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Speaker 1: This is Bloomberg Daybreak Weekend, our global look at the

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Speaker 1: top stories in the coming week from our Daybreak anchors

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Speaker 1: all around the world, and straight ahead on the program.

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Speaker 1: It's shaving up to be a very merry cryptomis with

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Speaker 1: bitcoin and ethereum soaring in value. Will the surge continue

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Speaker 1: in twenty twenty four with the SEC poise to approve

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Speaker 1: the first ever spot bitcoin ETF. I'm Tom Busby in

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Speaker 1: New York.

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Speaker 2: I'm calin Hedge in London, where we're thinking about the

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Speaker 2: lessons learned from the past year in stocks.

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Speaker 3: I'm Doug Prisoner looking at the odds for a better

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Speaker 3: gaming business in Macau for twenty twenty four.

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Speaker 4: I'm Kaylie Lynes in Washington, where we're reflecting on a

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Speaker 4: wild year in Congress and the legislative winners and losers.

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Speaker 5: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg

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Speaker 5: Eleve on Free Own New York, bloombergon ninety nine to one, Washington, DC,

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Speaker 5: Bloomberg one O six one, Boston, Bloomberg nine sixty, San Francisco,

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Speaker 5: DAB Digital Radio London, Sirius XM one to nineteen and

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Speaker 5: around the world on Bloomberg Radio dot com and via

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Speaker 5: the Bloomberg Business Appen.

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Speaker 1: Good day to you. I'm Tom Busby, and we begin

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Speaker 1: today's program with a look at cryptocurrencies. Bitcoin, starting the

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Speaker 1: year just under seventeen thousand dollars. Fast forward nearly twelve

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Speaker 1: months later, Bitcoin is more than double trading above forty thousand.

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Speaker 1: Why the big rally and will it continue? We're pleased

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Speaker 1: to welcome Mike McLoone. He's senior commodity strategist at Bloomberg

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Speaker 1: Intelligence and Bloomberg Markets editor Michael Reagan. Thank you both

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Speaker 1: for joining us. What is behind the big rally in

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Speaker 1: bitcoin this past year and what has changed if anything?

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Speaker 6: Hey, Tom, Well, the potential the US is going to

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Speaker 6: be launching Bitcoin ETF starting nine. The dates really January tense,

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Speaker 6: but that's kind of more than micro The market sorty price,

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Speaker 6: and it's the macro. I think that matters is virtually

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Speaker 6: all risk assets were pretty well beat up at the

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Speaker 6: end of last year, and virtually all risk assets are

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Speaker 6: up this year. Bitcoin is just the riskiest. It's the

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Speaker 6: highest beta up the most. So that's what I look

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Speaker 6: at next year. That tilt is a pendulum, Mike swing

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Speaker 6: the other way and kind of just revert a little.

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Speaker 6: To me, that's the key risk. And it's the example

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Speaker 6: of you know, bitcoin's up one hundred and sixty percent

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Speaker 6: this year and the NASSEX up about fifty three percent,

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Speaker 6: and on a voweltily weighting basis, that's just about what

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Speaker 6: Bitcoin should be up.

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Speaker 1: And Michael Reagan, so it's kind of mirrored the rise

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Speaker 1: in equities this past year.

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Speaker 7: Yeah, mirrored it and really out on it.

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Speaker 5: Yeah.

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Speaker 7: You know, Mike's talking about the beta in the market,

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Speaker 7: which is kind of a technical term for if you know,

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Speaker 7: one asset is moving one percent, a higher bait asset

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Speaker 7: might move two percent or three percent. So, you know,

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Speaker 7: Bitcoin just more a beneficiary of this return in risk

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Speaker 7: appetites than the equity market, even both are really just

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Speaker 7: putting in tremendous rebounds this year.

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Speaker 1: And as Michael alluded to, with the SEC expected to

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Speaker 1: approve January tenth, the spot bitcoin ETF, this could change everything.

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Speaker 7: Yeah, I mean that's the thinking.

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Speaker 1: You know.

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Speaker 7: The idea is that there are a lot of investors

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Speaker 7: and financial advisors out there who were reluctant to invest

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Speaker 7: in crypto because they didn't quite trust all the crypto

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Speaker 7: native platforms FTX obviously giving the best example of that

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Speaker 7: when it collapsed last year. So, you know, the thinking is,

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Speaker 7: now that it's available in an ETF, you can buy

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Speaker 7: it from your traditional brokerage whoever that is that you

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Speaker 7: deal with, and there's a little bit more safety there

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Speaker 7: involved now, you know, to Mike's point, I think the

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Speaker 7: question is is all that priced into the market already

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Speaker 7: for the price of bitcoin and then some you know,

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Speaker 7: is it a sell the news event, And it's really

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Speaker 7: hard to predict that when the CTF one and if

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Speaker 7: it is actually approved. But you know, I think the

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Speaker 7: general thinking is that even if even if investors allocate

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Speaker 7: a tiny percent of their entire portfolio, say one or

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Speaker 7: two percent to crypto, now that's going to add up

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Speaker 7: to tens hundreds of billions of dollars potentially. So the

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Speaker 7: optimism is that these ETFs will be a big hit,

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Speaker 7: and that perhaps while they might not rally, bitcoin might

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Speaker 7: not rally the way it did this year, once they're introduced,

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Speaker 7: that it will be a support going forward in the market.

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Speaker 7: But to Mike's point, you know, this market rallied so

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Speaker 7: hard this year that it would be sort of natural

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Speaker 7: to expect a little bit of a pullback a correction

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Speaker 7: from that.

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Speaker 1: So what do you think, Mike mcloon, I'll address this

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Speaker 1: to you. Why the change of heart from Gary Gensler

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Speaker 1: federal regulators about now going forward with this?

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Speaker 6: Oh, the good check and balances of courts. One example

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Speaker 6: was coinbase and GBTC Gray Scale Bitcoin Trust. They won

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Speaker 6: their actions in courts. There's been some other ones, but

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Speaker 6: it's that pendulum and it's just a wonderful check and

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Speaker 6: balance of our system. You might have people push back

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Speaker 6: on this rapidly advancing technology, then people push forward, and

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Speaker 6: that's what's happening. So I think what Michael pointed out

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Speaker 6: is the key thing is there is just so much

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Speaker 6: optimism and expectation. Okay, the ETFs are going to be launched.

