Speaker 1: This is Bloomberg Daybreak Weekend, our global look at the
Speaker 1: top stories in the coming week from our Daybreak anchors
Speaker 1: all around the world, and straight ahead on the program.
Speaker 1: It's shaving up to be a very merry cryptomis with
Speaker 1: bitcoin and ethereum soaring in value. Will the surge continue
Speaker 1: in twenty twenty four with the SEC poise to approve
Speaker 1: the first ever spot bitcoin ETF. I'm Tom Busby in
Speaker 1: New York.
Speaker 2: I'm calin Hedge in London, where we're thinking about the
Speaker 2: lessons learned from the past year in stocks.
Speaker 3: I'm Doug Prisoner looking at the odds for a better
Speaker 3: gaming business in Macau for twenty twenty four.
Speaker 4: I'm Kaylie Lynes in Washington, where we're reflecting on a
Speaker 4: wild year in Congress and the legislative winners and losers.
Speaker 5: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg
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Speaker 1: Good day to you. I'm Tom Busby, and we begin
Speaker 1: today's program with a look at cryptocurrencies. Bitcoin, starting the
Speaker 1: year just under seventeen thousand dollars. Fast forward nearly twelve
Speaker 1: months later, Bitcoin is more than double trading above forty thousand.
Speaker 1: Why the big rally and will it continue? We're pleased
Speaker 1: to welcome Mike McLoone. He's senior commodity strategist at Bloomberg
Speaker 1: Intelligence and Bloomberg Markets editor Michael Reagan. Thank you both
Speaker 1: for joining us. What is behind the big rally in
Speaker 1: bitcoin this past year and what has changed if anything?
Speaker 6: Hey, Tom, Well, the potential the US is going to
Speaker 6: be launching Bitcoin ETF starting nine. The dates really January tense,
Speaker 6: but that's kind of more than micro The market sorty price,
Speaker 6: and it's the macro. I think that matters is virtually
Speaker 6: all risk assets were pretty well beat up at the
Speaker 6: end of last year, and virtually all risk assets are
Speaker 6: up this year. Bitcoin is just the riskiest. It's the
Speaker 6: highest beta up the most. So that's what I look
Speaker 6: at next year. That tilt is a pendulum, Mike swing
Speaker 6: the other way and kind of just revert a little.
Speaker 6: To me, that's the key risk. And it's the example
Speaker 6: of you know, bitcoin's up one hundred and sixty percent
Speaker 6: this year and the NASSEX up about fifty three percent,
Speaker 6: and on a voweltily weighting basis, that's just about what
Speaker 6: Bitcoin should be up.
Speaker 1: And Michael Reagan, so it's kind of mirrored the rise
Speaker 1: in equities this past year.
Speaker 7: Yeah, mirrored it and really out on it.
Speaker 5: Yeah.
Speaker 7: You know, Mike's talking about the beta in the market,
Speaker 7: which is kind of a technical term for if you know,
Speaker 7: one asset is moving one percent, a higher bait asset
Speaker 7: might move two percent or three percent. So, you know,
Speaker 7: Bitcoin just more a beneficiary of this return in risk
Speaker 7: appetites than the equity market, even both are really just
Speaker 7: putting in tremendous rebounds this year.
Speaker 1: And as Michael alluded to, with the SEC expected to
Speaker 1: approve January tenth, the spot bitcoin ETF, this could change everything.
Speaker 7: Yeah, I mean that's the thinking.
Speaker 1: You know.
Speaker 7: The idea is that there are a lot of investors
Speaker 7: and financial advisors out there who were reluctant to invest
Speaker 7: in crypto because they didn't quite trust all the crypto
Speaker 7: native platforms FTX obviously giving the best example of that
Speaker 7: when it collapsed last year. So, you know, the thinking is,
Speaker 7: now that it's available in an ETF, you can buy
Speaker 7: it from your traditional brokerage whoever that is that you
Speaker 7: deal with, and there's a little bit more safety there
Speaker 7: involved now, you know, to Mike's point, I think the
Speaker 7: question is is all that priced into the market already
Speaker 7: for the price of bitcoin and then some you know,
Speaker 7: is it a sell the news event, And it's really
Speaker 7: hard to predict that when the CTF one and if
Speaker 7: it is actually approved. But you know, I think the
Speaker 7: general thinking is that even if even if investors allocate
Speaker 7: a tiny percent of their entire portfolio, say one or
Speaker 7: two percent to crypto, now that's going to add up
Speaker 7: to tens hundreds of billions of dollars potentially. So the
Speaker 7: optimism is that these ETFs will be a big hit,
Speaker 7: and that perhaps while they might not rally, bitcoin might
Speaker 7: not rally the way it did this year, once they're introduced,
Speaker 7: that it will be a support going forward in the market.
Speaker 7: But to Mike's point, you know, this market rallied so
Speaker 7: hard this year that it would be sort of natural
Speaker 7: to expect a little bit of a pullback a correction
Speaker 7: from that.
