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Speaker 1: Good morning. It's Friday, the twenty ninth of September here

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Speaker 1: in London. This is the BlueBag Day b a q

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Speaker 1: AT podcast. I'm Caroline Hepkat.

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Speaker 2: And I'm Stephen Carroll. Coming up today. Global stock markets

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Speaker 2: are on course for their worst month in a year

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Speaker 2: as bond yields hit decade highs.

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Speaker 1: US workers prepare for missed paychecks as a deal on

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Speaker 1: government funding remains elusive.

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Speaker 2: And we have exclusive reporting on how London's three decade

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Speaker 2: boom has pushed black residents out of the capital.

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Speaker 1: Let's start with a roundup of our top stories.

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Speaker 2: Global stocks are on course for their worst month in

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Speaker 2: a year as markets adjust to central banks keeping interest

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Speaker 2: rates higher for longer. September is likely to be the

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Speaker 2: worst month of the year for the SMP five hundred,

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Speaker 2: while stocks in Asia and Europe also look set to

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Speaker 2: post their biggest quarterly decline of twenty twenty three. Aaron Gibbs,

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Speaker 2: President and Chief investment Officer at Gibbs Wealth Management, says

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Speaker 2: many investors are now looking elsewhere for more reliable returns.

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Speaker 3: Now, why would I take the risk of the stock

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Speaker 3: that's going up and down and all over the place

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Speaker 3: when I can get a guaranteed five percent in into

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Speaker 3: year bond, that safety risk off type of mentality. Investors

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Speaker 3: that for decades really just wanted to be one hundred

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Speaker 3: percent equities. They didn't even want to talk about your

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Speaker 3: bond allocation, not until well into retirement, are actually looking

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Speaker 3: as real value and real options.

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Speaker 2: Aaron Gabe says the equity risk premium now makes it

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Speaker 2: hard to justify investing in large portions of the global

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Speaker 2: stock market at the moments.

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Speaker 1: Well. The equity market route comes after last week's Federal

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Speaker 1: Reserve meeting appeared to finally convince the markets that hire

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Speaker 1: bond deals are here to say stay and the Fed

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Speaker 1: chair Jeroam Powells, is that people need to appreciate what

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Speaker 1: they're trying to achieve.

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Speaker 4: One of our goals is to influence spending and investment

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Speaker 4: decisions today and in the months ahead. That will only

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Speaker 4: be the case if people understand generally what we're saying

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Speaker 4: and what it means for their own finances.

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Speaker 1: Jerom Powell. He made the comments at a town hall

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Speaker 1: with teachers in Washington. The bond market does seem to

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Speaker 1: be hearing his lesson, as yields on global government debt

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Speaker 1: hit decade highs.

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Speaker 2: This week, the officers of the AI chip giant and

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Speaker 2: Video have reportedly been raided in France. According to the

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Speaker 2: country's competition authority, investigators raided the officers of a business

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Speaker 2: suspected of quote anti competitive practices and the graphics cards sector.

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Speaker 2: While the statement doesn't name the company in question, the

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Speaker 2: Wall Street Journal reports that it is in Vidia. The

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Speaker 2: move suggests that there is now an increased focus on

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Speaker 2: the chip maker's dominant AI role. Shares in and Vidia

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Speaker 2: have risen by close to two hundred percent this year.

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Speaker 1: US government funding cuts off at midnight tomorrow night due

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Speaker 1: to the standoff in Congress. Government employees deemed essential will

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Speaker 1: still be working, but they'll do so without pay. The

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Speaker 1: President blamed hardline Republicans for the looming crisis.

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Speaker 3: Extremists in Congress more determined to shut down the government,

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Speaker 3: to burn the place down and lest the people's business.

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Speaker 1: Be done Bloomberg Economics. It says that a longer shutdown

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Speaker 1: might actually help Biden's electoral chances. According to pass polling models,

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Speaker 1: the shutdown won't affect the Federal Reserve, but some economic

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Speaker 1: data releases may be delayed.

