1 00:00:02,160 --> 00:00:04,400 Speaker 1: This is Bloomberg day Break Weekend, our global look at 2 00:00:04,400 --> 00:00:06,680 Speaker 1: the top stories in the coming week from our Daybreak 3 00:00:06,680 --> 00:00:09,840 Speaker 1: anchors all around the world, and straight ahead on the program, 4 00:00:10,039 --> 00:00:13,320 Speaker 1: a huge week on the economic front. I'll have that story. 5 00:00:13,520 --> 00:00:15,960 Speaker 2: I'm callin Hetcke here in London, where we're looking ahead 6 00:00:16,000 --> 00:00:18,480 Speaker 2: to the Dubai Air Show and why airlines have a 7 00:00:18,480 --> 00:00:21,680 Speaker 2: fear of missing out when it comes to plane orders. 8 00:00:21,920 --> 00:00:24,840 Speaker 3: I'm dek Krisner. We preview the meeting of Presidents Biden 9 00:00:24,880 --> 00:00:27,480 Speaker 3: and She on the sidelines of the APEC summit in 10 00:00:27,600 --> 00:00:28,400 Speaker 3: San Francisco. 11 00:00:28,560 --> 00:00:31,360 Speaker 4: I'm Kaylee Lines in Washington, where Congress is racing to 12 00:00:31,400 --> 00:00:35,200 Speaker 4: avert a government shutdown with just days until funding runs out. 13 00:00:35,440 --> 00:00:39,239 Speaker 5: That's all straight ahead on Bloomberg Daybreak Weekend, the business 14 00:00:39,280 --> 00:00:41,600 Speaker 5: news you need to wrap up your week in just 15 00:00:41,760 --> 00:00:46,320 Speaker 5: one fifteen minute podcast, available on Apple, Spotify, The Bloomberg 16 00:00:46,360 --> 00:00:49,040 Speaker 5: Business Appen everywhere you get your podcasts. 17 00:00:51,840 --> 00:00:54,000 Speaker 1: Good day to you. I'm Tom Busby. We begin today's 18 00:00:54,000 --> 00:00:58,880 Speaker 1: program with a focus on the US economy and specifically inflation. 19 00:00:59,520 --> 00:01:02,760 Speaker 1: Investor and the Fed will be scrutinizing two big readings 20 00:01:02,760 --> 00:01:05,320 Speaker 1: on inflation. On Tuesday, we get the consumer price Index 21 00:01:05,400 --> 00:01:09,199 Speaker 1: for October on Wednesday, the Producer Price Index and for more, 22 00:01:09,680 --> 00:01:12,720 Speaker 1: we're pleased to welcome Anna Wong, chief US economist with 23 00:01:12,720 --> 00:01:18,600 Speaker 1: Bloomberg Economics, and Michael McKee, Bloomberg International Economics and Policy correspondent. Well, 24 00:01:18,680 --> 00:01:22,160 Speaker 1: let's start with Anna and that read on consumer inflation. Anna, 25 00:01:22,640 --> 00:01:24,960 Speaker 1: what are you expecting to see this week? 26 00:01:25,080 --> 00:01:28,200 Speaker 6: We are expecting the headline CPI to be very soft 27 00:01:28,319 --> 00:01:33,360 Speaker 6: because seasonally adjusted gasoline prices actually came down over five 28 00:01:33,400 --> 00:01:38,680 Speaker 6: percent in October, so a monthly reading of a monthly 29 00:01:38,760 --> 00:01:41,800 Speaker 6: increase of zero point one percent on the headline CPI. 30 00:01:42,319 --> 00:01:45,960 Speaker 6: And we are also expecting core CPI to come in, 31 00:01:46,440 --> 00:01:51,360 Speaker 6: you know, in the zero two five range, so it 32 00:01:51,400 --> 00:01:55,400 Speaker 6: could easily round to either point three or point two. 33 00:01:55,440 --> 00:02:00,400 Speaker 6: But nonetheless, it is a reading that won't sound of 34 00:02:00,520 --> 00:02:03,520 Speaker 6: alarm bells among the Fed officials. 35 00:02:03,800 --> 00:02:07,040 Speaker 1: Well, and Michael, this sounds pretty good, not just won't 36 00:02:07,120 --> 00:02:08,360 Speaker 1: set off alarm bells. 37 00:02:08,880 --> 00:02:12,919 Speaker 7: Well, we are still almost six weeks away from the 38 00:02:12,960 --> 00:02:15,680 Speaker 7: next FED meeting, and there will be another CPI report 39 00:02:15,680 --> 00:02:18,799 Speaker 7: and a PCEE inflation report before we get to that, 40 00:02:19,040 --> 00:02:22,239 Speaker 7: so they'll focus on the more recent data. But yes, 41 00:02:22,639 --> 00:02:25,760 Speaker 7: this would if we get the scenario that Anna is 42 00:02:25,800 --> 00:02:29,359 Speaker 7: talking about, and that's pretty much the consensus. It will 43 00:02:29,360 --> 00:02:31,440 Speaker 7: tell the FED that they are still on the right track, 44 00:02:31,639 --> 00:02:35,560 Speaker 7: and it will suggest to them that they are in 45 00:02:35,639 --> 00:02:40,120 Speaker 7: restrictive enough territory because they're pushing down on inflation, and 46 00:02:40,200 --> 00:02:44,679 Speaker 7: so it won't change anyone's call to a higher rate 47 00:02:44,760 --> 00:02:45,560 Speaker 7: or something like that. 48 00:02:45,720 --> 00:02:48,320 Speaker 1: Well, month over month, Anna is zero point one percent. 49 00:02:48,400 --> 00:02:50,640 Speaker 1: What is it? Year over year October to October? 50 00:02:50,880 --> 00:02:54,760 Speaker 6: The year of a year for core inflation is looking 51 00:02:54,800 --> 00:02:59,520 Speaker 6: to be below three point six percent, and that means 52 00:02:59,520 --> 00:03:02,680 Speaker 6: that at the end of this year, the fourth quarter 53 00:03:02,840 --> 00:03:07,200 Speaker 6: year over year would be likely be undershooting the fed's 54 00:03:07,680 --> 00:03:11,000 Speaker 6: own forecast of three point seven percent. So this, as 55 00:03:11,280 --> 00:03:14,120 Speaker 6: Mike McKee was saying, this is the reason why the 56 00:03:14,120 --> 00:03:17,880 Speaker 6: FED does not feel the urgency to do that extra 57 00:03:18,040 --> 00:03:21,080 Speaker 6: realize that extra twenty five basis point hike they had 58 00:03:21,120 --> 00:03:24,440 Speaker 6: in the September dot plot is just because inflation is 59 00:03:24,480 --> 00:03:26,359 Speaker 6: now on track to undershoot their. 60 00:03:26,200 --> 00:03:30,800 Speaker 1: Forecast, but their long term forecast two percent were still 61 00:03:31,000 --> 00:03:34,160 Speaker 1: a ways away from there. Is there a dot plot 62 00:03:34,320 --> 00:03:37,440 Speaker 1: for when we could reach that? Will we ever reach that? Mike? 63 00:03:38,120 --> 00:03:41,960 Speaker 7: That's the question I asked JPAU at the last FED 64 00:03:42,040 --> 00:03:46,640 Speaker 7: news conference. The FED in September said on the dot 65 00:03:46,680 --> 00:03:48,880 Speaker 7: plot that there was an extra twenty five basis points 66 00:03:49,920 --> 00:03:53,560 Speaker 7: priced in in their forecast before the end of the year. 67 00:03:54,160 --> 00:03:59,120 Speaker 7: But as Powell answered me, those forecasts decay over time 68 00:03:59,400 --> 00:04:02,600 Speaker 7: and just the data comes in market adjusts every day, 69 00:04:02,680 --> 00:04:06,120 Speaker 7: minute by minute, the FED once every three months. So 70 00:04:06,640 --> 00:04:09,680 Speaker 7: he suggested that perhaps nobody would be putting that into 71 00:04:10,000 --> 00:04:12,600 Speaker 7: not nobody, but almost nobody would be putting that into 72 00:04:12,640 --> 00:04:16,640 Speaker 7: a dot plot today. The question is do we leave 73 00:04:16,680 --> 00:04:19,320 Speaker 7: out the rate increase or do we leave out the 74 00:04:19,400 --> 00:04:22,479 Speaker 7: time frame. If you leave out the idea that it 75 00:04:22,520 --> 00:04:25,000 Speaker 7: had to be by the end of the year, that's 76 00:04:25,040 --> 00:04:28,000 Speaker 7: probably more likely, but it doesn't mean that they're done. 77 00:04:28,120 --> 00:04:30,719 Speaker 7: And if inflation should start to go back up again, 78 00:04:31,760 --> 00:04:34,600 Speaker 7: that rate increase is still on the table, and then 79 00:04:34,640 --> 00:04:38,120 Speaker 7: they could add more. So you have to look at 80 00:04:38,320 --> 00:04:41,320 Speaker 7: every meeting December and then January and going forward as 81 00:04:41,360 --> 00:04:44,640 Speaker 7: a potential rate increase until they tell us differently. 