Speaker 1: This is Bloomberg day Break Weekend, our global look at
Speaker 1: the top stories in the coming week from our Daybreak
Speaker 1: anchors all around the world, and straight ahead on the program,
Speaker 1: here comes some big retail earnings. I'm Tom Busby in
Speaker 1: New York.
Speaker 2: I'm Stephen Carroll in London, where we're looking ahead to
Speaker 2: the next CPI print for the UK amid a gloomy
Speaker 2: economic forecast from a leading think tank.
Speaker 3: I'm Derek Krisner. We'll look at the most rapidly growing
Speaker 3: ev market in the world.
Speaker 4: I'm Kaylie Lines in Washington, where all eyes are on
Speaker 4: Georgia ahead of a potential fourth indictment for former President Trump.
Speaker 5: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg
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Speaker 1: Well, good day to yank you. I'm Tom Busby, and
Speaker 1: we begin today's program with a big week ahead for
Speaker 1: retail earnings with a look at what that tells us
Speaker 1: about the US consumer and maybe what to expect in
Speaker 1: the months ahead. Now, this week we hear from three giants,
Speaker 1: Home Depot on Tuesday, Target on Wednesday, and the biggest
Speaker 1: of them all, Walmart on Thursday. There are other familiar
Speaker 1: names TJX, Ross Stores, Teen Retailer, Buckle, but we're going
Speaker 1: to focus on the biggies now for what we can
Speaker 1: expect to see. We're joined by Bloomberg News retail reporter
Speaker 1: Brendan Case. Brendan, thank you so much for joining us.
Speaker 6: Thanks for having me on, Tom.
Speaker 1: Well, let's start get right into it. Home Depot HD
Speaker 1: cut its financial forecast in May as shoppers finally post
Speaker 1: pandemic kind of tap the brakes on spending on their
Speaker 1: homes and yards. What do we expect to see from
Speaker 1: Home Depot.
Speaker 6: Yeah, we're going to be looking closely for any clues
Speaker 6: on how the home improvement market is doing. That had
Speaker 6: been such a strong area of consumer spending during the pandemic,
Speaker 6: and even the you know, the few quarters coming out
Speaker 6: of the pandemic, it finally slowed down in the first quarter.
Speaker 6: There were also some some sort of temporary issues like weather,
Speaker 6: but definitely you are starting to see some softness in
Speaker 6: that in that category, and of course the whole outlook
Speaker 6: for housing is wrapped up an interest rates. There's a
Speaker 6: lot of different signals coming out of the sector. What
Speaker 6: Home Depot is going to tell us is, above all,
Speaker 6: how how much people are spending on home improvement projects,
Speaker 6: both in terms of do it yourself projects and also contractors,
Speaker 6: which is an area where Home Depot is really strong.
Speaker 1: Yeah, and it's really a proxy for in a way,
Speaker 1: for the entire housing market because, like you said, the
Speaker 1: home improvement, but also all that building going on the contractors,
Speaker 1: and we have seen, despite the ups and downs in
Speaker 1: the housing market, home construction consistently strong.
Speaker 6: Yeah, that's exactly right. And Home Depot likes to say
Speaker 6: that it can prosper whatever the environment is. If there's
Speaker 6: not a whole lot of new construction, there's going to
Speaker 6: be a lot more renovations. And they went either way
Speaker 6: that are given weekend a little bit in the first quarter,
Speaker 6: especially as the home improvement projects, you know, the remodelings
Speaker 6: kind of you know, there were signs that that it
Speaker 6: was slowing down, especially as reflected in Home Depots business.
Speaker 6: The new construction is certainly something that's going to help
Speaker 6: them though, and we should get a little more information
Speaker 6: from them about how they see that mix kind of
Speaker 6: evolving throughout the year and what their expectations are for
Speaker 6: the remodels and also for the new homes.
Speaker 1: Now, I do have a question about Lows. For a
Speaker 1: long time number two to Home Depot. Home Depot obviously
Speaker 1: the leader and the do it yourself market, but they've
Speaker 1: been making some pretty big gains. They don't report to
Speaker 1: the following week, but are we seeing Lows kind of
Speaker 1: evening the playing field with Home Depot.
Speaker 6: Yeah, and this adds a company specific issue for Home
Speaker 6: Depots earnings next week. Certainly they're going to reflect a
Speaker 6: lot of what's going on in a macro sense, but
Speaker 6: just from a company from a competitive standpoint. You know,
Speaker 6: they've been such a leader for so long, but one
Speaker 6: of the general themes in that part of the retail
Speaker 6: market is that Low's really has been catching up. You know,
Speaker 6: it followed Home Depot by launching same day delivery last month.