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Speaker 2: HSBC's head of Public Affairs is stepping down after controversial

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Speaker 2: comments about the British government's handling of its relationship with Beijing.

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Speaker 2: A source tells Bloomberg that shared cowper Coles will leave

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Speaker 2: the Lander next month. In August to the former diplomat

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Speaker 2: apologized for calling the UK Week for allowing the US

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Speaker 2: to guide its business dealings with China.

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Speaker 1: Germany's Chancellor Olaf Schultz says that a trade war with

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Speaker 1: China quote obviously will not happen. The leader of Europe's

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Speaker 1: biggest economy appear to dismiss the EU investigation into China's

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Speaker 1: electric vehicle subsidies.

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Speaker 5: We are not working protectionists. We want to sell to

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Speaker 5: save our costs in Europe, in North America, in Japan,

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Speaker 5: in China, in Africa, in South America, in all the places.

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Speaker 5: But this means that we are open to get the

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Speaker 5: cause of other countries also on the market of Germany.

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Speaker 1: Germany stands to be the EU country most affected in

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Speaker 1: the event of a tit for tat tariff dispute with China.

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Speaker 1: German automakers collectively sold four point six million cars in

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Speaker 1: the Asian superpower last year.

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Speaker 2: Microsoft reportedly discussing selling bing to Apple three years ago.

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Speaker 2: The deal would have made the search engine the default

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Speaker 2: option on all of the iPhone maker's devices. The revelation

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Speaker 2: comes as the two firms find themselves embroiled in the

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Speaker 2: government's suit over Google's search dominance. Bloomberg's at Baxter has more.

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Speaker 6: Since Bing's launch in two thousand and nine as arrival

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Speaker 6: at Google, the property has never gained much traction, accounting

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Speaker 6: for less than ten percent of searches well now. Bloomberg

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Speaker 6: sources say about twenty twenty, early talks occurred between Apple

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Speaker 6: and Bing, but Microsoft got into the deal to be

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Speaker 6: Apples go to search Engine on its devices. So as

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Speaker 6: the Google trial goes on, the Justice Department is using

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Speaker 6: this as an example of how Google unfairly dominates the

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Speaker 6: searche market. If that partnership is broken down by legal action,

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Speaker 6: who knows what might happen.

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Speaker 1: Now those are our top stories. Look, I think it's

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Speaker 1: worth lingering on the fact that it's caught to end

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Speaker 1: today and that we've seen just an amazing turnaround. Septembers

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Speaker 1: often are a very difficult time for markets, a moment

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Speaker 1: of realization, but it seems like a really big one

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Speaker 1: with fed rates hitting it a twenty two year high.

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Speaker 1: The ten interest rates rises that we've seen from the

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Speaker 1: ECB does actually seem that bon markets have now sort

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Speaker 1: of woken up to that new reality we've been talking

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Speaker 1: about on Bloomberg, Crazio and elsewhere for a long time,

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Speaker 1: you know, the message from policymakers about higher for longer.

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Speaker 1: That does seem to be syncing in. So Stock's having

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Speaker 1: really quite a difficult time. Well, they're actually, yeah.

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Speaker 2: It's certainly been a month of reckoning for those mind mats.

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Speaker 2: Why you've been thinking about the markets, Caroline, I've been

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Speaker 2: thinking about fashion, have you? And look, so I have

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Speaker 2: to admit I didn't realize that Jans Nhuang from Nvidia

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Speaker 2: always wears his black leather jacket, and this has become

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Speaker 2: extremely apparent in during his visit to India because despite

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Speaker 2: the fact that it's been very hot while he's been

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Speaker 2: on this tour of various locations in the country, he's

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Speaker 2: kept the leather jacket on a lot of people's Well,

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Speaker 2: a musal amusement doesn't really the question, but certainly it's

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Speaker 2: been noted he has managed to continuing wearing what must

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Speaker 2: have been extremely uncomfortable.