82 00:04:44,880 --> 00:04:49,320 Speaker 1: There's always that doubt always. And let's switch now to 83 00:04:49,400 --> 00:04:51,760 Speaker 1: the producer price index, because you brought up a big 84 00:04:51,760 --> 00:04:55,120 Speaker 1: factor there, and that is a decline in energy prices, 85 00:04:55,160 --> 00:04:57,760 Speaker 1: and how will that impact your forecast? 86 00:04:57,760 --> 00:04:58,080 Speaker 8: There. 87 00:04:58,720 --> 00:04:58,920 Speaker 9: Yeah. 88 00:04:59,000 --> 00:05:02,080 Speaker 6: I think the important of the PPI is what it 89 00:05:02,839 --> 00:05:06,919 Speaker 6: implies for the FEDS preferred inflation metric, which is the 90 00:05:06,960 --> 00:05:10,480 Speaker 6: PCE deflator. So the things in the PPI report that's 91 00:05:10,600 --> 00:05:14,280 Speaker 6: very important for the FEDS preferred metric is airfares and 92 00:05:14,320 --> 00:05:18,839 Speaker 6: also healthcare prices. So healthcare prices account for you know, 93 00:05:19,440 --> 00:05:23,240 Speaker 6: over ten percent of the PCE basket, and we have 94 00:05:23,360 --> 00:05:25,600 Speaker 6: seen over the last couple of years that there's still 95 00:05:25,640 --> 00:05:31,880 Speaker 6: significant labor shortages in healthcare services sector, and also that 96 00:05:31,960 --> 00:05:37,160 Speaker 6: a lot of the you know, wage increase is still 97 00:05:37,240 --> 00:05:40,120 Speaker 6: coming from the healthcare sector. So it could be that 98 00:05:40,960 --> 00:05:47,800 Speaker 6: through twenty twenty four, the remaining the lingering inflation impulse 99 00:05:47,920 --> 00:05:52,280 Speaker 6: could be coming from sectors like healthcare wages, where you know, 100 00:05:52,360 --> 00:05:54,200 Speaker 6: we still saw this year that there were a lot 101 00:05:54,240 --> 00:05:59,560 Speaker 6: of labor strikes in you know, in UAW and Hollywood 102 00:05:59,600 --> 00:06:04,680 Speaker 6: screen but you know, the healthcare workers still are the 103 00:06:04,680 --> 00:06:08,080 Speaker 6: ones who who have been burned, who have been overworking 104 00:06:08,160 --> 00:06:10,960 Speaker 6: during the pandemic, and their wage increase have not been 105 00:06:11,600 --> 00:06:14,279 Speaker 6: catching up to inflation. So I think a risk is 106 00:06:14,320 --> 00:06:16,640 Speaker 6: that next year we'll see more of the strikes coming 107 00:06:16,640 --> 00:06:20,000 Speaker 6: from the healthcare sector and eventually those would be passed 108 00:06:20,000 --> 00:06:23,799 Speaker 6: on to PC prices, so I would be paying attention 109 00:06:23,839 --> 00:06:27,200 Speaker 6: to airfares and healthcare prices in the PPI. 110 00:06:27,480 --> 00:06:30,400 Speaker 1: Well and Mike more on that. How are airfares looking. 111 00:06:30,520 --> 00:06:33,920 Speaker 1: I mean, we've seen a demand still strong, especially in 112 00:06:34,000 --> 00:06:37,520 Speaker 1: the national travel but it looks a little weakness domestically. 113 00:06:38,800 --> 00:06:43,280 Speaker 7: We are still seeing some declines in air prices overall. 114 00:06:43,680 --> 00:06:46,160 Speaker 7: The question on a month over month basis is how 115 00:06:46,160 --> 00:06:49,120 Speaker 7: they get accounted for, because, as anybody who's tried to 116 00:06:49,120 --> 00:06:52,359 Speaker 7: buy an airline ticket knows, the prices are quite volatile. 117 00:06:52,400 --> 00:06:55,840 Speaker 7: They go up and down. But this is the time 118 00:06:55,880 --> 00:06:59,839 Speaker 7: of year when prices tend to decline because everybody's gone 119 00:06:59,880 --> 00:07:02,440 Speaker 7: back school, it's fall, the weather's not great, so the 120 00:07:02,480 --> 00:07:06,400 Speaker 7: tourists kind of stop. We'll see airfares probably go up 121 00:07:06,440 --> 00:07:09,880 Speaker 7: again when we get closer. Well, we're getting pretty close 122 00:07:09,920 --> 00:07:16,160 Speaker 7: to Thanksgiving and then the Christmas New Year's period airfares 123 00:07:16,160 --> 00:07:20,000 Speaker 7: should go up again, but the government does seasonally adjust that, 124 00:07:20,080 --> 00:07:22,440 Speaker 7: so we'll have to see how it all plays out. 125 00:07:22,640 --> 00:07:26,559 Speaker 7: One of the interesting areas in all of these price 126 00:07:26,600 --> 00:07:29,480 Speaker 7: indexes is used cars, and they have just fallen off 127 00:07:29,480 --> 00:07:33,600 Speaker 7: a cliff lately, so that could be something that puts 128 00:07:33,600 --> 00:07:36,240 Speaker 7: downward pressure on these inflation measures. 129 00:07:36,440 --> 00:07:39,080 Speaker 1: Now, we talked about Thanksgiving, which is coming a lot 130 00:07:39,160 --> 00:07:41,800 Speaker 1: faster than I think anyone realizes. Christmas just a few 131 00:07:41,800 --> 00:07:44,480 Speaker 1: weeks ahead, and that leads us to retail sales, because 132 00:07:44,520 --> 00:07:47,960 Speaker 1: we get a read on retail sales for October this week, 133 00:07:48,320 --> 00:07:52,240 Speaker 1: and a lot of the biggies, Walmart, Target, Amazon all 134 00:07:52,360 --> 00:07:56,080 Speaker 1: had early Black Friday sales during the month of October, 135 00:07:56,880 --> 00:07:59,080 Speaker 1: and what are we expecting to see for retail sales? 136 00:07:59,120 --> 00:08:01,160 Speaker 1: And Mike, I'll ask you what it tells us about 137 00:08:01,160 --> 00:08:01,680 Speaker 1: the consumer? 138 00:08:01,840 --> 00:08:04,920 Speaker 6: Yeah, I think the early Black Friday cales. What it 139 00:08:04,960 --> 00:08:08,120 Speaker 6: does is that it could potentially make for a retail 140 00:08:08,160 --> 00:08:11,960 Speaker 6: reading that's stronger than what the consensus is penciling. And 141 00:08:12,040 --> 00:08:15,320 Speaker 6: so we have been saying that the consumption should be 142 00:08:15,360 --> 00:08:20,320 Speaker 6: slowing down and retail sales should be entering into negative 143 00:08:20,720 --> 00:08:24,720 Speaker 6: territory in the fall. However, if it's true that there's 144 00:08:24,800 --> 00:08:27,960 Speaker 6: a lot of early Black Friday sales and people took 145 00:08:28,000 --> 00:08:31,360 Speaker 6: advantage of that those sales, it could mean that they 146 00:08:31,400 --> 00:08:35,240 Speaker 6: won't be they would be stronger seasonally adjusted sales. But 147 00:08:35,280 --> 00:08:38,800 Speaker 6: that doesn't mean that that's permanent, because what that means 148 00:08:38,840 --> 00:08:41,360 Speaker 6: is that it will just pull forward to Christmas spending, 149 00:08:41,400 --> 00:08:44,119 Speaker 6: so that will be weaker November and December. 150 00:08:44,400 --> 00:08:47,439 Speaker 1: Do you think so much? Do you think it seems 151 00:08:47,480 --> 00:08:49,840 Speaker 1: like people just spend, spend, spend, but you know, maybe 152 00:08:49,880 --> 00:08:50,680 Speaker 1: they are pulling back. 153 00:08:50,840 --> 00:08:55,320 Speaker 7: Well, the question is when they spend and how it 154 00:08:55,400 --> 00:08:59,559 Speaker 7: will compare. Obviously to what we saw in the last 155 00:08:59,600 --> 00:09:04,040 Speaker 7: couple of year, everything's been very distorted by the pandemic. 