1 00:00:00,240 --> 00:00:07,720 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:10,440 --> 00:00:13,240 Speaker 2: This is Bloomberg Daybreak Weekend, our global look at the 3 00:00:13,240 --> 00:00:15,720 Speaker 2: top stories in the coming week from our Daybreak anchors 4 00:00:15,800 --> 00:00:18,240 Speaker 2: all around the world. Straight Ahead on the program, we'll 5 00:00:18,280 --> 00:00:20,800 Speaker 2: look ahead to some key housing data, along with earnings 6 00:00:20,800 --> 00:00:23,919 Speaker 2: from some of tech's biggest companies. I'm Nathan Hager in 7 00:00:24,000 --> 00:00:24,439 Speaker 2: New York. 8 00:00:24,640 --> 00:00:27,080 Speaker 3: I'm Caroline Hepco in London, where we're looking ahead to 9 00:00:27,120 --> 00:00:30,440 Speaker 3: Andy Burnham's first few weeks as UK Prime Minister. 10 00:00:30,800 --> 00:00:33,360 Speaker 4: I'm Doug Prisner, looking at how the people of Japan 11 00:00:33,400 --> 00:00:36,839 Speaker 4: will reflect this week on the ocean's vital role in 12 00:00:36,920 --> 00:00:37,839 Speaker 4: life and culture. 13 00:00:38,360 --> 00:00:42,400 Speaker 1: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 14 00:00:42,400 --> 00:00:46,120 Speaker 1: eleven three YEO New York, Bloomberg ninety nine to one, Washington, DC, 15 00:00:46,600 --> 00:00:51,760 Speaker 1: Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Syrias, 16 00:00:51,920 --> 00:00:55,440 Speaker 1: XM one twenty one, and around the world on Bloomberg Radio, 17 00:00:55,480 --> 00:00:57,640 Speaker 1: dot Com and the Bloomberg Business App. 18 00:01:02,440 --> 00:01:05,240 Speaker 2: Good day, do you. I'm Nathan Hager. We begin today's 19 00:01:05,280 --> 00:01:07,520 Speaker 2: program with some key housing data. I mean, in the 20 00:01:07,640 --> 00:01:09,920 Speaker 2: US we get new home sales figures for the month 21 00:01:09,920 --> 00:01:12,959 Speaker 2: of June. This Friday at ten am Wall Street Time 22 00:01:13,080 --> 00:01:14,840 Speaker 2: and for more and what to expect with the real 23 00:01:14,920 --> 00:01:17,800 Speaker 2: estate market moving forward. We are joined by Drew Reading, 24 00:01:18,160 --> 00:01:21,480 Speaker 2: us home building analysts for Bloomberg Intelligence. Great to speak 25 00:01:21,480 --> 00:01:24,160 Speaker 2: with you, Drew. After we kind of saw a surprise 26 00:01:24,280 --> 00:01:27,440 Speaker 2: drop in new home sales last month, what's the risk 27 00:01:27,480 --> 00:01:29,480 Speaker 2: we see in another surprise this time around? 28 00:01:29,920 --> 00:01:32,760 Speaker 5: The June data will really mark the end of the 29 00:01:33,120 --> 00:01:35,360 Speaker 5: new home spring selling season, and you know, it's been 30 00:01:35,440 --> 00:01:39,160 Speaker 5: lackluster to say the least. You know, if we zoom 31 00:01:39,200 --> 00:01:41,240 Speaker 5: out a little bit on a year to date basis, 32 00:01:41,240 --> 00:01:44,759 Speaker 5: we're up just about two percent. And the most recent 33 00:01:44,840 --> 00:01:47,560 Speaker 5: data we got, which is the highest frequency data we 34 00:01:47,600 --> 00:01:51,720 Speaker 5: have on mortgage applications, shows that applications to purchase new 35 00:01:51,720 --> 00:01:55,120 Speaker 5: homes were up about two percent. You know, the census 36 00:01:55,200 --> 00:01:59,120 Speaker 5: data can continues to be extremely volatile, but I think 37 00:01:59,440 --> 00:02:02,800 Speaker 5: you know, the the bigger picture story here is that 38 00:02:02,920 --> 00:02:06,720 Speaker 5: the market continues to be pressured by affordability challenges and 39 00:02:06,880 --> 00:02:11,200 Speaker 5: consumer uncertainty remains elevated. There's more concerns about the outlook 40 00:02:11,240 --> 00:02:14,480 Speaker 5: for the economy, the outlook for employment. So you have 41 00:02:14,600 --> 00:02:17,200 Speaker 5: people on the sidelines who are saying, maybe now is 42 00:02:17,240 --> 00:02:19,840 Speaker 5: not the right time to make such a big purchasing decision. 43 00:02:20,040 --> 00:02:22,120 Speaker 2: Yeah, it seems like there have been so many headwinds 44 00:02:22,120 --> 00:02:24,639 Speaker 2: over the last few months. Like what you said, the 45 00:02:24,720 --> 00:02:28,600 Speaker 2: prices are elevated to home, mortgage rates continue to be 46 00:02:28,680 --> 00:02:31,160 Speaker 2: elevated as well. I mean, is there anything that you 47 00:02:31,480 --> 00:02:34,720 Speaker 2: can see down the pipeline that can sort of reach 48 00:02:34,760 --> 00:02:36,960 Speaker 2: an inflection point potentially for this market? 49 00:02:37,120 --> 00:02:38,760 Speaker 5: Well, I think a couple of things. As it pertains 50 00:02:38,800 --> 00:02:41,120 Speaker 5: to mortgage rates, you know, I think one of the 51 00:02:41,160 --> 00:02:44,239 Speaker 5: important points there is that they've just been so volatile, 52 00:02:44,280 --> 00:02:47,519 Speaker 5: so it's difficult for consumers out there in the market 53 00:02:47,560 --> 00:02:49,480 Speaker 5: to kind of get a grasp on what their monthly 54 00:02:49,520 --> 00:02:51,040 Speaker 5: payment is going to be. And when you think about 55 00:02:51,080 --> 00:02:54,840 Speaker 5: the low end consumer and particularly you know, those swings 56 00:02:54,840 --> 00:02:57,000 Speaker 5: and mortgage rates can have a meaningful impact on their 57 00:02:57,040 --> 00:02:59,600 Speaker 5: monthly payment. So number one, I think we need to 58 00:02:59,600 --> 00:03:03,680 Speaker 5: see just a little bit stability in borrowing costs would 59 00:03:03,680 --> 00:03:07,600 Speaker 5: certainly help. And then on the consumer side, I think, 60 00:03:07,720 --> 00:03:09,160 Speaker 5: you know, we need to see a little bit more 61 00:03:09,200 --> 00:03:12,600 Speaker 5: clarity on what direction the economy is ultimately going to take. 62 00:03:12,639 --> 00:03:16,359 Speaker 5: I mean, things are pretty good now, but again there's 63 00:03:16,400 --> 00:03:18,240 Speaker 5: more concerns about the economy and now we have these 64 00:03:18,280 --> 00:03:21,560 Speaker 5: geopolitical tensions that have kind of elevated uncertainty. So I 65 00:03:21,560 --> 00:03:24,800 Speaker 5: think you need to get those factors under control. You know, 66 00:03:24,800 --> 00:03:27,000 Speaker 5: when we look out a little further, we have new 67 00:03:27,000 --> 00:03:30,200 Speaker 5: home sales, single family starts download single digits in twenty 68 00:03:30,240 --> 00:03:34,079 Speaker 5: twenty six. We think that could ultimately be the trough 69 00:03:34,240 --> 00:03:36,640 Speaker 5: because what the industry really needs to do is get 70 00:03:36,640 --> 00:03:39,640 Speaker 5: supply and demand and better balance. So builders have been 71 00:03:39,680 --> 00:03:42,280 Speaker 5: pulling back on housing starts in an effort to work 72 00:03:42,360 --> 00:03:46,600 Speaker 5: down elevated speck home inventory, and we think that'll continue 73 00:03:46,600 --> 00:03:49,480 Speaker 5: through this year, which should demand pick up modestly, we 74 00:03:49,520 --> 00:03:52,080 Speaker 5: think we could see a rebound in sales and starts 75 00:03:52,120 --> 00:03:52,880 Speaker 5: into next year. 76 00:03:53,120 --> 00:03:55,040 Speaker 2: So if we do start to see that rebound, what 77 00:03:55,040 --> 00:03:59,640 Speaker 2: could that potentially mean for multifamily starts? When you're talking 78 00:03:59,640 --> 00:04:02,400 Speaker 2: about it a consumer that's still feeling pressured right now, 79 00:04:02,520 --> 00:04:06,320 Speaker 2: you'd have to think that multifamily would would be facing 80 00:04:06,400 --> 00:04:08,680 Speaker 2: some pretty difficult headwinds as well. 81 00:04:09,000 --> 00:04:11,520 Speaker 5: The multi family segment has had its own challenges, but 82 00:04:11,520 --> 00:04:12,920 Speaker 5: by and large, if you I mean, if you were 83 00:04:12,920 --> 00:04:15,400 Speaker 5: to look at you know, the for sale market, verst 84 00:04:15,400 --> 00:04:17,320 Speaker 5: the for rent market, I mean, just look at the 85 00:04:17,400 --> 00:04:20,320 Speaker 5: affordability challenges, and you know, we've done survey work on 86 00:04:20,400 --> 00:04:22,560 Speaker 5: this and most of the industry data speaks to this 87 00:04:22,680 --> 00:04:26,559 Speaker 5: as well. Is that the value proposition for renting over 88 00:04:26,880 --> 00:04:31,000 Speaker 5: owning is firmly in favor of renting, and that's particularly 89 00:04:31,000 --> 00:04:33,600 Speaker 5: true with the lower end of the market. So, you know, 90 00:04:33,640 --> 00:04:35,520 Speaker 5: we expect that to be the case in the near term, 91 00:04:35,560 --> 00:04:39,159 Speaker 5: with home prices continuing to rise and mortgage rates really 92 00:04:39,160 --> 00:04:41,479 Speaker 5: not making, you know, gaining any meaningful ground. 