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Speaker 1: Well, but I think that and this is why it

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Speaker 1: has captured people's imagination. I think because it has become

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Speaker 1: I think it is getting to be close to as

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Speaker 1: iconic as the kind of black turtle neck, you know,

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Speaker 1: Mark Zuckerberg's T shirts. It said, it does look like

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Speaker 1: he's wanting to project at least an image of you know,

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Speaker 1: tech tyg Koon. He seems it's also not the same

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Speaker 1: leather jacket. It is a different leather jacket every.

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Speaker 2: Time opening the wardrobe to like twenty of the same thing.

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Speaker 1: He has a black T shirt and black chasers as well. No,

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Speaker 1: it does definitely seem that he wants to channel something.

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Speaker 1: I mean, there's been lots of articles about it written

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Speaker 1: about you know, it's a little bit like the the

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Speaker 1: Anna Wintle Bob. You know, it's a very stark image

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Speaker 1: and in a kind of image driven world. Actually, there

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Speaker 1: are some advantages to a CEO having speaking the language

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Speaker 1: of fashion, which we sometimes discuss. It's a uniform. It's

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Speaker 1: quite powerful. It also says something, doesn't it. Maybe it

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Speaker 1: hints to Hollywood the open road speed.

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Speaker 2: Creativity Jacket's pretty pretty iconic, I think, And I think

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Speaker 2: the idea that you know someone who if you don't

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Speaker 2: have to be a sort of fashion I can't be

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Speaker 2: wearing as the tech tech CEOs can can make the

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Speaker 2: fashion statements there as well.

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Speaker 1: Yeah, absolutely, anyway, nice piece on the terminal all about

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Speaker 1: well CEOs and yeah and.

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Speaker 2: What they wear. Yes, let's go back to say for

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Speaker 2: territory on the markets now, Global stocks, of course for

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Speaker 2: their worst month since last September. Central bank decisions around

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Speaker 2: the world consolidating the view that rates will stay higher

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Speaker 2: for longer. Bond markets, meanwhile, look like they're having their

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Speaker 2: worst months in February, Treasury yields hovering close to sixteen

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Speaker 2: year highs Our market supporter Valerie Title is with us

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Speaker 2: in studio for more on this. How should we be

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Speaker 2: thinking about what we've seen on the markets in September?

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Speaker 2: Is it the moment that all of a sudden everyone

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Speaker 2: woke up and said, oh, now I get it higher

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Speaker 2: for longer.

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Speaker 7: Look, Stephen, you can put it that way, but they're

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Speaker 7: really The funny thing is here, and this is what

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Speaker 7: worries markets so much, is there really wasn't a catalyst

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Speaker 7: for this massive treasury sell off that we've seen, and

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Speaker 7: it has been massive. We've seen a fifty basis point

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Speaker 7: rise in the ten year yield and in the thirty

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Speaker 7: year yield, which normally never happens at this point of

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Speaker 7: the cycle or ever, that we see this kind of

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Speaker 7: steepening move in the treasury curve. That's what is really

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Speaker 7: worrying markets. A lot of chat out there. That's due

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Speaker 7: to the fact that the US economy is still strong.

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Speaker 7: The US government is still spending a lot of money,

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Speaker 7: meaning they'll be issuing a lot of treasury so supply

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Speaker 7: and demand does play into this, as well as the

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Speaker 7: fact that the US economy, i mean globally is still

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Speaker 7: the standout as to how well it is holding up

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Speaker 7: to all these right rises from the Federal Reserve.

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Speaker 1: Yeah, absolutely, it's still say that German, Japanese yeads are

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Speaker 1: following the same path. Is the economic data fitting into

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Speaker 1: all of this?

