1 00:00:03,560 --> 00:00:06,240 Speaker 1: This is Bloomberg Daybreak Weekend, our global look at the 2 00:00:06,240 --> 00:00:09,360 Speaker 1: top stories in the coming week from our Daybreak anchors 3 00:00:09,360 --> 00:00:11,440 Speaker 1: all around the world, and straight ahead on the program. 4 00:00:11,440 --> 00:00:15,160 Speaker 1: Another big week coming for bank earnings. I'm Tom Busby 5 00:00:15,280 --> 00:00:17,920 Speaker 1: in New York. I'm Stephen Carlin London with a Prime Minister, 6 00:00:17,960 --> 00:00:19,759 Speaker 1: and the Bank of England will be hoping there won't 7 00:00:19,760 --> 00:00:23,599 Speaker 1: be another unpleasant inflation surprise in store. I'm Brian Curtis 8 00:00:23,600 --> 00:00:26,040 Speaker 1: in Hong Kong. We look ahead at Tesla's earnings by 9 00:00:26,160 --> 00:00:29,520 Speaker 1: the company's progress in China. I'm Kaylee Lines in Washington, 10 00:00:29,600 --> 00:00:32,000 Speaker 1: where we're getting ready for Congress to come back to 11 00:00:32,040 --> 00:00:35,760 Speaker 1: the Capitol after two week recess. Watch for fireworks when 12 00:00:35,800 --> 00:00:40,159 Speaker 1: they return. That's all straight ahead on Bloomberg Daybreak Weekend 13 00:00:40,360 --> 00:00:44,960 Speaker 1: on Bloomberg eleven three on New York, Bloomberg ninety nine one, Washington, DC, 14 00:00:45,280 --> 00:00:49,360 Speaker 1: Bloomberg one O six one, Boston, Bloomberg nine sixty, San Francisco, 15 00:00:49,600 --> 00:00:53,840 Speaker 1: DAB Digital Radio, London, Sirius XM one nineteen and around 16 00:00:53,840 --> 00:00:56,480 Speaker 1: the world on Bloomberg Radio dot Com and via the 17 00:00:56,520 --> 00:01:02,760 Speaker 1: Bloomberg Business App. Good day to you. I'm Tom Busby, 18 00:01:02,800 --> 00:01:05,440 Speaker 1: and we begin today's program with all the first quarterbank 19 00:01:05,520 --> 00:01:08,280 Speaker 1: earnings that began this past Friday and continue in the 20 00:01:08,319 --> 00:01:11,959 Speaker 1: coming week. Bloomberg Wall Street reporter Shanali Bassett joining me 21 00:01:12,040 --> 00:01:16,320 Speaker 1: now for some insight. He s, all right, well, let's 22 00:01:16,319 --> 00:01:17,880 Speaker 1: start with some of the good news that we heard 23 00:01:17,959 --> 00:01:22,399 Speaker 1: on Friday, particularly upside earning surprises from the biggest JP 24 00:01:22,480 --> 00:01:25,520 Speaker 1: Morgan Chase and Citygroup. Yeah, there are a few things. 25 00:01:25,640 --> 00:01:28,600 Speaker 1: For JP Morgan in particular, not only did they beat 26 00:01:28,680 --> 00:01:32,880 Speaker 1: on revenue, they also had some really interesting items within 27 00:01:33,120 --> 00:01:35,680 Speaker 1: different lines of the banks. So, for example, they said 28 00:01:35,680 --> 00:01:38,640 Speaker 1: they're going to make billions of dollars more in net 29 00:01:38,680 --> 00:01:43,399 Speaker 1: interest income than was initially expected. Another thing that happened though, 30 00:01:43,640 --> 00:01:46,520 Speaker 1: was that they beat on fixed income trading, and so 31 00:01:46,560 --> 00:01:49,640 Speaker 1: you also saw an institutional business do very well here 32 00:01:49,720 --> 00:01:54,040 Speaker 1: relative to what was expected. That was similar for Citygroup 33 00:01:54,080 --> 00:01:56,520 Speaker 1: as well. Remember, the markets are still very volatile, so 