WEBVTT - Oracle Disappoints, BOJ Unlikely to Change Direction

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<v Speaker 1>Good morning. I'm Brian Curtis and I'm Doug Prisner. Here

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<v Speaker 1>are the stories we're following today.

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<v Speaker 2>Special counsel Jack Smith is going directly to the US

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<v Speaker 2>Supreme Court for a final decision. This goes to whether

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<v Speaker 2>Donald Trump is entitled to absolute immunity. That Baxter has

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<v Speaker 2>that story and more from the nine to sixty news

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<v Speaker 2>room in San Francisco.

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<v Speaker 3>Yeah, that's right, Brian, that's a Trump claim that he

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<v Speaker 3>has total immunity in the January case accusing him of

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<v Speaker 3>being part of the effort to overturn the election. He

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<v Speaker 3>lost a decision from District Judge Tanya Chutkin. Bloomberg Supreme

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<v Speaker 3>Court reported Greg Stores says Smith wants to go directly

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<v Speaker 3>now to the highest court.

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<v Speaker 4>And today Jack Smith said, we need this matter resolve

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<v Speaker 4>so urgently that I'm going to go straight to the

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<v Speaker 4>Supreme Court. Supreme Court, please take this matter up without

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<v Speaker 4>even waiting for our federal appeals court to hear Donald

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<v Speaker 4>Trump's appeal. Jack Smith is asking for the Supreme Court

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<v Speaker 4>to resolve the case in its current term, which runs

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<v Speaker 4>through June. So why today he did it today? Because

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<v Speaker 4>time's a wasting it. Trial is scheduled to start March

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<v Speaker 4>the fourth. It cannot been as long as Donald Trump

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<v Speaker 4>is appealing this issue of immunity, So Jack Smith needs

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<v Speaker 4>this resolved as quickly as possible.

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<v Speaker 3>Now, the filing mark's first time the Supreme Court has

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<v Speaker 3>been asked to intervene in one of the cases pending

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<v Speaker 3>against Trump. Hunter Biden's attorneys are saying today that the

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<v Speaker 3>gun and tax charges against him are invalid. Well, Congressional

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<v Speaker 3>Republicans and Democrats mud rustle over aid to Israel and Ukraine.

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<v Speaker 3>Ukrainian President Vladimer Zelenski's in the US today to make

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<v Speaker 3>his case.

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<v Speaker 5>Rossa's war on Ukraine isn't just about isn't just about

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<v Speaker 5>some old pheaciant dictatorship trying to settle scores real or imagine.

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<v Speaker 3>And US Defense Secretary Lloyd Austin says aid for Ukraine

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<v Speaker 3>and for NATO is imperative.

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<v Speaker 4>And we are determined to show the world that America

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<v Speaker 4>will not flinch in our defense of freedom.

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<v Speaker 3>Now, the two spoke at the National Offense University in Washington.

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<v Speaker 3>Russian opposition leader Aleski Nelvanni has missed a court appearance today.

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<v Speaker 3>It is raising alarms because his family says it hasn't

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<v Speaker 3>heard from him for five days. US National Security Council

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<v Speaker 3>spokesman John Kirby says concern too for the US.

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<v Speaker 2>We concerned about these reports that he's now being on

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<v Speaker 2>for allegedly a week, and neither his representatives or his

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<v Speaker 2>family know where he is. He should be released immediately.

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<v Speaker 3>Today's apparent's supposed to be video, but when they dialed

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<v Speaker 3>it up, the screen was dark. Israeli offensive into Gaza's intensified,

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<v Speaker 3>but it's refusing to cease fire still. Farmer is rarely

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<v Speaker 3>Ambassador of the US. Michael Oran on Bloomberg's sound On

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<v Speaker 3>says he feels there will be a ceasefire at some point.

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<v Speaker 6>And this is just a gut feeling that the negotiations

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<v Speaker 6>will start soon as Israel's military news continues to close

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<v Speaker 6>around hamas leadership, and they will once again sue to

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<v Speaker 6>negotiate to gain time. Remember, Hamas wants that cease fire.

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<v Speaker 6>That's the most important thing. Hamas can get Bessie's firing survival.

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<v Speaker 6>It means Thomas wins, Israel loses.

