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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: day Break You Up podcast, available every morning on Apple,

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Speaker 1: Spotify or wherever you listen. It's Tuesday, the nineteenth of

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Speaker 1: November in London.

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Speaker 2: I'm Caroline Hepka and.

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Speaker 3: I'm Stephen Carroll coming up today. Hedge fund titan Ken

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Speaker 3: Griffin says he's very anxious about Donald Trump's potential tariff policies.

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Speaker 1: European markets have been losing against the US for decades,

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Speaker 1: but investors fhere things could get even more brutal under

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Speaker 1: the next president.

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Speaker 3: Plus searching for a solution, Bloomberg learns that US competition

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Speaker 3: officials want Google to sell it's Chrome browser to break

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Speaker 3: up its monopoly.

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Speaker 2: Let's start with a roundup of our top stories.

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Speaker 1: Hedge fund titan Ken Griffin says he's quote very anxious

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Speaker 1: about Donald Trump's potential tariff policies. Speaking to the UK's

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Speaker 1: Oxford Union, the Citadel Founder and Republican donor, so tariffs

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Speaker 1: are a quote long slippery slope that can be profitable

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Speaker 1: in the short run, but damaging to US company's ability

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Speaker 1: to compete globally in the long run. Financial chiefs are

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Speaker 1: increasingly turning their attention to how the incoming administration's policies

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Speaker 1: will impact the economy. Here's what City Group CEO Jane

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Speaker 1: Fraser told the HKMA Global Financial Leader's Summit overnight.

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Speaker 4: The agenda is largely pro growth, some questions around whether

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Speaker 4: it will also be inflationary, and it's one where I

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Speaker 4: think we know what is coming when we think about it,

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Speaker 4: probably forties if you'll forgive me tariffs, taxes, the tapering

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Speaker 4: of regulation and tightening of inflation.

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Speaker 1: That was City Group CEO Jane Fraser speaking in Hong Kong.

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Speaker 3: Well, the comments on tire some two of the biggest

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Speaker 3: names and finance came as the CEO of Morgan Stanley

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Speaker 3: also expressed concerns about the changing economic environment for business.

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Speaker 3: Here's what Ted Pick told that about in Hong Kong.

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Speaker 5: There are ongoing inflationary themes that bear consideration. Some element

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Speaker 5: of degloralization, ongoing climate transition, the muscularity of the nation

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Speaker 5: state or regionalized as ie defense war. Those are all inflationary.

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Speaker 3: Morgan Stanley's Tedpick and Citadel's Ken Griffin both expressed at

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Speaker 3: reservations about the economic impact of President Elected Trump's immigration policies.

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Speaker 3: It comes as Trump confirmed his plan to use the

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Speaker 3: US military for a mass deportation program in a post

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Speaker 3: on his Truth social network.

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Speaker 1: Well the Business Secretary says the UK shouldn't jeopardize its

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Speaker 1: relationship with the EU for a trade deal with Donald Trump.

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Speaker 1: Jonathan Reynolds told a committee in the House of Lords

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Speaker 1: that Britain would not seek to choose between its key

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Speaker 1: export markets.

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Speaker 6: I mean the US is a major and important trading

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Speaker 6: partner for the UK three hundred billion pounds of bilateral trade,

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Speaker 6: but compared to E with over eight hundred billion pounds

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Speaker 6: of bilateral train. Clearly, if there are things that we

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Speaker 6: are offered or host to do that would result in

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Speaker 6: an adverse relationship on the European side, would have to

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Speaker 6: weigh the consequence of that.

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Speaker 1: The comments from the Business Secretary come as the Labor

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Speaker 1: government looks for ways to boost trade and growth. Prime

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Speaker 1: Minister Kis Darmatov reporters at the G twenty that he

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Speaker 1: would restart talks on a UK India free trade agreement

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Speaker 1: next year. Negotiations on that deal stalled in May after

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Speaker 1: two years. Despite the strong personal relationship between the former

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Speaker 1: Prime Minister of Sheisunak and India's Nuendra Modi.

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Speaker 3: European Center Bank president, says the European Union should be

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Speaker 3: pulling its resources. Speaking at an event in Paris, Christine

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Speaker 3: Laguard said boosting productivity growth in areas like defense and

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Speaker 3: climate should be a priority. Her call for greater integration

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Speaker 3: echoes warning some other policymakers who say Donald Trump's return

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Speaker 3: to the White House could accelerate a new era of

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Speaker 3: Briton actionism.

