:24:41,560 Speaker 5: and eighteen votes passes in the House before they will 521 00:24:41,600 --> 00:24:42,080 Speaker 5: do anything. 522 00:24:42,200 --> 00:24:45,320 Speaker 12: Line thus far has been that Republicans need to release 523 00:24:45,400 --> 00:24:49,399 Speaker 12: a full budget blueprint before the President will agree to 524 00:24:49,440 --> 00:24:53,800 Speaker 12: sit down with Speaker McCarthy. That's pretty unlikely, at least 525 00:24:53,800 --> 00:24:57,280 Speaker 12: in the short term, given Republican divisions over what should 526 00:24:57,280 --> 00:25:00,200 Speaker 12: be in that budget. But you pointed out that if 527 00:25:00,240 --> 00:25:03,680 Speaker 12: this proposal on the limit gets two hundred and eighteen 528 00:25:03,720 --> 00:25:07,440 Speaker 12: votes and passes the House, it will increase Speaking McCarthy's 529 00:25:07,520 --> 00:25:10,760 Speaker 12: leverage to ask for a vote. If it doesn't, President 530 00:25:10,840 --> 00:25:14,040 Speaker 12: Biden can afford to stand pat and say, look, I 531 00:25:14,040 --> 00:25:17,879 Speaker 12: can't negotiate with you because you don't have a position 532 00:25:17,920 --> 00:25:19,960 Speaker 12: to negotiate on. You can't you don't have control over 533 00:25:20,000 --> 00:25:23,399 Speaker 12: your conference. And so that's why the vote is going 534 00:25:23,440 --> 00:25:26,640 Speaker 12: to be looked at so closely, both on the Capitol 535 00:25:26,680 --> 00:25:28,840 Speaker 12: and the White House. The other thing that could increase 536 00:25:29,000 --> 00:25:33,679 Speaker 12: leverage on for Republicans is if tax receipts come in 537 00:25:33,760 --> 00:25:38,040 Speaker 12: lower than expected from this tax day and the X state, 538 00:25:38,080 --> 00:25:40,440 Speaker 12: the so called X day with a data which default 539 00:25:40,440 --> 00:25:44,159 Speaker 12: would sort of occur, would would be sooner than expected, 540 00:25:44,720 --> 00:25:46,879 Speaker 12: you know, if if that date moves up to say, 541 00:25:47,119 --> 00:25:51,200 Speaker 12: you know, June, that would also increase urgency for both 542 00:25:51,240 --> 00:25:53,280 Speaker 12: sides to sit down and hammer something out. 543 00:25:53,480 --> 00:25:55,679 Speaker 5: Yeah, that's a really good point. We've seen this past 544 00:25:55,720 --> 00:25:59,240 Speaker 5: week some strategists from Wall Street saying they're looking at 545 00:25:59,240 --> 00:26:01,960 Speaker 5: the receipt numbers which are tracking well below twenty twenty 546 00:26:02,000 --> 00:26:04,600 Speaker 5: two levels and saying June might be actually more of 547 00:26:04,640 --> 00:26:08,240 Speaker 5: a possibility than we previously thought, which would just mean 548 00:26:08,280 --> 00:26:11,280 Speaker 5: that the clock is perhaps ticking faster and louder because 549 00:26:11,280 --> 00:26:14,159 Speaker 5: the window is shorter. But eric As Jordan was just 550 00:26:14,240 --> 00:26:16,200 Speaker 5: raising the line from the White House has been show 551 00:26:16,280 --> 00:26:18,840 Speaker 5: us the budget. Where are we on the budget? If 552 00:26:18,920 --> 00:26:23,080 Speaker 5: McCarthy's just focusing specifically on this debt sealing race. 553 00:26:22,960 --> 00:26:25,439 Speaker 11: Bill, now we may never see a budget. I think 554 00:26:25,480 --> 00:26:28,000 Speaker 11: the White House would like them to produce that because 555 