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Speaker 6: The key thing we like to say about it is

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Speaker 6: that when we launched the Bloomberg Galaxy crypto inext in

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Speaker 6: twenty eighteen, this was the goal to get ETFs tracking

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Speaker 6: cryptos and most lightly a broad index, and we're just

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Speaker 6: so far behind. Now they happen, They already exist in

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Speaker 6: other countries. The US is just catching up. But it's

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Speaker 6: Michael mentioned, it's the key thing that matters. The point

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Speaker 6: I'm worried about is what it's doing for the space

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Speaker 6: is since futures were launched in bitcoin in twenty seventeen,

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Speaker 6: valtile is getting squashed. So what's happening is this teenager

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Speaker 6: or this child acid is becoming an adult rapidly, and

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Speaker 6: ETFs are going to push into the adult space really

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Speaker 6: fast meeting. Can I expect those very big returns we've

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Speaker 6: had in the past when it was trading at a

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Speaker 6: volatility of one hundred to two hundred percent, and now

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Speaker 6: that valtil is around thirty percent, that's the lowest ever.

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Speaker 6: That's a two hundred and sixty day measure or an

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Speaker 6: annual measure. And the thing is it's still much higher

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Speaker 6: volatility than stock market goal. And that's where I think

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Speaker 6: people I'm worried about if we do get that normal

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Speaker 6: reversion in the stock market next year bitcoin keep thinking

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Speaker 6: about Bitcoin. It's trades twenty four seven. It's one of

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Speaker 6: the most significant leading indicators in the planet. It might

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Speaker 6: lead that way down. That's why I look at is yes,

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Speaker 6: there's always going to be small pullbacks. I'm looking at

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Speaker 6: the pendulum for next year swinging more towards reversion as

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Speaker 6: the best Maybe we've already seen the best buy the

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Speaker 6: rumor in the markets.

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Speaker 7: Michael, Yeah, and that falseeity issue is a fascinating once unpacked,

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Speaker 7: because you know, that's something these traders like, you know,

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Speaker 7: your typical buy and hold investor might not level lot

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Speaker 7: of volatility in their portfolio, but crypto investors, that's that's

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Speaker 7: their bread and butter, right, So you know, regardless of

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Speaker 7: what Bitcoin does, it's fascinating to look at some of

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Speaker 7: the other areas of crypto market and what's going on.

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Speaker 7: I'll give you an example. Solana is the big star

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Speaker 7: of the industry this year. Their native token soul is

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Speaker 7: up like eight hundred percent. And the thinking there is

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Speaker 7: this is a blockchain that's much faster and cheaper to

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Speaker 7: run transactions on than Bitcoin or ethereum. So a lot

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Speaker 7: of these really crazy sort of meme coins and NFTs

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Speaker 7: and all that very very speculative and extra risky. I mean,

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Speaker 7: all of crypto's risky, but this stuff is super ultra risky.

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Speaker 7: Has really found a home on that blockchain and Avalanche,

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Speaker 7: so you know, the market is kind of I think

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Speaker 7: to Mike's point, there's a potential for sort of a

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Speaker 7: a fork in the road where bitcoin becomes more of

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Speaker 7: the mainstream, lower volatile the side of the market. But

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Speaker 7: then you still have this sort of more wild west,

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Speaker 7: wildly volatile and speculative angle of the market where all

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Speaker 7: the true crypto you know, guys who like to trade

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Speaker 7: and really actively go long, go short, we'll be happy

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Speaker 7: to sort of move over to that side of the market.

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Speaker 1: Well, it seems also there are always new ones, ones

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Speaker 1: happening now you've never even heard of. Yeah.

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Speaker 7: Absolutely, I mean it's so easy to create a new coin.

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Speaker 7: You can basically copy the code from the last one,

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Speaker 7: change a few variables in it, give it a new name,

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Speaker 7: and you're off to the racist. And then it's you know,

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Speaker 7: a matter of you know, how strongly can you market

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Speaker 7: it and pump it up and get other people excited

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Speaker 7: about it. It's kind of a crazy scheme, but that

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Speaker 7: is sort of the nature of the market these days.

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Speaker 1: Oh, it's a crazy scheme. Now, Mike mcgoon, I want

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Speaker 1: to talk about something I know you have spoken about,

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Speaker 1: referring to bitcoin as a form of digital gold. What

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Speaker 1: do you mean, why is that and what do you mean?

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Speaker 6: It really struck me when I was in Hong Kong,

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Speaker 6: the twenty eighteen visying colleagues, and almost everybody met there

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Speaker 6: when they're talking about mainland this and mainland that is

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Speaker 6: a no. And that was a significant bear market cryptos.

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Speaker 6: Yet there was one bull market, and that was the

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Speaker 6: market capitalization of the number one stable going called Teather.

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Speaker 6: And the key thing that really struck me is now

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Speaker 6: on a global basis, sort of first time in history,

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Speaker 6: everybody in the planet with an iPhone, which you can

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Speaker 6: get now a phone in India for twelve bucks, has

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Speaker 6: access to a stable currency or something more like digital

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Speaker 6: like bitcoin, through their digital assistant or their phones. And

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Speaker 6: the key thing I like to stay about bitcoin is

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Speaker 6: in terms of gold is average Ask your average thirty

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Speaker 6: something person or someone like the age of my kids.

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Speaker 6: They don't really care about goal. And that to me

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Speaker 6: is like to say, is if you are in the

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Speaker 6: gold space, you're bullish gold. I'm bullish gold, You're you're

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Speaker 6: involved in gold. That's kind of you have to have

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Speaker 6: some consideration of the world's going digital and bitcoin being

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Speaker 6: in that space. So it's me it has to have

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Speaker 6: some bitcoin in that space. Now, how much you put

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Speaker 6: in there is subject, but the world is going digital,

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Speaker 6: and it's just a better way to transact. But one

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Speaker 6: thing I really want to touch on it's happening in

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Speaker 6: this space is Michael alluded to a little bit with

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Speaker 6: Solona is proliferation of stable coins. This technology allows everybody

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Speaker 6: in the planet to get access to the dollar. Call

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Speaker 6: them stable coins, I call them crypto dollars because they

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Speaker 6: all track the dollar and the AUM. And these crypto

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Speaker 6: dollars now are almost about one hundred and twenty five billion,

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Speaker 6: and that's something that's just happening more and more, and

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Speaker 6: it's because the technology allows everybody in the will to

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Speaker 6: get access to this, particularly when you live in a

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Speaker 6: country with a melting currency, which most hour in the

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Speaker 6: long term is just the dollars, the most, the strongest,

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Speaker 6: and just in terms of bitcoin, to me, it's digital

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Speaker 6: gold versus regular golden analog gold. You probably should put

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Speaker 6: them together. And then in the space, what's significant is

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Speaker 6: just the technologies allowing people to get to the dollar.