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<v Speaker 3>He says, Amas may not have any bargaining power because

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<v Speaker 3>of the condition of the hostages. The pregnant Texas woman

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<v Speaker 3>who sought court permission for an abortion under extraordinary health

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<v Speaker 3>circumstances will apparently not wait for Texas. Her attorneys say

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<v Speaker 3>that she has left the state, saying her health and

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<v Speaker 3>her futures on the line. They say she's been in

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<v Speaker 3>and out of emergency rooms and can't wait any longer.

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<v Speaker 3>Global News twenty four hours a day and whatever you

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<v Speaker 3>wanted with Bloomberg News Now in San Francisco, I met

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<v Speaker 3>Baxter and this is Bloomberg ar Brian.

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<v Speaker 2>Ed thanks very much. Well, let's get a look now

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<v Speaker 2>at the top business and economic news stories of the hour.

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<v Speaker 2>Central banks are in focus this week, with the FED,

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<v Speaker 2>the European Central Bank, and the Bank of England all

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<v Speaker 2>holding policy meetings, and next week we'll be hearing from

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<v Speaker 2>the Bank of Japan. The BOJ is likely to keep

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<v Speaker 2>its monetary stimulus settings unchanged. BOJ officials are said to

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<v Speaker 2>see little need to rush into scrapping what is the

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<v Speaker 2>world's last negative interest rate this month, and that's despite

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<v Speaker 2>recent market speculation that the negative rate may be scrapped

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<v Speaker 2>as soon as the December meeting, which to old officials

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<v Speaker 2>have yet to see enough evidence, though, of wage growth

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<v Speaker 2>that would support sustainable inflation, and BOJ officials view the

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<v Speaker 2>potential cost of waiting for more information as not very high. Well.

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<v Speaker 1>China is said to have started the annuals Central Economic

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<v Speaker 1>Work Conference. The aim here is to discuss China's growth

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<v Speaker 1>targets for the new year. We have more from Bloomberg

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<v Speaker 1>sivon men in Hong Kong.

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<v Speaker 7>The high profile meeting is usually closely watched by market

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<v Speaker 7>participants on how China handles monetary, fiscal, and various industrial policies.

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<v Speaker 7>Neither the Chinese government nor state run media has announced

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<v Speaker 7>the start of the conference, but reports say that two

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<v Speaker 7>day meeting will conclude today. The meeting follows top leaders

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<v Speaker 7>pledging to strengthen fiscal support at a pull up Bureau

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<v Speaker 7>meeting on front. The leaders also emphasize the importance of

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<v Speaker 7>economic progress. Expectations are high that China will set a

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<v Speaker 7>new growth target similar to this year's goal of about

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<v Speaker 7>five percent. In Hong Kong, I'm von Mann Bloomberg Radio.

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<v Speaker 2>Meantime, Chinese President Shi Jinping is expected to visit Vietnam

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<v Speaker 2>today for the first time in six years. Bloomberg's Joan

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<v Speaker 2>Wong has.

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<v Speaker 8>More president she is looking to upgrade relations with Vietnam

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<v Speaker 8>and counter US influence. The trip comes just three months

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<v Speaker 8>after US President Joe Biden visited. On that trip, Biden

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<v Speaker 8>forged agreements with Hanoi on everything from semiconductors to security.

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<v Speaker 8>For China's part, is moving to provide funding to upgrade

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<v Speaker 8>railway lines in the country. These are arteries considered crucial

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<v Speaker 8>for Vietnam's exports. The fans and maritime issues are also

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<v Speaker 8>expected to be discussed. For some time, Vietnam has been

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<v Speaker 8>worried that China is moving to a certain more control

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<v Speaker 8>in the South China Sea. In Hong Kong, Join Wang Bloomberg.

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<v Speaker 1>Radio State Side Commerce Secretary Gina Romundo is vowing this

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<v Speaker 1>a very strong action on this new advanced semiconductor from Huawei.

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<v Speaker 1>Romando calling this breakthrough chip deeply concerning. We have more

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<v Speaker 1>from Bloomberg's Erica Hirshkowitz.

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<v Speaker 9>When asked how the Commerce Department would respond to a

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<v Speaker 9>recent chip making breakthrough in China, Romando said the US

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<v Speaker 9>would take the strongest possible action to protect its national security.