34 00:01:56,560 --> 00:02:00,160 Speaker 1: the fact that they're still making money from institutional clients 35 00:02:00,160 --> 00:02:02,520 Speaker 1: are a big deal as we watch some of the 36 00:02:02,560 --> 00:02:04,560 Speaker 1: cracks in the market and how they affect both the 37 00:02:04,560 --> 00:02:08,519 Speaker 1: consumer and institutional clients. Now, speaking of those cracks, JP 38 00:02:08,600 --> 00:02:11,800 Speaker 1: Morgan Chase CEO Jamie Diamond told investors, you can count 39 00:02:11,800 --> 00:02:15,919 Speaker 1: the number of troubled banks on your hands. What does 40 00:02:15,960 --> 00:02:18,120 Speaker 1: that tell us? You know, nobody wants to be in 41 00:02:18,160 --> 00:02:21,320 Speaker 1: a banking crisis. Or you can use what Muhammadalarian would say, 42 00:02:21,320 --> 00:02:24,079 Speaker 1: and he says it's a banking tremor, not a banking crisis. 43 00:02:24,560 --> 00:02:27,679 Speaker 1: And even with the struggles we're seeing with the likes 44 00:02:27,680 --> 00:02:30,160 Speaker 1: of Silicon Valley Bank, a lot of questions still around 45 00:02:30,200 --> 00:02:33,040 Speaker 1: First Republic. What JP Morgan and City Group are telling 46 00:02:33,080 --> 00:02:37,440 Speaker 1: you that this is fairly contained now? JP Morgan banks 47 00:02:37,560 --> 00:02:41,080 Speaker 1: hundreds of banks in America as well. There are more 48 00:02:41,080 --> 00:02:44,640 Speaker 1: than four thousand of them, and there's a consensus here 49 00:02:44,680 --> 00:02:47,280 Speaker 1: among even the largest banks which have benefited a lot 50 00:02:47,320 --> 00:02:50,359 Speaker 1: from this kind of banking tremor crisis, whatever you want 51 00:02:50,360 --> 00:02:53,840 Speaker 1: to call it. The thing here is those regional banks 52 00:02:53,840 --> 00:02:56,040 Speaker 1: are really what touches a lot of America. They have 53 00:02:56,080 --> 00:02:58,639 Speaker 1: a lot of exposure to commercial real estate, for example, 54 00:02:58,919 --> 00:03:02,800 Speaker 1: small businesses which employ a lot of the American economy. 55 00:03:03,080 --> 00:03:05,240 Speaker 1: So if those regional banks face a lot of pressure, 56 00:03:05,280 --> 00:03:06,720 Speaker 1: which is really what we're going to see the bulk 57 00:03:06,760 --> 00:03:08,680 Speaker 1: of in terms of the earning cycle the next couple 58 00:03:08,680 --> 00:03:12,440 Speaker 1: of weeks, there could be ripple effects to any pains 59 00:03:12,520 --> 00:03:15,880 Speaker 1: those banks, the smaller banks would feel and in the 60 00:03:15,919 --> 00:03:19,640 Speaker 1: earnings that we just had on Friday, do we see 61 00:03:19,840 --> 00:03:21,760 Speaker 1: the movement of a lot of money, a lot of 62 00:03:21,800 --> 00:03:24,440 Speaker 1: deposits coming out of those regional banks and into the 63 00:03:24,440 --> 00:03:27,399 Speaker 1: big East. It was most notable at JP Morgan, where 64 00:03:26,680 --> 00:03:31,000 Speaker 1: they posted a surprise increase in deposits. They had been 65 00:03:31,440 --> 00:03:34,600 Speaker 1: drawing down for the last couple of quarters here because 66 00:03:34,680 --> 00:03:37,680 Speaker 1: interest rates are still very high, people moving into money 67 00:03:37,680 --> 00:03:40,720 Speaker 1: market funds instead. JP Morgan is telling you that don't 68 00:03:40,720 --> 00:03:44,000 Speaker 1: expect