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Speaker 6: And what's really it's called basically tokenization. What's next in

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Speaker 6: tokenization through the technology, And a lot of people I

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Speaker 6: hear say, are US treasuries?

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Speaker 1: Yeah, well they've got a lot to look forward to.

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Speaker 1: Our thanks to Mike McLoone, senior commodity strategist at Bloomberg

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Speaker 1: Intelligence and Bloomberg Market editor Michael Reagan. Coming up on

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Speaker 1: Bloomberg Daybreak Weekend runaway, inflation, raid hikes, job cuts and more.

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Speaker 1: What lessons have we learned from this past year? I'm

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Speaker 1: Tom Busby and this is Bloomberg. This is Bloomberg day

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Speaker 1: Break Weekend, our global look ahead at the top stories

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Speaker 1: for investors in the coming week. I'm Tom Busby in

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Speaker 1: New York. Up later in our program the big winners

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Speaker 1: in this year's do Nothing Congress. But first, twenty twenty

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Speaker 1: three has been a year of inflation, rate debates, job cuts,

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Speaker 1: geopolitical tensions. We'll look back at twenty twenty three through

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Speaker 1: a number of different lenses and ask what lessons can

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Speaker 1: be learned from the past year and how they can

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Speaker 1: help us navigate the next twelve months. For more, let's

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Speaker 1: go to London and bring in Bloomberg Daybreak anchor Caroline Hepger.

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Speaker 2: Some might be asking what twenty twenty four could possibly

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Speaker 2: throw at markets after a year packed with every challenge

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Speaker 2: in the book. Again, as the year draws to a close,

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Speaker 2: investors have been hit with a curveball at tax on

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Speaker 2: merchant ships in the Red Sea, threatening to d stable

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Speaker 2: as the global economy. There's also been a final surprise

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Speaker 2: in the UK this week's CPI data showing that inflation

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Speaker 2: slowed to three point nine percent. Now, that was a

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Speaker 2: bigger drop than had been originally forecast. No one saw

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Speaker 2: it coming, including Bloomberg's Markets Today reporter Dave Goodman. Here's

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Speaker 2: his reaction.

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Speaker 8: Pretty stll in reading, wasn't it. I sit next to Connor,

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Speaker 8: who deserves squalwk on on Bloomberg, and I think everyone

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Speaker 8: heard me shout wow loudly in the background as he

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Speaker 8: was reading out to people a three point nine percent

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Speaker 8: No one we Bloomberg had surveyed thirty five economists, Not

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Speaker 8: one of them saw of reading below four point two percent.

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Speaker 8: So that kind of shows you how much of a

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Speaker 8: shock in terms of a downward surprise. It's it's the

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Speaker 8: biggest since February twenty twenty one.

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Speaker 2: That was Bloomberg's David Goodman there. So what are the

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Speaker 2: takeaways then from an unforgettable year for global equities? We

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Speaker 2: asked Bloomberg Stocks Guru, our director of Research, Tim Craighead,

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Speaker 2: to help us make sense of it all, starting by

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Speaker 2: asking him his biggest lesson from the past year in stocks.

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Speaker 2: Here's what he had to say.

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Speaker 9: I guess one thing that really comes to mind is

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Speaker 9: that composition matters. If you look at the nature of

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Speaker 9: the markets that have worked in Europe, or think about

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Speaker 9: Europe versus the US, it really does boiled down the composition.

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Speaker 9: The SMI has been awful basically because of four stocks Rosa,

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Speaker 9: nov Artists, Nesle, and Richmond. If you take those out,

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Speaker 9: that market's up twenty one percent. It's equal to the US.

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Speaker 9: If you look at Europe, it looks awful at up

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Speaker 9: twelve percent versus the US up twenty one percent. But

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Speaker 9: if you look at the Eurostocks fifty, which is concentrated

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Speaker 9: into some of the biggest important names in the Eurozone,

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Speaker 9: it's up nineteen percent. That's call it roughly in line.

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Speaker 9: It's the UK and Switzerland that have been awful for

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Speaker 9: Europe and taking the whole index if you look at

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Speaker 9: the stock six hundred down, So composition really matter.

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Speaker 2: So then how do you think about Europe and how

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Speaker 2: it will fare against the United States?

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Speaker 9: Looking to next Yeah, yeah, well two things here come

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Speaker 9: immediately to mind. One is clearly the US has gotten

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Speaker 9: an awful lot more TMT and that's been a huge

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Speaker 9: driver of the rally that we've seen since the October lows.

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Speaker 9: They tend to be higher duration in terms of longer

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Speaker 9: term cash flow growth if you get into the math,

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Speaker 9: which makes them more sensitive to interest rate changes as

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Speaker 9: well as longer term secular growth drivers. So that is

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Speaker 9: a big difference in the last six weeks. That's really mattered.

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Speaker 9: It brings up what happens from here, and we can

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Speaker 9: talk a little bit more about that from the standpoint

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Speaker 9: of how much the market is now baked in central

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Speaker 9: bank pivots, which I think is definitely the case across

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Speaker 9: both continents, but probably even more so in the US.

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Speaker 9: The second thing is China. China is a big deal

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Speaker 9: for Europe. Call it four hundred and sixty billion dollars

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Speaker 9: in a billion euros in revenue across eighty big companies

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Speaker 9: in Europe. That's a lot of exposure. It's roughly thirty

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Speaker 9: percent of the market index that that's got China exposure.

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Speaker 9: That's a tough first half comparison. I think there's a

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Speaker 9: tale of two halts for European markets looking into twenty

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Speaker 9: twenty four. Tough earnings to begin with, but maybe an

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Speaker 9: interesting second half looking towards twenty twenty five.

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Speaker 10: So there's loads to unpack there. But I just want

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Speaker 10: to hone in on what you said about the UK.

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Speaker 2: When do you think people will start deciding that Britain's

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Speaker 2: cheap and it's a bargain and it's time to buy.

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Speaker 3: Never buy.