Speaker 6: It's trying really hard to get more professional contractors on board,
Speaker 6: which would help Lows make inroads. And what's been a
Speaker 6: real stronghold for Home Depot. There's a lot of signs
Speaker 6: that it's gaining traction, and you know, that's a real
Speaker 6: sort of direct head to head rivalry. And so just
Speaker 6: as we'll be looking for macro clues in Home Depot,
Speaker 6: we also want to know, you know, if there's any
Speaker 6: kind of signals in there about any ground they might
Speaker 6: be losing to their chief rival.
Speaker 1: Next there's Target. It's likely to post its big a
Speaker 1: sales drop in more than six years. A lot of
Speaker 1: Americans starting to pull back on discretionary spending things like toys, apparel, electronics.
Speaker 1: That shift began abruptly last year. Still weighing heavily on Target.
Speaker 6: Yes, this could be a real milestone quarter for Target
Speaker 6: in a lot of different ways, not necessarily negatively, but
Speaker 6: you know, there is this expectation on Wall Street that
Speaker 6: sales are going to decline in the neighborhood of about
Speaker 6: three or four percent. There are some indications that the
Speaker 6: drop could be could be even worse. People are going
Speaker 6: to be watching that number really closely. And you know,
Speaker 6: the big picture here is that Target was one of
Speaker 6: the big winners in the pandemic. A lot of demand,
Speaker 6: a lot of people buying stuff from Target. They did
Speaker 6: a great job of sort of shifting to e commerce
Speaker 6: as well as stores during the pandemic, and they did
Speaker 6: really well. That really seems to be running out. And
Speaker 6: problem number one is exactly what you said, the pullback
Speaker 6: and consumer spending from discretionary goods, electronics, toys, apparel, home goods,
Speaker 6: all the type of products that Target is typically so
Speaker 6: good at merchandising, with their whole sort of cheap chic
Speaker 6: approach to to to their their product lines. That's just
Speaker 6: been a real tough part of the market for more
Speaker 6: than a year now. People bought so much during the
Speaker 6: pandemic that there's less demand than there was, you know,
Speaker 6: just because they don't need as much new stuff number
Speaker 6: one and number two, with inflation having been so high
Speaker 6: last year and into the into the beginning of this year,
Speaker 6: a lot of consumers had to just focus on, you know,
Speaker 6: buying the essentials, the groceries. That's a business that Target
Speaker 6: you know, does have in some significance, but not to
Speaker 6: the extent that Walmart has or obviously grocery chants have.
Speaker 6: And then, of course the third pressure on their sales
Speaker 6: is the shift in spending towards services.
Speaker 1: And they're also coming off calls for a boycott. This
Speaker 1: is related to their LGBTQ merchandise collection for Pride month
Speaker 1: and that that may have really hurt things.
Speaker 6: Yes, and this is something that we will learn a
Speaker 6: lot more about next week. In detail, the company really
Speaker 6: hasn't commented on exactly what the effect on sales was.
Speaker 6: But as you'll recall, back in May, towards the end
Speaker 6: of May, they got caught up in a big kind
Speaker 6: of culture war controversy where you know, they've always had
Speaker 6: a pretty a pretty big, a pretty significant collection of
Speaker 6: merchandise for Pride months. In June this year, there were
Speaker 6: some some criticisms on social media, particularly around some of
Speaker 6: their their products. There was a bathing suit that that
Speaker 6: that caused a lot of controversy, and there was a
Speaker 6: misinformation there were there There were some some criticism of
Speaker 6: the bathing suit supposedly being designed for kids, which was
Speaker 6: not accurate. It was a it was an adult product,
Speaker 6: but nonetheless it turned into sort of a public relations
Speaker 6: fiasco for Target and a real hit to its brand
Speaker 6: among some shoppers. There were calls in certain parts of
Speaker 6: social media and online, you know, to do a boycott.
Speaker 6: As you said, we do not know exactly what kind
Speaker 6: of hit that delivered. Was it big, was it small,
Speaker 6: was it noticeable, was it you know, we just don't know,
Speaker 6: and we should learn a lot more next week. But
Speaker 6: that you know, clearly had some effect, and so that'll
Speaker 6: be another headwind for them.
Speaker 1: Now Walmart, if there's any chain that's going to benefit
Speaker 1: from high inflation and a pullback in consumer spending, it's
Speaker 1: going to be Walmart. What do we see happening there?