93 00:04:41,680 --> 00:04:44,599 Speaker 2: Well, now that we're nearing the end of the spring 94 00:04:44,680 --> 00:04:48,320 Speaker 2: home buying season, do you see anything in the forecast 95 00:04:48,360 --> 00:04:51,760 Speaker 2: that could point to potential price moderation in the new 96 00:04:51,760 --> 00:04:53,520 Speaker 2: home market or is it just too soon to say? 97 00:04:53,800 --> 00:04:55,719 Speaker 5: Yeah, that's a good question. I mean, prices in the 98 00:04:55,720 --> 00:04:58,799 Speaker 5: new home market have been moderating, and the primary reason 99 00:04:58,880 --> 00:05:01,960 Speaker 5: for that is because I think, as we're all aware 100 00:05:01,960 --> 00:05:04,320 Speaker 5: by now, builders have been very aggressive in their use 101 00:05:04,360 --> 00:05:07,440 Speaker 5: of financing incentives. So you've been buying down the mortgage 102 00:05:07,520 --> 00:05:09,800 Speaker 5: rates for the buyers come into their markets, and that's 103 00:05:09,839 --> 00:05:12,919 Speaker 5: accounted for as a reduction in the average selling price. 104 00:05:13,520 --> 00:05:15,800 Speaker 5: So the fact that rates are still elevated, we think 105 00:05:15,800 --> 00:05:17,560 Speaker 5: they're going to continue to keep their foot on the 106 00:05:17,560 --> 00:05:19,760 Speaker 5: gas pedal in terms of their use of incentives, which 107 00:05:19,760 --> 00:05:22,720 Speaker 5: will which will continue to put pressure on prices. At 108 00:05:22,720 --> 00:05:25,919 Speaker 5: the same time, what we've started to see a little 109 00:05:25,920 --> 00:05:30,479 Speaker 5: more broadly is outright base price reductions. Now it's not 110 00:05:30,520 --> 00:05:32,680 Speaker 5: something that all the builders are doing, but you know, 111 00:05:32,760 --> 00:05:35,840 Speaker 5: in a number of instances they're finding that in order 112 00:05:35,880 --> 00:05:38,160 Speaker 5: to clear that specumentory that we talked about earlier, they're 113 00:05:38,160 --> 00:05:40,919 Speaker 5: having the lower prices of the homes in their community. 114 00:05:40,960 --> 00:05:43,040 Speaker 5: So it's a combination of the two, you know. I 115 00:05:43,080 --> 00:05:45,960 Speaker 5: think builders are also of looking for ways to simplify 116 00:05:46,400 --> 00:05:50,200 Speaker 5: their products in order to meet affordability, so smaller square 117 00:05:50,200 --> 00:05:54,240 Speaker 5: footage floor plans, maybe more townhouses, which tend to be 118 00:05:54,279 --> 00:05:57,159 Speaker 5: lower asp So you know, it's it's not just outright 119 00:05:57,200 --> 00:05:59,080 Speaker 5: price pressure, but there's also some mix that will be 120 00:05:59,120 --> 00:06:00,360 Speaker 5: impacting prices well. 121 00:06:00,600 --> 00:06:02,720 Speaker 2: And of course you got that new housing bill that 122 00:06:03,279 --> 00:06:07,160 Speaker 2: just passed Congress in recent days. How could that potentially 123 00:06:07,200 --> 00:06:07,640 Speaker 2: affect the. 124 00:06:07,640 --> 00:06:11,400 Speaker 5: Outlook a big picture. It's important that the administration in 125 00:06:11,560 --> 00:06:15,320 Speaker 5: Washington as a whole have focused some attention on housing. 126 00:06:15,360 --> 00:06:18,400 Speaker 5: It's been long overdue, and I think that's a positive 127 00:06:18,400 --> 00:06:21,520 Speaker 5: that the new legislation is focused on the supply side 128 00:06:21,560 --> 00:06:23,960 Speaker 5: and trying to you know, remove or reduce some of 129 00:06:24,000 --> 00:06:27,560 Speaker 5: the friction in new home construction. You know, the emphasis 130 00:06:27,560 --> 00:06:31,279 Speaker 5: on zoning, permitting regulation is definitely a long term positive, 131 00:06:31,320 --> 00:06:33,640 Speaker 5: but don't really see as a needle mover in the 132 00:06:33,680 --> 00:06:35,880 Speaker 5: near term. You know, one of the things you have 133 00:06:35,960 --> 00:06:38,560 Speaker 5: to consider is that a lot of the things in 134 00:06:38,600 --> 00:06:42,240 Speaker 5: the bill really function as a framework for reform rather 135 00:06:42,320 --> 00:06:46,440 Speaker 5: than you know, being a direct mandate or a federal override, 136 00:06:46,440 --> 00:06:51,839 Speaker 5: which means that implementation still depends on local municipalities adopting 137 00:06:52,480 --> 00:06:55,680 Speaker 5: policies and processes. You know, these are things that will 138 00:06:55,680 --> 00:06:57,840 Speaker 5: take a long time to work through the system, and 139 00:06:57,960 --> 00:06:59,960 Speaker 5: you know, I think ultimately the impact is going to 140 00:06:59,960 --> 00:07:02,360 Speaker 5: be hard to quantify it. I certainly think, as I said, 141 00:07:02,400 --> 00:07:04,640 Speaker 5: it's a step in the right direction, But is it 142 00:07:05,040 --> 00:07:09,240 Speaker 5: a needle mover immediately for affordability and construction. Probably not. 143 00:07:09,600 --> 00:07:11,200 Speaker 2: It gives us something to think about as we get 144 00:07:11,200 --> 00:07:14,679 Speaker 2: closer to those new home sales figures for June later 145 00:07:14,720 --> 00:07:16,400 Speaker 2: on this week. Thank you for this, Drew, Really good 146 00:07:16,400 --> 00:07:18,520 Speaker 2: to have you with us. That's Drew reading us, home 147 00:07:18,560 --> 00:07:21,720 Speaker 2: building analyst for Bloomberg Intelligence. Let's take a look now 148 00:07:21,720 --> 00:07:23,960 Speaker 2: at some stocks making news in the week ahead. I'm 149 00:07:24,000 --> 00:07:28,240 Speaker 2: Nathan Hager, joined by Bloomberg News senior equities reporter Bailey Lipschultz, 150 00:07:28,280 --> 00:07:30,840 Speaker 2: and another really big week for earnings. We are right 151 00:07:30,920 --> 00:07:33,400 Speaker 2: in the thick of it, Bailey, and we're gonna be 152 00:07:33,400 --> 00:07:38,000 Speaker 2: hearing a lot from big tech names as well, starting 153 00:07:38,040 --> 00:07:41,320 Speaker 2: this Wednesday with Tesla. I guess Elon Musks wants us 154 00:07:41,320 --> 00:07:43,600 Speaker 2: to think about Tesla as a tech company more than 155 00:07:43,600 --> 00:07:45,000 Speaker 2: a car company, right. 156 00:07:44,960 --> 00:07:47,040 Speaker 6: No, exactly when you talk to Elan or even just 157 00:07:47,080 --> 00:07:50,280 Speaker 6: look at what he posts on social media conversations around 158 00:07:50,280 --> 00:07:53,280 Speaker 6: the company, Tesla is no longer just a car company. 159 00:07:53,720 --> 00:07:57,480 Speaker 6: It's the future of taxis, it's a robot company. It's 160 00:07:57,720 --> 00:08:01,960 Speaker 6: increasingly in terms of capital expenditure, a AI company and 161 00:08:02,000 --> 00:08:04,920 Speaker 6: a chip making company. So that's been kind of the 162 00:08:04,920 --> 00:08:07,120 Speaker 6: big push to no longer think about Tesla just as 163 00:08:07,160 --> 00:08:08,920 Speaker 6: the company that makes electric vehicles. 164 00:08:08,960 --> 00:08:12,400 Speaker 2: But going into these earnings, of course, we did get 165 00:08:12,440 --> 00:08:16,000 Speaker 2: some delivery numbers on the core business from Tesla, kind 166 00:08:16,040 --> 00:08:19,160 Speaker 2: of a beat when it comes to their second quarter 167 00:08:19,280 --> 00:08:21,920 Speaker 2: vehicle deliveries. I mean, how does that set the bar 168 00:08:22,000 --> 00:08:23,720 Speaker 2: in terms of what we could hear on some of 169 00:08:23,720 --> 00:08:25,720 Speaker 2: those other aspects of the business you were just talking about. 170 00:08:25,880 --> 00:08:28,280 Speaker 6: Yeah, No, I think that set's kind of a clear 171 00:08:28,520 --> 00:08:31,000 Speaker 6: expectation for what the core business will deliver. The big 172 00:08:31,080 --> 00:08:34,240 Speaker 6: question from that is, Okay, what are the financial implications 173 00:08:34,240 --> 00:08:37,800 Speaker 6: from strong deliveries? How does that ultimately impact the business 174 00:08:37,840 --> 00:08:39,960 Speaker 6: on the top and bottom line. Again, this is a 175 00:08:40,000 --> 00:08:43,280 Speaker 6: company that hasn't grown car sales as quickly as many 176 00:08:43,280 --> 00:08:45,480 Speaker 6: on Wall Street would have anticipated, But the big question 177 00:08:45,559 --> 00:08:48,320 Speaker 6: now shifts towards Okay, how much is the company spending 178 00:08:48,360 --> 00:08:50,920 Speaker 6: on things like tara fab, the partnership to build out 179 00:08:50,960 --> 00:08:54,720 Speaker 6: chips alongside SpaceX, how is the company thinking about spending 180 00:08:54,720 --> 00:08:58,280 Speaker 6: for optimists, this robot that they've long been talking about 181 00:08:58,320 --> 00:09:00,560 Speaker 6: but haven't really delivered kind of a key update on 182 00:09:00,600 --> 00:09:04,439 Speaker 6: the humanoid robot project in recent months, in recent quarters, 183 00:09:04,559 --> 00:09:07,920 Speaker 6: and really the big key topic of discussion on the 184 00:09:07,920 --> 00:09:11,320 Speaker 6: earnings call expected to be around robotaxi. 