00:26:28,040 --> 00:26:31,679 Speaker 11: separately from all this, Republicans have pledged to renew the 556 00:26:31,720 --> 00:26:35,120 Speaker 11: Trump era tax cuts. So essentially, you know, spending two 557 00:26:35,160 --> 00:26:37,920 Speaker 11: trillion or more on tax cuts that it's kew toward 558 00:26:37,960 --> 00:26:40,720 Speaker 11: the wealthy, And if the budget comes out and reflects that, 559 00:26:40,760 --> 00:26:43,280 Speaker 11: they can say, look, these aren't deficit hawks. These aren't 560 00:26:43,280 --> 00:26:46,119 Speaker 11: people trying to reduce the deficit. They're just trying to 561 00:26:46,160 --> 00:26:49,280 Speaker 11: cut Medicaid benefits in order to give a tax break 562 00:26:49,320 --> 00:26:52,800 Speaker 11: to the rite Republicans are divided on that budget, we 563 00:26:52,840 --> 00:26:55,879 Speaker 11: may never see it. It made this and that. Functionally, 564 00:26:55,880 --> 00:26:58,320 Speaker 11: that would just mean that the appropriators, the committees that 565 00:26:58,359 --> 00:27:02,000 Speaker 11: actually divide up the age and key budgets and write 566 00:27:02,040 --> 00:27:04,560 Speaker 11: those bills, would just go ahead and figure out a 567 00:27:04,600 --> 00:27:06,960 Speaker 11: top line number for the whole year on their own. 568 00:27:07,480 --> 00:27:10,080 Speaker 11: But I think, I mean, functionally, if the debt ceiling 569 00:27:10,200 --> 00:27:13,160 Speaker 11: bill passes, I don't see how the Whites can sustainably 570 00:27:13,200 --> 00:27:15,199 Speaker 11: continue to say they need a budget. I mean, there 571 00:27:15,200 --> 00:27:17,760 Speaker 11: will be an effective offer on the table. They can 572 00:27:17,800 --> 00:27:19,159 Speaker 11: say we're not going to negotiate. 573 00:27:19,400 --> 00:27:22,439 Speaker 5: I mean, we had Senator Joe Manchin, a Democrat from 574 00:27:22,480 --> 00:27:26,480 Speaker 5: West Virginia, on Thursday, praising Speaker McCarthy and criticizing the 575 00:27:26,520 --> 00:27:30,000 Speaker 5: White House for not negotiating. Are others likely to join him? 576 00:27:30,119 --> 00:27:32,800 Speaker 11: Well, he's the proverbial canary nicole mine. But yeah, others 577 00:27:32,840 --> 00:27:34,959 Speaker 11: are already joining. We have this members of the Problem 578 00:27:35,040 --> 00:27:38,280 Speaker 11: Solvers Caucus. It's the thirty two Democrats as part of 579 00:27:38,280 --> 00:27:41,600 Speaker 11: a sixty four member bipartisan group that put forward their 580 00:27:41,640 --> 00:27:44,480 Speaker 11: own plan. They would raise the debt ceiling until December 581 00:27:44,880 --> 00:27:47,280 Speaker 11: and set up sort of a commission it's kind of 582 00:27:47,320 --> 00:27:49,480 Speaker 11: a punch, really, a commission to come up with budget 583 00:27:49,480 --> 00:27:52,840 Speaker 11: cuts and force a vote in two years. You know, 584 00:27:52,920 --> 00:27:56,480 Speaker 11: this is the kind of gimmicky solution we've seen in 585 00:27:56,560 --> 00:27:59,240 Speaker 11: past debt ceiling crises where they don't really want to 586 00:27:59,240 --> 00:28:02,040 Speaker 11: take responsibility for cuts of maybe they institute something that 587 00:28:02,119 --> 00:28:05,879 Speaker 11: could potentially do cuts of revenue later. But yeah, that 588 00:28:06,000 --> 00:28:08,800 Speaker 11: means that thirty two Democrats there are sort of on 589 00:28:08,840 --> 00:28:12,280 Speaker 11: the idea of negotiate, let's let's find a compromise. But 590 00:28:12,440 --> 00:28:15,160 Speaker 11: so far that the leaders of the party, Akeeme Jeffries 591 00:28:15,200 --> 00:28:17,080 Speaker 11: in the House and Chuck Schumer and the senat are 592 00:28:17,119 --> 00:28:19,800 Speaker 11: holding a line saying, you know, we're going to see 593 00:28:19,840 --> 00:28:23,040 Speaker 11: them buckle. We're looking also very closely at Senate Republicans 594 00:28:23,119 --> 00:28:27,199 Speaker 11: right now they're backing McCarthy. But at some point the 595 00:28:27,240 --> 00:28:29,639 Speaker 11: way that the White House would win on this is 596 00:28:29,760 --> 00:28:33,040 Speaker 11: would be that the Senate would center Publis would cave 597 00:28:33,200 --> 00:28:35,879 Speaker 11: presumably enough of them, you know, ten of them that 598 00:28:35,920 --> 00:28:38,440 Speaker 11: are needed to pass a bill, and it cleaned that 599 00:28:38,560 --> 00:28:41,240 Speaker 11: something increase comes out of the Senate, and then at 600 00:28:41,240 --> 00:28:43,680 Speaker 11: that point, in the face of literally minutes away from 601 00:28:43,680 --> 00:28:46,920 Speaker 11: a default, McCarthy folds at the risk of his own 602 00:28:46,960 --> 00:28:48,520 Speaker 11: career and puts that bill on the floor. 603 00:28:48,600 --> 00:28:52,560 Speaker 5: Okay, so that's McCarthy's career and how it could affect him. Jordan, 604 00:28:52,680 --> 00:28:56,880 Speaker 5: let's talk about the president's career, which in theory, he's 605 00:28:56,880 --> 00:28:59,959 Speaker 5: hoping to prolong. There were reports over this past week 606 00:29:00,280 --> 00:29:03,000 Speaker 5: that he's finally going to do it. President Biden is 607 00:29:03,000 --> 00:29:06,000 Speaker 5: going to announce he's running again in twenty twenty four 608 00:29:06,440 --> 00:29:09,560 Speaker 5: this coming week. Could we just talk about the timing 609 00:29:10,400 --> 00:29:12,640 Speaker 5: of that announcement if it is in the middle of 610 00:29:12,680 --> 00:29:15,960 Speaker 5: this debt sealing conflict. It seems interesting. 611 00:29:16,480 --> 00:29:20,720 Speaker 12: You raised a great point, which is that no president 612 00:29:20,800 --> 00:29:24,520 Speaker 12: wants to run for reelection amid economic uncertainty or any 613 00:29:24,560 --> 00:29:27,719 Speaker 12: headwinds that it's going to hurt the economy. I mean, 614 00:29:27,760 --> 00:29:31,200 Speaker 12: it's really traditionally to the number one issue the voters 615 00:29:31,240 --> 00:29:35,640 Speaker 12: cast ballots on. And so the president has kind of 616 00:29:35,720 --> 00:29:39,440 Speaker 12: dragged a seat on a reelection announcement. We're hearing from 617 00:29:39,480 --> 00:29:42,720 Speaker 12: sources he's going to do it as soon as you know, 618 00:29:42,760 --> 00:29:47,720 Speaker 12: the coming week, and so he's going to want going 619 00:29:47,800 --> 00:29:50,080 Speaker 12: forward this to be taken. 620 00:29:49,800 --> 00:29:50,600 Speaker 4: Care of, all right. 621 00:29:50,680 --> 00:29:54,640 Speaker 5: Jordan Fabian and Eric Wasawson are terrific reporters covering both 622 00:29:54,680 --> 00:29:57,920 Speaker 5: the White House and Congress for Bloomberg. Thank you so 623 00:29:58,160 --> 00:30:01,120 Speaker 5: very much, and Tom will see a new week. We'll 624 00:30:01,160 --> 00:30:04,720 Speaker 5: see if we see progress as that clock ticks ever louder. 