this kind of increase in deposits to continue, even 69 00:03:44,000 --> 00:03:46,000 Speaker 1: what they took in in the wake of kind of 70 00:03:46,000 --> 00:03:49,360 Speaker 1: the Silicon Valley bank issue. They say that these are 71 00:03:49,360 --> 00:03:51,960 Speaker 1: not necessarily sticky deposits. They can go out the door 72 00:03:52,080 --> 00:03:54,200 Speaker 1: just as easily as they've come in. Of course, we 73 00:03:54,200 --> 00:03:57,040 Speaker 1: don't worry about deposits at JP Morgan. You know, I 74 00:03:57,080 --> 00:03:59,800 Speaker 1: want to say that their deposit base is probably bigger 75 00:03:59,840 --> 00:04:02,920 Speaker 1: here than the GDP of France. It's two point three 76 00:04:03,040 --> 00:04:06,200 Speaker 1: seven trillion dollars we're talking about in deposits at JP Morgan. 77 00:04:06,480 --> 00:04:10,400 Speaker 1: But again, you know, does that deposit movement cause fragilities 78 00:04:10,440 --> 00:04:13,040 Speaker 1: in the smaller banks. That's where it becomes more of 79 00:04:13,040 --> 00:04:16,000 Speaker 1: a question. Now, I want to touch on something you 80 00:04:16,080 --> 00:04:18,920 Speaker 1: spoke about, and that is higher interest rates and how 81 00:04:18,960 --> 00:04:22,440 Speaker 1: these banks benefited from the What's it been nine in 82 00:04:22,480 --> 00:04:25,960 Speaker 1: a row of increases from the Federal Reserve and maybe 83 00:04:25,960 --> 00:04:28,479 Speaker 1: one or two more to come. The interesting thing about 84 00:04:28,560 --> 00:04:31,080 Speaker 1: this is that if you look at City Group and 85 00:04:31,120 --> 00:04:33,160 Speaker 1: if you look at JP Morgan, a lot of this 86 00:04:33,240 --> 00:04:37,320 Speaker 1: is coming from their credit card portfolios. So they're really 87 00:04:37,520 --> 00:04:40,680 Speaker 1: getting more because people are borrowing more from on their 88 00:04:40,680 --> 00:04:43,200 Speaker 1: credit card debt. That's not the same by the way, 89 00:04:43,240 --> 00:04:45,240 Speaker 1: as we know for a lot of the regionals and 90 00:04:45,279 --> 00:04:48,800 Speaker 1: for Wells Fargo, which is more heavily tilted towards, for example, 91 00:04:48,839 --> 00:04:51,520 Speaker 1: the mortgage market, which has been facing a lot of 92 00:04:51,560 --> 00:04:54,120 Speaker 1: pressures in this higher interest rate environment. Oh yeah, and 93 00:04:55,040 --> 00:04:58,760 Speaker 1: we just saw, speaking of credit cards, retail sales dipping 94 00:04:59,400 --> 00:05:03,640 Speaker 1: last last month. But still it's it's a big pot 95 00:05:03,760 --> 00:05:06,039 Speaker 1: that you know, we're spending a lot of money Americans, 96 00:05:06,040 --> 00:05:08,040 Speaker 1: and it makes total sense. You see them the bank numbers. 97 00:05:08,080 --> 00:05:11,799 Speaker 1: Also you see card spending up at these banks. How 98 00:05:11,839 --> 00:05:14,120 Speaker 1: long that continues for remember a couple of times this 99 00:05:14,240 --> 00:05:16,960 Speaker 1: year Jamie Diamond has said that the consumer will start 100 00:05:17,000 --> 00:05:18,400 Speaker 1: to hit a cliff at the end of this year. 101 00:05:18,800 --> 00:05:21,720 Speaker 1: So you have city groups saying that you can expect 102 00:05:21,880 --> 00:05:24,880 Speaker 1: kind of a soft or shallow recession, if you will, 103 00:05:25,080 --> 00:05:27,280 Speaker 