Speaker 1: This is Bloomberg Daybreak Cube for this Monday, the sixth
Speaker 1: of February in London. Coming up today for see not Out.
Speaker 1: The UK's leading index hit a record high, but is
Speaker 1: that as good as it gets? More than just hotter?
Speaker 1: Tensions rise as the U S shoots down what they
Speaker 1: say is a Chinese spy balloom a wow number of
Speaker 1: the Feds. Mary Daily reacts to the red heart US
Speaker 1: jobs growth but sees no reason to change course trust
Speaker 1: on the comeback trail, Astra Zeneca calls for increased investment,
Speaker 1: and Solomon's DJ gig leads to bloodlines for Goldman. Those
Speaker 1: are the stories we're looking at in today's newspapers, and
Speaker 1: I'm Leanne Garon's plus a Tale of Two Cities. We
Speaker 1: sit down for an exclusive chat with the Lord Mayor
Speaker 1: of London and the Tokyo Governor. That's all straight ahead
Speaker 1: on Bloomberg Daybreak Europe on DAB Digital Radio, London, Bloomberg
Speaker 1: eleven three oh New York, Bloomberg Washington, d C, Bloomberg
Speaker 1: one oh six one, Boston, Bloomberg nine sixties, San Francisco,
Speaker 1: cyrus XM Channel one nineteen and around the world on
Speaker 1: Bloomberg Radio dot Com and via the Bloomberg Business at
Speaker 1: Good Morning. I'm Stephen Carroll and I'm Caroline Hecker. Here
Speaker 1: are the stories that we're following today. The foot one
Speaker 1: d is heading into the week, having hit a record
Speaker 1: high on Friday, but the outlook for the future is
Speaker 1: less rosy, as Bloomberg Samuel Etty and reports. On Friday,
Speaker 1: the UK's blue chip index finally rose above its eighteen peak,
Speaker 1: but it's still lagging behind over benchmarks in Europe, China,
Speaker 1: and the US so far this year. In two higher
Speaker 1: oil and gas prices helped boost energy giants BP and
Speaker 1: Shell and lift the foot see one overall. Longer term, though,
Speaker 1: the UK benchmark is virtually flat in dollar terms since
Speaker 1: the twenty sixteen Brexit vote, while markets elsewhere have seen
Speaker 1: significant gains. Paris overtook London is Europe's largest equity market
Speaker 1: last year and remains firmly in the lead in London
Speaker 1: and samue Letien Bloomberg Daybreak Europe well now. The feds
Speaker 1: December dot plot remains a good signal of where rates
Speaker 1: are headed that according to the Federals A Bank of
Speaker 1: San Francisco president Mary Daily, speaking to Fox Business Daily
Speaker 1: had this to say on January's Red Hot jobs reports.
Speaker 1: The number today on the jobs report was a wow number,
Speaker 1: but the trend was not surprising. We knew that the
Speaker 1: labor market was strong has been strong despite the fact
Speaker 1: that the economy overall has been slowing. And so right
Speaker 1: now I see the December sep that we had in
Speaker 1: our last meeting back for the two is being a
Speaker 1: good indicator of where policy is at least heading. But
Speaker 1: I'm prepared to do more than that if more is needed.
Speaker 1: Mary Daily does not have a vote at this year's
Speaker 1: rate meetings, however, have you will add weight to market
Speaker 1: expectations that the hiking cycle is knowing it's end. The
Speaker 1: US economy added five hundred seventeen thousand jobs at last month,
Speaker 1: pushing the unemployment rate to a fifty three year low.
Speaker 1: The United States has sent divers to salvage what they
Speaker 1: believe is spy equipment from the Chinese balloon shot down
Speaker 1: off the coast of South Carolina. The balloon was down
Speaker 1: by an American F twenty two fighter jet on direct
Speaker 1: orders from President Biden and Our Tangan, senior fellow at
Speaker 1: the Chinese think tank the Tiger Institute, says it's hard
Speaker 1: to understand what strategic advantage that Chinese expected to gain
Speaker 1: from using the balloon. From the face of it, it
Speaker 1: doesn't seem like a very good message. You can't really
Speaker 1: figure out exactly how China would get ahead by sending
Speaker 1: a balloon that's the size of three buses and clearly
Speaker 1: visible to the American public. It's not going to help
Speaker 1: relations or anything like that. And a Tangan spoke to
Speaker 1: Bloomberg as China continues to insist the device as a
Speaker 1: climate research airship, that's straight off course, however, of the
Speaker 1: U s argues it's part of a broader spying program
Speaker 1: by the country. Now, the Lord Mayor of London, Nicholas Lions,
Speaker 1: and his Tokyo counterpart, Governor Euriko Koike, have been making
Speaker 1: the case for closer ties between the two countries financial hubs.