185 00:09:11,720 --> 00:09:13,760 Speaker 2: And also on Wednesday, we're going to hear from another 186 00:09:13,800 --> 00:09:16,080 Speaker 2: company that we think of more traditionally I think as 187 00:09:16,480 --> 00:09:19,199 Speaker 2: a tech company, one of those big mag seven players 188 00:09:19,200 --> 00:09:21,600 Speaker 2: in Google parent alphabet of course, one of the big 189 00:09:21,640 --> 00:09:25,280 Speaker 2: spenders in this big wave of AI Capex that it 190 00:09:25,320 --> 00:09:27,199 Speaker 2: seems like we've been talking about all year long. 191 00:09:27,720 --> 00:09:31,000 Speaker 6: Yeah, Now, I think when you look at analyst expectations, Yes, 192 00:09:31,080 --> 00:09:34,080 Speaker 6: we will in the wake of earnings talk about software. Yes, 193 00:09:34,080 --> 00:09:36,680 Speaker 6: in the wake of that, we'll be talking about cloud growth. 194 00:09:36,880 --> 00:09:39,080 Speaker 6: But it does come back to that CAPEX number. And 195 00:09:39,160 --> 00:09:43,120 Speaker 6: we saw analysts coming out from City saying they continue 196 00:09:43,160 --> 00:09:46,800 Speaker 6: to expect all of these hyperscalers to not only deliver 197 00:09:46,960 --> 00:09:49,360 Speaker 6: greater revenues but also to spend more. And this has 198 00:09:49,360 --> 00:09:51,720 Speaker 6: been a market that has been so heavily driven by 199 00:09:52,000 --> 00:09:55,760 Speaker 6: these mag seven names, these big spenders continuing to spend 200 00:09:55,760 --> 00:09:58,640 Speaker 6: and spend on AI infrastructure. So the big question will 201 00:09:58,679 --> 00:10:01,760 Speaker 6: be are they able to build out their TPUs. They're 202 00:10:01,800 --> 00:10:04,320 Speaker 6: kind of chipping that opportunity again. This is a company 203 00:10:04,320 --> 00:10:08,800 Speaker 6: that plays across the entire suite of technology and can 204 00:10:09,120 --> 00:10:11,400 Speaker 6: they deliver on the upside, because over the last two 205 00:10:11,440 --> 00:10:13,760 Speaker 6: weeks they're up about three percent, which stands out in 206 00:10:13,800 --> 00:10:16,680 Speaker 6: a market that's been up one day and down the next. 207 00:10:16,760 --> 00:10:19,079 Speaker 2: And certainly when you think about those TPUs, you think 208 00:10:19,120 --> 00:10:22,640 Speaker 2: as well about the competition with Nvidia and the GPUs. 209 00:10:22,720 --> 00:10:26,720 Speaker 2: There where is alphabet in terms of that aspect of 210 00:10:26,720 --> 00:10:27,280 Speaker 2: the business. 211 00:10:27,320 --> 00:10:30,240 Speaker 6: They're working to build it out it's obviously very early days. 212 00:10:30,240 --> 00:10:33,280 Speaker 6: These are two technologies that are somewhat complimentary. They do 213 00:10:33,480 --> 00:10:35,800 Speaker 6: kind of compete, but I don't think many people would 214 00:10:35,840 --> 00:10:38,880 Speaker 6: say the core business from the TPUs, the core business 215 00:10:38,960 --> 00:10:42,839 Speaker 6: from Google and Alphabet is going after Jensen Wong's lunch, 216 00:10:42,920 --> 00:10:45,760 Speaker 6: if you will. So the big question is can they 217 00:10:45,760 --> 00:10:48,560 Speaker 6: find kind of a niche opportunity within the TPUs, and again, 218 00:10:48,840 --> 00:10:51,760 Speaker 6: can they use that to really bolster and fill out 219 00:10:52,200 --> 00:10:55,040 Speaker 6: a suite of offerings, because when you think about the 220 00:10:55,080 --> 00:10:58,400 Speaker 6: debate we've been having for even just large language models 221 00:10:58,440 --> 00:11:02,079 Speaker 6: in some of those frontier labs. Anthropics obviously well ahead 222 00:11:02,080 --> 00:11:04,760 Speaker 6: of Opening Eye these days. But Google has its own offering, 223 00:11:04,760 --> 00:11:07,040 Speaker 6: Microsoft has its own offering. That's another corner of the 224 00:11:07,040 --> 00:11:09,200 Speaker 6: market that I think people will be interested in what 225 00:11:09,240 --> 00:11:10,240 Speaker 6: management says on the call. 226 00:11:10,280 --> 00:11:13,559 Speaker 2: All right, and after those two major companies report Wednesday, 227 00:11:13,600 --> 00:11:17,520 Speaker 2: we're going to hear from Intel on Thursday. How are 228 00:11:17,520 --> 00:11:19,880 Speaker 2: we thinking the chip maker is going to fare after 229 00:11:19,880 --> 00:11:23,040 Speaker 2: what we heard last week from IBM about missing out 230 00:11:23,040 --> 00:11:24,760 Speaker 2: on the spending shift. 231 00:11:25,080 --> 00:11:28,560 Speaker 6: Not great. I think es vibes are off, vibes are off. 232 00:11:28,840 --> 00:11:30,880 Speaker 6: The one thing I want to call out is that 233 00:11:31,200 --> 00:11:36,120 Speaker 6: Taiwan Semi reported earnings that if you talk to most investors, 234 00:11:36,360 --> 00:11:39,319 Speaker 6: looked pretty darn good, and the stock traded down. So 235 00:11:39,480 --> 00:11:44,320 Speaker 6: how high are expectations for the entire semiconductor ecosystem. You 236 00:11:44,400 --> 00:11:46,920 Speaker 6: have to keep in mind last twelve months, Intel's up 237 00:11:47,080 --> 00:11:49,600 Speaker 6: three hundred and forty three hundred and fifty percent. There's 238 00:11:49,640 --> 00:11:52,319 Speaker 6: a high bar to clear. Yes, there's the partnerships and 239 00:11:52,400 --> 00:11:55,200 Speaker 6: kind of the optimism around its relationship with the US government, 240 00:11:55,600 --> 00:11:57,599 Speaker 6: but we are hitting a point where we've seen so 241 00:11:57,679 --> 00:12:00,800 Speaker 6: much volatility in these semiconductor names that I don't think 242 00:12:00,840 --> 00:12:03,600 Speaker 6: a beaten raise is enough to drive the stock hire. 243 00:12:04,040 --> 00:12:06,840 Speaker 6: And the big question will be a what does the 244 00:12:06,880 --> 00:12:09,480 Speaker 6: buyside really want to see and be will they look 245 00:12:09,520 --> 00:12:11,959 Speaker 6: at it and say, all right, great, maybe I want 246 00:12:11,960 --> 00:12:14,120 Speaker 6: to take some chips off the table, just because if 247 00:12:14,160 --> 00:12:16,839 Speaker 6: you use Taiwan Semi as an example to look at, 248 00:12:16,960 --> 00:12:18,599 Speaker 6: you can have a pretty darn good quarter, but you 249 00:12:18,679 --> 00:12:19,560 Speaker 6: might be priced to professor. 250 00:12:19,559 --> 00:12:21,679 Speaker 2: So are you thinking that that it's almost a foregone 251 00:12:21,679 --> 00:12:24,960 Speaker 2: conclusion that we could see some profit taking following these 252 00:12:25,000 --> 00:12:27,040 Speaker 2: earnings given what you've just been talking about, or is 253 00:12:27,080 --> 00:12:28,640 Speaker 2: there a chance that we could see a little bit 254 00:12:28,640 --> 00:12:29,760 Speaker 2: of a pop to the upside. 255 00:12:29,960 --> 00:12:31,520 Speaker 6: You would have to see a pretty dark good quarter. 256 00:12:31,800 --> 00:12:35,480 Speaker 6: They've been up the last three times after earnings beat expectations, 257 00:12:35,760 --> 00:12:38,680 Speaker 6: but again that was before a lot of this latest 258 00:12:38,760 --> 00:12:42,400 Speaker 6: rally has taken place, and before the company as it 259 00:12:42,440 --> 00:12:45,440 Speaker 6: is now is a half a trillion dollar semiconductor maker. 260 00:12:45,840 --> 00:12:49,800 Speaker 2: Big week in big Tech. That's Bloomberg News senior equities 261 00:12:49,840 --> 00:12:53,440 Speaker 2: reporter Bailey Lipschultz, And coming up on Bloomberg day Break weekend, 262 00:12:53,480 --> 00:12:56,440 Speaker 2: we'll look ahead to Andy Burnham's likely debut as the 263 00:12:56,480 --> 00:12:59,719 Speaker 2: next Prime Minister of the UK. I'm Nathan Hager, and 264 00:13:00,040 --> 00:13:14,000 Speaker 2: this is Bloomberg. This is Bloomberg day Break Weekend, our 265 00:13:14,040 --> 00:13:16,480 Speaker 2: global look ahead at the top stories for investors in 266 00:13:16,520 --> 00:13:18,920 Speaker 2: the coming week. I'm Nathan Hager in New York. Up 267 00:13:19,000 --> 00:13:21,360 Speaker 2: later in our program, we look to the unofficial start 268 00:13:21,360 --> 00:13:25,319 Speaker 2: of beach and island hopping season in Japan. But first, 269 00:13:25,440 --> 00:13:28,280 Speaker 2: the UK is preparing to usher in its seventh prime 270 00:13:28,320 --> 00:13:31,560 Speaker 2: minister in ten years. Andy Burnham, the former mayor of 271 00:13:31,600 --> 00:13:34,720 Speaker 2: Greater Manchester who's little known in the US, will have 272 00:13:34,760 --> 00:13:37,000 Speaker 2: his work cut out for him. Britain's been grappling with 273 00:13:37,120 --> 00:13:41,400 Speaker 2: decades long low investment record, high taxation, and government debt 274 00:13:41,440 --> 00:13:45,280 Speaker 2: heading toward one hundred percent of GDP. So how does 275 00:13:45,320 --> 00:13:48,360 Speaker 2: Andy Burnham plan to turn things around? From more Let's 276 00:13:48,360 --> 00:13:50,840 Speaker 2: go to London and bring in Bloomberg daybreak. You're a banker, 277 00:13:50,920 --> 00:13:52,120 Speaker 2: Caroline Hepger. 