1: maybe in the second half of this year. But then 104 00:05:27,320 --> 00:05:29,400 Speaker 1: you also have to take into account what Jamie Diamond 105 00:05:29,440 --> 00:05:32,520 Speaker 1: and JP Morgan has said about the uncertainties that bake 106 00:05:32,600 --> 00:05:35,240 Speaker 1: into twenty twenty four into next year. So we're talking 107 00:05:35,240 --> 00:05:38,480 Speaker 1: about a long horizon of uncertainty here. So that so 108 00:05:38,600 --> 00:05:42,480 Speaker 1: despite you know, the upbeat earnings, they are very cautious. 109 00:05:42,480 --> 00:05:45,599 Speaker 1: They are being cautious. They're telling investors it's not over yet, 110 00:05:46,240 --> 00:05:49,320 Speaker 1: certainly not. And even in their numbers alone, you see 111 00:05:49,360 --> 00:05:53,159 Speaker 1: them really preparing with higher provisions for credit losses, even 112 00:05:53,240 --> 00:05:56,479 Speaker 1: higher charge offs. The ninety data linguency rate on for example, 113 00:05:56,720 --> 00:05:58,960 Speaker 1: JP Morgan's credit card book has ticked a little higher. 114 00:05:59,200 --> 00:06:03,400 Speaker 1: They're well bull you know levels we've seen that would 115 00:06:03,640 --> 00:06:07,000 Speaker 1: be considered alarming. They're well below that. JP Morgan calls 116 00:06:07,000 --> 00:06:10,040 Speaker 1: it a normalization. We're getting it back to more normal levels. 117 00:06:10,320 --> 00:06:13,040 Speaker 1: You're going to get more losses as you're lending more. 118 00:06:13,440 --> 00:06:17,560 Speaker 1: But all in all, I mean, JP Morgan is very profitable. 119 00:06:17,680 --> 00:06:19,479 Speaker 1: In fact, in terms of revenue. They just had a 120 00:06:19,480 --> 00:06:24,840 Speaker 1: record corridor. So that is a pretty incredible considering all 121 00:06:24,839 --> 00:06:28,279 Speaker 1: the worries that we had gone into the quarter with. Right, 122 00:06:29,000 --> 00:06:33,360 Speaker 1: and now the cavalcade of earnings continues this coming week 123 00:06:33,560 --> 00:06:36,760 Speaker 1: and we hear from some the rest of the biggies, 124 00:06:37,160 --> 00:06:39,280 Speaker 1: a lot of the regional banks, even the small ones. 125 00:06:39,360 --> 00:06:42,360 Speaker 1: So what are we expecting to hear from Bank of America, 126 00:06:42,440 --> 00:06:45,520 Speaker 1: from Golden Sex, from Morgan Stanley on the Bank of 127 00:06:45,600 --> 00:06:47,479 Speaker 1: of America front. I think it'll be interesting to see 128 00:06:47,480 --> 00:06:49,680 Speaker 1: what they say on that interest income, given that they're 129 00:06:49,720 --> 00:06:52,080 Speaker 1: such a big lender to the American economy. Do they 130 00:06:52,160 --> 00:06:54,719 Speaker 1: say the same things as JP Morgan that they expect more? 131 00:06:55,000 --> 00:06:57,880 Speaker 1: Remember City Group didn't really change their outlook for the year, 132 00:06:58,320 --> 00:07:01,320 Speaker 1: and also JP Morgan City Group in particular, their head 133 00:07:01,440 --> 00:07:04,640 Speaker 1: count has risen over the past year. How about Bank 134 00:07:04,680 --> 00:07:08,440 Speaker 1: of America Wages have risen also, so we know that 135 00:07:08,480 --> 00:07:11,960 Speaker 1: expenses tied to pay are rising, but how much can 136 00:07:12,040 --> 00:07:14,920 Speaker 1: banks really take on with that much uncertainty