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<v Speaker 9>In an interview with Bloomberg News, Romando said every time

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<v Speaker 9>they see something that's concerning, they investigated vigorously. Romando wouldn't

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<v Speaker 9>confirm a formal investigation is underway into Huawei Technologies and

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<v Speaker 9>its chip making partner, Semiconductor Manufacturing International, even though her

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<v Speaker 9>department's Bureau of Industry and Security has said it's probing

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<v Speaker 9>the purported seven nanimeter chip and a smartphone that Huawei

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<v Speaker 9>debuted in late August. I'm Erica Herskowitz Bloomberg Radio.

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<v Speaker 1>Separately, Romando told Bloomberg News the US is looking into

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<v Speaker 1>specifics of three new artificial intelligence accelerators made by Nvidia.

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<v Speaker 1>The company is developing those chips for the market in China.

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<v Speaker 1>Earlier this month, UA did vow to restrict any new

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<v Speaker 1>chips that gives China capabilities and artificial intelligence.

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<v Speaker 2>Brian Oracle reported second quarters sales that increased five percent

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<v Speaker 2>to twelve point nine billion dollars that missed analyst estimates

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<v Speaker 2>of thirteen point one billion, and it comes after a

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<v Speaker 2>second consecutive quarter of slowing growth for Oracle's cloud unit.

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<v Speaker 2>Oracle is known for its database software. It has been

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<v Speaker 2>focusing lately on expanding its cloud business, but Bloomberg's arag

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<v Speaker 2>Rana says it may take some time to catch up

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<v Speaker 2>with the world's biggest cloud providers.

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<v Speaker 10>Over time, I think they will have a cloud offering,

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<v Speaker 10>or they will have a cloud revenue that is going

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<v Speaker 10>to be much bigger than this. But I don't think

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<v Speaker 10>they're going to catch up to either Amazon or Microsoft

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<v Speaker 10>anytime in the near term. In fact, I don't think

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<v Speaker 10>that's going to be possible, just because of the two

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<v Speaker 10>different businesses these guys are right.

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<v Speaker 2>And that's Bloomberg's an rug Rana.

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<v Speaker 1>Doug Goldman Sachs is reshuffling its asset management arm the

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<v Speaker 1>story from Bloomberg's and Kate's.

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<v Speaker 11>Goldman is moving around senior executives and it's one hundred

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<v Speaker 11>and ten billion dollar private credit unit as it seeks

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<v Speaker 11>to double the size of the business in the medium term.

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<v Speaker 11>Goldman has long lead Wall Street rivals like JP Morgan, Chase,

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<v Speaker 11>Barkley's and City Group and the growing one point six

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<v Speaker 11>trillion dollar market, and is rare for maintaining a sizeable

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<v Speaker 11>private credit division that dates back to before the two

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<v Speaker 11>thousand and eight financial crisis. The latest changes come as

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<v Speaker 11>Goldman's rival scramble to respond to the rise of a

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<v Speaker 11>new asset class that competes directly with their leverage finance

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<v Speaker 11>business in Washington and Kate's Bloomberg Radio.

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<v Speaker 2>I'm Brand Curtis along with Paul Allen, and we are

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<v Speaker 2>visiting with William Lee now on the program, chief economist

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<v Speaker 2>at the Milken Institute, to take a look at what

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<v Speaker 2>we can expect from the Fed this week. Bill, thanks

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<v Speaker 2>very much for joining us. We're getting pretty close to

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<v Speaker 2>the last mile kind of discussions and whether or not

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<v Speaker 2>disinflation will continue to grind its way through or whether

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<v Speaker 2>we might find it pretty sticky. Do you see it?

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<v Speaker 12>Well, the markets are pretty confused about what the Fed

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<v Speaker 12>really wants to do, right. I mean, in some ways,

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<v Speaker 12>the market is absolutely certain that they're going to be

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<v Speaker 12>rate cuts and it's a matter of when and how many.