156 00:09:04,920 --> 00:09:08,800 Speaker 7: It's been hard to know exactly what's happening with consumer 157 00:09:08,880 --> 00:09:12,600 Speaker 7: spending because of the pandemic bonuses you got from the 158 00:09:12,640 --> 00:09:15,080 Speaker 7: government and the fact that when everybody went back to 159 00:09:15,120 --> 00:09:19,640 Speaker 7: work they got raises, so it isn't quite clear what's 160 00:09:19,679 --> 00:09:22,720 Speaker 7: going to happen, and all of that sort of distorted 161 00:09:22,720 --> 00:09:26,280 Speaker 7: the timing of spending as well. But now the question 162 00:09:26,440 --> 00:09:31,560 Speaker 7: is do we see a rebound because people still have 163 00:09:31,800 --> 00:09:37,040 Speaker 7: money in the bank and they still they're making more money, 164 00:09:37,080 --> 00:09:39,760 Speaker 7: they spend their paychecks and they're feeling good enough to 165 00:09:39,800 --> 00:09:43,680 Speaker 7: go out and buy stuff, or do they pull back somewhat. 166 00:09:43,720 --> 00:09:48,840 Speaker 7: Now last year we saw a rise in retail sales 167 00:09:49,000 --> 00:09:54,280 Speaker 7: for October that then was eliminated in November and we 168 00:09:54,320 --> 00:09:57,600 Speaker 7: went way way down November and December wear week do 169 00:09:57,720 --> 00:10:02,360 Speaker 7: we see that same pattern again, or do we get 170 00:10:02,400 --> 00:10:04,520 Speaker 7: back to what we were seeing before the pandemic. And 171 00:10:04,760 --> 00:10:07,920 Speaker 7: the one thing I wonder about is going into the pandemic, 172 00:10:07,960 --> 00:10:10,600 Speaker 7: the psychology for a lot of buyers was wait till 173 00:10:10,640 --> 00:10:13,160 Speaker 7: the last minute and prices will go down. While in 174 00:10:13,200 --> 00:10:16,719 Speaker 7: an inflationary environment like this, maybe that's what people are 175 00:10:16,760 --> 00:10:19,520 Speaker 7: going to start doing again. And then we wait and 176 00:10:19,559 --> 00:10:22,040 Speaker 7: see what happens in November December. 177 00:10:22,080 --> 00:10:25,439 Speaker 1: All right, well, our thanks to Annawong, Chief US Economists 178 00:10:25,440 --> 00:10:30,280 Speaker 1: with Bloomberg Economics, Michael McKee, Bloomberg International Economics and Policy correspondent, 179 00:10:30,600 --> 00:10:32,760 Speaker 1: Thank you both for being here and coming up on 180 00:10:32,800 --> 00:10:35,640 Speaker 1: Bloomberg day Break weekend. What to look for at this 181 00:10:35,720 --> 00:10:39,880 Speaker 1: week's Dubai air Show. I'm Tom Busby and this is Bloomberg. 182 00:10:50,000 --> 00:10:52,360 Speaker 1: This is Bloomberg day Break Weekend, our global look ahead 183 00:10:52,360 --> 00:10:54,560 Speaker 1: of the top stories for investors in the coming week. 184 00:10:54,720 --> 00:10:58,000 Speaker 1: I'm Tom Busby in New York. Up later in our program, 185 00:10:58,040 --> 00:11:00,600 Speaker 1: we preview one of the year's most crucial slums and 186 00:11:00,720 --> 00:11:04,400 Speaker 1: a meeting of US and Chinese leaders. But first, it's 187 00:11:04,400 --> 00:11:06,520 Speaker 1: shaping up to be among the hottest years ever for 188 00:11:06,679 --> 00:11:10,520 Speaker 1: large aircraft deals and the buying spree expected to continue 189 00:11:10,520 --> 00:11:12,960 Speaker 1: at the Dubai Air Show in the days ahead. This 190 00:11:13,080 --> 00:11:15,640 Speaker 1: comes has production at both Airbus and Boeing or having 191 00:11:15,679 --> 00:11:18,800 Speaker 1: trouble meeting demand because of a shortage of parts, and 192 00:11:18,920 --> 00:11:22,960 Speaker 1: that's intensifying the race among airlines for the last remaining 193 00:11:22,960 --> 00:11:26,040 Speaker 1: production slots available this decade and for more we head 194 00:11:26,080 --> 00:11:29,560 Speaker 1: to London and Bloomberg Daybreak Europe anchor Caroline. 195 00:11:29,000 --> 00:11:32,560 Speaker 2: Hepgar Tom the Dubai Air Show is an important barometer 196 00:11:32,760 --> 00:11:35,360 Speaker 2: for the health of the aviation industry, measured by the 197 00:11:35,440 --> 00:11:38,960 Speaker 2: appetite for deals. The industry's last big gathering was in 198 00:11:39,000 --> 00:11:42,600 Speaker 2: Paris in June. It resulted in about one three hundred 199 00:11:42,640 --> 00:11:46,480 Speaker 2: aircraft sales, and the organizer of the Dubai Air Show 200 00:11:47,280 --> 00:11:50,560 Speaker 2: they are hoping to see something similar. The event caters 201 00:11:50,640 --> 00:11:53,560 Speaker 2: to some of the world's largest wide body operators. The 202 00:11:53,640 --> 00:11:56,800 Speaker 2: local champion Emirates has already teased that it wants to 203 00:11:56,960 --> 00:11:59,600 Speaker 2: order more. Anna Edwards and I have been speaking to 204 00:11:59,640 --> 00:12:03,320 Speaker 2: US aviation reporters, Saidel Philip about what to expect from 205 00:12:03,320 --> 00:12:07,000 Speaker 2: this major event, but first to get a flavor of 206 00:12:07,040 --> 00:12:11,640 Speaker 2: the industry. Air Boss CEO Gillumfori says that the company 207 00:12:11,679 --> 00:12:15,840 Speaker 2: expects higher output in twenty twenty four thanks to surging demand. 208 00:12:16,280 --> 00:12:18,160 Speaker 2: He's been speaking to bring back to the main Bostic 209 00:12:18,240 --> 00:12:22,680 Speaker 2: and Guy Johnson after Airbus's third quarter results. 210 00:12:22,200 --> 00:12:27,120 Speaker 10: The single aisle business, so the short and mid range 211 00:12:27,480 --> 00:12:32,160 Speaker 10: activity will continue to dominate a number of planes. We've 212 00:12:32,200 --> 00:12:36,080 Speaker 10: seen the activity on the single isle recovering much faster 213 00:12:36,679 --> 00:12:40,800 Speaker 10: after COVID than it was for white bodies for long range, 214 00:12:41,840 --> 00:12:45,800 Speaker 10: but we think long range will follow up, will also 215 00:12:46,559 --> 00:12:50,719 Speaker 10: recover first and probably even stronger moving forward. And when 216 00:12:50,720 --> 00:12:54,440 Speaker 10: we look at the long term perspectives for the market, 217 00:12:54,840 --> 00:12:59,920 Speaker 10: we expect both single lile and white bodies to significantly grow, 218 00:13:00,679 --> 00:13:03,959 Speaker 10: to the extent that we believe there will be around 219 00:13:04,040 --> 00:13:07,520 Speaker 10: forty thousand plans to be delivered in the next twenty years. 220 00:13:08,360 --> 00:13:10,280 Speaker 8: You're ramping up, as you just confirmed to me the 221 00:13:10,720 --> 00:13:13,640 Speaker 8: three fifty program. You're going to go to ten a 222 00:13:13,720 --> 00:13:17,520 Speaker 8: month twenty twenty six. That's not a big push higher. 