ahead? There's 137 00:07:14,960 --> 00:07:18,400 Speaker 1: also Schwab on Monday. Remember Schwab will be very interesting 138 00:07:18,440 --> 00:07:22,400 Speaker 1: because they've had a large sell off. They are very concerned, 139 00:07:22,440 --> 00:07:25,680 Speaker 1: or their investors rather are concerned about people moving from 140 00:07:25,680 --> 00:07:28,800 Speaker 1: deposits to money market funds. It's not a question of 141 00:07:29,000 --> 00:07:32,160 Speaker 1: viability of the firm necessarily, it's a question of profitability 142 00:07:32,200 --> 00:07:35,720 Speaker 1: and what will cause more pressures at a place like Schwab. 143 00:07:36,240 --> 00:07:38,920 Speaker 1: You also have Goldman, Saxe and Morgan Stanley in the 144 00:07:38,960 --> 00:07:43,000 Speaker 1: coming days after that. Like I said, the institutions investment 145 00:07:43,040 --> 00:07:47,400 Speaker 1: banking fees are way down, but Goldman in particular, if 146 00:07:47,440 --> 00:07:51,640 Speaker 1: they find the same fixed income trading figures or beats 147 00:07:51,720 --> 00:07:54,800 Speaker 1: that JP Morgan and City Group had, you know, and 148 00:07:55,040 --> 00:07:59,000 Speaker 1: their bankers are just fine. Let's put it that way. Now. 149 00:07:59,240 --> 00:08:03,160 Speaker 1: Some of the others that have truest is one that 150 00:08:03,200 --> 00:08:06,040 Speaker 1: we just heard news from them last week, Fifth third 151 00:08:06,120 --> 00:08:08,560 Speaker 1: Key Corps, some of the second level or third level 152 00:08:08,600 --> 00:08:11,600 Speaker 1: of banks, and are we seeing a similar thing. That's 153 00:08:11,600 --> 00:08:13,680 Speaker 1: what you talked about. The ones that are the regional 154 00:08:13,680 --> 00:08:16,440 Speaker 1: banks that are really vital to smaller communities. This is 155 00:08:16,480 --> 00:08:18,800 Speaker 1: where it gets so stressful. The big banks this quarter, 156 00:08:18,880 --> 00:08:22,920 Speaker 1: they're very easy stories more or less, but the regional banks, 157 00:08:24,120 --> 00:08:26,680 Speaker 1: line by line, number my number. If I take a 158 00:08:26,720 --> 00:08:29,480 Speaker 1: look at P and C all through Friday had been 159 00:08:29,600 --> 00:08:32,320 Speaker 1: kind of up and down in the stock market. They 160 00:08:32,400 --> 00:08:35,360 Speaker 1: were up, they were down, and remember they were stable 161 00:08:35,440 --> 00:08:39,520 Speaker 1: in their actual numbers. When you looked at the deposit flows, 162 00:08:39,520 --> 00:08:42,040 Speaker 1: they actually did better than what Wall Street had expected. 163 00:08:42,600 --> 00:08:45,080 Speaker 1: So do we see the same from M ANDT and 164 00:08:45,120 --> 00:08:47,280 Speaker 1: Fifth Third and all of these other regionals or did 165 00:08:47,320 --> 00:08:52,760 Speaker 1: they for whatever reason face stiffer outputs and deposits from 166 00:08:52,800 --> 00:08:56,000 Speaker 1: their clients? You know, PNC is based in Pittsburgh, some 167 00:08:56,080 --> 00:08:58,599 Speaker 1: of them. Some people say that these are regional differences. 168 00:08:59,000 --> 00:09:00,920 Speaker 1: It tended to be a lot of the California banks. 