625 00:30:05,040 --> 00:30:05,400 Speaker 2: Thank you. 626 00:30:05,480 --> 00:30:09,320 Speaker 1: Kaylee reporting from our Bloomberg ninety nine one newsroom in Washington. 627 00:30:09,360 --> 00:30:11,320 Speaker 1: And you can hear Sound on with Joe, Matthew and 628 00:30:11,440 --> 00:30:15,320 Speaker 1: Kaylee weekdays one to three pm Wall Street Time right 629 00:30:15,360 --> 00:30:18,880 Speaker 1: here on Bloomberg Radio and coming up on Bloomberg day 630 00:30:18,920 --> 00:30:22,280 Speaker 1: Break Weekend. How hot could tourism get in Japan this 631 00:30:22,360 --> 00:30:25,360 Speaker 1: summer and what does it mean for the country's economy. 632 00:30:25,600 --> 00:30:41,640 Speaker 1: I'm Tom Busby, and this is Bloomberg. This is Bloomberg 633 00:30:41,680 --> 00:30:44,000 Speaker 1: day Break Weekend, our global look ahead at the top 634 00:30:44,000 --> 00:30:47,040 Speaker 1: stories for investors in the coming week. I'm Tom Busby 635 00:30:47,120 --> 00:30:49,640 Speaker 1: in New York, thinking about getting some R and R 636 00:30:49,920 --> 00:30:53,320 Speaker 1: in Japan. Turns out, tourism there is seeing a pickup 637 00:30:53,680 --> 00:30:56,160 Speaker 1: for more. Let's go to Hong Kong and Bloomberg Daybreak 638 00:30:56,160 --> 00:30:59,320 Speaker 1: Asia host Brian Curtis and his colleague Doug Krisner. 639 00:31:00,080 --> 00:31:03,120 Speaker 4: For the most part, the COVID story is now firmly 640 00:31:03,200 --> 00:31:05,520 Speaker 4: in the rear view mirror, at least for many countries. 641 00:31:06,000 --> 00:31:08,440 Speaker 4: Central banks are getting close to the end of their 642 00:31:08,600 --> 00:31:12,240 Speaker 4: intense rate hiking cycle, and at least for much of 643 00:31:12,280 --> 00:31:14,920 Speaker 4: the world, we may, and I have to stress the 644 00:31:14,960 --> 00:31:17,800 Speaker 4: word may be getting close to the end of this 645 00:31:18,000 --> 00:31:19,240 Speaker 4: recent bout of inflation. 646 00:31:19,360 --> 00:31:21,240 Speaker 13: Well, if that's the case, we might see a big 647 00:31:21,280 --> 00:31:24,840 Speaker 13: pickup in tourism and tourism related spending around the world. 648 00:31:25,480 --> 00:31:28,160 Speaker 13: For a case study, we selected Japan. We know the 649 00:31:28,160 --> 00:31:31,760 Speaker 13: currency as we can considerably and recently Bloomberg reported that 650 00:31:31,840 --> 00:31:35,360 Speaker 13: foreigners have been buying up hotel property in Japan at 651 00:31:35,400 --> 00:31:38,880 Speaker 13: a rapid pace and at a scale not seen in decades. 652 00:31:39,480 --> 00:31:42,680 Speaker 4: Joining us now is Lisa dou who covers Asia finance 653 00:31:42,760 --> 00:31:46,080 Speaker 4: for Bloomberg again wrote that story about the hotel investment. Lisa, 654 00:31:46,080 --> 00:31:48,600 Speaker 4: thanks so much for being with us. We thought it 655 00:31:48,680 --> 00:31:52,520 Speaker 4: might be a decent prism through which we can see 656 00:31:52,640 --> 00:31:55,640 Speaker 4: if real foreign demand could be coming. We know that 657 00:31:55,760 --> 00:31:58,920 Speaker 4: domestic demand is still a little sluggish in Japan, but 658 00:31:59,560 --> 00:32:01,520 Speaker 4: is it come and how far might it go? 659 00:32:01,840 --> 00:32:04,840 Speaker 14: We actually just had the latest numbers in March from 660 00:32:04,920 --> 00:32:07,960 Speaker 14: the Japan Tourism Bureau. They had one point eight million 661 00:32:08,040 --> 00:32:11,040 Speaker 14: visitors for the month. Definitely improvement from the last three 662 00:32:11,120 --> 00:32:14,160 Speaker 14: years where they are effectively no tourists, but still a 663 00:32:14,280 --> 00:32:15,880 Speaker 14: very far away from full recovery. 