223 00:13:18,200 --> 00:13:20,559 Speaker 8: You're basically going from eight to nine to ten by 224 00:13:20,559 --> 00:13:24,320 Speaker 8: twenty twenty six. Picking up on Romain's point is that 225 00:13:24,880 --> 00:13:28,280 Speaker 8: you talk, you signaling caution that you actually think the 226 00:13:28,600 --> 00:13:31,400 Speaker 8: big push we're saying for long haul demand at the 227 00:13:31,440 --> 00:13:35,320 Speaker 8: moment is not sustainable. Could you take that program higher 228 00:13:35,360 --> 00:13:38,600 Speaker 8: by that point if demand remains as robust as it 229 00:13:38,679 --> 00:13:39,079 Speaker 8: is now. 230 00:13:39,400 --> 00:13:42,119 Speaker 10: Actually, we see the demand growing, We see a recovery 231 00:13:42,160 --> 00:13:45,360 Speaker 10: in the demand, and we will at a low point 232 00:13:45,559 --> 00:13:49,720 Speaker 10: of rate four on the eighty fifty during COVID. So 233 00:13:49,960 --> 00:13:53,920 Speaker 10: we went from four and we keep growing and we 234 00:13:53,920 --> 00:13:58,880 Speaker 10: are now targeting ten. It's slightly or it's very comparable 235 00:13:58,880 --> 00:14:01,840 Speaker 10: to what we had recover and we had said that 236 00:14:01,880 --> 00:14:06,320 Speaker 10: the traffic itself would be recovering back to pre COVID 237 00:14:06,400 --> 00:14:09,719 Speaker 10: levels between twenty three to twenty five, twenty twenty three 238 00:14:09,760 --> 00:14:14,280 Speaker 10: to twenty twenty five. So I think we are consistent 239 00:14:15,200 --> 00:14:19,760 Speaker 10: with the evaluation the assessment we made of the recovery 240 00:14:19,960 --> 00:14:22,440 Speaker 10: of the market going just out of COVID. 241 00:14:22,760 --> 00:14:24,120 Speaker 9: Do we have the potential for more? 242 00:14:24,240 --> 00:14:26,880 Speaker 10: Yes, the e three fifty has the potential to go 243 00:14:27,360 --> 00:14:30,840 Speaker 10: up to rate thirteen based on the existing production system, 244 00:14:31,280 --> 00:14:34,200 Speaker 10: and we will continue to monitor the demand. The recovery 245 00:14:34,240 --> 00:14:37,680 Speaker 10: of the demand with a big replacement cycle for white 246 00:14:37,720 --> 00:14:43,200 Speaker 10: bodies that is just starting, and also some expectations for growth. 247 00:14:43,440 --> 00:14:46,040 Speaker 10: So the market has the potential to go higher and 248 00:14:46,120 --> 00:14:49,120 Speaker 10: we have the potential to continue to serve that market. 249 00:14:49,600 --> 00:14:52,840 Speaker 10: By further ramping up. But I'd like to just confirm 250 00:14:53,080 --> 00:14:55,600 Speaker 10: that rate ten on the three fifty is already a 251 00:14:55,680 --> 00:14:56,440 Speaker 10: very big number. 252 00:14:56,680 --> 00:15:00,520 Speaker 2: So that was the Airbus c high hypes. Then airlines 253 00:15:00,560 --> 00:15:05,320 Speaker 2: will continue expanding, but there are plenty of headwinds for 254 00:15:05,360 --> 00:15:09,240 Speaker 2: the industry, including obviously the disruption in the Middle East, 255 00:15:09,280 --> 00:15:13,000 Speaker 2: the war in Ukraine, high all prices and why do 256 00:15:13,160 --> 00:15:17,120 Speaker 2: economic uncertainty, so I asked our own said our Philip 257 00:15:17,400 --> 00:15:20,200 Speaker 2: ahead of the Dubai Air Show, what he thinks the 258 00:15:20,360 --> 00:15:23,200 Speaker 2: mood in the industry is going into the event. 259 00:15:24,000 --> 00:15:26,680 Speaker 9: In terms of the mood for the industry at the moment, 260 00:15:27,080 --> 00:15:30,400 Speaker 9: the industry is sort of struggling to get any aircraft. 261 00:15:30,720 --> 00:15:33,600 Speaker 9: So everyone's sort of trying to order as many aircraft 262 00:15:33,680 --> 00:15:37,320 Speaker 9: as they can as they look to tap into growth 263 00:15:37,400 --> 00:15:41,240 Speaker 9: and demand over the next coming years. Remember that during 264 00:15:41,280 --> 00:15:44,680 Speaker 9: the pandemic everything really slowed down, and so now airlines 265 00:15:44,720 --> 00:15:46,720 Speaker 9: are sort of ramped up again and they're trying to 266 00:15:46,800 --> 00:15:50,600 Speaker 9: get as much demand indicated to as much demand as 267 00:15:50,600 --> 00:15:53,360 Speaker 9: they can. And that involves by new aircraft. 268 00:15:54,960 --> 00:15:57,720 Speaker 11: Yes, it does involved by new aircraft. Hello, good to 269 00:15:57,720 --> 00:15:59,320 Speaker 11: speak to you. So what are the orders that we're 270 00:15:59,320 --> 00:16:00,880 Speaker 11: expecting to get in Dubai. 271 00:16:02,120 --> 00:16:05,880 Speaker 9: So yeah, we're expecting to We're expecting Emmerits, which is 272 00:16:05,880 --> 00:16:09,800 Speaker 9: the local carrier of the of the UAE of Dubai, 273 00:16:10,000 --> 00:16:13,680 Speaker 9: is basically expected to make a massive splash. And Tim 274 00:16:13,720 --> 00:16:16,280 Speaker 9: Clark has been saying that he's in the market for 275 00:16:16,400 --> 00:16:19,560 Speaker 9: more white body jets. In June, he talked about how 276 00:16:19,600 --> 00:16:21,360 Speaker 9: he might order as many as one hundred to one 277 00:16:21,400 --> 00:16:24,200 Speaker 9: hundred and fifty Acraft and he said he was looking 278 00:16:24,240 --> 00:16:27,680 Speaker 9: at both Boeing and Airbus's largest models. So it's really 279 00:16:27,680 --> 00:16:30,520 Speaker 9: a question of seeing how much Emeritz actually does sort 280 00:16:30,560 --> 00:16:33,480 Speaker 9: of manage to succeed in terms of trying to get 281 00:16:33,520 --> 00:16:35,560 Speaker 9: those orders across the line. We're also going to see 282 00:16:35,560 --> 00:16:39,040 Speaker 9: some action possibly from Ria there. They're a brand new 283 00:16:39,080 --> 00:16:42,480 Speaker 9: airline that Saudi Arabia is building from scratch and that's 284 00:16:42,600 --> 00:16:47,000 Speaker 9: run by the former Etihad CEO Tony Douglas, and they've 285 00:16:47,000 --> 00:16:49,560 Speaker 9: said that they're putting the final touches on what's going 286 00:16:49,600 --> 00:16:54,080 Speaker 9: to be a sizeable order involving narrowbody planes. And we 287 00:16:54,200 --> 00:16:58,240 Speaker 9: understand that Ria there is likely to order the Boeing 288 00:16:58,320 --> 00:17:02,440 Speaker 9: seven thry seven Max jets and that's still not finalized, 289 00:17:02,560 --> 00:17:05,280 Speaker 9: but and talks ongoing but we should be able to 290 00:17:05,320 --> 00:17:08,280 Speaker 9: see how that plays out in the next couple of days. 291 00:17:09,040 --> 00:17:13,480 Speaker 2: Okay, but with so many orders, what about the squeeze consumer? 292 00:17:13,600 --> 00:17:16,120 Speaker 2: Are they pulling back on travel? What an airline's saying 293 00:17:16,160 --> 00:17:17,440 Speaker 2: about demand? 294 00:17:18,080 --> 00:17:19,960 Speaker 9: It seems to be a mixed picture at the moment. 295 00:17:20,080 --> 00:17:23,840 Speaker 9: Some airlines are talking about how demand is slowing in 296 00:17:23,920 --> 00:17:27,320 Speaker 9: terms of growth, So demand hasn't actually fallen down, but 297 00:17:27,400 --> 00:17:30,760 Speaker 9: the growth percentage is slowing, especially in the US. We've 298 00:17:30,800 --> 00:17:35,000 Speaker 9: seen some carriers talking about slowing demand growth. And also, 299 00:17:35,080 --> 00:17:40,480 Speaker 9: I mean, there's been some experienced industry watchers, including Steven 300 00:17:40,560 --> 00:17:44,920 Speaker 9: Udvarhazi who's the chairman of Allies, and he's been talking 301 00:17:44,920 --> 00:17:49,280 Speaker 9: about how there's a concern that airlines are over ordering aircraft, 302 00:17:49,760 --> 00:17:53,560 Speaker 9: especially because of the fact that they've gone from virtually 303 00:17:53,640 --> 00:17:56,680 Speaker 9: no traffic to one hundred percent and now everyone's sort 304 00:17:56,680 --> 00:17:58,320 Speaker 9: of binging on aircraft. 