Speaker 6: So Walmart's really been hitting the cover off the ball
Speaker 6: for about a year now. They had a huge problem
Speaker 6: last year, as did Target in terms of getting overstocked
Speaker 6: on inventories. They both companies guessed wrong and really badly
Speaker 6: wrong on how much of the discretionary products they were
Speaker 6: going to need, and so you know, for both of
Speaker 6: them that led to a lot of markdowns last year
Speaker 6: and a big hit to profits. But for Walmart, at
Speaker 6: the same time, with inflation going up, a lot of
Speaker 6: people were thinking themselves, well, where do I get the
Speaker 6: best prices? You know, prices are going up, but where
Speaker 6: can I find the best prices on food, on other
Speaker 6: basic goods? And a lot of them shows Walmart Walmart
Speaker 6: has talked a lot about upper income households, households with
Speaker 6: incomes over one hundred thousand dollars accounting for you know,
Speaker 6: half to three quarters of the gains in their comparable
Speaker 6: store sales. And so they've been getting a lot of
Speaker 6: trade down activity even as they see some weakness in
Speaker 6: their core customer and in kind of the middle income
Speaker 6: or lower income of consumers. But if you net it
Speaker 6: all out, what they've gotten at the big uptick in
Speaker 6: sales that's expected to continue, But the question is going
Speaker 6: to be how much with inflation coming down, you know,
Speaker 6: one challenge for Walmart is going to be whether they
Speaker 6: can hold on to some of the more affluent shoppers
Speaker 6: that they've gotten at the same time. You know, with
Speaker 6: obviously we're not in a recession. The job market is
Speaker 6: still strong, but there's a lot of pressure on lower
Speaker 6: income consumers right now, and for Walmart, you know, it's
Speaker 6: going to be sort of a question mark how well
Speaker 6: they can hold up well.
Speaker 1: A lot to look forward to. Brendan Case, Bloomberg Retail Reporter,
Speaker 1: thank you so much for joining us and coming up
Speaker 1: on Bloomberg Daybreak weekend. Leading UK think tanks as Britain
Speaker 1: must confront reality rather than reject it when it comes
Speaker 1: to its economic flight. We'll explain. I'm Tom Busby and
Speaker 1: this is Bloomberg. This is Bloomberg Daybreak weekend, our global
Speaker 1: look ahead at the top stories for investors in the
Speaker 1: coming week. I'm Tom Busby in New York. Up later
Speaker 1: in our program. Former President Trump could be in the
Speaker 1: headlines again this coming week. But first, a leading UK
Speaker 1: think tank says Britain must confront reality rather than rejected
Speaker 1: when it comes to its economic plight. This ahead of
Speaker 1: the latest UK inflation data coming in the next few days,
Speaker 1: expected to show price increases continuing to plague the UK
Speaker 1: for more. Let's head to London and bring in Bloomberg
Speaker 1: Daybreak Europe anchors Caroline Hepger and Stephen.
Speaker 7: Carroll Tom we get the next set of consumer price
Speaker 7: inflation data in the coming few days. Prime Minister Rishi Sinak,
Speaker 7: of course, has set himself the goal of harving inflation
Speaker 7: by the end of the year from a starting point
Speaker 7: at that time of ten point seven percent. There was
Speaker 7: a point earlier in the year where that looked really
Speaker 7: quite tricky, like a really tall order. The last inflation
Speaker 7: print has shown prices cooling. The Bank of England Governor
Speaker 7: Andrew Bailey, who spoke to Bloomberg pretty recently, was warning
Speaker 7: Stephen that the last male in the inflation fight is,
Speaker 7: you know, looking very difficult. He was very committed to it,
Speaker 7: but it looks like quite a long mile Carolin.
Speaker 2: This is something we've heard over and over from the
Speaker 2: likes of Dan Hanson from Bloomberg Economics, who tells us
Speaker 2: that the easy bit is coming down the higher level inflation.
Speaker 2: When that number starts to get closer to that two
Speaker 2: percent level, that's going to be the really difficult part,
Speaker 2: and that's the part where you enter into the risk
Speaker 2: of overtightening by the Bank of England. Now, the latest
Speaker 2: forecast from Bloomberg Economics does see the UK CPI coming
Speaker 2: below five percent by the end of this year, but
Speaker 2: as you say, it's a very shaky path and there
Speaker 2: are lots of quite gloomy opinions out there about the
Speaker 2: trajectory for the UK economy.
Speaker 7: Absolutely so. That includes the National Institute of Economic and
Speaker 7: Social Research, a think tank here in London, which came
Speaker 7: out in the last few days with a major bit
Speaker 7: of reporting around where they see inflation. Economic growth, inequality
Speaker 7: and on all of those funds, it's pretty bad news.