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<v Speaker 12>And yet Share Powell has been and every other member

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<v Speaker 12>of the INFLAC has told us, no, we're going to

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<v Speaker 12>be very data dependent and if the data continue to improve,

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<v Speaker 12>then we will consider, uh keeping the stance of policy

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<v Speaker 12>tight enough to make sure that that inflation improves sufficiently

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<v Speaker 12>and and and long enough to get us into the

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<v Speaker 12>trajectory that will where conftantly believed that it's two percent

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<v Speaker 12>and the markets will say, hey, we're there. And so

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<v Speaker 12>that that conflict is is something that I think is

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<v Speaker 12>causing bond markets to be very unsettled. The volatility and

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<v Speaker 12>bond markets now has been at its highest level in almost,

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<v Speaker 12>you know, in years, and I think one of the

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<v Speaker 12>things that we're trying to sort out is what is

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<v Speaker 12>the FED going to do? And it doesn't help that

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<v Speaker 12>Chap Powell has been playing a game of Russian Roulette

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<v Speaker 12>with this. It depends on the data. You know, I

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<v Speaker 12>will shoot the bullet up and maybe my chamber's loaded,

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<v Speaker 12>maybe it's not, but I'll shoot when I see the

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<v Speaker 12>data require me to shoot, and I won't shoot unless

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<v Speaker 12>I'm provoked to shoot. That's not a good framework that

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<v Speaker 12>colms bond markets well.

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<v Speaker 13>In terms of the data, you know, you mentioned branded

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<v Speaker 13>to the CPI we're expecting from my Vamba cole CPI

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<v Speaker 13>is seen aging up a third of one percent, So

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<v Speaker 13>the data suggests it's going to be a while before

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<v Speaker 13>we see those right cuts exactly.

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<v Speaker 12>And I think one of the other things that the

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<v Speaker 12>FET is going to have to keep an eye on

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<v Speaker 12>is what's happening to the real economy. Retail sales will

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<v Speaker 12>also be coming out next week, and I think one

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<v Speaker 12>of the things that we're concerned about is whether the

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<v Speaker 12>consumer has sufficient momentum to keep going, or whether the

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<v Speaker 12>differences in income. The rich really seem to have a

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<v Speaker 12>lot of savings and are propelling the economy forward, but

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<v Speaker 12>the people who are living paycheck to paycheck are having

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<v Speaker 12>much more difficulties to go into more debt. Credit card

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<v Speaker 12>debts are going up, the loans are being you know,

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<v Speaker 12>defaulted on that car loans. So we're seeing lots of

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<v Speaker 12>tensions there and it may well be that the economy

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<v Speaker 12>is not as strong as the FED might think it is.

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<v Speaker 2>Bill, you mentioned the volatility in the bond market. In

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<v Speaker 2>terms of the stock market. If we do get a

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<v Speaker 2>kind of Fed repricing of rate cuts this week, especially

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<v Speaker 2>in what we get from the SEP, do you expect

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<v Speaker 2>markets to react badly to that or will it be

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<v Speaker 2>more like, well, we see it coming, it's just not

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<v Speaker 2>here yet.

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<v Speaker 12>I think that's your your EPSA right there. We see

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<v Speaker 12>it coming, and right now the equity markets are much

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<v Speaker 12>more focused on profits and whether or not the profit

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<v Speaker 12>margins will be maintained or whether we could have sufficiently

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<v Speaker 12>large downturn that profits will be affected. I think the

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<v Speaker 12>growth stocks, the nifty seven stocks that are propelling the

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<v Speaker 12>economy right now. They have gotten a big boost by

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<v Speaker 12>lowering of interest rates, But now it really is a

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<v Speaker 12>question of profits, and for copanies like Nvidia, it's whether

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<v Speaker 12>the chip industry will the margins be maintaind cuts into

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<v Speaker 12>their profit margins or the China markets start to affect them.

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<v Speaker 12>Those are the main concerns I think that are in

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<v Speaker 12>the equity markets right now, whereas the interest rate boost

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<v Speaker 12>has pretty much been discounted.

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<v Speaker 13>Yeah, we haven't really seen any waves of corporate bankruptcies

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<v Speaker 13>in this era of high rights. Do you see any

0:12:21.240 --> 0:12:24.640
<v Speaker 13>corporations that are really desperate and need a right cut

0:12:24.720 --> 0:12:27.400
<v Speaker 13>on the horizon or the balance sheets looking pretty good.