Speaker 1: So what do you think, Mike mcloon, I'll address this
Speaker 1: to you. Why the change of heart from Gary Gensler
Speaker 1: federal regulators about now going forward with this?
Speaker 6: Oh, the good check and balances of courts. One example
Speaker 6: was coinbase and GBTC Gray Scale Bitcoin Trust. They won
Speaker 6: their actions in courts. There's been some other ones, but
Speaker 6: it's that pendulum and it's just a wonderful check and
Speaker 6: balance of our system. You might have people push back
Speaker 6: on this rapidly advancing technology, then people push forward, and
Speaker 6: that's what's happening. So I think what Michael pointed out
Speaker 6: is the key thing is there is just so much
Speaker 6: optimism and expectation. Okay, the ETFs are going to be launched.
Speaker 6: The key thing we like to say about it is
Speaker 6: that when we launched the Bloomberg Galaxy crypto inext in
Speaker 6: twenty eighteen, this was the goal to get ETFs tracking
Speaker 6: cryptos and most lightly a broad index, and we're just
Speaker 6: so far behind. Now they happen, They already exist in
Speaker 6: other countries. The US is just catching up. But it's
Speaker 6: Michael mentioned, it's the key thing that matters. The point
Speaker 6: I'm worried about is what it's doing for the space
Speaker 6: is since futures were launched in bitcoin in twenty seventeen,
Speaker 6: valtile is getting squashed. So what's happening is this teenager
Speaker 6: or this child acid is becoming an adult rapidly, and
Speaker 6: ETFs are going to push into the adult space really
Speaker 6: fast meeting. Can I expect those very big returns we've
Speaker 6: had in the past when it was trading at a
Speaker 6: volatility of one hundred to two hundred percent, and now
Speaker 6: that valtil is around thirty percent, that's the lowest ever.
Speaker 6: That's a two hundred and sixty day measure or an
Speaker 6: annual measure. And the thing is it's still much higher
Speaker 6: volatility than stock market goal. And that's where I think
Speaker 6: people I'm worried about if we do get that normal
Speaker 6: reversion in the stock market next year bitcoin keep thinking
Speaker 6: about Bitcoin. It's trades twenty four seven. It's one of
Speaker 6: the most significant leading indicators in the planet. It might
Speaker 6: lead that way down. That's why I look at is yes,
Speaker 6: there's always going to be small pullbacks. I'm looking at
Speaker 6: the pendulum for next year swinging more towards reversion as
Speaker 6: the best Maybe we've already seen the best buy the
Speaker 6: rumor in the markets.
Speaker 7: Michael, Yeah, and that falseeity issue is a fascinating once unpacked,
Speaker 7: because you know, that's something these traders like, you know,
Speaker 7: your typical buy and hold investor might not level lot
Speaker 7: of volatility in their portfolio, but crypto investors, that's that's
Speaker 7: their bread and butter, right, So you know, regardless of
Speaker 7: what Bitcoin does, it's fascinating to look at some of
Speaker 7: the other areas of crypto market and what's going on.
Speaker 7: I'll give you an example. Solana is the big star
Speaker 7: of the industry this year. Their native token soul is
Speaker 7: up like eight hundred percent. And the thinking there is
Speaker 7: this is a blockchain that's much faster and cheaper to
Speaker 7: run transactions on than Bitcoin or ethereum. So a lot
Speaker 7: of these really crazy sort of meme coins and NFTs
Speaker 7: and all that very very speculative and extra risky. I mean,
Speaker 7: all of crypto's risky, but this stuff is super ultra risky.
Speaker 7: Has really found a home on that blockchain and Avalanche,
Speaker 7: so you know, the market is kind of I think
Speaker 7: to Mike's point, there's a potential for sort of a
Speaker 7: a fork in the road where bitcoin becomes more of
Speaker 7: the mainstream, lower volatile the side of the market. But
Speaker 7: then you still have this sort of more wild west,
Speaker 7: wildly volatile and speculative angle of the market where all
Speaker 7: the true crypto you know, guys who like to trade
Speaker 7: and really actively go long, go short, we'll be happy
Speaker 7: to sort of move over to that side of the market.
Speaker 1: Well, it seems also there are always new ones, ones
Speaker 1: happening now you've never even heard of. Yeah.
Speaker 7: Absolutely, I mean it's so easy to create a new coin.
Speaker 7: You can basically copy the code from the last one,
Speaker 7: change a few variables in it, give it a new name,
Speaker 7: and you're off to the racist. And then it's you know,
Speaker 7: a matter of you know, how strongly can you market
Speaker 7: it and pump it up and get other people excited
Speaker 7: about it. It's kind of a crazy scheme, but that
Speaker 7: is sort of the nature of the market these days.