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Speaker 1: Russia's invasion of Ukraine has now entered its thousandth day,

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Speaker 1: with tens of thousands of people killed on both sides.

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Speaker 1: The US President Joe Biden has now authorized Ukraine's use

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Speaker 1: of long range missiles to strike targets inside Russia, but

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Speaker 1: at the G twenty the UK Prime Minister Kis Starma

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Speaker 1: refused to be drawn on the specifics of Britain's policy.

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Speaker 7: I'm not going to get into operational details because Putin

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Speaker 7: is the only winner in that situation. But I've been

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Speaker 7: really clear for a long time now. We need to

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Speaker 7: double down. We need to make sure Ukraine has what

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Speaker 7: is necessary for as long as necessary, because we cannot

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Speaker 7: allow Putin to win this war.

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Speaker 1: Starmer's comments have been echoed by French officials attending the

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Speaker 1: G twenty summit. They have also refused to say whether

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Speaker 1: Kiev would be allowed to use their missiles against targets

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Speaker 1: in Russia. Meanwhile, German Chancellor Erla Schultz has maintained his

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Speaker 1: decision not to give Ukraine access to their long range missile,

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Speaker 1: saying that he needs to act prudently.

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Speaker 3: Bloomberg has learned the top competitional officials of the US

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Speaker 3: Justice Department have asked a federal judge to force Google

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Speaker 3: to sell off its Chrome browser Morne from Doug Kresner.

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Speaker 8: We're told the DOJ will ask federal Judge Ahmat Meta

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Speaker 8: to also require measures related to artificial intelligence and Google's

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Speaker 8: Android smartphone operating system. Meta is the same judge who

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Speaker 8: ruled back in August that Google illegally monopolized the search market.

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Speaker 8: The DOJ officials, along with states that have joined the case,

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Speaker 8: also plan to recommend Meta imposed data licensing requirements, and

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Speaker 8: if Meta accepts these proposals, they have the potential to

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Speaker 8: reshape the online search market and the developing AI industry.

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Speaker 8: By the way, this case was filed under the first

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Speaker 8: Trump administration and continued under President Biden in New York.

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Speaker 8: I'm Doug prisoner Bloomberg Radio.

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Speaker 1: A Hong Kong court has sentenced forty five pro democracy

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Speaker 1: activists to up to ten years in jail. The former

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Speaker 1: democracy advocate Benny Tie was handed down the longest sentence

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Speaker 1: under China's security law for organizing unofficial primary polls in

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Speaker 1: twenty twenty for the Legislative Council. Former youth activist Joshua

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Speaker 1: Wong got four years and eight months. The US has

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Speaker 1: called the case politically motivated. The mass arrests of democracy

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Speaker 1: advocates in twenty twenty one effectively silenced the city's entire

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Speaker 1: political opposition and is likely to further dissent in Hong Kong.

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Speaker 1: The chial of former media mogul Jimmy Lai is due

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Speaker 1: to resume today. Now in a moment, we are going

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Speaker 1: to be talking a bit more about the G twenty gathering,

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Speaker 1: and also one of our deep dives about European stocks,

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Speaker 1: why they've been in retreat, the outflows, the pressure on

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Speaker 1: the euro as a result, really and turbocharged by Donald

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Speaker 1: Trump's arrival in a few weeks in the White House.

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Speaker 1: But there was a picture out of the G twenty

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Speaker 1: that I want to pause on for a moment. You know,

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Speaker 1: that adage picture speaking a thousand words and all the

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Speaker 1: G twenty family photo right in front of Rio's Sugar

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Speaker 1: Loaf Mountain was quite fascinating.

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Speaker 2: There was Shijinping China.

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Speaker 1: She right at the front in the middle alongside India's mody.

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Speaker 1: Sergei Lavrov was sort of at the back standing in

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Speaker 1: for President Vladimir Putin. But there was no President Joe Biden.

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Speaker 3: It was like geopolitical spot the difference. It's like who's

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Speaker 3: missing from this photo that we should be able to recognize.

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Speaker 3: So no Joe Biden. A couple of other notable absences

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Speaker 3: as well, though at least Georgia Maloney wasn't there. No

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Speaker 3: just Intrudeau from Canada either, So it was apparently an

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Speaker 3: organizational mix up, yes, but it doesn't bode particularly well

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Speaker 3: at a time when world leaders are trying to present

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Speaker 3: themselves as being united, when there are so many challenges

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Speaker 3: facing the world that some of the key figures were absent.