664 00:32:16,000 --> 00:32:19,760 Speaker 13: So Japan recently approved plans for the country's first casino. 665 00:32:19,840 --> 00:32:22,440 Speaker 13: This paves the way to open up what may be 666 00:32:22,720 --> 00:32:26,320 Speaker 13: the largest untapped casino market in Asia, and recently is 667 00:32:26,360 --> 00:32:29,160 Speaker 13: a part of this. Prime Minister Kishita said that he 668 00:32:29,240 --> 00:32:32,840 Speaker 13: hopes the resort and casino will become a tourism base 669 00:32:32,880 --> 00:32:36,800 Speaker 13: that promotes Japan's charms to the world. So where is 670 00:32:36,800 --> 00:32:39,720 Speaker 13: the government when it comes to driving tourism right now? 671 00:32:40,360 --> 00:32:42,959 Speaker 14: Tourism is definitely one of the biggest strategies that Japan 672 00:32:43,280 --> 00:32:45,920 Speaker 14: had before the pandemic to drive growth in the economy, 673 00:32:45,960 --> 00:32:48,120 Speaker 14: and I think it continues to it will now continue 674 00:32:48,120 --> 00:32:50,760 Speaker 14: to be so now that COVID is mostly behind us. 675 00:32:51,120 --> 00:32:54,160 Speaker 4: If we look at that hotel investment story, is it 676 00:32:54,320 --> 00:32:57,880 Speaker 4: investors from Hong Kong or Singapore? And does it match 677 00:32:57,960 --> 00:33:00,640 Speaker 4: up with where we see the biggest numbers of tourists 678 00:33:00,720 --> 00:33:01,560 Speaker 4: going into Japan. 679 00:33:02,440 --> 00:33:05,520 Speaker 14: You definitely see a mix of investors. Just to give 680 00:33:05,520 --> 00:33:09,520 Speaker 14: you the numbers, you know, for investors basically accounted for 681 00:33:09,560 --> 00:33:12,800 Speaker 14: nearly half of the three point seven billion invested in 682 00:33:12,840 --> 00:33:15,000 Speaker 14: hotel deals in Japan the past twelve month and that's 683 00:33:15,000 --> 00:33:18,440 Speaker 14: probably the highest proportion we've seen since twenty fourteen according 684 00:33:18,440 --> 00:33:22,040 Speaker 14: to MSCI data. And and you know, looking at some 685 00:33:22,040 --> 00:33:24,480 Speaker 14: of the big deals you are seeing, it is Hong Kong, 686 00:33:25,000 --> 00:33:29,400 Speaker 14: US and Singapore and so and these are reflective also 687 00:33:29,880 --> 00:33:32,680 Speaker 14: of you know, where most of the tours are coming from. 688 00:33:32,800 --> 00:33:34,280 Speaker 14: So some of the big deals we've seen in the 689 00:33:34,280 --> 00:33:38,840 Speaker 14: past twelve months, KKR, with a Hong Kong fund called 690 00:33:39,360 --> 00:33:42,840 Speaker 14: gall Capital, spent fifty seven billion yen buying the High 691 00:33:42,960 --> 00:33:46,520 Speaker 14: Regency in Tokyo. The Canadian pe firm Bental Green Oak 692 00:33:46,600 --> 00:33:49,880 Speaker 14: bought a nice hotel in Osaka also for about fifty 693 00:33:49,880 --> 00:33:52,560 Speaker 14: five billion yin And you know, and then you compare 694 00:33:52,600 --> 00:33:54,880 Speaker 14: that now against where most of the tours are coming 