Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: This is the BlueBag Day Baker at podcast. Good morning,
Speaker 2: It's Wednesday, the twenty fourth of September. I'm Caroline Hepgar
Speaker 2: in London. Coming up today. President Trump says that NATO
Speaker 2: allies should shoot down Russian aircraft that enter their territory
Speaker 2: as he backs Ukraine to win the war. Jimmy Kimmel
Speaker 2: chokes up as he says it was never his intention
Speaker 2: to make light of the murder of Charlie Kirk before
Speaker 2: calling efforts to take his program off the air on
Speaker 2: American plas the trillion dollar race, European money managers moved
Speaker 2: to consolidate as they try to head off the growing
Speaker 2: threat from Wall Street rivals. Let's start with the roundup
Speaker 2: of our top stories. President Donald Trump is sounding a
Speaker 2: new note on Ukraine's chances of winning its war against
Speaker 2: Russia and saying that NATO itself sho take a tougher line.
Speaker 2: He says members of the Alliance should take down Russian
Speaker 2: planes that breach their airspace. That was after a series
Speaker 2: of jet and drone incursions this month on NATO's eastern
Speaker 2: flank which alarmed allies. Here is the exchange with reporters
Speaker 2: when President Trump was directly pressed on his stance, Mister Prednay, do.
Speaker 3: You think that NATO countries should shoot down Russian aircraft
Speaker 3: if they enter their airspace?
Speaker 2: Donald Trump was speaking alongside Ukraine's Vladim Zelinsky on the
Speaker 2: sidelines of the UN General Assembly in New York. In
Speaker 2: a subsequent social media post, Trump said he believed that
Speaker 2: with EU backing, Ukraine was positioned to reclaim all the
Speaker 2: territory taken by Russia since its invasion in twenty twenty two.
Speaker 2: Not only to fight back, President Trump wants NATO to
Speaker 2: step up and also put more pressure on Russia. Though
Speaker 2: Finnish President Alexander Stubb has been speaking to Bloomberg, all.
Speaker 4: The conversations that I've had with my American friends and
Speaker 4: also with President Trump lead me to believe that there's
Speaker 4: a very strong commitment to nature and the alliance. Remember
Speaker 4: that a year ago, if someone would have told me
Speaker 4: in the summer, at the seventy fifth Anniversary of Nature
Speaker 4: that we will hike up our defense expenditure from JUO
Speaker 4: to five percent next summer, I would have said, you'd
Speaker 4: probably going to need to go and see a doctor.
Speaker 2: Finished President Alexander stood there speaking to Bloomberg's Tyler Kendall.
Speaker 2: The US President meanwhile delivered his first UN speech of
Speaker 2: his second term, in which he severely criticized the UN
Speaker 2: organization and repeated his call for stronger borders.
Speaker 1: Now.
Speaker 2: The US's late night host Jimmy Kimmel became notably emotional
Speaker 2: as his show returned, and he railed against the threat
Speaker 2: of censorship. Disney suspended Kimmel's show last week following controversial
Speaker 2: remarks that the comedian made about the assassination of Republican
Speaker 2: activists Charlie Kirk. At the start of his ABC show,
Speaker 2: the comedian thanked both political supporters and opponents who had
Speaker 2: backed his freedom to share his views on air, before
Speaker 2: then offering this conciliatory message.
Speaker 5: You understand that it was never my intention to make
Speaker 5: light of the murder of a young man.
Speaker 3: I don't.
Speaker 5: I don't think there's anything funny about it. I posted
Speaker 5: a message on Instagram of the daves killed, sending love
Speaker 5: to his family and asking him for compassion, and I
Speaker 5: meant it and I still do. Nor was in my
Speaker 5: intention to blame any specific group for the actions of
Speaker 5: what it was obviously a deeply disturbed individual.
Speaker 2: Kimmel went on to call the push to take his
Speaker 2: show off air on American Disney reinstated kim OLL's program
Speaker 2: after reaching an agreement with the late night host about
Speaker 2: what he would say on air, following a public backlash
Speaker 2: out the decision to suspend him. Now, in a social
Speaker 2: media post, President Trump floated the prospect of unspecified future
Speaker 2: legal challenges against the company's decision to bring back the show,
Speaker 2: calling him an arm of the Democratic Party. Now. Another news,
Speaker 2: violent wind and torrential rain super typhoon Ragasa has been
Speaker 2: pounding Hong Kong and it is expected to hit China's
Speaker 2: Guangdong province later today. Ragasa has killed at least fourteen
Speaker 2: people in Taiwan and six in the Philippines, and is
Speaker 2: the worst cyclone worldwide this year. The storm has led
Speaker 2: to thousands of flights being canceled, school classes, train services,
Speaker 2: and business activities being suspended across major cities in southern China.