Speaker 7: NISA sees the UK economy stagnating for years, says the
Speaker 7: UK is actually unlikely to return to pre pandemic levels
Speaker 7: of activity before twenty twenty four.
Speaker 5: Yeah.
Speaker 2: Look, that's something that makes the UK economy an outlier
Speaker 2: in the G seven as well. The outlook for inflation
Speaker 2: as well as a very slow climb down. They're saying
Speaker 2: they're still seeing inflation at two point three percent in
Speaker 2: twenty twenty five. They've also pointed to rising inequality among
Speaker 2: the regions of the UK, falling wages in some places,
Speaker 2: and a government whose hands are tied because if it's
Speaker 2: continually spending more than it's bringing in. We've been speaking
Speaker 2: to the director of NISER, jag Jit Chada about this
Speaker 2: latest report.
Speaker 8: It's not a very pleasant picture. And I think in
Speaker 8: as an economy, as a set of decision makers and policymakers,
Speaker 8: particularly with the election in front of us next year,
Speaker 8: I think it's time to come. The time has come
Speaker 8: to confront reality rather than reject it. So if we
Speaker 8: could think of the report as a plane of another
Speaker 8: description of where we are and where we're likely to go,
Speaker 8: I think our ultimate hope is that could prompt better policy.
Speaker 8: So what we have is an economy that went into
Speaker 8: COVID with a weak structural supply side, as well as
Speaker 8: having just affected Brexit breaking relations with our nearest and
Speaker 8: richest trading neighbors. The COVID crisis revealed all kinds of
Speaker 8: weaknesses in our health service that still haven't been addressed
Speaker 8: that seemed to me to be intimately linked with labour
Speaker 8: supply and the economy. Subsequently, that labour supply has been
Speaker 8: hampered because people fearing ill health haven't returned to labor force.
Speaker 8: That's older people, but as well, we find ourselves short
Speaker 8: in many sectors, with vacancies still at elevated left levels.
Speaker 8: The food and energy crisis, created by the increase in
Speaker 8: by Russia's invasion of Ukraine led to a large increase
Speaker 8: in energy and food prices, which we don't produce largely
Speaker 8: on the margin. That meant that as an economy, we
Speaker 8: suffered a fall in income what economists call the terms
Speaker 8: of trade shock. That was not the same for example,
Speaker 8: for the United States, that is a net producer of
Speaker 8: energy and food, but for us it meant that we
Speaker 8: were importing goods that had become more expensive, and for
Speaker 8: a large time at an exchange rate that had depreciated.
Speaker 8: You remember sterling was in decline for much of twenty
Speaker 8: twenty two. This then upward pressure on inflation as well
Speaker 8: as the constricted supply side. That's meant the Bank of
Speaker 8: had to respond very rapidly to that and raise interest rates.
Speaker 8: And when we had all this up, it leads to
Speaker 8: an economy that on average is not likely to grow
Speaker 8: very much at all, and I think that's something we
Speaker 8: all need to think about hard except and address.
Speaker 7: You are tearing strips off the government as far as
Speaker 7: I can see in this report. You talk about facing reality.
Speaker 7: How much of this is the government's fault.
Speaker 8: Well, we've had an immense amount of political churn in
Speaker 8: the last three or four years. You don't need me
Speaker 8: to go through all the episodes, but I would say
Speaker 8: the height of that was the mini budget crisis of
Speaker 8: September twenty twenty two, which is certainly scarred in my memory,
Speaker 8: if not yours. That demonstrated that there are no quick
Speaker 8: fixes to the problems that we face in the economy.
Speaker 8: Nurturing the supply side, whether it's in the public sector,
Speaker 8: the health sector, transport, or in the private sector by
Speaker 8: getting firms to invest, to encourage them to invest both
Speaker 8: in physical and intangible capital, but also in their workers'
Speaker 8: skills is something that will take a generation or so
Speaker 8: to achieve. No quick boost is going to work here,
Speaker 8: and I think we're kind of at the end of
Speaker 8: those short run political plans a dash for growth or
Speaker 8: some announcement that will quickly lead to growth. It's not
Speaker 8: really the way the supply side of the economy works.
Speaker 8: And we really need our political classes and decision makers
Speaker 8: to accept that the decisions that they now may make,
Speaker 8: ultimately they're going to help the supply side of the economy,
Speaker 8: ones that won't necessarily lead to benefits over the political cycle.