695 00:33:54,880 --> 00:33:57,880 Speaker 14: from this year. The highest numbers you're seeing in Asia, 696 00:33:57,960 --> 00:34:00,760 Speaker 14: South Korea, Taiwan, Hong Kong, and then in North America 697 00:34:00,800 --> 00:34:02,840 Speaker 14: definitely the US and Canada. So it does you do 698 00:34:02,880 --> 00:34:04,400 Speaker 14: see some matching up there as well. 699 00:34:04,640 --> 00:34:09,480 Speaker 4: And just briefly, Lisa, what does inbound tourism do for 700 00:34:09,560 --> 00:34:13,040 Speaker 4: the overall Japanese economy? In other words, could you know 701 00:34:13,239 --> 00:34:15,719 Speaker 4: this kind of rush of people and money coming in 702 00:34:16,000 --> 00:34:18,520 Speaker 4: will that stoke growth in the local economy. 703 00:34:19,160 --> 00:34:21,160 Speaker 14: I think that's what the hope is, you know, the 704 00:34:21,280 --> 00:34:24,520 Speaker 14: if these inbound tours are coming in and spending locally, 705 00:34:24,680 --> 00:34:26,520 Speaker 14: you know, that puts more money into the system. The 706 00:34:26,680 --> 00:34:30,040 Speaker 14: yen has weakened considerably against the dollar since you know, 707 00:34:30,120 --> 00:34:33,239 Speaker 14: the beginning of twenty twenty two because the boj and 708 00:34:33,280 --> 00:34:36,080 Speaker 14: the Bank of Japan has kept its negative rate policy 709 00:34:36,120 --> 00:34:39,120 Speaker 14: while most of the other developed you know, economies have 710 00:34:39,239 --> 00:34:41,440 Speaker 14: raise rates. And so I think the hope now is 711 00:34:41,480 --> 00:34:43,440 Speaker 14: if you know, people are coming in and spending in 712 00:34:43,520 --> 00:34:46,680 Speaker 14: Japan and bringing their foreign currenzies into Japan, that will 713 00:34:46,680 --> 00:34:49,040 Speaker 14: maybe kind of ease the pressure on the yen a 714 00:34:49,080 --> 00:34:51,759 Speaker 14: little bit, and that and that will then feed over 715 00:34:51,800 --> 00:34:54,479 Speaker 14: into the rest of the economy and helping with food 716 00:34:54,520 --> 00:34:57,560 Speaker 14: prices and energy prices, which have been you know, kind 717 00:34:57,600 --> 00:34:59,799 Speaker 14: of the main source of inflation, and up the slight 718 00:35:00,320 --> 00:35:01,160 Speaker 14: we're seeing in Japan. 719 00:35:01,560 --> 00:35:04,360 Speaker 13: Lisa, Thank you so much. Lisa do there. She covers 720 00:35:04,520 --> 00:35:07,879 Speaker 13: Asia Finance for Bloomberg. I'm Doug Krisner along with Brian 721 00:35:07,960 --> 00:35:10,400 Speaker 13: Curtis in Hong Kong, and you can catch us weekdays 722 00:35:10,400 --> 00:35:13,040 Speaker 13: here from Bloomberg Day Break Asia beginning at six am 723 00:35:13,160 --> 00:35:15,920 Speaker 13: in Hong Kong. Six pm on Wall Street. 724 00:35:16,160 --> 00:35:19,000 Speaker 1: Tom, thank you, Brian and Doug. And that does it 725 00:35:19,040 --> 00:35:21,680 Speaker 1: for this edition of Bloomberg day Break Weekend. Join us 726 00:35:21,680 --> 00:35:24,120 Speaker 1: again Monday morning at five am Wall Street time for 727 00:35:24,200 --> 00:35:27,080 Speaker 1: the latest on markets overseas and the news you need 728 00:35:27,120 --> 00:35:28,000 Speaker 1: to start your day. 729 00:35:28,480 --> 00:35:30,319 Speaker 2: I'm Tom Buzzby. Stay with us. 730 00:35:30,480 --> 00:35:34,840 Speaker 1: Top stories and global business headlines are coming up right now.