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Speaker 9: So it is cheap, but it's cheap for a reason,

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Speaker 9: and that goes back to the composition issue. It's got

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Speaker 9: a bunch of banks. Banks tend to trade cheap relative

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Speaker 9: to do a lot of other sectors. It's got a

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Speaker 9: heavy heavy dose of oil and metals and mining. Those

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Speaker 9: are contra to earnings, and right now we're still at

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Speaker 9: relatively higher earnings, so you're at relatively low valuations. The

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Speaker 9: only time you're going to see real revaluation in those

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Speaker 9: is when you have a down cycle in the commodity

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Speaker 9: prices that really depresses earnings and inflates multiples. But as

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Speaker 9: you look at it's interesting if you look over a

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Speaker 9: two year period, the Footsie's actually outperformed both the EERO

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Speaker 9: stocks and the S and P five hundred. Take a

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Speaker 9: look at that. Going back to January one, twenty twenty two,

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Speaker 9: and it's because it was relatively flat and when we

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Speaker 9: had down drafts in the market, the FOOTE totally outperformed.

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Speaker 9: So if you're concerned for whatever reason tactically at certain

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Speaker 9: points in time, the Footsie is a safe haven. If

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Speaker 9: you're looking for juice, you know, the foot sis global

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Speaker 9: defensives don't give you that a space. The pounds a

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Speaker 9: little bit stronger. Depends on what you think about commodity markets.

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Speaker 9: It's got a lot of exposure there, but right now

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Speaker 9: those are relatively depressed, and it's got a heavy dose

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Speaker 9: in financials where margins are very inflated. And if you

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Speaker 9: think we're going to have a central bank pivot, that

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Speaker 9: puts those margins at risk a little bit of deflating.

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Speaker 2: So how do we think about then the central bank pivots.

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Speaker 2: I mean, we've been slower in pricing in the potential

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Speaker 2: of interest rate cuts on the Bank of England than

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Speaker 2: we have for the ECB and the FED, but it

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Speaker 2: is there. And if you think about the GDP data

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Speaker 2: that some are concerned about the stagnation slash recession story

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Speaker 2: for the UK, you know, how do you think about

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Speaker 2: the pivot?

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Speaker 9: So between now and say year in twenty twenty four.

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Speaker 9: I think it's a positive backdrop and it's good for

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Speaker 9: the foot seat, and it's going to be good for

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Speaker 9: the European markets because both central banks are humble opinion,

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Speaker 9: likely to either be pivoting. You know, there's a lot

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Speaker 9: more visibility on that progress continuing into twenty twenty five.

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Speaker 9: The concern I suppose right now is that we've had

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Speaker 9: in all markets such a big discounting of a pivot

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Speaker 9: in the past six weeks that you know, just technically

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Speaker 9: we're getting a little bit extended, and you know, does

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Speaker 9: that balk a little bit, especially for the UK market

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Speaker 9: and Europe as we get into January February and have

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Speaker 9: to face fourth quarter earnings that are probably going to

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Speaker 9: be similar to third quarter, where yeah, they were somewhat resilient,

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Speaker 9: but we saw negative revisions and we think you could

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Speaker 9: see a bit more on the negative revision front. So

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Speaker 9: first quarter I think is a little dicey, especially at

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Speaker 9: these elevated market levels, but an interesting second half of

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Speaker 9: the year.

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Speaker 2: My thanks there to Bloomberg's director of research, Tim Craighead.

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Speaker 2: I'm Caroline hepget here in London. You can catch us

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Speaker 2: every weekday morning for Bloomberg Daybreak Europe, beginning at six

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Speaker 2: am in London. That's one am on Wall Street.

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Speaker 1: Thanks Carolina. Coming up on Bloomberg day Break weekend and

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Speaker 1: look at how Mcow's casino industry has weathered the challenges

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Speaker 1: of a global pandemic and a slow economic recovery in China.

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Speaker 1: I'm Tom Busby, and this is Bloomberg.

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Speaker 5: Broadcasting from the Bloomberg It a active brokers studio in.

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Speaker 11: New York, Bloomberg Eleving free own to Washington, DC, Bloomberg

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Speaker 11: ninety nine one to Boston, Bloomberg one O six one

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Speaker 11: to San Francisco, Bloomberg nine sixty to the Country, Serious

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Speaker 11: XM one one and around the globe, the Bloomberg Business

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Speaker 11: app in Bloomberg Radio dot Com. This is Bloomberg Daybreak.

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Speaker 1: This is Bloomberg Daybreak weekend, our global look ahead at

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Speaker 1: the top stories for investors in the coming week. I'm

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Speaker 1: Tom Busby in New York. After a devastating pandemic and

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Speaker 1: a prolonged economic slowdown in China, how has Macow's casino

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Speaker 1: and gaming business recovered? For more, we go to Bloomberg

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Speaker 1: Daybreak Asia co host Doug Krisner.

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Speaker 3: Tom The major casinos in Macau are still in the

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Speaker 3: process of recovering after being hard hit by the pandemic

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Speaker 3: obviously when China closed its borders. Despite the sluggishness of

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Speaker 3: the overall Chinese economy, though, many analysts have a positive

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Speaker 3: outlook for Macau as we approach the new year. The city,

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Speaker 3: if you didn't know, is the world's largest gambling center

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Speaker 3: by revenue. For a closer look at gaming and McCaw

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Speaker 3: let's bring in Bloomberg's Angela han Lee, gaming and Hospitality

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Speaker 3: analyst for the apack at Bloomberg Intelligence. It's a pleasure

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Speaker 3: to have the chance to chat with you, and I

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Speaker 3: know that in peak times, Macau gets a lot of

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Speaker 3: activity during the Lunar New Year festivity and the Golden

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Speaker 3: Week holiday in October. But since the Christmas holiday is

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Speaker 3: upon us and New Year's is just around the corner, Angela,

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Speaker 3: I'm curious will these holidays produce any traffic in a

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Speaker 3: meaningful way for the casinos.

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Speaker 12: Yes, I think that in the past, the Luna New

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Speaker 12: Year and October Golden Week were the major events for

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Speaker 12: McCall casinos because that's basically where mainland China has the

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Speaker 12: longest holidays. But now I think it's a bit different

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Speaker 12: because we are having more young people who likes to

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Speaker 12: celebrate Christmas. And also given that this consumption downgraade trend,

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Speaker 12: people cannot travel too far. That's why they prefer to

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Speaker 12: go make shock hold trips. And Macau is one of

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Speaker 12: the popular places because it's outside Mala in China but

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Speaker 12: still very attractive. So and also because the Macau's integrity

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Speaker 12: results now have much more amenities. They are hosting a

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Speaker 12: lot of concerts and also events. So you see that

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Speaker 12: some TV stations of China is hosting some year end

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Speaker 12: concerts and events in Macau as well, so that it's

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Speaker 12: going to also bring more traffic from mailing Chinese people.