Speaker 8: And one of the problems we have is that we're
Speaker 8: focused always on the next election, which means we're looking
Speaker 8: for quick fixes, which we can see time and time
Speaker 8: and again episode after episode political cycle of the political
Speaker 8: cycle just haven't worked to have five years without growth
Speaker 8: on average, and alongside that widening disparitied. If we look,
Speaker 8: for example, that where we think that on average workers
Speaker 8: in London will be by the end of next year,
Speaker 8: their real wages will be seven percent above the pre
Speaker 8: COVID peak, whereas if I take one region at random,
Speaker 8: the West Midlands, they will be five percent below. There's
Speaker 8: widening disparities when we take the average of That is
Speaker 8: the reason we have such low growth in the economy.
Speaker 8: We need consistency of planning to help the other parts
Speaker 8: of the economy outside of London and the Southeast catch up,
Speaker 8: create productivity, high level, high income jobs that will propel
Speaker 8: this economy onto a better path. And we've been stuck
Speaker 8: at this level for quite some time.
Speaker 7: There are a couple of points that I think are
Speaker 7: really important though, to pull out of your report. One
Speaker 7: the idea that the UK is at nearly full employment,
Speaker 7: a very very low unemployment, and that we still haven't
Speaker 7: managed to grow, and that also there isn't actually much
Speaker 7: fiscal leeway, are you The amount of money that the
Speaker 7: government is bringing in in order to achieve its goals
Speaker 7: because we're not growing is very very little, And that
Speaker 7: crunch I'm not sure people necessarily understand. Why is that
Speaker 7: so important? You know, to understand that, I mean that
Speaker 7: we would be a real outlier in the G seven,
Speaker 7: you know, to have so little fiscal headroom.
Speaker 8: I think that's absolutely right, and that's the critical question
Speaker 8: that any government will have to face when it wins
Speaker 8: the election next year. We see unemployment rising a bit,
Speaker 8: something like just slightly over five percent in a year
Speaker 8: and a half or so. That's not high by historical
Speaker 8: standards at all, and what you would expect under the
Speaker 8: circumstances if we were at full employment, with people paying
Speaker 8: taxes on their income, that we were then being in
Speaker 8: fiscal balance or a small fiscal surplus. Sadly, of course,
Speaker 8: because in part because of these income inequalities that I've
Speaker 8: been talking about, even those high levels of employment don't
Speaker 8: generate sufficient taxes to lead to the balance budget or
Speaker 8: the fiscal surplus that we would require that would then
Speaker 8: give us funds to address the fundamental lack of public
Speaker 8: investment in the economy and also to help grow the
Speaker 8: skills base that we see around the country.
Speaker 7: That was Professor jag Jitchado, who is director of the
Speaker 7: National Institute of Economic and Social Research, speaking to us
Speaker 7: here on Bloomberg Radio as we get ready, of course
Speaker 7: for the next UK inflation reading at what it means
Speaker 7: for the economy.
Speaker 2: I'm Stephen Carroll.
Speaker 7: And I'm Caroline Hepgar here in London.
Speaker 2: You can catch us every weekday warning here for Bloomberg
Speaker 2: Daybreak Europe, beginning at six am in London and one
Speaker 2: am on Wall Streets.
Speaker 1: Tom, thank you, Steven and Caroline, and coming up on
Speaker 1: Bloomberg day Break weekend. Former President Trump in the headlights
Speaker 1: once again. I'm Tom Busby. This is Bloomberg.
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Speaker 5: This is Bloomberg Daybreak Weekend.
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: Another indictment could be coming for President Trump. For more,
Speaker 1: let's add to our Bloomberg ninety nine one newsroom in
Speaker 1: Washington and Bloomberg Sound On. Co host Kaylee Lines.
Speaker 4: That's right, Tom, the former president has already been indicted
Speaker 4: three times, first in the state of New York related
Speaker 4: to hush money payments to adult film actress Stormy Daniels,
Speaker 4: then in Florida, where he was shit with federal charges
Speaker 4: in the classified documents case, and most recently another federal
Speaker 4: indictment brought in Washington over efforts to overturn the results
Speaker 4: of the twenty twenty election and obstruct the transition of power.
Speaker 4: And now a fourth indictment could be coming. The district
Speaker 4: attorney in Fulton County, Georgia, Fannie Willis, is widely expected
Speaker 4: to bring charges related to efforts to overturn the election
Speaker 4: results in that state. President Trump was actually talking about
Speaker 4: that this past week in an interview on Newsmax.
Speaker 9: And I don't know what she'said.
Speaker 5: I really don't know.
Speaker 9: All I know is she could have done it two
Speaker 9: and a half years ago if she was going to
Speaker 9: do something. And this is about a perfect phone call,
Speaker 9: a call where I'm questioning the election. I'm telling them
Speaker 9: that in my op the election was rigged, and this
Speaker 9: saying that I was I did something in Greek I
Speaker 9: didn't do or anything wrong. I believe I won that
Speaker 9: election by many, many votes.