Speaker 1: Oh, it's a crazy scheme. Now, Mike mcgoon, I want
Speaker 1: to talk about something I know you have spoken about,
Speaker 1: referring to bitcoin as a form of digital gold. What
Speaker 1: do you mean, why is that and what do you mean?
Speaker 6: It really struck me when I was in Hong Kong,
Speaker 6: the twenty eighteen visying colleagues, and almost everybody met there
Speaker 6: when they're talking about mainland this and mainland that is
Speaker 6: a no. And that was a significant bear market cryptos.
Speaker 6: Yet there was one bull market, and that was the
Speaker 6: market capitalization of the number one stable going called Teather.
Speaker 6: And the key thing that really struck me is now
Speaker 6: on a global basis, sort of first time in history,
Speaker 6: everybody in the planet with an iPhone, which you can
Speaker 6: get now a phone in India for twelve bucks, has
Speaker 6: access to a stable currency or something more like digital
Speaker 6: like bitcoin, through their digital assistant or their phones. And
Speaker 6: the key thing I like to stay about bitcoin is
Speaker 6: in terms of gold is average Ask your average thirty
Speaker 6: something person or someone like the age of my kids.
Speaker 6: They don't really care about goal. And that to me
Speaker 6: is like to say, is if you are in the
Speaker 6: gold space, you're bullish gold. I'm bullish gold, You're you're
Speaker 6: involved in gold. That's kind of you have to have
Speaker 6: some consideration of the world's going digital and bitcoin being
Speaker 6: in that space. So it's me it has to have
Speaker 6: some bitcoin in that space. Now, how much you put
Speaker 6: in there is subject, but the world is going digital,
Speaker 6: and it's just a better way to transact. But one
Speaker 6: thing I really want to touch on it's happening in
Speaker 6: this space is Michael alluded to a little bit with
Speaker 6: Solona is proliferation of stable coins. This technology allows everybody
Speaker 6: in the planet to get access to the dollar. Call
Speaker 6: them stable coins, I call them crypto dollars because they
Speaker 6: all track the dollar and the AUM. And these crypto
Speaker 6: dollars now are almost about one hundred and twenty five billion,
Speaker 6: and that's something that's just happening more and more, and
Speaker 6: it's because the technology allows everybody in the will to
Speaker 6: get access to this, particularly when you live in a
Speaker 6: country with a melting currency, which most hour in the
Speaker 6: long term is just the dollars, the most, the strongest,
Speaker 6: and just in terms of bitcoin, to me, it's digital
Speaker 6: gold versus regular golden analog gold. You probably should put
Speaker 6: them together. And then in the space, what's significant is
Speaker 6: just the technologies allowing people to get to the dollar.
Speaker 6: And what's really it's called basically tokenization. What's next in
Speaker 6: tokenization through the technology, And a lot of people I
Speaker 6: hear say, are US treasuries?
Speaker 1: Yeah, well they've got a lot to look forward to.
Speaker 1: Our thanks to Mike McLoone, senior commodity strategist at Bloomberg
Speaker 1: Intelligence and Bloomberg Market editor Michael Reagan. Coming up on
Speaker 1: Bloomberg Daybreak Weekend runaway, inflation, raid hikes, job cuts and more.
Speaker 1: What lessons have we learned from this past year? I'm
Speaker 1: Tom Busby and this is Bloomberg. This is Bloomberg day
Speaker 1: Break Weekend, our global look ahead at the top stories
Speaker 1: for investors in the coming week. I'm Tom Busby in
Speaker 1: New York. Up later in our program the big winners
Speaker 1: in this year's do Nothing Congress. But first, twenty twenty
Speaker 1: three has been a year of inflation, rate debates, job cuts,
Speaker 1: geopolitical tensions. We'll look back at twenty twenty three through
Speaker 1: a number of different lenses and ask what lessons can
Speaker 1: be learned from the past year and how they can
Speaker 1: help us navigate the next twelve months. For more, let's
Speaker 1: go to London and bring in Bloomberg Daybreak anchor Caroline Hepger.
Speaker 2: Some might be asking what twenty twenty four could possibly
Speaker 2: throw at markets after a year packed with every challenge
Speaker 2: in the book. Again, as the year draws to a close,
Speaker 2: investors have been hit with a curveball at tax on
Speaker 2: merchant ships in the Red Sea, threatening to d stable
Speaker 2: as the global economy. There's also been a final surprise
Speaker 2: in the UK this week's CPI data showing that inflation
Speaker 2: slowed to three point nine percent. Now, that was a
Speaker 2: bigger drop than had been originally forecast. No one saw
Speaker 2: it coming, including Bloomberg's Markets Today reporter Dave Goodman. Here's
Speaker 2: his reaction.
Speaker 8: Pretty stll in reading, wasn't it. I sit next to Connor,
Speaker 8: who deserves squalwk on on Bloomberg, and I think everyone
Speaker 8: heard me shout wow loudly in the background as he
Speaker 8: was reading out to people a three point nine percent
Speaker 8: No one we Bloomberg had surveyed thirty five economists, Not
Speaker 8: one of them saw of reading below four point two percent.