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Speaker 1: So did the.

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Speaker 3: Gaming companies use the opportunity of a decline in business

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Speaker 3: during the pandemic to really reinvest and put some of

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Speaker 3: these new venues in place so that hopefully when things

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Speaker 3: emerged from the pandemic that a lot of new venues

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Speaker 3: would be in place for people to take advantage of.

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Speaker 12: Yes, there are some new casinos that open during the pandemic,

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Speaker 12: say s GM's grandl Isba Palace and recently Galaxy Macau

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Speaker 12: also expanded fifty three, so it's new capacity and its

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Speaker 12: new capacity can bring much more traffic because in the

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Speaker 12: past those hotel rooms were only for big rollers, but

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Speaker 12: now there are much more hotel rooms in Macau. So

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Speaker 12: that's why, like some young people can also pay for

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Speaker 12: the hotel biers by themselves and stay in Macau.

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Speaker 10: So I think the.

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Speaker 12: Whole maccaunt is changing towards this type of mass lasor

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Speaker 12: travel thing rather than pure gambling.

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Speaker 3: So younger people, I understand. What about for the family,

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Speaker 3: if you have even younger children, is it a good destination?

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Speaker 10: True?

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Speaker 12: If you go to Macau, you will find some fancy facilities,

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Speaker 12: say in Galaxy Macau.

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Speaker 10: There are places like.

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Speaker 12: You know, artificial Beach that you can go and enjoy

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Speaker 12: video kids. And also there is a water park in

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Speaker 12: Still City face two. And you also see many other

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Speaker 12: events and shows that you can go with kids. So

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Speaker 12: Macau is transforming. I would say mask gaming revenue is

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Speaker 12: something coming with the higher profit margin, so I guess

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Speaker 12: that also benefits Macaus casinos to achieve itBit the improvement

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Speaker 12: faster than gaming revenue.

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Speaker 3: So I suggested that many analysts have upgraded their opinion

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Speaker 3: of twenty twenty four in terms of outlook for revenue.

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Speaker 3: What is driving a lot of this optimism if.

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Speaker 12: They say so the pre pandemic numbers by ten percent.

434
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Speaker 12: It's about the mask gaming revenue, meaning the people who

435
00:23:55,920 --> 00:23:59,120
Speaker 12: go and gamble with their own cash, excluding the gaming

436
00:24:00,240 --> 00:24:02,240
Speaker 12: revenue coming from credit gamblers.

437
00:24:02,400 --> 00:24:04,480
Speaker 10: But this is a major driver for ma CAA casinos.

438
00:24:04,520 --> 00:24:07,479
Speaker 12: That makes sense, and the major reason is orgain because

439
00:24:07,480 --> 00:24:11,239
Speaker 12: of the hotel inventory has increased in Macau, making like

440
00:24:11,440 --> 00:24:13,919
Speaker 12: people to be like the hotel rooms are much more

441
00:24:13,920 --> 00:24:16,360
Speaker 12: affordable for some people as well, So I think that's

442
00:24:16,359 --> 00:24:19,440
Speaker 12: one thing. The other is because the people who used

443
00:24:19,480 --> 00:24:22,280
Speaker 12: to travel long hauld don't go there far because too

444
00:24:22,320 --> 00:24:25,560
Speaker 12: expensive for them, so they prefer coming to Macau. So

445
00:24:25,680 --> 00:24:28,960
Speaker 12: Macau is kind of benefiting from this consumption downreature in

446
00:24:29,000 --> 00:24:29,520
Speaker 12: China too.

447
00:24:29,920 --> 00:24:32,280
Speaker 3: I'm wondering if the government has been involved in helping

448
00:24:32,320 --> 00:24:35,960
Speaker 3: to promote the industry from countries like South Korea, Malaysia,

449
00:24:36,000 --> 00:24:39,320
Speaker 3: Philippines and Singapore. Has there been an active campaign to

450
00:24:39,359 --> 00:24:42,840
Speaker 3: try to get tourists from those jurisdictions to come to Macau.

451
00:24:43,080 --> 00:24:45,200
Speaker 10: I think that's the trend as well.

452
00:24:45,480 --> 00:24:48,960
Speaker 12: So to start with, I would say Macau's hirola business,

453
00:24:49,000 --> 00:24:52,760
Speaker 12: which means credit gamblers, junket business has been under crackdown,

454
00:24:53,080 --> 00:24:55,440
Speaker 12: so some people has been who used to play in

455
00:24:55,520 --> 00:24:59,600
Speaker 12: Macau with credit facilitated by underground banks in China are

456
00:24:59,640 --> 00:25:02,720
Speaker 12: also to like cash gamblers. That is also a type

457
00:25:02,720 --> 00:25:05,520
Speaker 12: of thing that Macau and Melan government is urging those

458
00:25:05,560 --> 00:25:08,520
Speaker 12: players and the whole industry to become much more transparent.

459
00:25:08,720 --> 00:25:09,360
Speaker 10: That's one thing.

460
00:25:09,680 --> 00:25:12,320
Speaker 12: The other is that you know, like there are a

461
00:25:12,359 --> 00:25:16,040
Speaker 12: lot of crackdowns going on regarding some human trafficking and

462
00:25:16,119 --> 00:25:19,520
Speaker 12: some organized crimes in Southea Asia. You may also have

463
00:25:19,680 --> 00:25:22,400
Speaker 12: seen some news saying that, like China has sent their

464
00:25:22,400 --> 00:25:26,600
Speaker 12: own military forces to crack down those organized crimes in Miyama.

465
00:25:27,040 --> 00:25:30,760
Speaker 12: So all the things together, I think even government and

466
00:25:30,800 --> 00:25:33,080
Speaker 12: even some like a media in China are kind of

467
00:25:33,119 --> 00:25:35,800
Speaker 12: promoting that, you know, like a be more careful when

468
00:25:35,800 --> 00:25:38,919
Speaker 12: you travel out and try to try to be like

469
00:25:38,960 --> 00:25:40,520
Speaker 12: a stay in safe places.