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Speaker 7: The funny thing is, Caroline, is that we have had

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Speaker 7: some economic data, but none of it has really been

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Speaker 7: a surprise over this last month. Right, This move in

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Speaker 7: treasuries has not been spurred by a big upside surprise

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Speaker 7: in GDP. That's not what's really spurred it, and I

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Speaker 7: think that is again what the worrying thing is here,

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Speaker 7: what is driving this treasury move Because it is not

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Speaker 7: only having an issue on US assets, with the US

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Speaker 7: stocks having the worst month since September, but then globally

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Speaker 7: we're seeing jgbs attempt the Bank of Japan to buy

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Speaker 7: more to defend their yield curve control. We're seeing what

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Speaker 7: happened in the UK yesterday. UK yields spiked twenty basis

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Speaker 7: points yesterday on no new news just because of this

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Speaker 7: jitters around this treasury move, and German yields as well

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Speaker 7: climbed fifteen basis points inter day session yesterday on little news.

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Speaker 7: Just this jitters around why are these treasury yields moving higher?

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Speaker 7: And what is going to stop them? They're continuing this

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Speaker 7: morning their truck higher.

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Speaker 2: Yeah, this latest step from the Bank of Japan were

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Speaker 2: worth noting because it's only happened in the past few hours.

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Speaker 2: What more can you tell us about what the Bank

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Speaker 2: of Japan has been doing.

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Speaker 7: So they the last time they intervened, the tenure yield,

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Speaker 7: which is which is where their intervention is focused on,

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Speaker 7: the ten yere yield was around sixty five basis points.

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Speaker 7: They came in and intervened when the tenure yield hit

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Speaker 7: seventy seven basis points. But it wasn't a big market

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Speaker 7: move overnight. We thought before that maybe their trigger for

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Speaker 7: intervention was a five basis point rise intraday that didn't

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Speaker 7: necessarily happen today. But perhaps they're just seeing what happening

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Speaker 7: in the treasury market and really want to cap the

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Speaker 7: rise of these Japan yields because yesterday, you know, ten

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Speaker 7: year yields broke through seventy five basis points for the

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Speaker 7: first time over a decade, we hit a new high,

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Speaker 7: and twenty year bond yields yesterday, and overnight tonight we

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Speaker 7: hit a new high in thirty year bonds. So perhaps

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Speaker 7: that pressure from the treasury market just tempting the Bank

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Speaker 7: of Japan to intervene in the market toe to keep

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Speaker 7: yields anchored.

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Speaker 1: Okay, follow thank you so much for being with us

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Speaker 1: taking us through the market stories this morning. Our market's

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Speaker 1: reporter value Titele, I want to take.

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Speaker 2: You back to the UK for the next story. For

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Speaker 2: the first time and at least thirty years, less than

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Speaker 2: half of England's black residents live in London, as the

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Speaker 2: city's affordability at crisis when it comes to housing has

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Speaker 2: hit at the crisis levels. Let's speak to our quality

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Speaker 2: reporter Olivier conteo Hulu for more on this story, Olivia,

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Speaker 2: good morning to you. Where are some of the places

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Speaker 2: the black population is growing outside of London.

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Speaker 8: So it varies. Sometimes it's places where it's cheaper, such

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Speaker 8: as cities in the north like Manchester, and then sometimes

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Speaker 8: it's places around London. So we found areas like thorough

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Speaker 8: and Dartford and towns like Milton Keynes where there's all

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Speaker 8: kind of an okay commute to London. Those are all

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Speaker 8: areas where we found that the proportion of black people

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Speaker 8: are growing.

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Speaker 1: What's happening to black communities inside London some of the

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Speaker 1: reasons for all of these changes.

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Speaker 8: So it depends a bit if you're looking at central

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Speaker 8: London or outer London. When it comes to the Core

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Speaker 8: and when you look at some of the kind of

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Speaker 8: historically black neighborhoods like Brixton and Peckham, what we're finding

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Speaker 8: is that the share of black people has been going

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Speaker 8: down overall, because basically the overall number has been growing

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Speaker 8: more slowly than the overall number, if that makes sense.

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Speaker 8: But then on the outskirts, basically it's quite a straightforward

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Speaker 8: story where in at least kind of three outer London boroughs,

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Speaker 8: the number has grown quite sharply.