Speaker 8: So that kind of shows you how much of a
Speaker 8: shock in terms of a downward surprise. It's it's the
Speaker 8: biggest since February twenty twenty one.
Speaker 2: That was Bloomberg's David Goodman there. So what are the
Speaker 2: takeaways then from an unforgettable year for global equities? We
Speaker 2: asked Bloomberg Stocks Guru, our director of Research, Tim Craighead,
Speaker 2: to help us make sense of it all, starting by
Speaker 2: asking him his biggest lesson from the past year in stocks.
Speaker 2: Here's what he had to say.
Speaker 9: I guess one thing that really comes to mind is
Speaker 9: that composition matters. If you look at the nature of
Speaker 9: the markets that have worked in Europe, or think about
Speaker 9: Europe versus the US, it really does boiled down the composition.
Speaker 9: The SMI has been awful basically because of four stocks Rosa,
Speaker 9: nov Artists, Nesle, and Richmond. If you take those out,
Speaker 9: that market's up twenty one percent. It's equal to the US.
Speaker 9: If you look at Europe, it looks awful at up
Speaker 9: twelve percent versus the US up twenty one percent. But
Speaker 9: if you look at the Eurostocks fifty, which is concentrated
Speaker 9: into some of the biggest important names in the Eurozone,
Speaker 9: it's up nineteen percent. That's call it roughly in line.
Speaker 9: It's the UK and Switzerland that have been awful for
Speaker 9: Europe and taking the whole index if you look at
Speaker 9: the stock six hundred down, So composition really matter.
Speaker 2: So then how do you think about Europe and how
Speaker 2: it will fare against the United States?
Speaker 9: Looking to next Yeah, yeah, well two things here come
Speaker 9: immediately to mind. One is clearly the US has gotten
Speaker 9: an awful lot more TMT and that's been a huge
Speaker 9: driver of the rally that we've seen since the October lows.
Speaker 9: They tend to be higher duration in terms of longer
Speaker 9: term cash flow growth if you get into the math,
Speaker 9: which makes them more sensitive to interest rate changes as
Speaker 9: well as longer term secular growth drivers. So that is
Speaker 9: a big difference in the last six weeks. That's really mattered.
Speaker 9: It brings up what happens from here, and we can
Speaker 9: talk a little bit more about that from the standpoint
Speaker 9: of how much the market is now baked in central
Speaker 9: bank pivots, which I think is definitely the case across
Speaker 9: both continents, but probably even more so in the US.
Speaker 9: The second thing is China. China is a big deal
Speaker 9: for Europe. Call it four hundred and sixty billion dollars
Speaker 9: in a billion euros in revenue across eighty big companies
Speaker 9: in Europe. That's a lot of exposure. It's roughly thirty
Speaker 9: percent of the market index that that's got China exposure.
Speaker 9: That's a tough first half comparison. I think there's a
Speaker 9: tale of two halts for European markets looking into twenty
Speaker 9: twenty four. Tough earnings to begin with, but maybe an
Speaker 9: interesting second half looking towards twenty twenty five.
Speaker 10: So there's loads to unpack there. But I just want
Speaker 10: to hone in on what you said about the UK.
Speaker 2: When do you think people will start deciding that Britain's
Speaker 2: cheap and it's a bargain and it's time to buy.
Speaker 3: Never buy.
Speaker 9: So it is cheap, but it's cheap for a reason,
Speaker 9: and that goes back to the composition issue. It's got
Speaker 9: a bunch of banks. Banks tend to trade cheap relative
Speaker 9: to do a lot of other sectors. It's got a
Speaker 9: heavy heavy dose of oil and metals and mining. Those
Speaker 9: are contra to earnings, and right now we're still at
Speaker 9: relatively higher earnings, so you're at relatively low valuations. The
Speaker 9: only time you're going to see real revaluation in those
Speaker 9: is when you have a down cycle in the commodity
Speaker 9: prices that really depresses earnings and inflates multiples. But as
Speaker 9: you look at it's interesting if you look over a
Speaker 9: two year period, the Footsie's actually outperformed both the EERO
Speaker 9: stocks and the S and P five hundred. Take a
Speaker 9: look at that. Going back to January one, twenty twenty two,
Speaker 9: and it's because it was relatively flat and when we
Speaker 9: had down drafts in the market, the FOOTE totally outperformed.
Speaker 9: So if you're concerned for whatever reason tactically at certain
Speaker 9: points in time, the Footsie is a safe haven. If
Speaker 9: you're looking for juice, you know, the foot sis global
Speaker 9: defensives don't give you that a space. The pounds a
Speaker 9: little bit stronger. Depends on what you think about commodity markets.