0:12:27.880 --> 0:12:31.079
<v Speaker 12>That's what makes this expansion a little bit unusual because

0:12:31.280 --> 0:12:33.520
<v Speaker 12>companies were very smart to take advantage of the low

0:12:33.640 --> 0:12:35.920
<v Speaker 12>rates and locked in a lot of financing so that

0:12:37.000 --> 0:12:39.720
<v Speaker 12>it'll be a while before companies will need to roll

0:12:39.800 --> 0:12:42.680
<v Speaker 12>over and refinance their debt. One thing where it's hurt

0:12:42.800 --> 0:12:45.680
<v Speaker 12>the corporate sector is it's cut back on the level

0:12:45.720 --> 0:12:48.719
<v Speaker 12>of investments. When interest rates are very low, every cat

0:12:48.760 --> 0:12:50.840
<v Speaker 12>and dog investment looks good. So there are a lot

0:12:50.880 --> 0:12:53.400
<v Speaker 12>of corporate investments going on. But when interest rates are

0:12:53.520 --> 0:12:56.760
<v Speaker 12>highlight this, companies are very careful to make sure that

0:12:56.880 --> 0:12:59.240
<v Speaker 12>the projects they invest in are going to pay off.

0:13:00.120 --> 0:13:02.679
<v Speaker 12>That case, there's some good to come out of this,

0:13:02.800 --> 0:13:05.080
<v Speaker 12>because the quality of investment that's being put in place

0:13:05.200 --> 0:13:07.280
<v Speaker 12>is going to be much higher, but the amount of

0:13:07.360 --> 0:13:10.080
<v Speaker 12>investment is much less, and that means that the amount

0:13:10.120 --> 0:13:12.960
<v Speaker 12>of momentum the economy has going forward is much less

0:13:13.040 --> 0:13:17.040
<v Speaker 12>and will depend much more on consumers and our exports.

0:13:18.200 --> 0:13:21.200
<v Speaker 2>I'm curious whether or not, you know, longer term, say

0:13:21.440 --> 0:13:25.280
<v Speaker 2>into twenty twenty five, you feel as though this level

0:13:25.360 --> 0:13:27.160
<v Speaker 2>of growth can be maintained, or whether or not we

0:13:27.320 --> 0:13:29.640
<v Speaker 2>really hit some bumps in twenty twenty four.

0:13:30.080 --> 0:13:33.319
<v Speaker 12>Oh, that's the question on everyone's mind, every question I

0:13:33.440 --> 0:13:36.199
<v Speaker 12>get when we talk out when we go beyond the

0:13:36.280 --> 0:13:40.600
<v Speaker 12>next few months, Every corporate CEO and portfolio managers asking

0:13:40.640 --> 0:13:43.959
<v Speaker 12>the question, what's the new sustainable level of growth for

0:13:44.000 --> 0:13:48.120
<v Speaker 12>the US economy? Is the productivity enhancement that's coming from

0:13:48.200 --> 0:13:50.520
<v Speaker 12>AI and all this technology and all this investment that

0:13:50.600 --> 0:13:52.760
<v Speaker 12>we're doing going to kick in and will kick in

0:13:52.960 --> 0:13:56.160
<v Speaker 12>sufficiently to keep our economy going at a pace of

0:13:56.520 --> 0:13:59.880
<v Speaker 12>better than two percent. And I think many people feel

0:13:59.880 --> 0:14:02.400
<v Speaker 12>it that's a hope and of prayer because so far

0:14:02.800 --> 0:14:06.720
<v Speaker 12>a lot of this AI is still vaporware. I mean, people,

0:14:07.440 --> 0:14:11.199
<v Speaker 12>there's a lot of promise, but the actual implementation of

0:14:11.320 --> 0:14:14.400
<v Speaker 12>this stuff has really not enhanced productivity. One thing that

0:14:14.520 --> 0:14:17.240
<v Speaker 12>has enhanced productivity, which I've really been stunned by and

0:14:17.320 --> 0:14:20.280
<v Speaker 12>people don't talk about enough, are how clever people have.

0:14:20.720 --> 0:14:24.160
<v Speaker 12>Businesses have change the business models. Ghost kitchens have now

0:14:24.240 --> 0:14:28.440
<v Speaker 12>made the restaurant industry very profitable. Deliveries have taken over,

0:14:28.680 --> 0:14:31.680
<v Speaker 12>and the restaurants that do deliveries have done very well.

0:14:32.120 --> 0:14:36.440
<v Speaker 12>Whereas the old middle of the road kind of restaurant

0:14:36.440 --> 0:14:38.280
<v Speaker 12>where you just go and have a family dinner, those

0:14:38.320 --> 0:14:39.720
<v Speaker 12>are going out of business.

0:14:41.320 --> 0:14:44.160
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