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Speaker 2: Yeah, looking at the figures that you have in this story,

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Speaker 2: and it's a great read on Bloomberg dot Carmen on

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Speaker 2: the terminal as well. I mean Black Londoners that decline

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Speaker 2: nineteen percentage points in twenty years, they're fairly stark figures.

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Speaker 8: Yeah, it's been a relatively kind of consistent decrease over time,

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Speaker 8: but it is quite striking that, Yes, for the first time,

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Speaker 8: more than half of people live outside of London when

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Speaker 8: I think for years, not just the conception but the perception,

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Speaker 8: but it has been true that kind of the majority

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Speaker 8: of black people did live in the capitol. So it's

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Speaker 8: kind of a shift in what it means to be

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Speaker 8: black and British.

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Speaker 1: What do the people that you spoke to say about

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Speaker 1: why they're moving and the places that they want to

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Speaker 1: go to.

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Speaker 8: Well, all of them talked about this English dream of

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Speaker 8: having a house in a quiet neighborhood with kind of

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Speaker 8: enough space that they could properly raise a family, and

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Speaker 8: then pretty much all of them said that none of that,

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Speaker 8: it would just be impossible to afford that where they

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Speaker 8: lived when they lived in central London and somewhere like Brixton,

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Speaker 8: which is kind of where we spoke to one family.

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Speaker 8: So yeah, it was very consistent where people said it

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Speaker 8: was just they couldn't afford the lifestyle that they would

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Speaker 8: want to give their family in the capital.

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Speaker 2: Did many of them see disadvantages to moving out of

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Speaker 2: London or what was the sort of balance of when

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Speaker 2: they were talked about the pluses and minuses of moving

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Speaker 2: out of a capital.

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Speaker 8: I think it does vary in how much choice they

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Speaker 8: had in the matter. So for some people they felt

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Speaker 8: that they just really had no choice in order to

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Speaker 8: make ends meet but to move outside of London, and

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Speaker 8: then there they really kind of felt it because you're

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Speaker 8: losing access to friends and family quite often in the

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Speaker 8: kind of a social community and having to start somewhere else.

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Speaker 8: But for other people that it was a plus in that,

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Speaker 8: like as I was saying, they could have had a

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Speaker 8: better stance of life than London itself was able to offer.

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Speaker 8: So when the Manchester in particular was kind of delight

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Speaker 8: to it the quality of life, but he was able

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Speaker 8: to afford in Manchester compared to London, So there was

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Speaker 8: a mix, I would say.

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Speaker 1: I mean the impact also in the capital though is significant,

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Speaker 1: you know, of not being able to keep black communities

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Speaker 1: within the city because of affordability and other reasons. That's

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Speaker 1: a big issue surely in you know, Britain, supposedly leveling

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Speaker 1: up a gender.

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Speaker 8: Yeah, you would think, because part of London's appeal and

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Speaker 8: attraction just to outside is the fact that it's meant

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Speaker 8: to be this kind of cliche but a melting port,

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Speaker 8: a place where anyone can live and be, and that

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Speaker 8: is increasingly becoming not the case. And so yeah, so London,

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Speaker 8: so black people are crucial to the economy and lots

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Speaker 8: and lots and lots of different ways, like the proportion

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Speaker 8: of health workers and how it contribute to the community

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Speaker 8: in just like loads of different ways. And if that

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Speaker 8: proportion is shrinking, then it does rease the question of

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Speaker 8: how the city will look like and say ten years.

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Speaker 2: Olivia, it's a fascinating read how London last its place

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Speaker 2: at the heart of black break And you'll find it

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Speaker 2: on the Bloomberg website and on the terminal that's our

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Speaker 2: quality reporter, Olivia connote a whol it breaking. This is

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Speaker 2: Bloomberg Daybreak Europe, your morning brief on the stories making

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Speaker 2: news from London. To Wall Street and beyond.

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Speaker 1: I'm Caroline Hepka and.

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Speaker 2: I'm Stephen Carol. Join us again tomorrow morning for all

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