Speaker 4: Of course, he's referring to that phone call between himself
Speaker 4: and Brad Raffensberger, the Georgia Secretary of State, in which
Speaker 4: he said, quote, I just want to find eleven seven
Speaker 4: and eighty votes. So let's get more on this potential
Speaker 4: indictment that is seemingly just around the corner. David Wriaco's
Speaker 4: Bloomberg Legal reporter and Wendy benjamins in Bloomberg Washington Senior
Speaker 4: editor are joining me now. So David, just to you first,
Speaker 4: what are we expecting this coming week in Fulton County?
Speaker 4: What charges could we be looking at here?
Speaker 10: Well, the prosecutors who work for Fulton County District Attorney
Speaker 10: Fannie Willis have been investigating this case for two and
Speaker 10: a half years and they are expected in the coming
Speaker 10: week to present evidence to a grand jury that could
Speaker 10: return an indictment against Trump and his ally as it
Speaker 10: could be this coming week or the week after that.
Speaker 10: But they have spent a lot of time assembling evidence.
Speaker 10: There was an advisory grand jury convened last year that
Speaker 10: heard from seventy five different witnesses, and so now they're
Speaker 10: presenting it to a different grand jury that can actually
Speaker 10: bring criminal charges. And what we're hearing is that Fannie
Speaker 10: Willis could go big, as many legal observers in Atlanta
Speaker 10: believe she will, and in so doing, she would probably
Speaker 10: bring charges under the state racketeering law, or perhaps just
Speaker 10: under election fraud and conspiracy laws, and such an indictment
Speaker 10: could involve Trump and a number of his allies, as
Speaker 10: many as twelve different people, we have heard, and there's
Speaker 10: a variety of different incidents that they're looking at.
Speaker 4: Yeah, and we've also heard from the sheriff in Fulden
Speaker 4: County who's indicated that the former president would be treated
Speaker 4: just like anyone else, mugshot included, and David, that could
Speaker 4: make this case a little different than the others we
Speaker 4: have seen.
Speaker 10: Right in the other cases in which he was criminally
Speaker 10: charged in federal court in Washington and in Florida, and
Speaker 10: in the state case in New York, he was not mugshotted.
Speaker 10: And I would just say that the sheriff said that
Speaker 10: that would be their plan unless the judge who receives
Speaker 10: the case tells them otherwise.
Speaker 4: So Wendy to bring you in here on kind of
Speaker 4: the political implications of all of this. This, if the
Speaker 4: pattern follows, is likely just going to fire up the
Speaker 4: former president's base even more. He has said multiple times
Speaker 4: in the last week and change that he just needs
Speaker 4: one more indictment to since the twenty twenty four race.
Speaker 11: Yeah, and like I said before, I don't think he's
Speaker 11: necessarily wrong on that, at least on the presidential nomination.
Speaker 11: He has a you know, raised more money every time
Speaker 11: he's indicted, or raised money every time he's indicted. It
Speaker 11: does seem to be tapering off as they become sadly
Speaker 11: routine for him to do this, but it's you know,
Speaker 11: it seems like the indictments are emboldening him. But I
Speaker 11: think the more he talks about the case, the more
Speaker 11: that things happen not in his favor, either through pre
Speaker 11: trial rulings or later on convictions. If those happen, that
Speaker 11: may begin to chip away at everything but the die
Speaker 11: hard base, which is still only about a third of
Speaker 11: Republican primary voters.
Speaker 4: But he's still going to face the challenge even if
Speaker 4: there are people who want to show up and vote
Speaker 4: for him in the primaries, that he's going to be
Speaker 4: trying to campaign in all of these primary states that
Speaker 4: are critically important at the same time that he's also
Speaker 4: going to be dealing with court dates with trials and Wendy,
Speaker 4: that's just calendar wise, very difficult.
Speaker 11: Calendar wise, very difficult. Although Trump is not a traditional candidate,
Speaker 11: and that he'll stand next to a buttercow at the
Speaker 11: Iowa State Fair and all of that. He likes to
Speaker 11: do his rallies. He likes to fly in on his jet,
Speaker 11: you know, keep the jet in the background, do the
Speaker 11: rally and all of that. And so he may be
Speaker 11: able to, you know, given his wealth and private jet
Speaker 11: and all that, be able to maintain both schedules, although
Speaker 11: it's going to be nutty and completely unprecedented in American history.