Speaker 9: It's got a lot of exposure there, but right now
Speaker 9: those are relatively depressed, and it's got a heavy dose
Speaker 9: in financials where margins are very inflated. And if you
Speaker 9: think we're going to have a central bank pivot, that
Speaker 9: puts those margins at risk a little bit of deflating.
Speaker 2: So how do we think about then the central bank pivots.
Speaker 2: I mean, we've been slower in pricing in the potential
Speaker 2: of interest rate cuts on the Bank of England than
Speaker 2: we have for the ECB and the FED, but it
Speaker 2: is there. And if you think about the GDP data
Speaker 2: that some are concerned about the stagnation slash recession story
Speaker 2: for the UK, you know, how do you think about
Speaker 2: the pivot?
Speaker 9: So between now and say year in twenty twenty four.
Speaker 9: I think it's a positive backdrop and it's good for
Speaker 9: the foot seat, and it's going to be good for
Speaker 9: the European markets because both central banks are humble opinion,
Speaker 9: likely to either be pivoting. You know, there's a lot
Speaker 9: more visibility on that progress continuing into twenty twenty five.
Speaker 9: The concern I suppose right now is that we've had
Speaker 9: in all markets such a big discounting of a pivot
Speaker 9: in the past six weeks that you know, just technically
Speaker 9: we're getting a little bit extended, and you know, does
Speaker 9: that balk a little bit, especially for the UK market
Speaker 9: and Europe as we get into January February and have
Speaker 9: to face fourth quarter earnings that are probably going to
Speaker 9: be similar to third quarter, where yeah, they were somewhat resilient,
Speaker 9: but we saw negative revisions and we think you could
Speaker 9: see a bit more on the negative revision front. So
Speaker 9: first quarter I think is a little dicey, especially at
Speaker 9: these elevated market levels, but an interesting second half of
Speaker 9: the year.
Speaker 2: My thanks there to Bloomberg's director of research, Tim Craighead.
Speaker 2: I'm Caroline hepget here in London. You can catch us
Speaker 2: every weekday morning for Bloomberg Daybreak Europe, beginning at six
Speaker 2: am in London. That's one am on Wall Street.
Speaker 1: Thanks Carolina. Coming up on Bloomberg day Break weekend and
Speaker 1: look at how Mcow's casino industry has weathered the challenges
Speaker 1: of a global pandemic and a slow economic recovery in China.
Speaker 1: I'm Tom Busby, and this is Bloomberg.
Speaker 5: Broadcasting from the Bloomberg It a active brokers studio in.
Speaker 11: New York, Bloomberg Eleving free own to Washington, DC, Bloomberg
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Speaker 11: app in Bloomberg Radio dot Com. This is Bloomberg Daybreak.
Speaker 1: This is Bloomberg Daybreak weekend, our global look ahead at
Speaker 1: the top stories for investors in the coming week. I'm
Speaker 1: Tom Busby in New York. After a devastating pandemic and
Speaker 1: a prolonged economic slowdown in China, how has Macow's casino
Speaker 1: and gaming business recovered? For more, we go to Bloomberg
Speaker 1: Daybreak Asia co host Doug Krisner.
Speaker 3: Tom The major casinos in Macau are still in the
Speaker 3: process of recovering after being hard hit by the pandemic
Speaker 3: obviously when China closed its borders. Despite the sluggishness of
Speaker 3: the overall Chinese economy, though, many analysts have a positive
Speaker 3: outlook for Macau as we approach the new year. The city,
Speaker 3: if you didn't know, is the world's largest gambling center
Speaker 3: by revenue. For a closer look at gaming and McCaw
Speaker 3: let's bring in Bloomberg's Angela han Lee, gaming and Hospitality
Speaker 3: analyst for the apack at Bloomberg Intelligence. It's a pleasure
Speaker 3: to have the chance to chat with you, and I
Speaker 3: know that in peak times, Macau gets a lot of
Speaker 3: activity during the Lunar New Year festivity and the Golden
Speaker 3: Week holiday in October. But since the Christmas holiday is
Speaker 3: upon us and New Year's is just around the corner, Angela,
Speaker 3: I'm curious will these holidays produce any traffic in a
Speaker 3: meaningful way for the casinos.
Speaker 12: Yes, I think that in the past, the Luna New
Speaker 12: Year and October Golden Week were the major events for
Speaker 12: McCall casinos because that's basically where mainland China has the
Speaker 12: longest holidays. But now I think it's a bit different
Speaker 12: because we are having more young people who likes to
Speaker 12: celebrate Christmas. And also given that this consumption downgraade trend,
Speaker 12: people cannot travel too far. That's why they prefer to
Speaker 12: go make shock hold trips. And Macau is one of
Speaker 12: the popular places because it's outside Mala in China but
Speaker 12: still very attractive. So and also because the Macau's integrity
Speaker 12: results now have much more amenities. They are hosting a
Speaker 12: lot of concerts and also events. So you see that
Speaker 12: some TV stations of China is hosting some year end
Speaker 12: concerts and events in Macau as well, so that it's
Speaker 12: going to also bring more traffic from mailing Chinese people.