305 00:17:59,400 --> 00:18:03,240 Speaker 11: That was feature of the airline industry decades ago, wasn't 306 00:18:03,240 --> 00:18:06,080 Speaker 11: it said they're sort of overordering in good times and 307 00:18:06,080 --> 00:18:07,879 Speaker 11: then paying the price sending all the planes to the 308 00:18:07,920 --> 00:18:09,840 Speaker 11: desert in the bad times. How are the big plane 309 00:18:09,880 --> 00:18:12,479 Speaker 11: makers then coping with this surge in demand? 310 00:18:12,560 --> 00:18:13,640 Speaker 2: Are there are there. 311 00:18:13,840 --> 00:18:16,439 Speaker 11: Still supply issues or are they able to deliver. 312 00:18:18,119 --> 00:18:19,800 Speaker 9: There are still supply issues that have been We heard 313 00:18:19,800 --> 00:18:22,200 Speaker 9: from Eirbas and Eirbus was talking about how the supply 314 00:18:22,280 --> 00:18:25,399 Speaker 9: chain continues to be constrained and everyone's been trying to 315 00:18:25,480 --> 00:18:28,680 Speaker 9: ramp up production ever since the lows of COVID, and 316 00:18:28,960 --> 00:18:31,399 Speaker 9: they haven't yet been able to. That's partly because they 317 00:18:31,480 --> 00:18:35,520 Speaker 9: sort of cut back, especially smaller suppliers in the supply chain, 318 00:18:35,600 --> 00:18:38,600 Speaker 9: cut back on staffing, they cut back on tooling, they 319 00:18:38,600 --> 00:18:41,640 Speaker 9: cut back on facilities, and so bringing all of that 320 00:18:41,840 --> 00:18:45,600 Speaker 9: back has been much harder than they anticipated. We've seen 321 00:18:45,720 --> 00:18:48,280 Speaker 9: EBS talking about how they want to go to seventy 322 00:18:48,280 --> 00:18:50,879 Speaker 9: five aircraft a month by twenty twenty six on the 323 00:18:51,000 --> 00:18:54,000 Speaker 9: eighty twenty one wide narrow bodies, and they've talked about 324 00:18:54,040 --> 00:18:56,240 Speaker 9: how they want to go to ten a month on 325 00:18:56,400 --> 00:18:59,679 Speaker 9: the eighty fifty wide bodies, and so but at the 326 00:18:59,720 --> 00:19:02,000 Speaker 9: moment they're still trying to ramp up. I mean, Boeing's 327 00:19:02,040 --> 00:19:05,520 Speaker 9: had its own issues with suppliers. It's currently trying to 328 00:19:05,520 --> 00:19:09,080 Speaker 9: rework issues with its seven thry seven Max jets, which 329 00:19:10,040 --> 00:19:13,200 Speaker 9: because of an issue with a Spirit Aero system in 330 00:19:13,280 --> 00:19:16,679 Speaker 9: terms of production, and so everyone sort of trying to 331 00:19:16,680 --> 00:19:20,760 Speaker 9: bring back production, but so far it is pretty slow going. 332 00:19:21,240 --> 00:19:24,320 Speaker 2: So that was our senior aviation reporter, said our Phillip 333 00:19:24,320 --> 00:19:27,359 Speaker 2: speaking to me and to Bloomberg's Anna Edwards. I'm Caroline 334 00:19:27,359 --> 00:19:29,560 Speaker 2: Hepkee here in London. You can catch us every weekday 335 00:19:29,560 --> 00:19:31,760 Speaker 2: morning for Boomberg day Break you at beginning at six 336 00:19:31,800 --> 00:19:34,520 Speaker 2: am in London. That's one am on Wall Street. 337 00:19:34,600 --> 00:19:37,600 Speaker 1: Tom, Thank you, Caroline, And coming up on Bloomberg day 338 00:19:37,600 --> 00:19:41,240 Speaker 1: Break weekend, we preview a big scheduled meeting with President 339 00:19:41,280 --> 00:19:45,239 Speaker 1: Biden and Chinese President Chi Jinping. I'm Tom Busby, and 340 00:19:45,359 --> 00:19:59,119 Speaker 1: this is Bloomberg. I'm Tom Busby in New York with 341 00:19:59,119 --> 00:20:01,399 Speaker 1: your global look ahead the top stories for investors in 342 00:20:01,440 --> 00:20:04,600 Speaker 1: the coming week. On the sidelines of this week's Asia 343 00:20:04,640 --> 00:20:08,639 Speaker 1: Pacific Economic Summit in San Francisco, a crucial meeting between 344 00:20:08,640 --> 00:20:11,199 Speaker 1: the leaders of the US and China taking place, and 345 00:20:11,200 --> 00:20:14,280 Speaker 1: for more, let's check in with Bloomberg Daybreak Asia anchor 346 00:20:14,480 --> 00:20:15,280 Speaker 1: Doug Prisner. 347 00:20:15,400 --> 00:20:18,359 Speaker 3: Tom. The last meeting of Presidents Biden and She was 348 00:20:18,440 --> 00:20:21,040 Speaker 3: one year ago at the G twenty summit in Bali. 349 00:20:21,119 --> 00:20:24,240 Speaker 3: Back then, the goal was to improve relations, but those 350 00:20:24,280 --> 00:20:27,520 Speaker 3: talks were derailed when a suspected Chinese spy balloon flew 351 00:20:27,560 --> 00:20:31,119 Speaker 3: over the US. Well, now both sides have reason to reset. 352 00:20:31,600 --> 00:20:34,480 Speaker 3: Biden is seeking stability as he gears up for a 353 00:20:34,560 --> 00:20:37,520 Speaker 3: presidential election next year, and she wants to attract more 354 00:20:37,600 --> 00:20:42,080 Speaker 3: foreign investment to help reinvigorate china slowing economy. For some 355 00:20:42,200 --> 00:20:45,520 Speaker 3: help previewing this meeting, I'm joined by Bloomberg's Chill diesis 356 00:20:45,640 --> 00:20:49,320 Speaker 3: our China Economy and Government editor. She joins us from 357 00:20:49,359 --> 00:20:52,240 Speaker 3: our studios in Hong Kong. What do we know about 358 00:20:52,240 --> 00:20:54,919 Speaker 3: the preparations for this face to face? What type of 359 00:20:55,000 --> 00:20:56,240 Speaker 3: groundwork has been laid? 360 00:20:57,200 --> 00:20:59,320 Speaker 12: Hi, Doug. Yeah, well, I think that at this point 361 00:20:59,320 --> 00:21:01,919 Speaker 12: it really feels like we've been preparing for this meeting 362 00:21:02,040 --> 00:21:04,960 Speaker 12: since she and Biden last met in Bali a year ago. 363 00:21:05,119 --> 00:21:09,600 Speaker 12: I mean, as you mentioned, the Chinese spy balloon incident 364 00:21:09,920 --> 00:21:12,720 Speaker 12: earlier this year certainly seemed to derail some of the 365 00:21:12,720 --> 00:21:15,080 Speaker 12: preparation for this. But what we've seen the US in 366 00:21:15,160 --> 00:21:19,679 Speaker 12: particular do over the past several months is send various 367 00:21:19,760 --> 00:21:23,360 Speaker 12: high level delegations to China trying to lay the groundwork 368 00:21:23,400 --> 00:21:26,800 Speaker 12: for this meeting. We saw Secretary of State Anthony Blincoln 369 00:21:27,040 --> 00:21:29,560 Speaker 12: go to China. We saw the US Secretary of Commerce, 370 00:21:29,880 --> 00:21:31,920 Speaker 12: Juina Ramando go to China. We saw Janet yell And 371 00:21:31,960 --> 00:21:34,800 Speaker 12: go to China, the US Treasurer Secretary, and all of 372 00:21:34,840 --> 00:21:37,600 Speaker 12: this prep to try to lay the groundwork for this 373 00:21:37,720 --> 00:21:40,520 Speaker 12: eventual She Biden meeting. So there's been a lot of 374 00:21:40,560 --> 00:21:43,960 Speaker 12: these sort of high level talks between people who either 375 00:21:44,000 --> 00:21:47,080 Speaker 12: aren't Sheer Biden or in some cases She meeting with 376 00:21:47,440 --> 00:21:50,840 Speaker 12: some of the top level Biden officials to kind of 377 00:21:51,720 --> 00:21:54,760 Speaker 12: pave the way for what I think both sides eventually 378 00:21:54,840 --> 00:21:57,040 Speaker 12: hope is a very smooth meeting between their top leaders. 