Speaker 1: Speaking exclusively to us here on Bloomberg Daybreak Europe, Lions
Speaker 1: sought to downplay the threat to London from continental Europe
Speaker 1: in terms of the threat to London as a global
Speaker 1: financial center from what's happening in continental Europe. That we
Speaker 1: we encourage competitiveness, what is happening in continental Europe will
Speaker 1: only make us stronger. You will see that in Frankfurt,
Speaker 1: or in Paris, or in Absterdawn, or in Dublin or
Speaker 1: in Luxembourg, that there is an aspect of financial services
Speaker 1: where there as real expertise, but nobody can compete with
Speaker 1: London in terms of the whole ecosystem. That is just
Speaker 1: not replicable. So the Lord Mayor of London. While he
Speaker 1: also told us that the City of London has been
Speaker 1: able to replace the seven thousand jobs lost since Brexit,
Speaker 1: uk Kik added that closer ties between the UK and
Speaker 1: Japan are down to both economics and strategic concerns over China.
Speaker 1: The board of Reno has signed off on a deal
Speaker 1: to rebalance its troubled alliance with Nissan and Mitsubishi. Under
Speaker 1: the agreement, to the French carmaker will reduce its ownership
Speaker 1: of Nissan from forty three to fifteen percent. The rest
Speaker 1: of the current shareholding will be putting a trust which
Speaker 1: will be slowly sold down. Representatives and the three companies
Speaker 1: will hold a news conference in London later to announced
Speaker 1: details of the plan. A hundred thousand nurses and ten
Speaker 1: thousand ambulance staff in England are expected to strike today
Speaker 1: and what's thought to be the biggest walkout in NHS history.
Speaker 1: Members of the Rawal College of Nursing at Health Trusts
Speaker 1: are taking action along with GMB members at seven ambulance services.
Speaker 1: Both unions are demanding pay talks with ministers, saying that
Speaker 1: the government could have prevented the strikes. Business Secretary Grant
Speaker 1: Chefs says that the government is bringing in new anti
Speaker 1: strike laws due to the lack of corporate and from paramedics.
Speaker 1: That leaves the army who are driving the backups here
Speaker 1: in a very difficult position of postcode lottery. If it
Speaker 1: comes to having heart attack or a stroke when there's
Speaker 1: a strike on, we cannot have that situation and that's
Speaker 1: why I'm introducing laws for minimum safety levels. So that
Speaker 1: was the business sexually Grant Shaps. Meanwhile, a second day
Speaker 1: of nursing strikes will take place tomorrow. Those are top
Speaker 1: stories this morning. Look at another very difficult week I
Speaker 1: had for the NHS. If you're looking to try to
Speaker 1: get doctor's appointments, things going to be very tricky. Yeah, absolutely.
Speaker 1: Acclauding to the Bloomberg calculations, at least fifty five thousand
Speaker 1: appointments are likely to be delayed just by this week's action.
Speaker 1: The Government's in a very difficult position are the Raw
Speaker 1: College of Nursing. The RCN has backed away from the
Speaker 1: kind of pay wise it once, but it doesn't seem
Speaker 1: to be any way forwards at the moment some of
Speaker 1: the negotiations with government. Another story that cat my eye
Speaker 1: this morning is to do with the housing market here
Speaker 1: in the UK. Mortgages set for their slowest growth in
Speaker 1: twenty eleven as we see the house prices. This is
Speaker 1: research from the accounting from e Y Are College. Greena
Speaker 1: and Gallas written up the story on the Bloomberg terminal
Speaker 1: look another symptom of what we've been talking about for
Speaker 1: so long, falling house prices and now it's having a
Speaker 1: knock on effect and borrowing. Yes, Although in that e
Speaker 1: Y research what I found interesting also was their stats
Speaker 1: on business lending also expected to fall significantly obviously higher debt,
Speaker 1: servicing costs, lower earning, supply chain snarls. Yes, there's still
Speaker 1: a problem according to e Y. So you're also going
Speaker 1: to see business lending drop this year. Up next Trust
Speaker 1: on the comeback trail, astro Zenica calls for increased investment
Speaker 1: and Solomon's dj gig leads to blurred lines for Goldman.
Speaker 1: Now the paper review on blue Bird Daybreak Europe. The
Speaker 1: news you need to know from today's papers, Bloomberg, Ley
Speaker 1: and Gerrans joins us Now. The headline in the Telegraph
Speaker 1: says Liz Trust set to rignite China route in fresh
Speaker 1: challenge to Rishi Sunac. The GERANs March of the weekend
Speaker 1: spent pouring over the attempted came back by the former PM.