470
00:25:40,760 --> 00:25:43,240
Speaker 3: Angela, We've touched on two things, and I'm wondering whether

471
00:25:43,280 --> 00:25:46,919
Speaker 3: there's a connection. The interesting attracting young people to a

472
00:25:46,920 --> 00:25:49,399
Speaker 3: lot of these casinos, and you're talking about the extent

473
00:25:49,440 --> 00:25:53,080
Speaker 3: to which these gaming companies are more reliant on cash

474
00:25:53,560 --> 00:25:56,760
Speaker 3: rather than credit. And I'm wondering whether young people now

475
00:25:56,800 --> 00:26:00,320
Speaker 3: are using the latest technology when they walk into these

476
00:26:00,359 --> 00:26:03,320
Speaker 3: gaming facilities, so they're able to take their phone and

477
00:26:03,480 --> 00:26:05,560
Speaker 3: essentially gamble using the phone.

478
00:26:05,640 --> 00:26:06,760
Speaker 1: Is that is that happening?

479
00:26:07,240 --> 00:26:09,760
Speaker 12: You are not allowed to use phone when you're gambling.

480
00:26:10,000 --> 00:26:12,840
Speaker 12: If you take out your phone to take pictures. They

481
00:26:12,920 --> 00:26:15,520
Speaker 12: were coming say like, don't take pictures of the casinos.

482
00:26:15,760 --> 00:26:18,439
Speaker 12: That's about privacy thing. And also because they want to

483
00:26:18,440 --> 00:26:22,560
Speaker 12: prevent this phone gambling, they don't want people to do

484
00:26:22,600 --> 00:26:25,399
Speaker 12: the video streaming with the gaming tables because that is

485
00:26:25,440 --> 00:26:29,280
Speaker 12: allowing another kind of proxy gambling online that used to

486
00:26:29,320 --> 00:26:31,960
Speaker 12: happen more like in other parts of the world, like

487
00:26:32,200 --> 00:26:35,639
Speaker 12: in Philippines, which was which used to be legal. In

488
00:26:35,720 --> 00:26:38,399
Speaker 12: Macau it has been illegal for a long time, like

489
00:26:38,560 --> 00:26:40,960
Speaker 12: for the past I think Alice in my memory should

490
00:26:41,000 --> 00:26:44,960
Speaker 12: be more than seven years. So Macaw's gaming business is

491
00:26:45,080 --> 00:26:49,160
Speaker 12: really about in person gambling thing rather than online streaming.

492
00:26:49,280 --> 00:26:50,840
Speaker 10: If you do online stream you get caught.

493
00:26:51,240 --> 00:26:55,200
Speaker 3: But what about using new forms of money technology. I'm

494
00:26:55,240 --> 00:26:59,560
Speaker 3: not necessarily saying a cryptocurrency, but are there technological platforms

495
00:26:59,560 --> 00:27:02,040
Speaker 3: that you might have on your phone where you could

496
00:27:02,160 --> 00:27:05,159
Speaker 3: use the phone just in a moment to transfer money

497
00:27:05,520 --> 00:27:07,639
Speaker 3: at the casino so that you could get cash in

498
00:27:07,680 --> 00:27:09,679
Speaker 3: hand and then go to a table and play.

499
00:27:10,359 --> 00:27:12,720
Speaker 12: So one to start with that, you know, China has

500
00:27:12,760 --> 00:27:15,720
Speaker 12: some limits if you want to vitual money off show.

501
00:27:16,040 --> 00:27:18,359
Speaker 12: If you are we're doing the money which is under

502
00:27:18,400 --> 00:27:21,840
Speaker 12: the like a lot amount, then you obviously can do

503
00:27:21,920 --> 00:27:25,399
Speaker 12: through the union pay. But if you want to do

504
00:27:25,720 --> 00:27:27,800
Speaker 12: more than a lot of amount, then you have to

505
00:27:27,800 --> 00:27:29,919
Speaker 12: do something else, which is like a weed chad or

506
00:27:29,960 --> 00:27:33,000
Speaker 12: something else that you know, like some underground banks will facilitate.

507
00:27:33,080 --> 00:27:35,600
Speaker 12: So at the end, what Macau will do is that

508
00:27:35,840 --> 00:27:39,359
Speaker 12: Macau casinos will try to make money from more people

509
00:27:39,600 --> 00:27:41,000
Speaker 12: who spend less than before.

510
00:27:41,119 --> 00:27:44,360
Speaker 3: I'm wondering how the office of the Chief Executive in Macau,

511
00:27:44,960 --> 00:27:48,880
Speaker 3: how that office is expressing a view on the business,

512
00:27:48,880 --> 00:27:52,080
Speaker 3: whether or not the office of the Chief Executive is

513
00:27:52,119 --> 00:27:54,320
Speaker 3: as optimistic as many of the animals that we've been

514
00:27:54,359 --> 00:27:55,160
Speaker 3: talking about.

515
00:27:55,320 --> 00:27:59,160
Speaker 12: He's also optimistic, and government is always trying to express

516
00:27:59,200 --> 00:28:02,480
Speaker 12: that the most important is promoting non gaming business and

517
00:28:02,520 --> 00:28:07,040
Speaker 12: then they don't like gaming business. But from casino product perspective,

518
00:28:07,240 --> 00:28:10,320
Speaker 12: casino business is the best business with better ROI.

519
00:28:10,440 --> 00:28:11,879
Speaker 10: So there's some suggle over there.

520
00:28:12,119 --> 00:28:14,120
Speaker 12: But we come to a point that you know, casino

521
00:28:14,119 --> 00:28:17,040
Speaker 12: products now understand that if they want to draw more

522
00:28:17,080 --> 00:28:20,160
Speaker 12: traffic and keep players longer, they should have more non

523
00:28:20,160 --> 00:28:24,000
Speaker 12: gaming amenities to people to let peper use. So on,

524
00:28:24,040 --> 00:28:27,399
Speaker 12: this says, I believe casino operators will keep investing in

525
00:28:27,440 --> 00:28:32,520
Speaker 12: non gaming amenities including hotel rooms or other like you know, say,

526
00:28:32,720 --> 00:28:36,520
Speaker 12: other retail shops or even like a concert. There are

527
00:28:36,560 --> 00:28:39,240
Speaker 12: so many concerts going on and this is driving so

528
00:28:39,360 --> 00:28:39,960
Speaker 12: much traffic.