278 00:13:52,240 --> 00:13:56,080 Speaker 3: Nathan third time lucky. Andy Burnham is on course to 279 00:13:56,160 --> 00:13:58,840 Speaker 3: take over from kir Salma as the new UK Prime 280 00:13:58,840 --> 00:14:02,360 Speaker 3: Minister in the coming day. He has made two previous 281 00:14:02,440 --> 00:14:06,000 Speaker 3: attempts at leading the Labour Party. He has recently built 282 00:14:06,040 --> 00:14:09,800 Speaker 3: his reputation as mayor of Greater Manchester, before that an 283 00:14:09,920 --> 00:14:14,880 Speaker 3: MP and minister, but his policy proposals now for national 284 00:14:14,920 --> 00:14:19,560 Speaker 3: government are little known and untested. Burnham and his key 285 00:14:19,600 --> 00:14:24,440 Speaker 3: advisors have talked about devolving power and creating economic growth 286 00:14:24,560 --> 00:14:27,480 Speaker 3: across the whole of the UK. The fifty six year 287 00:14:27,480 --> 00:14:31,680 Speaker 3: old has promised to make Britain resilient, confident and principled, 288 00:14:32,040 --> 00:14:34,440 Speaker 3: with a number ten in the North, growth in every 289 00:14:34,480 --> 00:14:38,360 Speaker 3: postcode and room for maneuver on tax and spending. But 290 00:14:38,720 --> 00:14:41,600 Speaker 3: it looks at daunting task. Bank of England Governor Andrew 291 00:14:41,640 --> 00:14:44,080 Speaker 3: Bailey issued a veiled warning and a speech to the 292 00:14:44,080 --> 00:14:47,680 Speaker 3: City of London at Mansion House that Britain's long term 293 00:14:47,840 --> 00:14:50,840 Speaker 3: growth rate has more than half since the two thousand 294 00:14:50,880 --> 00:14:55,400 Speaker 3: and eight financial crisis. And what's more, Burnham's advisors are 295 00:14:55,440 --> 00:14:59,000 Speaker 3: reported to be divided over his choice for chancellor. The 296 00:14:59,200 --> 00:15:03,000 Speaker 3: likely outgoing Finance Minister Rachel Reeves says that the next 297 00:15:03,240 --> 00:15:08,040 Speaker 3: government must combine ambitious reform with economic credibility. 298 00:15:08,360 --> 00:15:12,400 Speaker 7: This government has shown that change, indeed, radical change is possible. 299 00:15:12,560 --> 00:15:16,880 Speaker 7: Governments can achieve that change only when they combine radicalism 300 00:15:17,120 --> 00:15:21,360 Speaker 7: with credibility. That hard won credibility must be sustained if 301 00:15:21,360 --> 00:15:23,640 Speaker 7: this work of radical change is to continue. 302 00:15:23,880 --> 00:15:26,880 Speaker 3: That was Rachel Reeves making what may be her last 303 00:15:26,920 --> 00:15:30,280 Speaker 3: major speech as chancellor to business and finance leaders in 304 00:15:30,320 --> 00:15:32,840 Speaker 3: the City of London. So with more on what we 305 00:15:32,880 --> 00:15:35,920 Speaker 3: can expect from Burnham's first few weeks in power, We're 306 00:15:36,000 --> 00:15:40,040 Speaker 3: joined by Bloomberg's UK politics reporter Chloe Chaplin and Bloomberg 307 00:15:40,120 --> 00:15:44,200 Speaker 3: Economics's UK economist Matt Bonny. Matt, can I start with 308 00:15:44,280 --> 00:15:48,720 Speaker 3: you in terms of the policy platform? I mean Burnham 309 00:15:48,840 --> 00:15:52,560 Speaker 3: talked about a ten year plan reminiscent in many ways 310 00:15:52,560 --> 00:15:55,960 Speaker 3: of Keir Starmer's decade of renewal, and even actually of 311 00:15:56,120 --> 00:15:59,920 Speaker 3: previous past Conservative leaders like Boris Johnson and Theresa May. 312 00:16:00,480 --> 00:16:03,280 Speaker 3: Does Burnham really have that time? What do we think 313 00:16:03,320 --> 00:16:07,080 Speaker 3: are the pillars of his policy outline in as far 314 00:16:07,120 --> 00:16:08,240 Speaker 3: as we know what they are. 315 00:16:08,160 --> 00:16:12,160 Speaker 8: Right now, So the policy platform is still very much evolving. 316 00:16:12,240 --> 00:16:14,040 Speaker 8: I think that's reflected in the fact that who will 317 00:16:14,040 --> 00:16:15,480 Speaker 8: be Chancellor is up in the air, and that will 318 00:16:15,480 --> 00:16:18,480 Speaker 8: be an important signal of the direction that policy is heading. 319 00:16:18,880 --> 00:16:22,680 Speaker 8: We can get a sense of the broad contours of 320 00:16:22,840 --> 00:16:26,240 Speaker 8: Burnham's policy platform based on his track Rocket a Manchester 321 00:16:26,320 --> 00:16:29,120 Speaker 8: based on his recent speech, So some of the key 322 00:16:29,120 --> 00:16:32,280 Speaker 8: things he's highlighted is greater devolution, so this means moving 323 00:16:32,360 --> 00:16:37,160 Speaker 8: power out of Westminster to the regions. There's also increasing 324 00:16:37,320 --> 00:16:41,880 Speaker 8: public control of essential services and finally, more home building. 325 00:16:42,000 --> 00:16:46,000 Speaker 8: So Burnham has committed to embarking on the largest council 326 00:16:46,080 --> 00:16:50,760 Speaker 8: house building drive since the post war period. So whether 327 00:16:50,880 --> 00:16:53,920 Speaker 8: or not he can deliver on these packages is another 328 00:16:54,200 --> 00:16:56,560 Speaker 8: kind of question. The other thing to flag is that 329 00:16:56,800 --> 00:17:01,240 Speaker 8: these are all long term ambitions. Will be acutely aware 330 00:17:01,480 --> 00:17:04,119 Speaker 8: there is a general election due by twenty twenty nine 331 00:17:04,359 --> 00:17:08,000 Speaker 8: and those kinds of long term growth initiatives do little 332 00:17:08,320 --> 00:17:11,720 Speaker 8: for short term political capital, so we think it's quite 333 00:17:11,840 --> 00:17:14,920 Speaker 8: likely he'll be looking to institute some kind of cost 334 00:17:14,960 --> 00:17:18,080 Speaker 8: of living relief in his first budget. This will be 335 00:17:18,160 --> 00:17:21,919 Speaker 8: to help directly bring down inflation. How that will be 336 00:17:21,960 --> 00:17:25,200 Speaker 8: funded is another question. I mean, we know that perse 337 00:17:25,240 --> 00:17:28,000 Speaker 8: strings are tight, so to speak, and bond markets will 338 00:17:28,000 --> 00:17:31,040 Speaker 8: be watching closely, so it's likely they'll seek to raise 339 00:17:31,280 --> 00:17:34,040 Speaker 8: taxes of some description in order to fund that. 340 00:17:34,720 --> 00:17:37,680 Speaker 3: Chloe is also expected to be warned by senior civil 341 00:17:37,720 --> 00:17:40,720 Speaker 3: servants from day one of just how difficult the outlook 342 00:17:40,760 --> 00:17:43,560 Speaker 3: for the UK economy is. This probably won't be news 343 00:17:43,600 --> 00:17:47,800 Speaker 3: to anybody in the country about how difficult this outlook is. 344 00:17:48,080 --> 00:17:51,040 Speaker 3: What does growth and inflation look like? What might burn 345 00:17:51,160 --> 00:17:52,639 Speaker 3: them and his team be warned of. 346 00:17:53,200 --> 00:17:55,959 Speaker 9: Yeah, so this feeds into the cost of living issue. 347 00:17:56,440 --> 00:17:59,200 Speaker 9: We've written a story saying that Treasury officials will be 348 00:17:59,280 --> 00:18:03,600 Speaker 9: warning Burner that actually inflation is likely to tick up 349 00:18:03,640 --> 00:18:06,800 Speaker 9: to three point two percent. There is still a great 350 00:18:06,840 --> 00:18:10,240 Speaker 9: deal of uncertainty about oil prices. Obviously, the conflict in 351 00:18:10,280 --> 00:18:12,959 Speaker 9: the Middle East is very much a live issue. We 352 00:18:13,000 --> 00:18:14,760 Speaker 9: don't know what's going to happen with that in the 353 00:18:14,760 --> 00:18:20,280 Speaker 9: coming weeks. But that pressure of inflation only exacerbates the 354 00:18:20,320 --> 00:18:24,240 Speaker 9: existing cost of living challenges that many families, households and 355 00:18:24,520 --> 00:18:28,000 Speaker 9: businesses are dealing with. Burnham has been explicit that he 356 00:18:28,040 --> 00:18:30,159 Speaker 9: wants to reduce the cost of energy for households and 357 00:18:30,160 --> 00:18:33,719 Speaker 9: small businesses. That is only going to become more expensive 358 00:18:33,920 --> 00:18:36,760 Speaker 9: if energy prices are going up at the same time, 359 00:18:37,760 --> 00:18:41,400 Speaker 9: economic growth has been a key pillar of Rachel Reeves's 360 00:18:41,800 --> 00:18:45,639 Speaker 9: kind of priorities as Chancellor, and the little we do 361 00:18:45,720 --> 00:18:49,280 Speaker 9: understand about Burnham's policy platform, you know, he's really relied 362 00:18:49,359 --> 00:18:52,560 Speaker 9: on private investment and economic growth in his success in Manchester, 363 00:18:53,160 --> 00:18:55,720 Speaker 9: so there has been talk of things like capital gains 364 00:18:55,760 --> 00:18:58,480 Speaker 9: tax to range money. These kind of policies will have 365 00:18:58,520 --> 00:19:00,920 Speaker 9: a really detrimental impact on economic growth, so he has 366 00:19:00,960 --> 00:19:04,400 Speaker 9: to be very careful. He's operating within very slim margins, 367 00:19:04,480 --> 00:19:06,760 Speaker 9: much like his predecessor Kirstarma has been. 368 00:19:07,280 --> 00:19:07,520 Speaker 3: Yeah. 369 00:19:07,760 --> 00:19:07,800 Speaker 5: No. 370 00:19:07,920 --> 00:19:11,080 Speaker 3: The last time I was up in Manchester meeting Andy Burnham, 371 00:19:11,440 --> 00:19:14,240 Speaker 3: he was surrounded by all the business leaders and made 372 00:19:14,240 --> 00:19:17,760 Speaker 3: a real point of that