Speaker 2: Here in the UK, the government is looking at making
Speaker 2: it easier for highly skilled workers to come to Britain
Speaker 2: to take advantage of America's visa changes. The Chance of
Speaker 2: Rachel Reeves told staff at revolutes new global headquarters that
Speaker 2: the UK government is moving quickly to try to grab talent.
Speaker 2: Here is Bloomberg's James Walcock with more.
Speaker 6: The UK government wants your tech professionals, bankers and lawyers,
Speaker 6: but if you're coming illegally, it wants to discourage you
Speaker 6: from coming. The mixed messaging is created by two competing priorities.
Speaker 6: The UK government wants economic growth, but it's also terrified
Speaker 6: of being seen not to be in control of migration
Speaker 6: in London James Wacock, Bloomberg Radio.
Speaker 2: Faircha Jo and Powell says that there is no risk
Speaker 2: free path for the US economy. The Central Bank chair
Speaker 2: pointed to high inflation and a fragile jobs market as
Speaker 2: pain on both sides of the monetary policy problem. Powell
Speaker 2: says that economists are also still watching for a tariff
Speaker 2: impact your term, risks.
Speaker 7: To inflation are tilted to the upside and risks to
Speaker 7: employment are tilted to the downside, a challenging situation. Two
Speaker 7: sided risks mean that there is no risk free path.
Speaker 2: Powell's comments are in stark contrast to President Trump's new
Speaker 2: appointee to the FED Board, Stephen Myron. Myron says that
Speaker 2: the threat to the labor market is the main priority,
Speaker 2: and is voting for steep cuts to the interest rate.
Speaker 2: The open divide the US Central Bank is driving big
Speaker 2: swings in trading in options markets. Traders now expect only
Speaker 2: one more twenty five basis point cut this year, and
Speaker 2: the so called neutral raids they see as higher than
Speaker 2: current market expectations at just below three percent. Open AI
Speaker 2: is planning to invest roughly four hundred billion dollars to
Speaker 2: develop five new US data centers. The project, in partnership
Speaker 2: with Oracle and SoftBank, is the biggest push to fulfill
Speaker 2: a pledge to spend a half trillion dollars on AI
Speaker 2: infrastructure in America. J Jacobs, head of Equity ETFs at
Speaker 2: black Rock, expects even more money to flow in to
Speaker 2: the sector.
Speaker 8: Investor enthusiasm is only growing. If you look at one
Speaker 8: of our ETFs, BAI. It's an actively managed AIETF. It's
Speaker 8: brought in over five billion dollars this year and is
Speaker 8: now the largest AIETF in the United States, and a
Speaker 8: lot of the exposure that is providing to investors is
Speaker 8: around that digital infrastructure layer. The hardware producers in the
Speaker 8: semiconductor space, the digital infrastructure owners, some of the data
Speaker 8: owners that are becoming really valuable in this explosion of
Speaker 8: AI models, and so there's a ton of investor enthusiasm,
Speaker 8: and I think there's a lot of expectations that revenues
Speaker 8: will match the expenditures, if not exceed them, in the
Speaker 8: next several years.
Speaker 2: Now Black Clox J Jacobs there speaking to Bloomberg. According
Speaker 2: to the firms, the new locations will be spread across Texas,
Speaker 2: New Mexico, and Ohio and eventually have a capacity of
Speaker 2: seven gigawatts, which is as much as some cities. Open
Speaker 2: AI says that the sites will also create tens of
Speaker 2: thousands of additional jobs across the US. So those are
Speaker 2: our top stories for you this morning. Looking at the
Speaker 2: market stop future for the European market, open are quite weak,
Speaker 2: down four tenths of one percent, but we're keeping an
Speaker 2: eye on defense stocks, which have seen valleys in Asia
Speaker 2: after President Trump's un address yesterday. US STOP futures are
Speaker 2: in the green. Looking at the MSCI Asia Pacific Index
Speaker 2: that is slightly softer. The dollar is stronger a tenth
Speaker 2: of one percent. Oil prices are also higher this morning,
Speaker 2: again on the rhetoric around Russia from President Trump, treasuries
Speaker 2: holding their gains after your own power warned about those
Speaker 2: risks in the labor market and inflation persisting in the US.