529
00:28:40,320 --> 00:28:41,200
Speaker 10: They did like a.

530
00:28:41,200 --> 00:28:44,880
Speaker 12: Black Pink in the middle of this year, and Brunomas

531
00:28:44,960 --> 00:28:47,560
Speaker 12: is also coming like the next year. They also have

532
00:28:47,720 --> 00:28:50,520
Speaker 12: like some big Canton pop stars like a Jackie Chen

533
00:28:50,600 --> 00:28:53,280
Speaker 12: as well like this year. Everyone is just trying to

534
00:28:53,320 --> 00:28:56,120
Speaker 12: bring more people to the property so that they can

535
00:28:56,200 --> 00:28:58,360
Speaker 12: generate more gaming and on gaming revenue.

536
00:28:58,480 --> 00:29:01,120
Speaker 3: Angela, You've given us a lot of good information. Thanks

537
00:29:01,160 --> 00:29:03,360
Speaker 3: for taking the time to chat with us. That is

538
00:29:03,440 --> 00:29:06,800
Speaker 3: Angela Han League Gaming and Hospitality analyst for the apack

539
00:29:06,840 --> 00:29:10,080
Speaker 3: at Bloomberg Intelligence. I'm Doug Prisner in New York and

540
00:29:10,120 --> 00:29:13,520
Speaker 3: you can catch Brian Curtison myself weekdays here for Bloomberg

541
00:29:13,560 --> 00:29:17,120
Speaker 3: Daybreak Asia beginning at seven am in Hong Kong six

542
00:29:17,200 --> 00:29:19,680
Speaker 3: pm on Wall Street, Tom.

543
00:29:19,280 --> 00:29:22,000
Speaker 1: Thank you Doug. Coming up on Bloomberg day Break weekend.

544
00:29:22,040 --> 00:29:25,120
Speaker 1: The US Congress this past year passing the fewest laws

545
00:29:25,400 --> 00:29:28,320
Speaker 1: in decades. How did that benefit some of the biggest

546
00:29:28,320 --> 00:29:32,240
Speaker 1: players on Wall Street. I'm Tom Busby and this is Bloomberg.

547
00:29:41,240 --> 00:29:43,160
Speaker 1: I'm Tom Busby in New York with your global look

548
00:29:43,160 --> 00:29:45,520
Speaker 1: ahead at the top stories for investors in the coming week.

549
00:29:46,080 --> 00:29:49,160
Speaker 1: Turmoil this year in the one hundred and eighteenth Congress,

550
00:29:49,160 --> 00:29:52,160
Speaker 1: which went through several House speakers even voted out one

551
00:29:52,160 --> 00:29:55,560
Speaker 1: of its own members while lawmakers did little to actually govern.

552
00:29:56,080 --> 00:29:59,760
Speaker 1: That meant good news for banks, tech giants, and big pharma.

553
00:30:00,120 --> 00:30:00,200
Speaker 9: More.

554
00:30:00,320 --> 00:30:02,880
Speaker 1: Let's head to our Bloomberg ninety nine one Newsomen Washington

555
00:30:02,920 --> 00:30:06,040
Speaker 1: and Bloomberg Sound on co host Kaylee Lines.

556
00:30:06,520 --> 00:30:06,760
Speaker 4: Yeah.

557
00:30:06,800 --> 00:30:07,040
Speaker 6: Tom.

558
00:30:07,040 --> 00:30:10,080
Speaker 4: Congress is officially done for twenty twenty three, and what

559
00:30:10,160 --> 00:30:10,480
Speaker 4: a year.

560
00:30:10,520 --> 00:30:10,840
Speaker 6: It was.

561
00:30:11,280 --> 00:30:13,560
Speaker 4: Started off with fifteen rounds of votes to elect Kevin

562
00:30:13,600 --> 00:30:16,080
Speaker 4: McCarthy Speaker of the House, continued on to a dead

563
00:30:16,120 --> 00:30:19,760
Speaker 4: ceiling fight, multiple almost shutdowns, the ouster of Kevin McCarthy,

564
00:30:19,880 --> 00:30:22,240
Speaker 4: the election of a new Speaker, My Johnson, the expulsion

565
00:30:22,680 --> 00:30:25,360
Speaker 4: of New York Congressman George Santos, and for all of

566
00:30:25,360 --> 00:30:28,080
Speaker 4: the drama in the headlines outside of major must pass

567
00:30:28,160 --> 00:30:32,000
Speaker 4: legislation that barely squeaked through, what was actually accomplished and

568
00:30:32,080 --> 00:30:35,080
Speaker 4: who were the winners and losers within that. Megan Scully,

569
00:30:35,120 --> 00:30:38,040
Speaker 4: who leads Bloomberg's congressional coverage, took a closer look at

570
00:30:38,040 --> 00:30:42,040
Speaker 4: that exact question and is joining me now with the answers. So, Megan,

571
00:30:42,080 --> 00:30:43,520
Speaker 4: there were winners this year.

572
00:30:44,560 --> 00:30:49,960
Speaker 13: There were largely thanks to inaction on Congress's part, which is,

573
00:30:50,480 --> 00:30:52,920
Speaker 13: you know, how lobbyists make their money in Washington is

574
00:30:53,240 --> 00:30:56,600
Speaker 13: trying to prevent legislation from happening more times than not.

575
00:30:57,120 --> 00:31:00,760
Speaker 13: So you had big winners such as banks and the

576
00:31:00,800 --> 00:31:06,040
Speaker 13: tech industry certainly walked away from this year without any

577
00:31:06,160 --> 00:31:10,720
Speaker 13: new stringent regulations placed against them. Railroad industry as well,

578
00:31:10,760 --> 00:31:15,520
Speaker 13: you know, following the East Palestine disaster, the real push

579
00:31:15,760 --> 00:31:20,640
Speaker 13: to enact new reforms for that industry fell by the

580
00:31:20,680 --> 00:31:24,560
Speaker 13: wayside amid you know, partisan fighting on Capitol Hill.