Speaker 1: So did the.
Speaker 3: Gaming companies use the opportunity of a decline in business
Speaker 3: during the pandemic to really reinvest and put some of
Speaker 3: these new venues in place so that hopefully when things
Speaker 3: emerged from the pandemic that a lot of new venues
Speaker 3: would be in place for people to take advantage of.
Speaker 12: Yes, there are some new casinos that open during the pandemic,
Speaker 12: say s GM's grandl Isba Palace and recently Galaxy Macau
Speaker 12: also expanded fifty three, so it's new capacity and its
Speaker 12: new capacity can bring much more traffic because in the
Speaker 12: past those hotel rooms were only for big rollers, but
Speaker 12: now there are much more hotel rooms in Macau. So
Speaker 12: that's why, like some young people can also pay for
Speaker 12: the hotel biers by themselves and stay in Macau.
Speaker 10: So I think the.
Speaker 12: Whole maccaunt is changing towards this type of mass lasor
Speaker 12: travel thing rather than pure gambling.
Speaker 3: So younger people, I understand. What about for the family,
Speaker 3: if you have even younger children, is it a good destination?
Speaker 10: True?
Speaker 12: If you go to Macau, you will find some fancy facilities,
Speaker 12: say in Galaxy Macau.
Speaker 10: There are places like.
Speaker 12: You know, artificial Beach that you can go and enjoy
Speaker 12: video kids. And also there is a water park in
Speaker 12: Still City face two. And you also see many other
Speaker 12: events and shows that you can go with kids. So
Speaker 12: Macau is transforming. I would say mask gaming revenue is
Speaker 12: something coming with the higher profit margin, so I guess
Speaker 12: that also benefits Macaus casinos to achieve itBit the improvement
Speaker 12: faster than gaming revenue.
Speaker 3: So I suggested that many analysts have upgraded their opinion
Speaker 3: of twenty twenty four in terms of outlook for revenue.
Speaker 3: What is driving a lot of this optimism if.
Speaker 12: They say so the pre pandemic numbers by ten percent.
Speaker 12: It's about the mask gaming revenue, meaning the people who
Speaker 12: go and gamble with their own cash, excluding the gaming
Speaker 12: revenue coming from credit gamblers.
Speaker 10: But this is a major driver for ma CAA casinos.
Speaker 12: That makes sense, and the major reason is orgain because
Speaker 12: of the hotel inventory has increased in Macau, making like
Speaker 12: people to be like the hotel rooms are much more
Speaker 12: affordable for some people as well, So I think that's
Speaker 12: one thing. The other is because the people who used
Speaker 12: to travel long hauld don't go there far because too
Speaker 12: expensive for them, so they prefer coming to Macau. So
Speaker 12: Macau is kind of benefiting from this consumption downreature in
Speaker 12: China too.
Speaker 3: I'm wondering if the government has been involved in helping
Speaker 3: to promote the industry from countries like South Korea, Malaysia,
Speaker 3: Philippines and Singapore. Has there been an active campaign to
Speaker 3: try to get tourists from those jurisdictions to come to Macau.
Speaker 10: I think that's the trend as well.
Speaker 12: So to start with, I would say Macau's hirola business,
Speaker 12: which means credit gamblers, junket business has been under crackdown,
Speaker 12: so some people has been who used to play in
Speaker 12: Macau with credit facilitated by underground banks in China are
Speaker 12: also to like cash gamblers. That is also a type
Speaker 12: of thing that Macau and Melan government is urging those
Speaker 12: players and the whole industry to become much more transparent.
Speaker 10: That's one thing.
Speaker 12: The other is that you know, like there are a
Speaker 12: lot of crackdowns going on regarding some human trafficking and
Speaker 12: some organized crimes in Southea Asia. You may also have
Speaker 12: seen some news saying that, like China has sent their
Speaker 12: own military forces to crack down those organized crimes in Miyama.
Speaker 12: So all the things together, I think even government and
Speaker 12: even some like a media in China are kind of
Speaker 12: promoting that, you know, like a be more careful when
Speaker 12: you travel out and try to try to be like
Speaker 12: a stay in safe places.
Speaker 3: Angela, We've touched on two things, and I'm wondering whether
Speaker 3: there's a connection. The interesting attracting young people to a
Speaker 3: lot of these casinos, and you're talking about the extent
Speaker 3: to which these gaming companies are more reliant on cash
Speaker 3: rather than credit. And I'm wondering whether young people now
Speaker 3: are using the latest technology when they walk into these
Speaker 3: gaming facilities, so they're able to take their phone and
Speaker 3: essentially gamble using the phone.
Speaker 1: Is that is that happening?
Speaker 12: You are not allowed to use phone when you're gambling.