Speaker 2: So those are the markets. In a moment, we are
Speaker 2: going to bring you a bit more then on the
Speaker 2: change in tone from President Trump and the United States
Speaker 2: on Russia, and also how Europe's fragmented asset managers are
Speaker 2: starting to consolidate in the face of big US players.
Speaker 2: So we'll get onto that in a moment. But something
Speaker 2: else has caught my eye today. How early do you
Speaker 2: get up? Do you write lists, you take a walk?
Speaker 2: I've been thinking about these habits after reading Bloomberg's CEO
Speaker 2: diet Kate Krader, who actually sits only a few desks
Speaker 2: away from me. She's been talking to a dozen also
Speaker 2: leaders and founders about how they use their time in
Speaker 2: the office and outside, and delighted to hear lots of
Speaker 2: them get up really early, but many of them also
Speaker 2: go to bed and get up at exactly the same time.
Speaker 2: And I just thought it was really interesting conversation about productivity.
Speaker 2: Glad to hear that actually a lot of these CEOs
Speaker 2: do balance, you know, they talk about balance even though
Speaker 2: they're high achievers. They balance their needs across the day.
Speaker 2: Yakob Arab Anderson, who's the CEO of Carlsberg, calls it
Speaker 2: FSN fitness, sleep, nutrition, and lots of others. I mean
Speaker 2: one new CEO, Rose Van Geven at the investment company
Speaker 2: Findlay Park Partners, says that she's completely ditched social media
Speaker 2: platforms because it takes up so much of her time.
Speaker 2: But look, I thought it was a very interesting list
Speaker 2: on Yeah, I guess how to be one of those
Speaker 2: top how to get maybe to be CEO with the
Speaker 2: habits daily habits. It's in Bloomberg's CEO Diet, and I'm
Speaker 2: going to put a link to it in our show
Speaker 2: notes for you to have a read and maybe get
Speaker 2: inspired today. Now, President Donald Trump says that NATO countries
Speaker 2: should shoot down Russian aircraft that violate their airspace in
Speaker 2: and addressed to the UN in which the US President
Speaker 2: was more optimistic about Ukraine's ability to regain all of
Speaker 2: its territory. Joining me now to discuss is Bloomberg's Brussels
Speaker 2: Bureau chief Suzanne Lynch. Good morning, Suzanne. How significant a
Speaker 2: shift is this by the US on support for Ukraine
Speaker 2: against Russia's putin.
Speaker 3: I mean, I think there was a lot of relief
Speaker 3: in New York among European allies about Donald Trump's comments
Speaker 3: that really came out during the day. He struck a
Speaker 3: very combative tone during his own address to the UN Assembly.
Speaker 3: M It was an extremely negative speech where he sailed
Speaker 3: allies over issues like migration and over energy. He said,
Speaker 3: you know your countries are going to hell. And this
Speaker 3: was the tone of his speech to the UN. But
Speaker 3: then later when he started having those bilateral meetings with leaders,
Speaker 3: when we heard from the President at those press points,
Speaker 3: and we definitely saw a different tone in terms of
Speaker 3: the specifics of the US policy visa v Russia and Ukraine,
Speaker 3: and most importantly there as he said he did say
Speaker 3: that he believed that NATO nations should shoot down Russian
Speaker 3: aircrafts that violated their airspace. Earlier we'd heard and Marco
Speaker 3: Rubio kind of moving away from that one slightly. This
Speaker 3: followed comments by the Polish Prime Minister Donald Tusk earlier
Speaker 3: in the week when he talked about shooting down Russian
Speaker 3: aircraft that came into airspace. But a very significant shift
Speaker 3: and tone there by Donald.
Speaker 2: Trump Russia seems to have been testing you also and
Speaker 2: NATO with these airspace incursions that we've been talking about
Speaker 2: throughout this week, sasan would the aircraft be shot down
Speaker 2: in future? And also what is now the US position
Speaker 2: on that?