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Speaker 3: The US officials saying that the photo started early, yea,

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Speaker 3: you know they did.

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Speaker 2: But the symbolism is all there, isn't it.

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Speaker 1: That Biden sort of wasn't particularly visible maybe at the gathering.

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Speaker 1: Mind you, it's not the only one who's perhaps coming

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Speaker 1: to the end maybe of their political tenure. I mean,

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Speaker 1: you've got Germany's Earl of Schultz and also Francis Emmanuel

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Speaker 1: Macon kind of scene. Also is maybe Lane Duck in

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Speaker 1: their administrations.

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Speaker 3: Well, let's focus from the symbolism to the substance of

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Speaker 3: what the leaders were discussing at the G twenty in Rio.

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Speaker 3: Of course, many of them looking to the potential impact

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Speaker 3: of what Donald Trump and the White House might mean

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Speaker 3: for trade and diplomatic relations. Let's bring in our Ama

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Speaker 3: News director Rosalind Matheson, who joins us in studio for

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Speaker 3: more The issue of trade hanging over this gathering ras

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Speaker 3: because everyone is thinking about what's going to change come January.

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Speaker 3: How international relations through the medium of trade could be

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Speaker 3: upended a particular concern for European leaders.

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Speaker 9: But you were just talking about symbolism and substance, and

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Speaker 9: in fact, both of those things tend to come together

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Speaker 9: in a G twenty communicate, which a lot of people

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Speaker 9: say communicats a communicate. But you always look for certain

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Speaker 9: words in the communicating, certain language, and particularly in the

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Speaker 9: first Donald Trump administration, the language around trade became extremely

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Speaker 9: fraught in his communication. In fact, he famously ripped up

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Speaker 9: a communicate the G seventh summit, I think it was

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Speaker 9: in Canada after he had signed it. And so you

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Speaker 9: can see that that's hanging over this meeting. You've got

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Speaker 9: European leaders Macron only a couple of days ago warning

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Speaker 9: of the risk of Europe being pulled into a trade

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Speaker 9: will not just with the US, but also with China.

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Speaker 9: So multiple fronts happening, and that's because Donald Trump is

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Speaker 9: talking about tariffs of ten to twenty percent, even on

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Speaker 9: countries that he were considered to be his allies and

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Speaker 9: his friends. He sees every country really when it comes

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Speaker 9: to business, as being a competitor.

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Speaker 2: So Europe is looking down the barrel of tariffs.

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Speaker 9: And we know, of course again in the first Trump

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Speaker 9: administration there was a lot of tension over steel and

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Speaker 9: iron in particular, and we can imagine that coming back.

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Speaker 9: But also there's a lot of other sectors that could

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Speaker 9: become problematic, and so you're seeing a lot of language

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Speaker 9: at the G twenty amongst leaders, perhaps not in the communicate,

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Speaker 9: but about the need to preserve that kind of global

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Speaker 9: rules based order, which is not just about security, it's

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Speaker 9: also about trade.

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Speaker 8: Yeah.

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Speaker 2: Absolutely.

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Speaker 1: Bloomberg Intelligence economist Anna Wong has done some extremely interesting

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Speaker 1: analysis in terms of out on aggregate how much she

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Speaker 1: thinks it's going to increase tariffs, the base case being

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Speaker 1: that weighted tariffs will increase by five percentage points, so

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Speaker 1: from about three percent currently to the expectation of eight

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Speaker 1: percent at the.

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Speaker 2: End of twenty twenty six.

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Speaker 1: So that's the kind of Bloomberg analysis of the situation.

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Speaker 1: The text, as you mention, is also so important on

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Speaker 1: the war in Ukraine and the crisis in the Middle East,

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Speaker 1: does seem to be that the language is papering over

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Speaker 1: some really deep divides and differences, and.

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Speaker 9: We can see some of the leaders are even ignoredoledging

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Speaker 9: that before the communicate is sort of officially done, although

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Speaker 9: it's normally tried, they try and get it done before

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Speaker 9: the meeting begins, including Olaf Schultz, the German leader, who

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Speaker 9: was there, saying, hang on, I think the language here

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Speaker 9: is not strong enough in support of Ukraine and also

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Speaker 9: in recognizing that Hamas did in fact attack Israel or

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Speaker 9: October seven last year, and so you can see the

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Speaker 9: language is trying to be very generic in both places.