379 00:21:57,160 --> 00:21:59,720 Speaker 3: You and I were talking a short while ago about 380 00:22:00,040 --> 00:22:04,360 Speaker 3: He's written by Bloomberg opinion columnist Mention Pay and he 381 00:22:04,480 --> 00:22:07,239 Speaker 3: was basically taking the view that this meeting holds very 382 00:22:07,280 --> 00:22:09,560 Speaker 3: little in the way of upside for Biden. The China 383 00:22:09,640 --> 00:22:13,280 Speaker 3: issue on the US side has become so toxic. Minchin 384 00:22:13,400 --> 00:22:16,760 Speaker 3: was saying, any diplomatic outreach can be cast as appeasement 385 00:22:16,800 --> 00:22:18,720 Speaker 3: and by extension, I'm thinking weakness. 386 00:22:19,280 --> 00:22:19,520 Speaker 5: Now. 387 00:22:19,640 --> 00:22:23,439 Speaker 3: She, on the other hand, has several reasons to maybe 388 00:22:23,480 --> 00:22:26,680 Speaker 3: shift this downward spiral in relations with the US. Most 389 00:22:26,720 --> 00:22:31,399 Speaker 3: obviously is this problem with investor confidence and the notion 390 00:22:31,480 --> 00:22:35,440 Speaker 3: that China is uninvestable. Does Minchin have an accurate read 391 00:22:35,480 --> 00:22:36,720 Speaker 3: on this dynamic? Do you think? 392 00:22:37,440 --> 00:22:39,600 Speaker 12: I do think he has a good point. I mean, look, 393 00:22:39,800 --> 00:22:41,880 Speaker 12: I think that on the Biden side of things, it's 394 00:22:41,880 --> 00:22:45,680 Speaker 12: definitely about politics here. I mean, Biden has a year 395 00:22:45,720 --> 00:22:49,240 Speaker 12: to gear up for the next presidential election. Certainly Democrats 396 00:22:49,240 --> 00:22:52,639 Speaker 12: were winning in some key races leading up to that. 397 00:22:53,160 --> 00:22:55,800 Speaker 12: They just had a slew of victories and various US 398 00:22:55,840 --> 00:22:59,800 Speaker 12: states that seemed very promising for the Democratic Party. But 399 00:22:59,840 --> 00:23:03,520 Speaker 12: I I think that as Biden gears up to challenge 400 00:23:03,800 --> 00:23:06,760 Speaker 12: whoever his kind of part is going to be in 401 00:23:06,760 --> 00:23:09,240 Speaker 12: the next presidential election, it looks most likely to be Trump. 402 00:23:09,600 --> 00:23:12,280 Speaker 12: He's really got to project this idea that he's going 403 00:23:12,320 --> 00:23:14,119 Speaker 12: to be very tough on China, and I think that 404 00:23:14,240 --> 00:23:17,359 Speaker 12: the risk with any kind of meeting with she is 405 00:23:17,400 --> 00:23:20,719 Speaker 12: that he comes across as a concessionary, depending on what 406 00:23:20,800 --> 00:23:24,439 Speaker 12: exactly he says. That though, I think really pales in 407 00:23:24,480 --> 00:23:27,679 Speaker 12: comparison to some of the big problems that are facing 408 00:23:27,720 --> 00:23:30,960 Speaker 12: presidents Chijin Ping and China. As you mentioned, I think 409 00:23:31,000 --> 00:23:34,480 Speaker 12: foreign investments in particular is a pretty significant issue for 410 00:23:34,560 --> 00:23:39,280 Speaker 12: China right now. The most recent information on foreign direct 411 00:23:39,320 --> 00:23:42,119 Speaker 12: investment into China. This came from the country's balance of 412 00:23:42,160 --> 00:23:46,000 Speaker 12: payments data that was just released recently showed falling into 413 00:23:46,000 --> 00:23:48,280 Speaker 12: the negative for the first time since records were kept 414 00:23:48,280 --> 00:23:51,560 Speaker 12: since nineteen ninety eight. And we've seen all year long 415 00:23:51,720 --> 00:23:55,480 Speaker 12: this big push by China, by Xi Jinping to try 416 00:23:55,520 --> 00:23:58,600 Speaker 12: to lure foreign investment back. It's just really not taken hold. 417 00:23:58,720 --> 00:24:01,880 Speaker 12: That's obviously due to a number of reasons, whether it's 418 00:24:01,880 --> 00:24:04,680 Speaker 12: holdover from COVID zero and all of the different restrictions 419 00:24:04,680 --> 00:24:07,160 Speaker 12: that were placed on China over the last several years, 420 00:24:07,160 --> 00:24:11,440 Speaker 12: whether it's regulatory issues, whether it's lack of clarity over 421 00:24:11,480 --> 00:24:14,320 Speaker 12: how exactly the government is handling a lot of those 422 00:24:14,359 --> 00:24:17,159 Speaker 12: regulatatory issues. That's all really led to this level of 423 00:24:17,440 --> 00:24:21,000 Speaker 12: lack of confidence and mistrust in China from foreign investors. 424 00:24:21,040 --> 00:24:22,760 Speaker 12: And I think that she is really on a mission 425 00:24:22,760 --> 00:24:23,800 Speaker 12: here to try to bring that back. 426 00:24:23,880 --> 00:24:26,159 Speaker 3: Yeah, maybe we can also talk about the role that 427 00:24:26,240 --> 00:24:30,159 Speaker 3: geopolitics plays in that level of unease. Taiwan, we know, 428 00:24:30,240 --> 00:24:32,720 Speaker 3: gets a lot of attention when it comes to flashpoints, 429 00:24:33,359 --> 00:24:36,679 Speaker 3: but increasingly the Philippines has become a little bit of 430 00:24:36,720 --> 00:24:40,080 Speaker 3: a concern. The US recently renewing a warning that it 431 00:24:40,080 --> 00:24:43,000 Speaker 3: would defend the Philippines in case of an armed attack 432 00:24:43,480 --> 00:24:46,200 Speaker 3: under a nineteen fifty one treaty that was after some 433 00:24:46,560 --> 00:24:50,840 Speaker 3: Chinese ships blocked and collided with two Filipino vessels. Do 434 00:24:50,920 --> 00:24:53,040 Speaker 3: you think this is a hot topic right now for 435 00:24:53,080 --> 00:24:54,920 Speaker 3: the relationship between Biden and. 436 00:24:54,880 --> 00:24:56,080 Speaker 9: She, Yes. 437 00:24:56,160 --> 00:24:58,640 Speaker 12: I mean, I think that anything involving the South China 438 00:24:58,680 --> 00:25:02,040 Speaker 12: Sea is certainly going to some particular issues. This issue 439 00:25:02,040 --> 00:25:04,640 Speaker 12: with the Philippines has been kind of unfolding for many 440 00:25:04,640 --> 00:25:08,000 Speaker 12: many months now, leading to obviously some of these military 441 00:25:08,040 --> 00:25:11,960 Speaker 12: confrontations there. I think that Biden's willingness to kind of 442 00:25:12,000 --> 00:25:13,919 Speaker 12: come out in the US's willingness to kind of come 443 00:25:14,000 --> 00:25:17,080 Speaker 12: up publicly and you know issue that support for the 444 00:25:17,080 --> 00:25:22,040 Speaker 12: Philippines does obviously signify that any kind of relationships military, 445 00:25:22,040 --> 00:25:25,960 Speaker 12: geopolitical relationships that the US has in the South China 446 00:25:26,000 --> 00:25:28,760 Speaker 12: see with any of its allies there or any other 447 00:25:28,840 --> 00:25:32,440 Speaker 12: nations there, are really particularly you know, important, strategically important 448 00:25:32,440 --> 00:25:35,760 Speaker 12: for the US to you know, kind of protect you know, 449 00:25:36,480 --> 00:25:38,640 Speaker 12: I don't know one hundred percent whether this is going 450 00:25:38,680 --> 00:25:41,040 Speaker 12: to come up at the She Biden meeting, but certainly 451 00:25:41,040 --> 00:25:44,320 Speaker 12: you would think that it's probably pretty top of mind 452 00:25:44,359 --> 00:25:48,600 Speaker 12: for Biden to you know, kind of you know, bring 453 00:25:48,680 --> 00:25:51,880 Speaker 12: up the fact that this is a geopolitical flashpoints, as 454 00:25:51,960 --> 00:25:53,800 Speaker 12: is Taiwan, as as many other issues here. 455 00:25:54,000 --> 00:25:57,040 Speaker 3: Yeah, and I think that geopolitics extends to the Mid East. 456 00:25:57,040 --> 00:25:58,600 Speaker 3: A but we were told there was a story on 457 00:25:58,600 --> 00:26:01,840 Speaker 3: the Bloomberg terminal highlighting the fact that President Biden had 458 00:26:01,880 --> 00:26:06,280 Speaker 3: been briefed recently on what his invisors see as a 459 00:26:06,359 --> 00:26:09,520 Speaker 3: Chinese plan to build a military facility in Oman. I 460 00:26:09,520 --> 00:26:12,920 Speaker 3: mean that seems to probably be very concerning, I would 461 00:26:12,960 --> 00:26:14,560 Speaker 3: imagine to the Biden administration. 