of bringing local business leaders 373 00:19:17,760 --> 00:19:19,840 Speaker 3: to the fore. You know, that was the time of 374 00:19:20,000 --> 00:19:25,760 Speaker 3: HS two. Of course, thinking about Manchesterism, Matt, you've done 375 00:19:25,840 --> 00:19:30,120 Speaker 3: quite an excellent deep dive into whether Manchesterism can actually 376 00:19:30,160 --> 00:19:34,600 Speaker 3: be morphed onto the whole nationwide picture here in the UK, 377 00:19:34,760 --> 00:19:37,920 Speaker 3: whether it can be used as a tool really to 378 00:19:38,040 --> 00:19:39,440 Speaker 3: deliver growth across the UK. 379 00:19:40,200 --> 00:19:44,320 Speaker 8: Yes, So we know that during Andy Burnham's tenure as 380 00:19:44,880 --> 00:19:47,760 Speaker 8: Mayor of Greater Manchester, the region has gone through a 381 00:19:47,800 --> 00:19:52,880 Speaker 8: period of extraordinary economic growth and there's a question as 382 00:19:52,920 --> 00:19:56,240 Speaker 8: to how much of that is a result of transformative 383 00:19:56,320 --> 00:20:01,600 Speaker 8: leadership or pre existing momentum. So Burnham really benefited from 384 00:20:02,000 --> 00:20:05,160 Speaker 8: decades of regeneration of the city center before he came 385 00:20:05,200 --> 00:20:08,359 Speaker 8: into power. There was an existing arrangement of devolution that 386 00:20:08,400 --> 00:20:11,119 Speaker 8: was put into place shortly before he came in. So 387 00:20:11,320 --> 00:20:13,280 Speaker 8: there's a number of factors there that gave him some 388 00:20:13,800 --> 00:20:16,840 Speaker 8: tailwinds as he stepped into power, and that's going to 389 00:20:16,840 --> 00:20:19,560 Speaker 8: be a very different situation than what he steps into 390 00:20:19,600 --> 00:20:22,520 Speaker 8: as Prime minister with a kind of economy that is 391 00:20:23,080 --> 00:20:26,439 Speaker 8: struggling along, grappling with a number of headwinds, not the 392 00:20:26,520 --> 00:20:28,679 Speaker 8: least obviously the US around war and the cost of 393 00:20:28,680 --> 00:20:32,680 Speaker 8: living challenges that we've been speaking about. The other challenge 394 00:20:32,800 --> 00:20:36,320 Speaker 8: to consider is often we see prime ministers come in 395 00:20:36,359 --> 00:20:40,199 Speaker 8: with big ambitions about how they will transform policy and 396 00:20:40,240 --> 00:20:43,240 Speaker 8: they are quite rapidly tempered by the realities of office, 397 00:20:43,600 --> 00:20:47,240 Speaker 8: the realities of the constraints of fiscal policy. They are 398 00:20:47,240 --> 00:20:51,720 Speaker 8: obviously very conscious of bond markets and how much they're 399 00:20:51,760 --> 00:20:55,000 Speaker 8: willing to test bond markets will probably be an important 400 00:20:56,240 --> 00:20:59,000 Speaker 8: important consideration in how far they can really push policy. 401 00:20:59,320 --> 00:21:02,359 Speaker 3: Yeah, certainly thinking about the forty nine days that Pro 402 00:21:02,440 --> 00:21:06,439 Speaker 3: Minister Liz Truss lasted because of that very issue. Just 403 00:21:06,480 --> 00:21:08,680 Speaker 3: give me a few pointers though on the thing that 404 00:21:08,880 --> 00:21:12,199 Speaker 3: has got so much attention and you know is always 405 00:21:12,200 --> 00:21:16,719 Speaker 3: hotly debated, and this is taxes. Which taxes might go up, 406 00:21:16,800 --> 00:21:19,199 Speaker 3: how much they might go up by Again, Matt, you've 407 00:21:19,240 --> 00:21:21,600 Speaker 3: been looking at this in detail and some of them 408 00:21:21,640 --> 00:21:23,760 Speaker 3: are more novel and quite radical. 409 00:21:24,560 --> 00:21:28,280 Speaker 8: So it's important to say up top that Burnham has 410 00:21:28,560 --> 00:21:32,760 Speaker 8: committed to Labour's Manifesto commitments on tax so that rules 411 00:21:32,800 --> 00:21:36,520 Speaker 8: out any of the big leavers so income tax, national 412 00:21:36,560 --> 00:21:40,960 Speaker 8: insurance VAT, corporation tax, so that does leave him with 413 00:21:41,280 --> 00:21:45,000 Speaker 8: a narrower set of options. We think, as was mentioned earlier, 414 00:21:45,480 --> 00:21:49,720 Speaker 8: capital gain tax is one quite likely candidate. The challenge 415 00:21:49,720 --> 00:21:51,840 Speaker 8: with this kind of tax is that it applies to 416 00:21:51,920 --> 00:21:55,040 Speaker 8: a narrower base and it is also more susceptible to 417 00:21:55,119 --> 00:21:57,800 Speaker 8: behavioral responses. So if people know capital gains tax is 418 00:21:57,800 --> 00:21:59,600 Speaker 8: going up, maybe going to rush to sell their house 419 00:21:59,600 --> 00:22:01,360 Speaker 8: before that. Are they going to delay selling their house 420 00:22:01,400 --> 00:22:04,200 Speaker 8: once it comes into place. So essentially what this means 421 00:22:04,240 --> 00:22:07,879 Speaker 8: is that there's a greater uncertainty about what revenues you 422 00:22:07,920 --> 00:22:10,679 Speaker 8: will yield from this kind of metric. So there's a 423 00:22:10,680 --> 00:22:13,000 Speaker 8: bit of a risk that they raise this tax not 424 00:22:13,160 --> 00:22:16,879 Speaker 8: to fund more spending and then fail to receive the 425 00:22:16,880 --> 00:22:18,720 Speaker 8: revenues they expect and then are left scrambling to try 426 00:22:18,720 --> 00:22:19,399 Speaker 8: and find the money. 427 00:22:19,560 --> 00:22:22,399 Speaker 3: Yeah, Chloe, what's your view on this? I mean, we 428 00:22:22,560 --> 00:22:25,880 Speaker 3: know obviously some of Burnham's key advisors, like the former 429 00:22:25,920 --> 00:22:29,840 Speaker 3: Gold and Sax chief economist Jim O'Neil, advising on tax policy, 430 00:22:29,880 --> 00:22:33,159 Speaker 3: and again it's this idea about how radical it is 431 00:22:33,200 --> 00:22:34,720 Speaker 3: going to be, how fast. 432 00:22:35,160 --> 00:22:37,520 Speaker 9: Yeah, Jim O'Neil was one of the authors of a 433 00:22:37,680 --> 00:22:41,760 Speaker 9: report recently looking into really quite a radical overhaul of 434 00:22:41,800 --> 00:22:45,159 Speaker 9: the tax system. These are proposals along the lines of 435 00:22:45,560 --> 00:22:49,160 Speaker 9: scrapping and replacing income tax and national insurance. We also 436 00:22:49,359 --> 00:22:54,080 Speaker 9: know that another policy area that Burnham has been advised 437 00:22:54,119 --> 00:22:56,399 Speaker 9: on by some on the more kind of I suppose 438 00:22:56,440 --> 00:22:59,720 Speaker 9: you would call them progressive side, is a replacement of 439 00:22:59,800 --> 00:23:02,080 Speaker 9: cancl tax. People have talked for a long time about 440 00:23:02,080 --> 00:23:04,639 Speaker 9: simplifying it, but this would be totally replacing it with 441 00:23:04,680 --> 00:23:06,960 Speaker 9: a form of landtax. Now, these are the kind of 442 00:23:07,040 --> 00:23:11,080 Speaker 9: radical policies that Burnham's supporters in the Labor Party really 443 00:23:11,200 --> 00:23:13,080 Speaker 9: like him for, because he has seen as someone with 444 00:23:13,160 --> 00:23:16,919 Speaker 9: ambition and vision. The reality is he is talking to 445 00:23:17,240 --> 00:23:21,199 Speaker 9: as many people as possible about long term ideas. I 446 00:23:21,280 --> 00:23:23,560 Speaker 9: don't think many of these are going to be translating 447 00:23:23,600 --> 00:23:26,760 Speaker 9: into the next two to three years of his policy plan. 448 00:23:27,119 --> 00:23:30,080 Speaker 9: I think we're looking more at tweaks to the existing 449 00:23:30,119 --> 00:23:32,639 Speaker 9: tax system. He said he wants to offer some relief 450 00:23:32,720 --> 00:23:35,879 Speaker 9: on business rates for kind of high street businesses. And 451 00:23:35,960 --> 00:23:38,920 Speaker 9: another thing that I think we should be looking closely 452 00:23:38,960 --> 00:23:42,680 Speaker 9: at is this idea of fiscal devolution, which does fit 453 00:23:42,720 --> 00:23:46,680 Speaker 9: into his pro devolution agenda, to give local leaders more 454 00:23:46,760 --> 00:23:50,760 Speaker 9: power about generating and spending their own income. This is 455 00:23:50,800 --> 00:23:54,560 Speaker 9: something that's already been worked on under Rachel Reeves. So 456 00:23:54,600 --> 00:23:57,720 Speaker 9: the policy is kind of halfway there and I can't 457 00:23:57,720 --> 00:23:59,680 Speaker 9: see it being anything Burnham would want to row back 458 00:23:59,680 --> 00:24:02,760 Speaker 9: on give and he's explicitly said multiple times that local 459 00:24:02,840 --> 00:24:06,080 Speaker 9: leaders should have more power over how they make money 460 00:24:06,359 --> 00:24:08,439 Speaker 9: and what that money is spent on, and that's the 461 00:24:08,480 --> 00:24:10,080 Speaker 9: kind of thing I think we should be looking close 462 00:24:10,119 --> 00:24:12,360 Speaker 9: toly at the near term changes, if you like. 463 00:24:12,800 --> 00:24:15,280 Speaker 3: Okay, something then for us to think about the next 464 00:24:15,280 --> 00:24:18,760 Speaker 3: few days and weeks as we see a new labor 465 00:24:18,800 --> 00:24:22,840 Speaker 3: team coming into number ten and number eleven Downing Street, 466 00:24:23,080 --> 00:24:25,840 Speaker 3: and of course we'll expect an autumn budget. There's also 467 00:24:25,880 --> 00:24:29,440 Speaker 3: the Labor Party conference that takes place in September, so 468 00:24:29,520 --> 00:24:32,679 Speaker 3: we're in another period of big changes. Chloe, thank you 469 00:24:32,720 --> 00:24:35,560 Speaker 3: so much for being with us. Chloe Chaplain and Matt 470 00:24:35,600 --> 00:24:39,320 Speaker 3: Bonny really appreciate your thoughts. With Andreie Bernham expected to 471 00:24:39,480 --> 00:24:42,320 Speaker 3: enter Downing Street on the twentieth of July, we will 472 00:24:42,359 --> 00:24:45,359 Speaker 3: have full coverage on what to expect for his first 473 00:24:45,400 --> 00:24:48,719 Speaker 3: few weeks and months in power across all Bloomberg platforms. 