Speaker 3: Yeah, it's an interesting one. Yesterday the NATO had a
Speaker 3: meeting of the North Atlantic Council, which is their main
Speaker 3: decision body here in Brussels. It had been called by
Speaker 3: Estonia because of the incursions into its airspace. But while
Speaker 3: that was happening, if you like, we were getting confirmation
Speaker 3: from Denmark that Copenhagen Airport had been closed for several
Speaker 3: hours because of drone incursions there. So Mark Ruta, the
Speaker 3: NATO Secretary General, was asked a specific question, I mean,
Speaker 3: what is the position vs. V and NATO and these
Speaker 3: drone incursions? Now, he was very careful in his wording.
Speaker 3: He said, you know, if this is intentional or not?
Speaker 3: He said a few times he said NATO is prepared
Speaker 3: to defend every inch of its territory.
Speaker 4: Now.
Speaker 3: He was asked as well about those comments O more
Speaker 3: belligerent to be like comments by President or Prime Minister
Speaker 3: Donald Tusker in the week, and he was keen to
Speaker 3: kind of say there was no daylight between the two saying, Look,
Speaker 3: Tusk is saying what I'm saying, if necessary, and NATO
Speaker 3: will act, and you know we're not at that point,
Speaker 3: but it is ready and that is a decision of
Speaker 3: the Supreme Allied Commander. You know, we are ready to
Speaker 3: respond if needed. So we got the sense from the
Speaker 3: NATO Secretary General that obviously NATO, the Alliance is very
Speaker 3: much on alert here. The meeting that was called by Estonia,
Speaker 3: and indeed Estonia also spoke of the UN Security Council
Speaker 3: on Monday in New York. I mean, this was quite unusual.
Speaker 3: There's now a lot of concern about these repeated drone incursions,
Speaker 3: particularly in Copenhagen. Just next week, Caroline is going to
Speaker 3: be a big meeting of EU leaders and European leaders,
Speaker 3: two day meeting in Copenhagen. So the timing of this
Speaker 3: incursion that closed the airport is quite interesting.
Speaker 2: Yes, indeed, and there has been a lot going on
Speaker 2: at the UN and also on the sidelines. I mean
Speaker 2: Trump's speech. You mentioned how sort of aggressive it was,
Speaker 2: and how President Trump was touting what he sees as
Speaker 2: his big wins, ending war, wasn't doing trade deals and
Speaker 2: ending immigration into cutting immigration into America. But that very
Speaker 2: harsh criticism of Europe, also of Hamaz, also of the
Speaker 2: UN itself. I mean, the United Nations seems to be
Speaker 2: dealing with the worst crisis in its history.
Speaker 3: Really, yes, And the United States, which is the biggest
Speaker 3: financial contributor by far to the UN, is not on
Speaker 3: board with a lot of what the UN is doing.
Speaker 3: It's already pulled out of some agencies and it effectively
Speaker 3: hasn't paid its bill for the UN since last year.
Speaker 3: So I think the UN Deecretary General has admitted that
Speaker 3: the organization has a liquidity crisis, it has a crisis
Speaker 3: of identity, and it's marking its Asian anniversary this year.
Speaker 3: But it is interesting to Donald Trump hit on some
Speaker 3: of those points. Even he was even critical of the UK.
Speaker 3: Just after his visit. He talked about, you know, the
Speaker 3: policy on wind turbine, saying that they're ruining the Scottish
Speaker 3: and English countryside. He took us wipe at the London mayor,
Speaker 3: said he can. He also talked about climate change, which
Speaker 3: was of a big focus for the UN through its
Speaker 3: cop system, calling it a con job. So yes, a
Speaker 3: very belligerent and kind of isolationist speech by Donald Trump. Now,
Speaker 3: I suppose the other way of looking at this is
Speaker 3: that he did hold a series of bilateral meetings during
Speaker 3: the day with European leaders in particular, also of course
Speaker 3: the Argentinian leader as well, But that I suppose to
Speaker 3: show that there was still an engagement there. He spent
Speaker 3: the day there meeting leaders, having a reception, later having
Speaker 3: serious conversations with people like Vladimir Lensky. So for all
Speaker 3: the rhetoric brawl, the bluster in his speech, there was
Speaker 3: a lot of diplomacy that happened, and the United States
Speaker 3: was at the center of that yesterday in the UN.