Speaker 11: But I think one of the larger issues for him,
Speaker 11: and why his attorneys are talking so much in their
Speaker 11: defense about this was my first Amendment right to say
Speaker 11: all of this is because they know they will not
Speaker 11: be able to control him on the campaign trail. And
Speaker 11: if the first Amendment is their defense, then he can
Speaker 11: call the judges nasty women, he can call the prosecutor deranged,
Speaker 11: he can talk about the case in a way that
Speaker 11: you know, we'll probably drive everyone with a law degree
Speaker 11: absolutely crazy. But Hill insists it's his first Amendment right
Speaker 11: until a judge, and David, you may predict this better
Speaker 11: than I can slaps a gag order on him.
Speaker 10: Judges are loath to put a gag order on a defendant,
Speaker 10: but Trump has a long career of pushing the boundaries,
Speaker 10: and he's trying to push the boundaries now in this case.
Speaker 10: I mean, as you said, when his defenses so far
Speaker 10: that he's articulated are mostly First Amendment. In the Jack
Speaker 10: Smith case relating to the election, Jack Smith said, this
Speaker 10: goes well beyond his free speech rights. But judges want
Speaker 10: to be careful not to put two title leash on Trump.
Speaker 10: And so that makes him much different than your average
Speaker 10: criminal defendant because he has such a big platform, and
Speaker 10: it's quite extraordinary and unprecedented for a defendant to be
Speaker 10: attacking the prosecutors, attacking the judges, attacking witnesses in the
Speaker 10: way that Trump is. And you know, it presents a
Speaker 10: real challenge for everyone in the criminal justice system to
Speaker 10: know how to deal with that.
Speaker 4: Well, there's so many ways in which this is unprecedented.
Speaker 4: Because also I may be wrong on this, but this
Speaker 4: could be the first time that we could see Theoretically,
Speaker 4: we're still a long ways out from November of twenty
Speaker 4: twenty four, but the defendant in all of these cases,
Speaker 4: if found guilty, could be in a position to pardon
Speaker 4: himself in the future. But David, there is a distinction
Speaker 4: to be made there. That's not the case in Georgia
Speaker 4: with the state indictment, right.
Speaker 10: Right, he cannot pardon himself on state charges in either
Speaker 10: Georgia or New York. He could do it on the
Speaker 10: federal charges, and so those two cases loom over him
Speaker 10: and present a real threat to him and his future
Speaker 10: in the way that the federal cases don't.
Speaker 4: Wendy, it seemed like you had a thought on that.
Speaker 11: Actually, David said exactly what I was thinking is that
Speaker 11: I think there will be an exploration if he becomes
Speaker 11: president again and if there are convictions on his record,
Speaker 11: there will be a real study of the so called
Speaker 11: absolute powers of pardoning of the president, because the Constitution
Speaker 11: says a president can grant a pardon, and that will
Speaker 11: take some judicial interpretation to decide if you can grant
Speaker 11: a pardon to yourself. If there's any president who would
Speaker 11: do that, it is certainly Donald Trump. But on state
Speaker 11: that's only on federal cases. On a state case, there's
Speaker 11: not a thing he can do about it.
Speaker 4: Well, of course, all of this is assuming he may
Speaker 4: be found guilty of any of these allegations, and he
Speaker 4: still has to go through the full judicial process that
Speaker 4: everyone else is entitled to here in this country. Thank
Speaker 4: you so much, Wendy benjamins In Bloomberg Washington Senior editor
Speaker 4: and David Voorakis, Bloomberg Legal Reporter. We appreciate it. And
Speaker 4: Tom all our eyes turned to Georgia this coming week.
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: newsroom in Washington, and you can hear sound on weekdays
Speaker 1: one to three pm on Bloomberg Radio. I'm Tom Busby.
Speaker 1: This is Bloomberg. This is Bloomberg day Break, Weekend, our
Speaker 1: global look ahead at the top stories for investors in
Speaker 1: the coming week. I'm Tom Busby in New York. China's
Speaker 1: EV market is fast growing. We just had Chinese electric
Speaker 1: car maker Lee Auto reporting better than expected quarterly results
Speaker 1: earlier in the week. Let's get to Doug Krisner, co
Speaker 1: host of Bloomberg Daybreak Asia.