169 00:09:00,920 --> 00:09:04,199 Speaker 1: People were concerned about the concentration and some of those 170 00:09:04,480 --> 00:09:07,240 Speaker 1: you know, First Republic and Silicon Valley Bank kind of 171 00:09:07,440 --> 00:09:10,640 Speaker 1: stories and their balance sheets. But do you see those 172 00:09:10,679 --> 00:09:13,800 Speaker 1: same pressures really start to come across from the client 173 00:09:13,840 --> 00:09:17,160 Speaker 1: base at least from a lot of these regionals. And 174 00:09:17,200 --> 00:09:19,240 Speaker 1: then you have to add the other question of what 175 00:09:19,280 --> 00:09:22,240 Speaker 1: did their loan books look like? Which is another question 176 00:09:22,400 --> 00:09:26,120 Speaker 1: that will continue to be a worry throughout the year. 177 00:09:26,280 --> 00:09:29,960 Speaker 1: Is if you're worried about credit quality deteriorating, and some 178 00:09:30,040 --> 00:09:33,360 Speaker 1: of those regional banks obviously maybe on Jamie Diamond's list. 179 00:09:33,840 --> 00:09:37,600 Speaker 1: You know, we saw wild fluctuations at PacWest, a big 180 00:09:37,679 --> 00:09:40,800 Speaker 1: lender in the Los Angeles area, you know, which it 181 00:09:40,800 --> 00:09:43,840 Speaker 1: could be spillover from Silicon Valley Bank. But do we 182 00:09:43,880 --> 00:09:46,360 Speaker 1: have any idea what some of these where some of 183 00:09:46,360 --> 00:09:49,040 Speaker 1: these banks are or which banks he may be referring 184 00:09:49,080 --> 00:09:51,920 Speaker 1: to which ones? No, And you don't want to say 185 00:09:51,920 --> 00:09:53,920 Speaker 1: them either, because you don't want to cause any alarm. 186 00:09:54,040 --> 00:09:57,320 Speaker 1: But you know it's interesting you name PacWest. Something interesting 187 00:09:57,320 --> 00:10:00,280 Speaker 1: about PacWest was one thing they did to kind of 188 00:10:00,280 --> 00:10:04,520 Speaker 1: cooled down the market was they said that they instead 189 00:10:04,520 --> 00:10:06,360 Speaker 1: of going out to the market and raising money, they 190 00:10:06,400 --> 00:10:11,679 Speaker 1: got essentially, you know, credit facility from a private firm 191 00:10:12,040 --> 00:10:14,240 Speaker 1: named Atlas sp This is a firm those started by 192 00:10:14,240 --> 00:10:17,079 Speaker 1: Apollo in the wake of Credit Suite, and they basically 193 00:10:17,160 --> 00:10:20,080 Speaker 1: lent the money against a series of assets to weather 194 00:10:20,200 --> 00:10:22,600 Speaker 1: the storm. And so you know, we could see more 195 00:10:22,640 --> 00:10:24,640 Speaker 1: deals like that. It was a very interesting deal that 196 00:10:24,720 --> 00:10:27,600 Speaker 1: I know that a lot of investors wanted to model. 197 00:10:28,120 --> 00:10:31,480 Speaker 1: And it also showed you another thing that if these 198 00:10:31,480 --> 00:10:34,040 Speaker 1: banks want to tap the capital markets, if they want 199 00:10:34,120 --> 00:10:37,319 Speaker 1: to raise money. You know, when Silicon Valley Bank happened, 200 00:10:37,840 --> 00:10:41,120 Speaker 1: that wasn't possible. The market was closed to these banks. 