Speaker 2: Yes, that's very interesting, isn't it. Suzanne, thank you so
Speaker 2: much for your time and being with us today. That
Speaker 2: is Bloomberg's Brussels bureau chief Suzanne lynch Worth, noting also
Speaker 2: there was some pushback from the UK government on that criticism,
Speaker 2: both from the Energy Secretary Ed Miliband and also from
Speaker 2: the London mayor, Sadiq Khan. Stay with us more from
Speaker 2: Bloomberg Day Bake EUOP coming up after this. Europe's money
Speaker 2: managers have done a string of high profile deals beginning
Speaker 2: to reshape the industry and push back against the large
Speaker 2: US firms like black Rock and Vanguard and JP Morgan
Speaker 2: as passive investment funds have grown in popularity and Europe's
Speaker 2: asset managers are still very fragmented. Bloomberg's asset management reporter
Speaker 2: Leo ken Scherper has penned this piece. He joins me, now,
Speaker 2: good to see you, Leo. What is the situation facing
Speaker 2: Europe's asset managers? And so also I guess that means
Speaker 2: what is driving consolidation?
Speaker 9: Good morning, Caroline, thank you, good to see you as well. Yeah,
Speaker 9: it's certainly not a new dynamic, but the pressure is
Speaker 9: increasing here. First of all, you've got the flight to
Speaker 9: passive products. You've had it for over a decade, which
Speaker 9: means for the asset managers lower revenue margins and at
Speaker 9: the same time you've got rising costs. And for European
Speaker 9: asset managers in particular, they are also seeing coming more
Speaker 9: under pressure from large US firms who have been winning
Speaker 9: market share over the past decade, especially again in passive products.
Speaker 9: And in Europe a lot of asset managers are also
Speaker 9: controlled by banks and insurers, and these you know, big
Speaker 9: firms now wondering you know, actually asset management only makes
Speaker 9: up a very small part of our overall bottom line.
Speaker 9: Should we double down or should we exit? So European
Speaker 9: asset managers overall have have long agreed that they need
Speaker 9: to merge in order to survive. And the new development
Speaker 9: that we've seen over the last twelve months is that
Speaker 9: we're now also seeing action. You know, b MP has
Speaker 9: acquired acc Investment Managers that has created a one point
Speaker 9: eight trillion dollar asset manager. And you also had Generally
Speaker 9: and Natixis agree on a deal that would create Europe's
Speaker 9: second biggest asset manager. And of course we have reported
Speaker 9: the talks between a Mundi and Alliance Global Investors, with
Speaker 9: which are now on hold.
Speaker 2: Okay, so one of the challenges then to get more
Speaker 2: of these deals happening. I mean, what's the kind of
Speaker 2: pipeline looking like?
Speaker 9: Yeah, exactly. So I've just mentioned the talks between a
Speaker 9: Mundi and Alliance and this isn't a very europe specific problem,
Speaker 9: but it's always a question about who gets to take control.
Speaker 9: You know, We've had a lot of infamous co CEO
Speaker 9: structures in corporate history, and that will always be a
Speaker 9: curveball to big deals and asset manager and beyond. And
Speaker 9: the second, the second curveball is, you know, national politics
Speaker 9: definitely gets in the way. There's a fair amount with
Speaker 9: doubt now that generally is deal with, that TIXIS will
Speaker 9: go ahead, in part because the Italian government isn't too
Speaker 9: fond of the prospect that decision makers at Generally, which
Speaker 9: is a major buyer of Italian government bonds, will slip
Speaker 9: further away from the Italian government's influence. And then another
Speaker 9: bit quirk, slightly quirky curveball is that one of the
Speaker 9: drivers behind BMP's acquisition of XIM has been this accounting
Speaker 9: perk known as the Danish compromise, and that allows banks
Speaker 9: to buy asset managers with a preferential capital treatment. Now,
Speaker 9: the ECB has since said earlier this year, to many
Speaker 9: people's surprise, well actually we don't think it's right that
Speaker 9: banks get a better treatment for buying an asset manager.
Speaker 9: Let's let's not do that. So that perk is now gone,
Speaker 9: and you know that is expected to at least slow
Speaker 9: down a bit of the deal making.
Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the
Speaker 1: stories making news from London to and beyond.
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Speaker 2: I'm Caroline Hepka.
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Speaker 1: here on Bloomberg Daybreak Europe