Speaker 1: You're absolutely right, Caroline, and I have the Sunday Telegraph
Speaker 1: with me, and she broke I've got it right here
Speaker 1: in the studio wrestling yes and yesterday she broke her silence,
Speaker 1: Caroline with this four thousand word essay in the newspaper
Speaker 1: Now she defended her tax cutting agenda, that course the
Speaker 1: economic turmoil we saw in this country during the mini budget,
Speaker 1: and she also criticized Richie Cenac. A line that I
Speaker 1: picked out from her essay in the paper yesterday says
Speaker 1: she criticized Whitehall strength of economic orthodoxy and its influence
Speaker 1: on the market, and condemns Treasury officials for blindsiding her
Speaker 1: over the collapse of the pension market, which did proceed
Speaker 1: her resignation show she's standing resolute. She said that the
Speaker 1: MPs weren't behind her, and of course she said that
Speaker 1: she was brought down by the left wing economic establishment. Now,
Speaker 1: moving on from that, we actually expected to see Liz
Speaker 1: Trust today on camera for the first time since her resignation.
Speaker 1: She'll be giving an interview to the Spectator magazine now
Speaker 1: that will be broadcast on YouTube, and the former PM
Speaker 1: will warn that the threat posed by Beijing has not
Speaker 1: been taking seriously enough. And this is, as you say, Caroline,
Speaker 1: she really continues her return to the political fray and
Speaker 1: this is set to re ignite around between Trust and
Speaker 1: soon Act. We saw this on the campaign trial who
Speaker 1: would take the toughest stance against Beijing? So strong words
Speaker 1: there from Liz Trust over the weekend. I think it's
Speaker 1: just very interesting the level of reaction. It's the speed
Speaker 1: at which Liz Trust is trying to rehabilitate her record
Speaker 1: poor by anybody's standards, you know, fantasy, delusional, These are
Speaker 1: the kind of words that you see in other newspapers
Speaker 1: like The Independent and The Times on what she's saying.
Speaker 1: You know, it's only a few months that she left office. Yeah,
Speaker 1: hard to believe. As you say, the timing is very
Speaker 1: tightly and let's turn into a story in the Times
Speaker 1: next Astra Zeneca UK losing out on investment in life
Speaker 1: sciences research. Yes, indeed, Stevens so Tom Keith wrote. He's
Speaker 1: the president of Astra Zeneca right here in the UK
Speaker 1: and he's told the Times newspaper the company has not
Speaker 1: made new research and development capital investments in Britain since
Speaker 1: twenty twenty one. He also warned that wider research and
Speaker 1: development spending in the country could also now be at risk.
Speaker 1: And this is due to uncompetitive fiscal environment, is what
Speaker 1: he calls it. So speaking to the Times, he has
Speaker 1: concluded that the UK is losing out on investment from
Speaker 1: astra Zeneca, and that's two more competitive countries. A wildly
Speaker 1: out of line NHS sales tax, he says, as a
Speaker 1: real particular concern. Now the foot see one hundred company
Speaker 1: increased US R and D spending to two point five
Speaker 1: million back in twenty one. So once again we see
Speaker 1: the fiscal environment affecting investment here, according to Astra Zeneca
Speaker 1: speaking to the Times newspaper. Okay, interesting. Just lastly to
Speaker 1: New York Times, the blurred lines between Goldman CEO's day
Speaker 1: job and his DJ gig tell us more so, we
Speaker 1: all love this, don't we. David Solomon, the chief executive
Speaker 1: of Goldman Sacks. We know that he's been spinning records
Speaker 1: for years, hasn't he outside of his job? But he
Speaker 1: has now actually hit the remix jackpot. After meeting this
Speaker 1: high flying US industry music executive that's Larry Mestel, Solomon
Speaker 1: got the chance to put a new spin on one
Speaker 1: of the most danced like dance two track sever I
Speaker 1: must have met I've danced this for years, Whitney Houston.
Speaker 1: I want to dance with somebody who loves me. And
Speaker 1: Solomon told senior Goldman Sachs executives. And he does donate
Speaker 1: any profits he makes as a DJ to a charity.
Speaker 1: Remember he's an amateur GJ, so he's not even really
Speaker 1: the big time. Sorry if you are listening, but do
Speaker 1: not if you look at the size of his gigs.
Speaker 1: Anybody who's seen the DJ numbers, you might not call it. Yes,
Speaker 1: it's not the back garden. No, it's Habitha. That's where
Speaker 1: he normally DJ. Is not the back garden, Caroline, Let's
Speaker 1: remember that. But he has been slightly criticized in this piece.