474 00:24:48,840 --> 00:24:50,720 Speaker 3: I'm Caroline Hepge here in London and you can catch 475 00:24:50,760 --> 00:24:53,600 Speaker 3: us every weekday morning for Bloomberg Daybreak. Youre at beginning 476 00:24:53,640 --> 00:24:56,159 Speaker 3: at six am in London. That's one am or Wall Street. 477 00:24:56,480 --> 00:25:00,320 Speaker 2: Nathan, Thanks Caroline. Man coming up on Bloomberg day Break weekend, 478 00:25:00,359 --> 00:25:04,000 Speaker 2: we look ahead to Marine Week in Japan. I'm Nathan 479 00:25:04,000 --> 00:25:17,960 Speaker 2: Hager And this is Bloomberg. This is Bloomberg day Break weekend, 480 00:25:18,040 --> 00:25:20,719 Speaker 2: our global look ahead at the top stories for investors 481 00:25:20,760 --> 00:25:23,280 Speaker 2: in the coming week. I'm Nathan Hager in New York. 482 00:25:23,680 --> 00:25:26,840 Speaker 2: Japan celebrates Marine Day in the coming week. It will 483 00:25:26,840 --> 00:25:30,560 Speaker 2: mark the unofficial start of beach and island hopping season. 484 00:25:30,960 --> 00:25:33,440 Speaker 2: For a closer look, let's hop over to Doug Krisner, 485 00:25:33,440 --> 00:25:35,560 Speaker 2: host of the Bloomberg Daybreak Asia podcast. 486 00:25:35,920 --> 00:25:39,639 Speaker 4: Thanks Nathan. This holiday is also known as Ocean Day 487 00:25:39,800 --> 00:25:42,960 Speaker 4: or Sea Day. Think of it as a day of appreciation, 488 00:25:43,119 --> 00:25:46,840 Speaker 4: a day when Japanese citizens are encouraged to reflect on 489 00:25:46,880 --> 00:25:50,960 Speaker 4: the seas vital role in both life and culture. Now, 490 00:25:51,000 --> 00:25:53,520 Speaker 4: beyond the trips to the beach, there will also be 491 00:25:53,680 --> 00:25:57,040 Speaker 4: visits to aquariums and marine parks, and there will be 492 00:25:57,080 --> 00:26:01,879 Speaker 4: events focused on education and concert Now, Marine Day doesn't 493 00:26:01,880 --> 00:26:06,960 Speaker 4: typically feature widespread commercial sales. Nonetheless, it probably will have 494 00:26:07,000 --> 00:26:10,400 Speaker 4: an impact on Japan's economy. For some insights, let's bring 495 00:26:10,440 --> 00:26:13,520 Speaker 4: in Bloomberg's Alice French, who joins us from our studio 496 00:26:13,560 --> 00:26:16,199 Speaker 4: in Tokyo. Thank you for being here, Alice. Can you 497 00:26:16,240 --> 00:26:19,560 Speaker 4: help me understand the popularity of Marine Day and the 498 00:26:19,680 --> 00:26:23,160 Speaker 4: level of participation. I'm curious about any sense of nationalism 499 00:26:23,280 --> 00:26:24,400 Speaker 4: that may exist. 500 00:26:25,040 --> 00:26:25,200 Speaker 10: Hi. 501 00:26:25,400 --> 00:26:28,160 Speaker 11: Yeah, so, I mean, c day is very much welcomed, 502 00:26:28,400 --> 00:26:31,040 Speaker 11: just because of the sheer temperature that we're feeling in 503 00:26:31,119 --> 00:26:34,880 Speaker 11: Tokyo right now. It's very humid. We're sort of around 504 00:26:35,119 --> 00:26:38,040 Speaker 11: the mid to high thirty degree celsius every day. I 505 00:26:38,080 --> 00:26:40,520 Speaker 11: know that everyone around the world is experiencing this heat, 506 00:26:40,560 --> 00:26:43,200 Speaker 11: but that just makes a trip to the beach look 507 00:26:43,280 --> 00:26:47,120 Speaker 11: even more attractive. So, yeah, we'll see family is going 508 00:26:47,200 --> 00:26:49,520 Speaker 11: to the beaches if you're living in Tokyo. Areas like 509 00:26:49,640 --> 00:26:53,440 Speaker 11: Zushi or kama Kuda particularly popular. Of course, that always 510 00:26:53,480 --> 00:26:55,720 Speaker 11: brings a bit of a burst of activity to those 511 00:26:55,760 --> 00:26:58,719 Speaker 11: more sort of rural areas outside of the big cities, 512 00:26:58,760 --> 00:27:02,040 Speaker 11: which I think is welcomed. Having said that, you know, 513 00:27:02,080 --> 00:27:05,600 Speaker 11: of course, we do have inflation continuing here in Japan, 514 00:27:05,720 --> 00:27:07,160 Speaker 11: as in a lot of the rest of the world. 515 00:27:07,160 --> 00:27:10,520 Speaker 11: A lot of people are tackling rising food costs, rising 516 00:27:10,640 --> 00:27:13,280 Speaker 11: energy costs, and so we may see more people, i suppose, 517 00:27:13,560 --> 00:27:16,280 Speaker 11: being a little bit more restrained with their holiday spending 518 00:27:16,640 --> 00:27:19,080 Speaker 11: this year. Of course, tourists as well have a part 519 00:27:19,119 --> 00:27:19,520 Speaker 11: to play. 520 00:27:19,600 --> 00:27:19,760 Speaker 5: Now. 521 00:27:19,760 --> 00:27:21,879 Speaker 11: I know that a lot of people try to avoid 522 00:27:21,960 --> 00:27:26,399 Speaker 11: Japan in July, August, September because of the mugginess, the humidity, 523 00:27:26,840 --> 00:27:29,480 Speaker 11: But Ceday is a good excuse to kind of get 524 00:27:29,520 --> 00:27:33,680 Speaker 11: out to those those coastal areas. A lot of places 525 00:27:33,720 --> 00:27:36,240 Speaker 11: have kind of special festivals and things like that. Now, 526 00:27:36,280 --> 00:27:38,800 Speaker 11: of course, recent months we have seen a bit of 527 00:27:38,800 --> 00:27:41,439 Speaker 11: a pullback in tourists from China because we do have 528 00:27:41,480 --> 00:27:45,440 Speaker 11: an ongoing diplomatic spat, and recent monthly figures have shown 529 00:27:45,480 --> 00:27:49,320 Speaker 11: that those Chinese numbers continuing to fall. But the weekgend 530 00:27:49,400 --> 00:27:52,240 Speaker 11: still drawing a lot of people from Europe and the US, 531 00:27:52,280 --> 00:27:54,760 Speaker 11: and I think we'll probably see a lot of tourists 532 00:27:54,880 --> 00:27:56,960 Speaker 11: enjoying the sea on Monday. 533 00:27:57,119 --> 00:27:59,920 Speaker 4: So you mentioned the inflationary pressures, the weakness in the current, 534 00:28:00,480 --> 00:28:04,440 Speaker 4: and I'm curious about the current mood among Japanese consumers. 535 00:28:04,480 --> 00:28:07,480 Speaker 4: Would you describe it as a little pessimistic right now? 536 00:28:07,760 --> 00:28:10,160 Speaker 11: Yeah, I think it very much depends, and we're definitely 537 00:28:10,160 --> 00:28:12,800 Speaker 11: seeing sort of a widening gap between those sort of 538 00:28:12,880 --> 00:28:15,439 Speaker 11: haves and the have nots. I would say sort of 539 00:28:15,720 --> 00:28:18,720 Speaker 11: the average person, the average worker in Tokyo, for example, 540 00:28:18,800 --> 00:28:21,639 Speaker 11: is definitely feeling the bite of inflation. When you go 541 00:28:21,680 --> 00:28:25,240 Speaker 11: to the supermarket, you can see basic items like vegetables, 542 00:28:25,320 --> 00:28:27,680 Speaker 11: eggs really rising, and it's not just the sort of 543 00:28:27,760 --> 00:28:31,320 Speaker 11: items themselves, it's the packaging to write the plastic. Of course, 544 00:28:31,320 --> 00:28:34,000 Speaker 11: we've seen rise and costs of things like naptha, that 545 00:28:34,080 --> 00:28:37,760 Speaker 11: oil feedstock as a result of the Iran conflict. Even 546 00:28:37,800 --> 00:28:40,120 Speaker 11: if that does sort of calm down a little bit 547 00:28:40,160 --> 00:28:43,520 Speaker 11: geopolitically wise, you know, we're still seeing supply chains affected 548 00:28:43,560 --> 00:28:45,600 Speaker 11: by that, I think for months to come, and people 549 00:28:45,640 --> 00:28:48,680 Speaker 11: are certainly feeling that. On the other end of the spectrum, though, 550 00:28:48,680 --> 00:28:52,080 Speaker 11: you do have those sort of more asset rich consumers, 551 00:28:52,080 --> 00:28:54,280 Speaker 11: so people for example, who manage to get into the 552 00:28:54,320 --> 00:28:57,200 Speaker 11: equity market at the right moment, we're able to sort 553 00:28:57,200 --> 00:29:00,640 Speaker 11: of ride that AI boom. And we're actually interestedly seeing 554 00:29:00,960 --> 00:29:05,200 Speaker 11: a pickup in luxury consumption among young investors, so people 555 00:29:05,240 --> 00:29:07,760 Speaker 11: in their twenties and early thirties kind of starting to 556 00:29:08,160 --> 00:29:11,440 Speaker 11: I suppose, splash their cash that they've enjoyed from those 557 00:29:11,560 --> 00:29:14,600 Speaker 11: equity gains on things like jewelry, sports cars, et cetera. 