462 00:26:15,440 --> 00:26:18,760 Speaker 12: Yes, I think that's particularly concerning in light of how 463 00:26:18,880 --> 00:26:22,199 Speaker 12: China has really stepped up its diplomatic involvement in that region. 464 00:26:22,280 --> 00:26:24,680 Speaker 12: I mean that, you know, sort of predates the Hamas 465 00:26:24,720 --> 00:26:28,840 Speaker 12: attack in Israel we've saw earlier this year. Obviously, she 466 00:26:29,000 --> 00:26:31,679 Speaker 12: has really kind of played this role, or tried to 467 00:26:31,680 --> 00:26:34,240 Speaker 12: play this role as a peacemaker in the region. He 468 00:26:34,240 --> 00:26:38,000 Speaker 12: helped broker a tentative to tent between Iran and Saudi Arabia. 469 00:26:38,480 --> 00:26:40,480 Speaker 12: He's also held joint naval drills not just with the 470 00:26:40,560 --> 00:26:43,280 Speaker 12: Roan but with Russia in the Gulf of Oman just 471 00:26:43,320 --> 00:26:46,080 Speaker 12: around that time. So I think that the Biden administration 472 00:26:46,200 --> 00:26:49,680 Speaker 12: is likely keen to, you know, look to see what 473 00:26:49,800 --> 00:26:53,040 Speaker 12: China is doing in the Middle East as the conflict 474 00:26:53,680 --> 00:26:57,680 Speaker 12: between Israel and Hamas continues to unfold. Obviously, whatever role 475 00:26:58,040 --> 00:27:01,840 Speaker 12: China plays with you know, Broker, any other relationships in 476 00:27:01,840 --> 00:27:04,200 Speaker 12: that region, particularly with Iran, I think is going to 477 00:27:04,240 --> 00:27:05,960 Speaker 12: be top of mind for the Biden administration. 478 00:27:06,119 --> 00:27:08,800 Speaker 3: Well, you mentioned Russia there, and I'm curious about the 479 00:27:08,840 --> 00:27:13,280 Speaker 3: recent comments from Vladimir Putin telling a senior Chinese military 480 00:27:13,280 --> 00:27:17,679 Speaker 3: official that Moscow and Beijing should expand their cooperation on 481 00:27:17,760 --> 00:27:22,359 Speaker 3: military satellites and other prospective defense technologies. And I'm wondering 482 00:27:22,880 --> 00:27:27,199 Speaker 3: how China's relationship with Russia complicates anything that she is 483 00:27:27,200 --> 00:27:29,600 Speaker 3: attempting to get out of the US. 484 00:27:30,440 --> 00:27:32,840 Speaker 12: Well, I think what we've seen dog over the past 485 00:27:32,840 --> 00:27:35,919 Speaker 12: couple of years in particular, is certainly she has not 486 00:27:36,080 --> 00:27:41,640 Speaker 12: been afraid to tout this diplomatic alliance with Russia in 487 00:27:41,680 --> 00:27:44,000 Speaker 12: many ways. I mean, we just saw a few weeks 488 00:27:44,040 --> 00:27:48,520 Speaker 12: ago at the Belton Road Conference in Beijing, Putin attended. 489 00:27:48,600 --> 00:27:52,320 Speaker 12: He was there with She. They talked side by side 490 00:27:52,400 --> 00:27:55,760 Speaker 12: certainly a lot. I mean, this is a particularly important 491 00:27:56,720 --> 00:27:59,880 Speaker 12: relationship for she to uphold and I think that as 492 00:28:00,000 --> 00:28:03,640 Speaker 12: we were continuing to see fallout from you know, Russia's 493 00:28:03,640 --> 00:28:06,720 Speaker 12: invasion in Ukraine, that is again I think sort of 494 00:28:06,720 --> 00:28:08,560 Speaker 12: a sticking point with the Biden administration. 495 00:28:09,440 --> 00:28:11,399 Speaker 3: Does there need to be a lot more in the 496 00:28:11,440 --> 00:28:14,639 Speaker 3: way of good communication happening between the US and China 497 00:28:14,960 --> 00:28:16,360 Speaker 3: where the military is concerned. 498 00:28:17,000 --> 00:28:20,080 Speaker 12: Yes, I mean I think that it's certainly true. Look, Doug, 499 00:28:20,200 --> 00:28:23,520 Speaker 12: over the past several years in particular, I don't think 500 00:28:23,560 --> 00:28:27,440 Speaker 12: that you can discount also the relationship that COVID zero 501 00:28:27,480 --> 00:28:29,720 Speaker 12: has had with you know, sort of fracturing a lot 502 00:28:29,760 --> 00:28:33,200 Speaker 12: of these ties and communication between the US and China. 503 00:28:33,320 --> 00:28:35,320 Speaker 12: I mean, when it's difficult to get into the country, 504 00:28:35,359 --> 00:28:37,960 Speaker 12: difficult to get diplomats into the country, you sort of 505 00:28:38,080 --> 00:28:41,600 Speaker 12: lose or those lines of communication or those lines of 506 00:28:41,600 --> 00:28:46,240 Speaker 12: communication between those medium level, mid level, you know, diplomats 507 00:28:46,360 --> 00:28:48,920 Speaker 12: in the US and China get certainly very freed. 508 00:28:49,160 --> 00:28:51,400 Speaker 3: Jill, thank you so much for helping us preview the 509 00:28:51,400 --> 00:28:55,160 Speaker 3: meeting between Presidents Biden and she Bloomberg's Jill desis our 510 00:28:55,280 --> 00:28:58,800 Speaker 3: China Economy and Government editor. I'm Doug Krisner. You can 511 00:28:58,840 --> 00:29:02,360 Speaker 3: catch Brian Kurtis and myself weekdays here for Bloomberg day 512 00:29:02,400 --> 00:29:05,720 Speaker 3: Break Asia beginning at seven am in Hong Kong, six 513 00:29:05,800 --> 00:29:07,640 Speaker 3: pm on Wall Street Tom. 514 00:29:07,400 --> 00:29:10,120 Speaker 1: Our thanks to Bloomberg day Break Asia anchor Doug Krisner, 515 00:29:10,160 --> 00:29:13,320 Speaker 1: and coming up here on Bloomberg day Break Weekend, another 516 00:29:13,600 --> 00:29:17,200 Speaker 1: possible government shutdown looming. We take you to Washington next 517 00:29:17,360 --> 00:29:20,640 Speaker 1: for the latest. I'm Tom Busby, and this is Bloomberg. 518 00:29:31,320 --> 00:29:33,640 Speaker 1: This is Bloomberg day Break Weekend, our global look ahead 519 00:29:33,640 --> 00:29:35,720 Speaker 1: at the top stories for investors in the coming week. 520 00:29:35,880 --> 00:29:39,440 Speaker 1: I'm Tom Busby in New York. Could the federal government 521 00:29:39,520 --> 00:29:43,320 Speaker 1: be hurtling toward a devastating shutdown? Could happen? 