Speaker 1: And this is all over the blurredlines between his day
Speaker 1: job as the Goldman CEO, and some employees have helped
Speaker 1: him manage his DJ schedule and also his donations. And
Speaker 1: this is according to three people who have worked with him.
Speaker 1: And also what have he got that remix if he
Speaker 1: was just a normal amateur GJ. So this is what
Speaker 1: the piece in the New York Times is really focusing
Speaker 1: on and arguing. Okay, fascinating stuff for the Anger, and
Speaker 1: thank you very much for that review of the newspapers. Well,
Speaker 1: let's move on to talk about a bit about the
Speaker 1: equity markets here in the UK. We have hitting a
Speaker 1: record high and trading on Friday. What does the future
Speaker 1: hole though for the UK's Benchmark Index member uk Starts
Speaker 1: reported Joe Eastern as with as in studio, Good morning
Speaker 1: to you, Joe. So is this keep climbing? I think
Speaker 1: potentially could keep going up with the broader market. But
Speaker 1: according to the people that we've spoken to for the
Speaker 1: piece we've got on the website today over the weekend,
Speaker 1: and they kind of think that the outperformance could start
Speaker 1: to fade now and we might have seen the peak
Speaker 1: in you know, some of the energy prices, some of
Speaker 1: the defensive trades have benefited the index, and people might
Speaker 1: start looking elsewhere, taking a bit more risk and going
Speaker 1: to the US, going to uh maybe even the FIR
Speaker 1: two fift. So I think the outperformance potentially coming to
Speaker 1: an end um. But but yeah, I'm trying to think
Speaker 1: of a way to bring in some DJing puns. Think
Speaker 1: of anything in terms of the performance of the index
Speaker 1: in recent years compared to markets elsewhere, I mean, is
Speaker 1: it's defensive and this is the environment that it should
Speaker 1: be doing well in? Yes, I think so. I think
Speaker 1: that what we've seen obviously in the past few months
Speaker 1: is the interest rate expectations coming back down and then
Speaker 1: the broader market you know this the European markets now
Speaker 1: in a ball market, as they call it, up twenty
Speaker 1: since the low. So potentially people are looking to take
Speaker 1: more risks. And we've spoken to black Croc in the
Speaker 1: piece and they're saying that they don't think that the
Speaker 1: foots one has has meant much legs as it had before,
Speaker 1: and they're looking elsewhere. And I think, particularly given the
Speaker 1: way the energy markets looking, I think that could start
Speaker 1: coming down and that would be a negative for the index.
Speaker 1: You draw this comparison the piece to the trajectory since
Speaker 1: Braxit in terms of dollar terms, and we look at
Speaker 1: us at the spire, the banks about European indexes and
Speaker 1: the foot see as well. How much of this underperformance
Speaker 1: that we saw in recent times be can be attributed
Speaker 1: to Braxit or what? What is the link that you've
Speaker 1: drawn in the article. Some of it is to do
Speaker 1: with Brexit, but obviously something we talked about a lot
Speaker 1: is how around seventy five percent of the revenue comes
Speaker 1: from abroad. And the FIRTE one hundred actually underperformed since
Speaker 1: about twenty twelve, so since basically the back end of
Speaker 1: the financial crisis, it started under performing. And that was
Speaker 1: because everyone got obsessed with growth stocks, like you know,
Speaker 1: tech stocks like Tesla and Google and stuff like that,
Speaker 1: and the foot see one hundred doesn't really have much
Speaker 1: big tech. We do have listed tech in London, but
Speaker 1: it's the small cap the mid caps, it's not in
Speaker 1: the foot see one hundred. So people avoided the foot
Speaker 1: see one hundred. And then when interest rates went up,
Speaker 1: the discount rates and some you know, technical things that
Speaker 1: analysts look at made tech stocks less attractive and they
Speaker 1: fell a lot, so the foot see one hundred fell
Speaker 1: by less. But then Brexit came and added to the
Speaker 1: woes for you know, the proportion of the revenue that
Speaker 1: comes from the UK economy. Okay, just really briefly then
Speaker 1: f Fittzee two fifty. Ravens cross c Io was in
Speaker 1: last week saying actually reverse two fifty is that a goer? Yes,
Speaker 1: because it's more cyclical. So I think that as people
Speaker 1: are getting slightly more optimistic on the economy, the foot
Speaker 1: see two fifty looks more attached to what's happening in
Speaker 1: the economy, and it will. It will move in tandem
Speaker 1: with the economy, whereas the foots does its own thing,
Speaker 1: is in its own little world. But the foot two
Speaker 1: fifty is a better way to track the economy higher.
Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the
Speaker 1: stories making news from London to Wall Streets and beyond.
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