558 00:29:14,680 --> 00:29:17,440 Speaker 11: So I think we're definitely sort of seeing that inequality 559 00:29:17,880 --> 00:29:20,640 Speaker 11: broadened out, but sort of the average mood is certainly 560 00:29:20,920 --> 00:29:23,520 Speaker 11: things are getting more expensive and people are trying to 561 00:29:23,560 --> 00:29:26,840 Speaker 11: find more sort of budget friendly ways to enjoy holidays 562 00:29:26,880 --> 00:29:27,120 Speaker 11: like this. 563 00:29:27,320 --> 00:29:29,560 Speaker 4: So I mentioned a moment ago that Marine Day doesn't 564 00:29:29,640 --> 00:29:34,280 Speaker 4: typically feature widespread commercial sales, But I'm curious does it 565 00:29:34,360 --> 00:29:39,200 Speaker 4: represent a branding opportunity for domestic companies in Japan? Did 566 00:29:39,240 --> 00:29:41,960 Speaker 4: they want to be associated with this day in particular 567 00:29:42,000 --> 00:29:43,040 Speaker 4: and what it represents? 568 00:29:43,360 --> 00:29:45,920 Speaker 11: I think so. I mean, look, Japan is very good 569 00:29:45,920 --> 00:29:49,040 Speaker 11: at running with a theme, right, and certainly we might 570 00:29:49,080 --> 00:29:52,000 Speaker 11: see some of those aquariums or sort of coastal related 571 00:29:52,040 --> 00:29:55,880 Speaker 11: businesses capitalizing on this, I would say, particularly for those 572 00:29:55,960 --> 00:29:59,400 Speaker 11: local areas. So for example, I've spent many a Marine 573 00:29:59,480 --> 00:30:01,760 Speaker 11: Day up in the tour Hawker region. I love it 574 00:30:01,840 --> 00:30:04,240 Speaker 11: up there. It's a lot cooler up there, and so 575 00:30:04,320 --> 00:30:06,400 Speaker 11: a lot of those sort of local areas will will 576 00:30:06,400 --> 00:30:09,600 Speaker 11: be looking to sell some of their local souvenirs, whether 577 00:30:09,640 --> 00:30:12,520 Speaker 11: those be suites or sort of local crafts and things 578 00:30:12,600 --> 00:30:14,479 Speaker 11: like that. So I would imagine there'll be a lot 579 00:30:14,520 --> 00:30:18,400 Speaker 11: of promotions linked to that, for sure, especially centered around 580 00:30:18,440 --> 00:30:20,080 Speaker 11: families and potentially taurists too. 581 00:30:20,320 --> 00:30:23,240 Speaker 4: So what is the national conversation like in Japan when 582 00:30:23,280 --> 00:30:27,520 Speaker 4: it comes to something like ocean health or even sustainability. 583 00:30:27,560 --> 00:30:30,240 Speaker 4: I know that in some countries, for example, the topic 584 00:30:30,320 --> 00:30:33,880 Speaker 4: of man made climate change is a little controversial. I mean, 585 00:30:33,880 --> 00:30:37,520 Speaker 4: what's the national feeling around the issue of ocean health. 586 00:30:37,640 --> 00:30:40,120 Speaker 11: Yeah, this is a really good question, and we recently 587 00:30:40,120 --> 00:30:43,400 Speaker 11: did a story actually about sort of Japan's attitude to plastic. 588 00:30:43,480 --> 00:30:45,640 Speaker 11: Of course, we know plastic pollution in the ocean is 589 00:30:46,280 --> 00:30:48,800 Speaker 11: a problem the world over, but Japan does have a 590 00:30:48,840 --> 00:30:52,240 Speaker 11: particular affinity I would say for single use plastic. If 591 00:30:52,240 --> 00:30:54,320 Speaker 11: you go to any of the convenience stores, of course, 592 00:30:54,400 --> 00:30:57,760 Speaker 11: everything even single bananas, you can find wrapped in in 593 00:30:57,840 --> 00:31:02,320 Speaker 11: plastic packaging. I think among sort of the younger generations, 594 00:31:02,320 --> 00:31:04,960 Speaker 11: we're seeing more and more kind of social media campaigns 595 00:31:05,240 --> 00:31:10,280 Speaker 11: centered around things like ocean pollution, climate change in general, 596 00:31:11,200 --> 00:31:13,880 Speaker 11: and the government, you know, has been saying they've got 597 00:31:13,920 --> 00:31:16,680 Speaker 11: several targets to sort of bring down plastic use and 598 00:31:16,800 --> 00:31:20,640 Speaker 11: reduce pollution. Whether they will actually be met, I'm not sure. 599 00:31:20,760 --> 00:31:23,560 Speaker 11: Of course, cost comes into it a lot. Plastic is 600 00:31:23,680 --> 00:31:27,920 Speaker 11: very cheap. Japan is very keen on things like food hygiene, 601 00:31:28,000 --> 00:31:30,040 Speaker 11: so I think it's quite it's quite a high hurdle 602 00:31:30,120 --> 00:31:33,240 Speaker 11: to to bring down that usage, but it's certainly something 603 00:31:33,280 --> 00:31:36,280 Speaker 11: that has sort of come more into the popular discourse 604 00:31:36,560 --> 00:31:39,400 Speaker 11: as a result of the around conflict and these rising 605 00:31:39,480 --> 00:31:41,600 Speaker 11: costs for plastic and other oil products. 606 00:31:41,840 --> 00:31:44,080 Speaker 4: Talk to me a little bit about some of the 607 00:31:44,240 --> 00:31:48,160 Speaker 4: traditional practices that may be associated with this day, whether 608 00:31:48,200 --> 00:31:52,400 Speaker 4: we're talking about fishing or seafood recipes. Is that very 609 00:31:52,480 --> 00:31:54,200 Speaker 4: much a part of the consciousness here. 610 00:31:54,440 --> 00:31:56,440 Speaker 11: One hundred percent. I mean, a trip to the beach 611 00:31:56,520 --> 00:31:58,760 Speaker 11: is the typical one. You know, take the kids to 612 00:31:58,800 --> 00:32:01,600 Speaker 11: the beach, splash in the sea, I will say, I've found. 613 00:32:01,800 --> 00:32:03,640 Speaker 11: I mean, I'm from the UK and swimming in the 614 00:32:03,640 --> 00:32:06,360 Speaker 11: sea is somewhat of a kind of British tradition. Even 615 00:32:06,360 --> 00:32:09,440 Speaker 11: when it's freezing, people will go in the sea. I 616 00:32:09,440 --> 00:32:13,120 Speaker 11: think Japanese people perhaps slightly less willing to get into 617 00:32:13,160 --> 00:32:15,520 Speaker 11: freezing cold waters, but when it's warm, you will definitely 618 00:32:15,560 --> 00:32:19,000 Speaker 11: see people swimming, fishing, of course, and yes, eating seafood. 619 00:32:19,000 --> 00:32:21,160 Speaker 11: I mean Japan has, in my opinions, some of the 620 00:32:21,160 --> 00:32:23,280 Speaker 11: best seafood in the world. Of course, you can find 621 00:32:23,320 --> 00:32:26,880 Speaker 11: fantastic sashimi kai send on. These kind of raw seafood 622 00:32:26,920 --> 00:32:29,640 Speaker 11: bowls are going to be definitely consumed on Monday. I 623 00:32:29,640 --> 00:32:32,320 Speaker 11: would imagine and anything to do with water really is 624 00:32:32,640 --> 00:32:34,160 Speaker 11: definitely a big part of this day. 625 00:32:34,400 --> 00:32:37,600 Speaker 4: So as I'm listening to you talking about being along 626 00:32:37,640 --> 00:32:41,480 Speaker 4: the seaside and encountering very warm weather, I'm wondering about 627 00:32:41,480 --> 00:32:45,760 Speaker 4: the prevalence air conditioning and the extent to which there 628 00:32:45,840 --> 00:32:48,640 Speaker 4: is adequate power right now. For some reason, I just 629 00:32:48,880 --> 00:32:52,640 Speaker 4: kind of thought of Fukushima and what that really kind 630 00:32:52,680 --> 00:32:55,680 Speaker 4: of brought to the forefront in terms of the awareness 631 00:32:55,720 --> 00:32:59,000 Speaker 4: about you know, kind of harming the environment and basically 632 00:32:59,000 --> 00:33:00,880 Speaker 4: the role that the sea place in the life of 633 00:33:00,880 --> 00:33:02,440 Speaker 4: people in Japan one percent. 634 00:33:02,520 --> 00:33:04,520 Speaker 11: I mean with the air con. Look, I just spent 635 00:33:04,600 --> 00:33:06,680 Speaker 11: two weeks back at home in the UK with no 636 00:33:06,840 --> 00:33:09,560 Speaker 11: air con and it was very tough. So I'm very 637 00:33:09,600 --> 00:33:11,600 Speaker 11: happy to be back in Japan where we do have 638 00:33:11,840 --> 00:33:14,800 Speaker 11: plentiful air con and Japan make some of the best 639 00:33:14,840 --> 00:33:16,880 Speaker 11: air con units in the world. But of course, yes, 640 00:33:16,960 --> 00:33:20,080 Speaker 11: that does mean there's huge need for power, and especially 641 00:33:20,120 --> 00:33:23,200 Speaker 11: as we've seen oil prices energy prices rising in recent months, 642 00:33:23,240 --> 00:33:26,400 Speaker 11: that has sort of come into focus a lot more. 643 00:33:26,480 --> 00:33:28,600 Speaker 11: I mean you bring up for Kushima there, of course, 644 00:33:28,640 --> 00:33:32,360 Speaker 11: it really highlighted the risks of nuclear power. Of course, 645 00:33:32,360 --> 00:33:36,480 Speaker 11: a lot of nuclear power plants are located in coastal areas, 646 00:33:36,480 --> 00:33:37,960 Speaker 11: and like you say that, you know, there was a 647 00:33:38,040 --> 00:33:40,640 Speaker 11: huge impact on on the environment, not only sort of 648 00:33:40,680 --> 00:33:43,800 Speaker 11: wild sea life, but also farmers in the region that 649 00:33:43,880 --> 00:33:46,400 Speaker 11: I think many are still kind of putting their businesses 650 00:33:46,400 --> 00:33:49,160 Speaker 11: and their lives back together, even more than ten years on. 651 00:33:49,360 --> 00:33:53,240 Speaker 11: Having said that, the Takaichi government is focusing on nuclear 652 00:33:53,320 --> 00:33:55,760 Speaker 11: energy as one of one of their policies. They want 653 00:33:55,800 --> 00:33:58,360 Speaker 11: to kind of get more power plants back up and running. 