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Speaker 9: In Ukraine, it's sort of talking most about things like

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Speaker 9: food security in the need for food security in the region,

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Speaker 9: not the fact that this war has been going on

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Speaker 9: for more than two years and we're probably getting to

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Speaker 9: the point where Ukraine's going to be forced in some

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Speaker 9: fashion to negotiate. And again, the statements of needing to

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Speaker 9: keep supporting Ukraine seem to be there, But in the etho,

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Speaker 9: in the conversations behind the scenes at the meeting, is

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Speaker 9: the reality of where we can't keep sending military and

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Speaker 9: financial aid there into perpetuity, and so there's going to

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Speaker 9: have to be talks at some point.

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Speaker 3: Okay, well, plenty more to watch from the G twenty

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Speaker 3: for now, Raslamas and our EMO news director thank you now.

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Speaker 1: In the days since the US election, European stocks have retreated,

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Speaker 1: outflows have picked up, and the euro has kidded towards

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Speaker 1: parity with the US dollar. Now the trend is being

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Speaker 1: turbocharged by Trump's proposed policy mix of tariffs, deregulation and

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Speaker 1: loose fiscal policy and tax cuts in America. Joining US

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Speaker 1: now to discuss is Bloomberg's Farah al Barawi, who leads

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Speaker 1: our team covering European equities. Farah, thank you for being

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Speaker 1: with us. What's the backdrop for stocks and what's being

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Speaker 1: priced into European equities markets right now?

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Speaker 2: Good morning.

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Speaker 10: Well, you have really investors ascribing such a steep discount

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Speaker 10: to European equities versus the US. That's a forty percent

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Speaker 10: record low for Europe versus the US, and the underperformance

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Speaker 10: of the stock six hundred versus the S and P

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Speaker 10: five hundred is one of the widest on record this year.

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Speaker 10: So investors clearly aren't favoring Europe and you have a

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Speaker 10: lot of out coming through and now recommending to buy

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Speaker 10: Europe is a contrarian call because the US is just

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Speaker 10: providing a lot more growth, a lot more diversification. You

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Speaker 10: have the AI plays and Europe really doesn't have something

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Speaker 10: similar to that, and all the passive inflows are generally

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Speaker 10: geared towards the US. If you look at the composition

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Speaker 10: of the US market, you have about eight companies that

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Speaker 10: are valued at more than one trillion dollars. In Europe,

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Speaker 10: not even a single company is valued at over five

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Speaker 10: hundred billion dollars. The market in the US is ten

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Speaker 10: is about four times bigger than all the markets in

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Speaker 10: Europe combined. So again, it's just such a massive market

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Speaker 10: that it makes Europe, with its lackluster growth, with the

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Speaker 10: headwinds that are potentially going to come through from Trump's

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Speaker 10: proposed tariffs, it makes it not a very attractive destination

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Speaker 10: for stock investors looking for lucrative returns. As we've seen

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Speaker 10: from the US. It's now known as a diversifier because

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Speaker 10: some equity investors may not put all their eggs in

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Speaker 10: one basket. But investors are not questioning is it good

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Speaker 10: to just be known as the diversifier in a portfolio?

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Speaker 3: What about the outlook for the euro as well? You know,

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Speaker 3: some stratetgers even saying that parity could be the only

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Speaker 3: way for euro dollar.

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Speaker 10: Absolutely, and that call for parody is only increasing, it's

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Speaker 10: not decreasing. The euro has been under significant pressure, trading

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Speaker 10: at the weakest level level in over a year, and

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Speaker 10: more and more investors are in strategists are expecting it

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Speaker 10: to slide to parity with the dollar. JP Morgan, Goldmen

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Speaker 10: Sax City groups say that the euro is one of

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Speaker 10: the biggest is set to be one of the biggest

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Speaker 10: losers from a Trump presidency. Going again back to that

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Speaker 10: tariff agenda that the President elect has set on the table,

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Speaker 10: and especially given Europe is quite reliant on manufacturing and

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Speaker 10: it has several industries such as auto's making up a

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Speaker 10: really big part of its economy, parity is definitely something

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Speaker 10: that more and more people are discussing these days.

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