581
00:31:25,320 --> 00:31:28,920
Speaker 4: So when we think about legislation that didn't pass, often,

582
00:31:29,040 --> 00:31:31,280
Speaker 4: you know, legislation can be viewed as a threat to

583
00:31:31,400 --> 00:31:34,120
Speaker 4: industries in some senses. You mentioned banks and the railroads,

584
00:31:34,400 --> 00:31:36,760
Speaker 4: but there also were a few industries that were actually

585
00:31:36,800 --> 00:31:39,720
Speaker 4: pushing for legislation to get through that actually hasn't fully

586
00:31:40,080 --> 00:31:42,560
Speaker 4: come through yet, like crypto. Yeah, you had a couple

587
00:31:42,640 --> 00:31:45,280
Speaker 4: bills passed out of house financial Services of course, helmed

588
00:31:45,280 --> 00:31:49,920
Speaker 4: by chair Patrick McHenry, and yet didn't get anywhere in

589
00:31:49,960 --> 00:31:52,680
Speaker 4: twenty twenty three beyond that. So in that sense, I

590
00:31:52,680 --> 00:31:54,760
Speaker 4: guess it's a loss that the bills didn't happen.

591
00:31:54,840 --> 00:31:58,000
Speaker 13: Yes, there are occasions, you know, certainly in the semiconductor

592
00:31:58,040 --> 00:32:01,720
Speaker 13: industry as well, and new regulations on China. You know

593
00:32:01,760 --> 00:32:03,840
Speaker 13: that China hawks tried to push through at the end

594
00:32:03,840 --> 00:32:06,280
Speaker 13: of the year and that fell by the wayside. Those

595
00:32:06,280 --> 00:32:10,320
Speaker 13: were certainly all losers this year. Perhaps the biggest loser

596
00:32:10,760 --> 00:32:14,000
Speaker 13: we sort of reversed it on our list, but was Ukraine,

597
00:32:14,120 --> 00:32:19,440
Speaker 13: which is walking away without aid. Yet Congress is going

598
00:32:19,480 --> 00:32:24,000
Speaker 13: to come back to that early January when they return,

599
00:32:24,120 --> 00:32:26,800
Speaker 13: you know, on our list we made that Putin certainly

600
00:32:26,840 --> 00:32:29,760
Speaker 13: is walking away with some bragging rights this year, or

601
00:32:29,800 --> 00:32:34,479
Speaker 13: at least attempting to use congressional inaction to say that

602
00:32:34,520 --> 00:32:38,920
Speaker 13: this demonstrates a weakening resolve in the US to fund

603
00:32:39,080 --> 00:32:39,920
Speaker 13: Ukraine in this war.

604
00:32:40,320 --> 00:32:42,080
Speaker 4: So you mentioned this is something they're going to have

605
00:32:42,120 --> 00:32:44,160
Speaker 4: to come back to. Of course, that's not the only

606
00:32:44,200 --> 00:32:46,480
Speaker 4: big item they're going to have to deal with very

607
00:32:46,520 --> 00:32:48,479
Speaker 4: early on in the year, and when you're dealing with

608
00:32:48,560 --> 00:32:53,240
Speaker 4: so much big picture must deal with stuff, does all

609
00:32:53,240 --> 00:32:57,000
Speaker 4: of these other legislative efforts, you know, targeted at specific industries,

610
00:32:57,280 --> 00:32:59,320
Speaker 4: other bills just kind of fall to the wayside? Again,

611
00:32:59,360 --> 00:33:00,920
Speaker 4: is that what we're in. We're in twenty twenty four.

612
00:33:01,280 --> 00:33:05,600
Speaker 13: So if you look at the last several congresses, the

613
00:33:05,640 --> 00:33:08,560
Speaker 13: first year of a Congress, which was twenty twenty three,

614
00:33:09,520 --> 00:33:13,840
Speaker 13: doesn't tend to have much legislative action. This one was

615
00:33:13,920 --> 00:33:17,000
Speaker 13: unusually low. There are only twenty two bills as of

616
00:33:17,800 --> 00:33:20,240
Speaker 13: December nineteenth that were passed. Maybe some more will be

617
00:33:20,360 --> 00:33:23,920
Speaker 13: enacted before the end of the year, and usually that

618
00:33:24,000 --> 00:33:25,640
Speaker 13: numbers in the seventies or eighties.

619
00:33:26,240 --> 00:33:27,280
Speaker 10: We will see.

620
00:33:27,080 --> 00:33:30,760
Speaker 13: Some a flurry of activity next year, even though it's

621
00:33:30,760 --> 00:33:34,080
Speaker 13: an election year. Probably some of these pieces of legislation

622
00:33:34,160 --> 00:33:39,120
Speaker 13: getting attached to other bills, be it spending bills or

623
00:33:39,240 --> 00:33:42,800
Speaker 13: the Annual Defense Authorization Bill that somehow managed to squeak

624
00:33:42,840 --> 00:33:46,440
Speaker 13: through at the end of each year. So there is

625
00:33:46,480 --> 00:33:49,840
Speaker 13: another hope legislation doesn't expire at the end of a year.

626
00:33:49,880 --> 00:33:52,240
Speaker 13: It expires at the end of a congress, so they

627
00:33:52,240 --> 00:33:54,880
Speaker 13: do have a second chance to get this done.

628
00:33:55,200 --> 00:33:58,040
Speaker 4: Bloomberg Congressional team leader Megan Schully, thank you so much

629
00:33:58,040 --> 00:34:00,360
Speaker 4: as always, and Tom, I guess we'll see what they

630
00:34:00,360 --> 00:34:01,840
Speaker 4: can do in twenty twenty four.

631
00:34:02,480 --> 00:34:04,960
Speaker 1: Thank you, Kaylee. That was Bloomberg's sound on co host

632
00:34:05,000 --> 00:34:07,600
Speaker 1: Kaylee Lines reporting from our Bloomberg ninety nine to one

633
00:34:07,640 --> 00:34:10,000
Speaker 1: news from in Washington. And you can hear sound on

634
00:34:10,200 --> 00:34:14,040
Speaker 1: weekdays one to three pm Wall Street Time on Bloomberg Radio.

635
00:34:14,200 --> 00:34:16,120
Speaker 1: And that does it for this edition of Bloomberg day

636
00:34:16,120 --> 00:34:18,600
Speaker 1: Break Weekend. Join us again Monday morning at five am

637
00:34:18,640 --> 00:34:20,920
Speaker 1: Wall Street Time for the latest on the markets, overseas

638
00:34:21,000 --> 00:34:23,600
Speaker 1: and the news you need to start your day. I'm

639
00:34:23,640 --> 00:34:26,560
Speaker 1: Tom Busby. Stay with us. Top stories and global business

640
00:34:26,560 --> 00:34:29,400
Speaker 1: headlines are coming up right now.