654 00:33:58,400 --> 00:34:01,880 Speaker 11: We've seen nuclear power related stocks, for example, in the 655 00:34:01,880 --> 00:34:05,480 Speaker 11: market really benefiting in recent months since She's come to power. 656 00:34:05,480 --> 00:34:07,680 Speaker 11: I think there's definitely this sense that Japan wants to 657 00:34:07,720 --> 00:34:10,960 Speaker 11: sort of become more self reliant when it comes to energy, 658 00:34:11,680 --> 00:34:13,560 Speaker 11: and so they are trying to bring more of those 659 00:34:13,560 --> 00:34:17,480 Speaker 11: power plants back online in a safe way that sort 660 00:34:17,520 --> 00:34:21,520 Speaker 11: of you know, that works for the national feeling around 661 00:34:21,920 --> 00:34:23,880 Speaker 11: nuclear power, which of course there is still a little 662 00:34:23,880 --> 00:34:26,200 Speaker 11: bit anxiety after what happened in Fukshima, no. 663 00:34:26,239 --> 00:34:29,200 Speaker 4: Doubt about that. Alice, thank you so very much. We'll 664 00:34:29,239 --> 00:34:33,080 Speaker 4: leave it there. Bloomberg's Alice French in Tokyo. So the 665 00:34:33,120 --> 00:34:36,240 Speaker 4: World Cup final is Sunday, and this year the tournament 666 00:34:36,320 --> 00:34:39,360 Speaker 4: gave an economic boost to host countries in North America. 667 00:34:39,719 --> 00:34:44,000 Speaker 4: The APEX Sports Business Group leader for Deloitte is James Walton, 668 00:34:44,040 --> 00:34:46,440 Speaker 4: and he spoke with Bloomberg's Heidi Stroud Watts. 669 00:34:46,760 --> 00:34:49,640 Speaker 12: James, I was just seeing a little bit earlier. There 670 00:34:49,680 --> 00:34:52,759 Speaker 12: was a real interviewing people that made a trip and 671 00:34:53,640 --> 00:34:55,600 Speaker 12: an adventure out of going to the World Cup. And 672 00:34:55,680 --> 00:34:58,759 Speaker 12: it feels like money is no object for some of 673 00:34:58,800 --> 00:35:01,359 Speaker 12: these people that have got along for the ride. Right. 674 00:35:01,560 --> 00:35:05,880 Speaker 12: What is it about this event in particular that drives 675 00:35:05,920 --> 00:35:08,759 Speaker 12: this revenue, because I do want to know why it's 676 00:35:08,800 --> 00:35:10,920 Speaker 12: become even more lucrative than before. 677 00:35:11,200 --> 00:35:13,080 Speaker 10: So I think there's a couple of things. One is, 678 00:35:13,120 --> 00:35:15,120 Speaker 10: from a fan point of view, most of us grew 679 00:35:15,200 --> 00:35:17,000 Speaker 10: up watching a World Cup when we were younger, and 680 00:35:17,040 --> 00:35:19,920 Speaker 10: the opportunity to actually attend, you know, whether it's on 681 00:35:19,960 --> 00:35:23,000 Speaker 10: your own doorstep or whether it's in an exotic location somewhere. 682 00:35:23,160 --> 00:35:26,160 Speaker 10: The opportunity to actually attend a World Cup, say I 683 00:35:26,320 --> 00:35:29,000 Speaker 10: was there, see all the action in the flesh, really 684 00:35:29,000 --> 00:35:32,640 Speaker 10: as a bucket list for many football fans. That's from 685 00:35:32,640 --> 00:35:34,799 Speaker 10: the fans point of view, but from the overall point 686 00:35:34,800 --> 00:35:36,920 Speaker 10: of view, you know, having a World Cup in a 687 00:35:37,000 --> 00:35:39,560 Speaker 10: country like the US, which is clearly one of the 688 00:35:39,600 --> 00:35:43,319 Speaker 10: best countries when it comes to activating sponsorships from a 689 00:35:43,360 --> 00:35:46,000 Speaker 10: sporting point of view and from a financial point of view, 690 00:35:46,000 --> 00:35:49,280 Speaker 10: this has undoubtedly been a success as you just set out. 691 00:35:49,480 --> 00:35:51,839 Speaker 12: Do you think then in that respect this is going 692 00:35:51,880 --> 00:35:55,600 Speaker 12: to weigh into how future host countries are chosen. 693 00:35:55,880 --> 00:35:56,040 Speaker 5: Well. 694 00:35:56,040 --> 00:35:58,440 Speaker 10: I think FIFA has been having a few issues with 695 00:35:58,480 --> 00:36:00,640 Speaker 10: that over the last couple of years because there's been 696 00:36:00,760 --> 00:36:03,080 Speaker 10: some locations and we look at the recent World Cup 697 00:36:03,120 --> 00:36:06,160 Speaker 10: in Qatar, the upcoming World Cup in Saudi in a 698 00:36:06,160 --> 00:36:08,799 Speaker 10: few years time, where it's pretty clear that money is 699 00:36:08,840 --> 00:36:12,399 Speaker 10: in the basis of why that opportunity is taking part. 700 00:36:12,480 --> 00:36:15,880 Speaker 10: At the same time, you have some perhaps established nations 701 00:36:15,880 --> 00:36:18,200 Speaker 10: that have been bailing for World Cups on the basis of, 702 00:36:18,400 --> 00:36:20,759 Speaker 10: you know, we are an established football nation that have 703 00:36:20,840 --> 00:36:23,360 Speaker 10: not had the opportunity to do so. And it's pretty 704 00:36:23,360 --> 00:36:26,399 Speaker 10: clear that FIFA's message now is that every World Cup 705 00:36:26,440 --> 00:36:28,359 Speaker 10: needs to be bigger and better than the last, and 706 00:36:28,400 --> 00:36:31,279 Speaker 10: what they're looking for from host nations is how are 707 00:36:31,320 --> 00:36:34,839 Speaker 10: you going to help them to commercialize and help them 708 00:36:34,880 --> 00:36:36,279 Speaker 10: to expand the appeal of the game. 709 00:36:36,640 --> 00:36:40,120 Speaker 12: Myriad grievances and controversies when it comes to FIFA, not 710 00:36:40,520 --> 00:36:43,239 Speaker 12: just with this World Cup but previous iterations as well. Right, 711 00:36:43,280 --> 00:36:45,520 Speaker 12: does that have an impact on sponsorship that doesn't seem 712 00:36:45,560 --> 00:36:48,840 Speaker 12: to damage the broader brand of the sport at all. 713 00:36:48,920 --> 00:36:50,600 Speaker 10: I think over the last couple of years, and this 714 00:36:50,640 --> 00:36:53,479 Speaker 10: goes back even before Infantino's time, even back to set 715 00:36:53,480 --> 00:36:57,640 Speaker 10: Bladders time, there was various accusations level at FIFA, particularly 716 00:36:57,640 --> 00:37:00,400 Speaker 10: around the process of how the World Cup was awarded. 717 00:37:00,440 --> 00:37:03,360 Speaker 10: The Russia edition in twenty eighteen the Quitar edition in 718 00:37:03,400 --> 00:37:06,000 Speaker 10: twenty twenty two were particularly under the spotlight and at 719 00:37:06,040 --> 00:37:09,000 Speaker 10: various times there have been sponsors that have said that 720 00:37:09,120 --> 00:37:13,040 Speaker 10: they will be reducing their sponsorship or withdrawing from sponsorship. 721 00:37:13,200 --> 00:37:14,680 Speaker 10: But at the end of the day, there is no 722 00:37:14,960 --> 00:37:18,400 Speaker 10: other event that compares to the World Cup in terms 723 00:37:18,440 --> 00:37:21,560 Speaker 10: of the opportunity that sponsorship presents. The Olympics is not 724 00:37:21,640 --> 00:37:23,680 Speaker 10: at the same table. The super Bowl is there, but 725 00:37:23,719 --> 00:37:27,520 Speaker 10: the super Bowl is primarily obviously a US focused event, 726 00:37:27,680 --> 00:37:30,279 Speaker 10: So it is such an opportunity for sponsors that are 727 00:37:30,280 --> 00:37:32,359 Speaker 10: willing to put their money there, and we have seen 728 00:37:32,800 --> 00:37:35,719 Speaker 10: that sometimes money talks and those decisions around whether or 729 00:37:35,760 --> 00:37:38,520 Speaker 10: not to continue with sponsorship have been very much based 730 00:37:38,560 --> 00:37:41,960 Speaker 10: on the ROI and the KPIs being met, perhaps sometimes 731 00:37:42,040 --> 00:37:44,960 Speaker 10: rather than whether or not they truly felt ethically that 732 00:37:45,000 --> 00:37:46,000 Speaker 10: this was the right direction. 733 00:37:46,239 --> 00:37:50,400 Speaker 4: That's Deloitte's Apax Sports Business Group leader James Walton speaking 734 00:37:50,400 --> 00:37:53,680 Speaker 4: with Bloomberg's Heidi Stroud Watts. I'm Doug Prisner. You can 735 00:37:53,719 --> 00:37:57,040 Speaker 4: catch us weekdays for the Daybreak Asia podcast. It's available 736 00:37:57,080 --> 00:37:58,840 Speaker 4: wherever you get your podcast. 737 00:37:59,160 --> 00:38:02,120 Speaker 2: Nathan, Thanks Doug, and that does it for this edition 738 00:38:02,200 --> 00:38:05,719 Speaker 2: of Bloomberg Daybreak Weekend. Join us again Monday morning at 739 00:38:05,760 --> 00:38:08,440 Speaker 2: five am Wall Street Time for the latest don markets, 740 00:38:08,440 --> 00:38:10,680 Speaker 2: overseas and the news you need to start your day. 741 00:38:11,040 --> 00:38:13,880 Speaker 2: I'm Nathan Hager. Stay with us. Top stories and global 742 00:38:13,960 --> 00:38:16,320 Speaker 2: business headlines are coming up right now.