522 00:29:43,440 --> 00:29:43,800 Speaker 11: For more? 523 00:29:43,880 --> 00:29:45,880 Speaker 1: Let's head to our Bloomberg ninety nine to one newsroom 524 00:29:45,920 --> 00:29:50,560 Speaker 1: in Washington and Bloomberg Sound On. Co host Kaylee Lines, Yeah. 525 00:29:50,400 --> 00:29:52,840 Speaker 4: Tom, we're running out of sand in the hourglass here, 526 00:29:52,880 --> 00:29:56,440 Speaker 4: and yes we've been here before. Remember in government funding 527 00:29:56,480 --> 00:29:58,920 Speaker 4: almost ran out at the end of September. Well, we 528 00:29:58,960 --> 00:30:02,960 Speaker 4: avoided that though a continuing resolution that ultimately costs former 529 00:30:03,040 --> 00:30:06,080 Speaker 4: Speaker Kevin McCarthy his job was the price, and that 530 00:30:06,200 --> 00:30:08,280 Speaker 4: just kicked the can down the road, a road that 531 00:30:08,440 --> 00:30:11,920 Speaker 4: ends on November seventeenth. So this coming week, it's going 532 00:30:11,960 --> 00:30:14,120 Speaker 4: to be up to the new Speaker, Mike Johnson and 533 00:30:14,160 --> 00:30:16,440 Speaker 4: the rest of Congress to figure out how to extend 534 00:30:16,560 --> 00:30:20,360 Speaker 4: funding again and avoid a government shutdown. So how do 535 00:30:20,400 --> 00:30:22,640 Speaker 4: they get it done? Here with some insight, hopefully is 536 00:30:22,680 --> 00:30:26,320 Speaker 4: Megan Scully, who leads our congressional coverage here at Bloomberg, 537 00:30:26,760 --> 00:30:28,920 Speaker 4: So Megan. Obviously they're not going to be able to 538 00:30:28,920 --> 00:30:31,560 Speaker 4: get all of the different appropriation bills done by the 539 00:30:31,640 --> 00:30:34,520 Speaker 4: end of next week. There's no time, so it's going 540 00:30:34,600 --> 00:30:36,000 Speaker 4: to have to be another CR. 541 00:30:36,520 --> 00:30:39,960 Speaker 13: It will be another continuing resolution, yes, if they can 542 00:30:40,280 --> 00:30:43,960 Speaker 13: agree to one. The House is currently trying to figure 543 00:30:44,000 --> 00:30:47,280 Speaker 13: out what exactly could get through that chamber. The new speaker, 544 00:30:47,320 --> 00:30:50,240 Speaker 13: Speaker Mike Johnson, is finding himself in the same difficult 545 00:30:50,280 --> 00:30:54,360 Speaker 13: position that his predecessor, Kevin McCarthy was in just about 546 00:30:54,680 --> 00:30:58,680 Speaker 13: two months ago, and he's trying to get consensus within 547 00:30:59,000 --> 00:31:02,360 Speaker 13: the Republican party in the House. But whatever they do 548 00:31:02,640 --> 00:31:06,320 Speaker 13: decide on still has to pass muster with the Senate, 549 00:31:06,400 --> 00:31:09,280 Speaker 13: which is controlled by Democrats. So there's going to be 550 00:31:09,320 --> 00:31:11,080 Speaker 13: a lot of maneuvering in the week ahead. 551 00:31:11,600 --> 00:31:13,959 Speaker 4: Absolutely, and of course one of the big sticking points 552 00:31:14,000 --> 00:31:17,120 Speaker 4: between Republicans and Democrats or the big policy differences is 553 00:31:17,880 --> 00:31:21,400 Speaker 4: people who want greater fiscal restraint versus maybe not so much. Right, 554 00:31:21,680 --> 00:31:23,959 Speaker 4: can something clean get through or are we going to have 555 00:31:24,040 --> 00:31:25,320 Speaker 4: to see spending cuts involved. 556 00:31:25,640 --> 00:31:29,800 Speaker 13: There's discussion about a clean cr maybe one that lasts 557 00:31:29,880 --> 00:31:34,200 Speaker 13: until January. There's also been sort of this new made 558 00:31:34,240 --> 00:31:37,640 Speaker 13: up concept of a laddered cr where what is that 559 00:31:37,920 --> 00:31:42,440 Speaker 13: some government agencies would close earlier than others, and the 560 00:31:42,520 --> 00:31:46,400 Speaker 13: dates could be December and January or January and February. 561 00:31:46,680 --> 00:31:50,280 Speaker 13: Sort of a rolling shutdown that would decrease the at 562 00:31:50,400 --> 00:31:53,800 Speaker 13: least the initial impact of a shutdown. You know, maybe 563 00:31:53,800 --> 00:31:56,560 Speaker 13: the Defense Department stays open for a couple of extra weeks, 564 00:31:57,120 --> 00:32:00,160 Speaker 13: but it doesn't solve the problem of we need to 565 00:32:00,200 --> 00:32:05,240 Speaker 13: fund the government until the fiscal year ends on September thirtieth. 566 00:32:05,600 --> 00:32:09,040 Speaker 13: So basically they are trying to negotiate exactly what to do, 567 00:32:09,120 --> 00:32:13,080 Speaker 13: whether to take this laddered approach that is perhaps clean 568 00:32:13,800 --> 00:32:17,360 Speaker 13: or another clean spending bill that is very short and 569 00:32:17,520 --> 00:32:20,760 Speaker 13: just buys the House sometime to figure out what to 570 00:32:20,800 --> 00:32:23,240 Speaker 13: do next. Because remember this is sort of the first 571 00:32:23,240 --> 00:32:26,600 Speaker 13: time this new speaker is involved in these high stakes 572 00:32:26,760 --> 00:32:28,120 Speaker 13: Washington negotiations. 573 00:32:28,200 --> 00:32:30,400 Speaker 4: Well, and it's not just a question of Senate Democrats. 574 00:32:30,400 --> 00:32:33,000 Speaker 4: It feels like there's also a good deal of daylight 575 00:32:33,080 --> 00:32:37,040 Speaker 4: between Republicans and the Senate and Republicans in the House, absolutely, 576 00:32:37,240 --> 00:32:42,880 Speaker 4: especially over sort of extra issues, things that aren't necessarily 577 00:32:43,240 --> 00:32:48,120 Speaker 4: directly tied to the government shutdown but are extraneous to that. 578 00:32:48,240 --> 00:32:52,120 Speaker 4: And that is, of course, the emergency spending on Ukraine, 579 00:32:52,560 --> 00:32:56,720 Speaker 4: on Israel, on Taiwan, and along the border. Well, on 580 00:32:56,800 --> 00:32:59,240 Speaker 4: the subject of the border funding, talk to us about 581 00:32:59,240 --> 00:33:03,120 Speaker 4: how that is fitting into the equation here, because obviously 582 00:33:03,160 --> 00:33:05,640 Speaker 4: that's something Republicans are pushing really heavily for, and it 583 00:33:05,640 --> 00:33:08,480 Speaker 4: seems like that's something the White House is willing to give, 584 00:33:08,560 --> 00:33:11,400 Speaker 4: right at least in terms of monetary giving. 585 00:33:11,760 --> 00:33:14,600 Speaker 13: Yes, the devil is certainly in the details. Immigration is 586 00:33:14,600 --> 00:33:19,760 Speaker 13: an issue that has long dogged lawmakers in Washington and 587 00:33:19,800 --> 00:33:23,160 Speaker 13: the White House. The migrant crisis right now that is 588 00:33:23,200 --> 00:33:27,560 Speaker 13: affecting not just communities along the border, but cities like 589 00:33:27,600 --> 00:33:33,200 Speaker 13: New York and Chicago, really blue areas, areas that Democratic 590 00:33:33,320 --> 00:33:37,080 Speaker 13: strongholds are being affected by this migrant crisis, which is 591 00:33:37,160 --> 00:33:42,200 Speaker 13: making Democrats perhaps more willing to deal on border and 592 00:33:42,240 --> 00:33:43,600 Speaker 13: immigration policies. 593 00:33:43,760 --> 00:33:46,560 Speaker 4: All Right, well, the clock is ticking, as it always 594 00:33:46,600 --> 00:33:50,040 Speaker 4: seems to be. Megan Scully, the leader of Bloomberg's congressional coverage, 595 00:33:50,080 --> 00:33:53,240 Speaker 4: Thank you so much, and Tom, you better watch that clock. 596 00:33:53,360 --> 00:33:53,640 Speaker 8: Thank you. 597 00:33:53,720 --> 00:33:54,080 Speaker 3: Kaylee. 598 00:33:54,120 --> 00:33:57,200 Speaker 1: That was Bloomberg's sound on co host Kaylee Lines, reporting 599 00:33:57,200 --> 00:34:00,080 Speaker 1: from our Bloomberg ninety nine one newsermen in Washington. And 600 00:34:00,120 --> 00:34:02,719 Speaker 1: you can hear sound on weekdays one to three pm 601 00:34:02,760 --> 00:34:05,640 Speaker 1: on Bloomberg Radio. And that does it for this edition 602 00:34:05,640 --> 00:34:08,640 Speaker 1: of Bloomberg day Break Weekend. Join us again Monday morning, 603 00:34:08,680 --> 00:34:10,759 Speaker 1: five am Wall Street Time for the latest on the 604 00:34:10,760 --> 00:34:13,560 Speaker 1: market's overseas and the news you need to start your day. 605 00:34:14,040 --> 00:34:17,040 Speaker 1: I'm Tom Busby. Stay with us. Top stories and global 606 00:34:17,080 --> 00:34:20,000 Speaker 1: business headlines are coming up right now.