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