Speaker 12: If you take out your phone to take pictures. They
Speaker 12: were coming say like, don't take pictures of the casinos.
Speaker 12: That's about privacy thing. And also because they want to
Speaker 12: prevent this phone gambling, they don't want people to do
Speaker 12: the video streaming with the gaming tables because that is
Speaker 12: allowing another kind of proxy gambling online that used to
Speaker 12: happen more like in other parts of the world, like
Speaker 12: in Philippines, which was which used to be legal. In
Speaker 12: Macau it has been illegal for a long time, like
Speaker 12: for the past I think Alice in my memory should
Speaker 12: be more than seven years. So Macaw's gaming business is
Speaker 12: really about in person gambling thing rather than online streaming.
Speaker 10: If you do online stream you get caught.
Speaker 3: But what about using new forms of money technology. I'm
Speaker 3: not necessarily saying a cryptocurrency, but are there technological platforms
Speaker 3: that you might have on your phone where you could
Speaker 3: use the phone just in a moment to transfer money
Speaker 3: at the casino so that you could get cash in
Speaker 3: hand and then go to a table and play.
Speaker 12: So one to start with that, you know, China has
Speaker 12: some limits if you want to vitual money off show.
Speaker 12: If you are we're doing the money which is under
Speaker 12: the like a lot amount, then you obviously can do
Speaker 12: through the union pay. But if you want to do
Speaker 12: more than a lot of amount, then you have to
Speaker 12: do something else, which is like a weed chad or
Speaker 12: something else that you know, like some underground banks will facilitate.
Speaker 12: So at the end, what Macau will do is that
Speaker 12: Macau casinos will try to make money from more people
Speaker 12: who spend less than before.
Speaker 3: I'm wondering how the office of the Chief Executive in Macau,
Speaker 3: how that office is expressing a view on the business,
Speaker 3: whether or not the office of the Chief Executive is
Speaker 3: as optimistic as many of the animals that we've been
Speaker 3: talking about.
Speaker 12: He's also optimistic, and government is always trying to express
Speaker 12: that the most important is promoting non gaming business and
Speaker 12: then they don't like gaming business. But from casino product perspective,
Speaker 12: casino business is the best business with better ROI.
Speaker 10: So there's some suggle over there.
Speaker 12: But we come to a point that you know, casino
Speaker 12: products now understand that if they want to draw more
Speaker 12: traffic and keep players longer, they should have more non
Speaker 12: gaming amenities to people to let peper use. So on,
Speaker 12: this says, I believe casino operators will keep investing in
Speaker 12: non gaming amenities including hotel rooms or other like you know, say,
Speaker 12: other retail shops or even like a concert. There are
Speaker 12: so many concerts going on and this is driving so
Speaker 12: much traffic.
Speaker 10: They did like a.
Speaker 12: Black Pink in the middle of this year, and Brunomas
Speaker 12: is also coming like the next year. They also have
Speaker 12: like some big Canton pop stars like a Jackie Chen
Speaker 12: as well like this year. Everyone is just trying to
Speaker 12: bring more people to the property so that they can
Speaker 12: generate more gaming and on gaming revenue.
Speaker 3: Angela, You've given us a lot of good information. Thanks
Speaker 3: for taking the time to chat with us. That is
Speaker 3: Angela Han League Gaming and Hospitality analyst for the apack
Speaker 3: at Bloomberg Intelligence. I'm Doug Prisner in New York and
Speaker 3: you can catch Brian Curtison myself weekdays here for Bloomberg
Speaker 3: Daybreak Asia beginning at seven am in Hong Kong six
Speaker 3: pm on Wall Street, Tom.
Speaker 1: Thank you Doug. Coming up on Bloomberg day Break weekend.
Speaker 1: The US Congress this past year passing the fewest laws
Speaker 1: in decades. How did that benefit some of the biggest
Speaker 1: players on Wall Street. I'm Tom Busby and this is Bloomberg.
Speaker 1: I'm Tom Busby in New York with your global look
Speaker 1: ahead at the top stories for investors in the coming week.
Speaker 1: Turmoil this year in the one hundred and eighteenth Congress,
Speaker 1: which went through several House speakers even voted out one
Speaker 1: of its own members while lawmakers did little to actually govern.
Speaker 1: That meant good news for banks, tech giants, and big pharma.
Speaker 9: More.
Speaker 1: Let's head to our Bloomberg ninety nine one Newsomen Washington
Speaker 1: and Bloomberg Sound on co host Kaylee Lines.
Speaker 4: Yeah.
Speaker 6: Tom.
Speaker 4: Congress is officially done for twenty twenty three, and what
Speaker 4: a year.
Speaker 6: It was.