Speaker 3: Tom and the week ahead. We'll get earnings from the
Speaker 3: Chinese ev maaker x Pong. So we thought it would
Speaker 3: be a good time to check in on China is
Speaker 3: EV market, where the adoption of electric cars has been
Speaker 3: rapidly growing. You know, in twenty twenty two, more than
Speaker 3: half of all global EV sales occurred in China. For
Speaker 3: a closer look, I'm joined now by Bloomberg's Danny Lee
Speaker 3: Bloomberg Asia Transport Reporter, joining us from our studios in
Speaker 3: Hong Kong. Danny, It's always a pleasure, and I want
Speaker 3: to begin with the big picture first, the domestic EV
Speaker 3: producers in China are clearly beating their foreign rivals. Eighty
Speaker 3: percent of all battery evs in China are now coming
Speaker 3: from domestic producers. And among the top sellers, I think
Speaker 3: that only the top ten. I think only Tesla is
Speaker 3: in the ranks, and German brands no longer play any
Speaker 3: role in the top ten. We can remember a time
Speaker 3: when foreign car makers were setting up joint ventures in China.
Speaker 3: Now they seem to be fading into the background. How
Speaker 3: did we get here?
Speaker 12: Yeah, it's a bit of a role reversal from the time,
Speaker 12: maybe they said twenty years ago, where you saw a
Speaker 12: lot of the foreign auto makers like your Volkswagens, looking
Speaker 12: at China as a huge growth market potential, but they
Speaker 12: had fossil fuel engines, and then we've seen the Chinese
Speaker 12: auto makers coming in with big bets, spurred on by
Speaker 12: the central government to look at new technologies. This is
Speaker 12: why we've seen huge state support in the likes of
Speaker 12: battery technology and the future, which is battery electric powered vehicles.
Speaker 12: And what China has done is managed to have a
Speaker 12: huge headstart ten fifteen years ahead of anyone else in
Speaker 12: the market to develop initially not the best looking, not
Speaker 12: the best spec powered electric vehicles. Now they have market leading,
Speaker 12: very stylish, very affordable at scale, very affordable evs and
Speaker 12: you look at where the competention is now in globally,
Speaker 12: they're nowhere to be seen in terms of in terms
Speaker 12: of matching up to what China has to offer, apart
Speaker 12: from Tesla, who's made a lot of the same kind
Speaker 12: of footprints of early bets into battery electric technology and
Speaker 12: battery evs.
Speaker 3: Wondering now about how sales are distributed. If you look
Speaker 3: at the premium category we just heard from Liato in
Speaker 3: the last week, the numbers seem to be very good.
Speaker 3: In revenue guidance was also very strong. More of a
Speaker 3: mainstream brand, and I'm thinking, like a Byd or a Glie,
Speaker 3: is there a real like split in the market here
Speaker 3: premium versus mainstream?
Speaker 12: I think there is a There is a consistent group
Speaker 12: of brands in particularly around the top ten, who in
Speaker 12: the last month in July reported sales that are near
Speaker 12: record hised or were record highsed. So you saw your Byds,
Speaker 12: you saw your your NEOs, and your your Li Auto's
Speaker 12: touching those highs. And then if you look at the
Speaker 12: wider market, even in just the wider auto space, the
Speaker 12: figures we saw in China showed the market contracting two
Speaker 12: point two percent. So you and yes, So in a way,
Speaker 12: there's a sales are coalescing around major brands because they
Speaker 12: have either the best price or the best lineup. And
Speaker 12: it's helped that some of the ev makers of late,
Speaker 12: like your Li Auto's and your Neo's have brought out
Speaker 12: new and more appealing models. And it's been quite a
Speaker 12: trial and error phase for them of late where they've
Speaker 12: brought out new models and they haven't always been well
Speaker 12: received or they haven't added in technology that everyone always likes.
Speaker 12: So with their most recent models they have been well
Speaker 12: received and what we have seen is higher numbers of
Speaker 12: sales coming through, so which is why you see someone
Speaker 12: like the Li Auto, who's gaining the confidence of raising
Speaker 12: its revenue guidance into the third quarter, also estimating higher
Speaker 12: sales in the third quarter. Although as we've seen in
Speaker 12: the market reaction last week, Le Auto's le Auto's stock
Speaker 12: reaction was pretty lackluster.
Speaker 3: Right, good stuff. Danny Lee is Bloomberg's Asia Transport reporter.
Speaker 3: I'm Doug Prisner. You can join Brian Curtison myself weekdays
Speaker 3: here for Bloomberg day Break Asia beginning at six am
Speaker 3: in Hong Kong six pm on Wall Street.
Speaker 1: Tom, Thank you, Doug, and that does it for this
Speaker 1: edition of Bloomberg day Break Weekend. Join us again Monday
Speaker 1: morning at five am Wall Street time for the latest
Speaker 1: on markets overseas and the news you need to start
Speaker 1: your day. I'm Tom Buzzby. Stay with us. Top stories
Speaker 1: and global business headlines are coming up right now.