Speaker 4: Started off with fifteen rounds of votes to elect Kevin
Speaker 4: McCarthy Speaker of the House, continued on to a dead
Speaker 4: ceiling fight, multiple almost shutdowns, the ouster of Kevin McCarthy,
Speaker 4: the election of a new Speaker, My Johnson, the expulsion
Speaker 4: of New York Congressman George Santos, and for all of
Speaker 4: the drama in the headlines outside of major must pass
Speaker 4: legislation that barely squeaked through, what was actually accomplished and
Speaker 4: who were the winners and losers within that. Megan Scully,
Speaker 4: who leads Bloomberg's congressional coverage, took a closer look at
Speaker 4: that exact question and is joining me now with the answers. So, Megan,
Speaker 4: there were winners this year.
Speaker 13: There were largely thanks to inaction on Congress's part, which is,
Speaker 13: you know, how lobbyists make their money in Washington is
Speaker 13: trying to prevent legislation from happening more times than not.
Speaker 13: So you had big winners such as banks and the
Speaker 13: tech industry certainly walked away from this year without any
Speaker 13: new stringent regulations placed against them. Railroad industry as well,
Speaker 13: you know, following the East Palestine disaster, the real push
Speaker 13: to enact new reforms for that industry fell by the
Speaker 13: wayside amid you know, partisan fighting on Capitol Hill.
Speaker 4: So when we think about legislation that didn't pass, often,
Speaker 4: you know, legislation can be viewed as a threat to
Speaker 4: industries in some senses. You mentioned banks and the railroads,
Speaker 4: but there also were a few industries that were actually
Speaker 4: pushing for legislation to get through that actually hasn't fully
Speaker 4: come through yet, like crypto. Yeah, you had a couple
Speaker 4: bills passed out of house financial Services of course, helmed
Speaker 4: by chair Patrick McHenry, and yet didn't get anywhere in
Speaker 4: twenty twenty three beyond that. So in that sense, I
Speaker 4: guess it's a loss that the bills didn't happen.
Speaker 13: Yes, there are occasions, you know, certainly in the semiconductor
Speaker 13: industry as well, and new regulations on China. You know
Speaker 13: that China hawks tried to push through at the end
Speaker 13: of the year and that fell by the wayside. Those
Speaker 13: were certainly all losers this year. Perhaps the biggest loser
Speaker 13: we sort of reversed it on our list, but was Ukraine,
Speaker 13: which is walking away without aid. Yet Congress is going
Speaker 13: to come back to that early January when they return,
Speaker 13: you know, on our list we made that Putin certainly
Speaker 13: is walking away with some bragging rights this year, or
Speaker 13: at least attempting to use congressional inaction to say that
Speaker 13: this demonstrates a weakening resolve in the US to fund
Speaker 13: Ukraine in this war.
Speaker 4: So you mentioned this is something they're going to have
Speaker 4: to come back to. Of course, that's not the only
Speaker 4: big item they're going to have to deal with very
Speaker 4: early on in the year, and when you're dealing with
Speaker 4: so much big picture must deal with stuff, does all
Speaker 4: of these other legislative efforts, you know, targeted at specific industries,
Speaker 4: other bills just kind of fall to the wayside? Again,
Speaker 4: is that what we're in. We're in twenty twenty four.
Speaker 13: So if you look at the last several congresses, the
Speaker 13: first year of a Congress, which was twenty twenty three,
Speaker 13: doesn't tend to have much legislative action. This one was
Speaker 13: unusually low. There are only twenty two bills as of
Speaker 13: December nineteenth that were passed. Maybe some more will be
Speaker 13: enacted before the end of the year, and usually that
Speaker 13: numbers in the seventies or eighties.
Speaker 10: We will see.
Speaker 13: Some a flurry of activity next year, even though it's
Speaker 13: an election year. Probably some of these pieces of legislation
Speaker 13: getting attached to other bills, be it spending bills or
Speaker 13: the Annual Defense Authorization Bill that somehow managed to squeak
Speaker 13: through at the end of each year. So there is
Speaker 13: another hope legislation doesn't expire at the end of a year.
Speaker 13: It expires at the end of a congress, so they
Speaker 13: do have a second chance to get this done.
Speaker 4: Bloomberg Congressional team leader Megan Schully, thank you so much
Speaker 4: as always, and Tom, I guess we'll see what they
Speaker 4: can do in twenty twenty four.
Speaker 1: Thank you, Kaylee. That was Bloomberg's sound on co host
Speaker 1: Kaylee Lines reporting from our Bloomberg ninety nine to one
Speaker 1: news from in Washington. And you can hear sound on
Speaker 1: weekdays one to three pm Wall Street Time on Bloomberg Radio.
Speaker 1: And that does it for this edition of Bloomberg day
Speaker 1: Break Weekend. Join us again Monday morning at five am
Speaker 1: Wall Street Time for the latest on the markets, overseas
Speaker 1: and the news you need to start your day. I'm
Speaker 1: Tom Busby. Stay with us. Top stories and global business
Speaker 1: headlines are coming up right now.