201 00:10:41,640 --> 00:10:45,640 Speaker 1: But now they're finding other folks. Comes at a cost, 202 00:10:45,960 --> 00:10:48,000 Speaker 1: but they could raise money to make it through this 203 00:10:48,040 --> 00:10:50,960 Speaker 1: difficult environment if they need to an alternative means of 204 00:10:51,080 --> 00:10:53,800 Speaker 1: raising money from the past. Thank you, Shinali. That was 205 00:10:53,840 --> 00:10:57,080 Speaker 1: Bloomberg Wall Street reporter Shanali bask And coming up on 206 00:10:57,120 --> 00:11:00,959 Speaker 1: Bloomberg Daybreak weekend in the UK, some key data coming 207 00:11:00,960 --> 00:11:03,760 Speaker 1: our way ahead of the Bank of England's next interest 208 00:11:03,840 --> 00:11:14,400 Speaker 1: rate decision. I'm Tom Busby. This is Bloomberg. This is 209 00:11:14,440 --> 00:11:17,240 Speaker 1: Bloomberg Daybreak weekend, our global look ahead at the top 210 00:11:17,280 --> 00:11:20,160 Speaker 1: stories for investors in the coming week. I'm Tom Busby 211 00:11:20,240 --> 00:11:23,000 Speaker 1: in New York. Up later in our program, watch for 212 00:11:23,040 --> 00:11:25,560 Speaker 1: a lot of drama as members of Congress get ready 213 00:11:25,600 --> 00:11:28,360 Speaker 1: to return to Capitol Hill. But first in the UK, 214 00:11:28,520 --> 00:11:30,840 Speaker 1: we'll get some key data in the coming days which 215 00:11:30,840 --> 00:11:34,319 Speaker 1: will factor into the Bank of England's next interest rate decision. 216 00:11:34,679 --> 00:11:36,840 Speaker 1: Like the FED, the UK Central Bank is thought to 217 00:11:36,880 --> 00:11:39,760 Speaker 1: be close to ending its hiking cycle, although the economic 218 00:11:39,840 --> 00:11:43,679 Speaker 1: situation in Britain does look quite different. Downple Moore or 219 00:11:43,760 --> 00:11:46,440 Speaker 1: let's head to London and bringing Bloomberg Daybreak Europe Banker 220 00:11:46,480 --> 00:11:49,319 Speaker 1: Stephen Carroll, Stephen Tom the Prime Minister is she seen 221 00:11:49,320 --> 00:11:51,400 Speaker 1: not named Halfing the race of inflation is one of 222 00:11:51,400 --> 00:11:53,960 Speaker 1: his five key priorities for this year. He'll be hoping 223 00:11:53,960 --> 00:11:56,520 Speaker 1: about the CPI print from March. It starts to show 224 00:11:56,520 --> 00:11:59,040 Speaker 1: that trans after we had a surprise uptake to ten 225 00:11:59,120 --> 00:12:02,040 Speaker 1: point four scent in February. To discuss this and some 226 00:12:02,160 --> 00:12:04,120 Speaker 1: more of the data points will be unpacking from the 227 00:12:04,240 --> 00:12:06,560 Speaker 1: UK in the coming days. I'm joined by Bloomberg's senior 228 00:12:06,640 --> 00:12:09,560 Speaker 1: UK economist, Dan Hanson, and our UK correspondent Lizzie Burden 229 00:12:09,640 --> 00:12:12,200 Speaker 1: is in the studio with us as well. Dan, this 230 00:12:12,360 --> 00:12:17,760 Speaker 1: February ECPI number was a shucker. Remind us what drove that. Yeah, 231 00:12:17,800 --> 00:12:20,360 Speaker 1: so we had we had a pick up in a 232 00:12:20,400 --> 00:12:22,720 Speaker 1: little well quite a big pick up actually. The surprises 233 00:12:22,760 --> 00:12:25,400 Speaker 1: and core goods inflation, so clothing and footwear and also 234 00:12:25,440 --> 00:12:29,000 Speaker 1: in food inflation as well. They were the sources of surprises, 235 00:12:30,840 --> 00:12:33,720 Speaker 1: and we were expecting a reading of nine point nine percent. 236 00:12:34,040 --> 00:12:36,000 Speaker 1: It came in ten point four percent. The Bank of 237 00:12:36,040 --> 00:12:37,920 Speaker 1: England was expecting a reading of nine point nine percent. 238 00:12:37,960 --> 00:12:42,000 Speaker 1: So you're ride it was a big surprise. Looking ahead, 239 00:12:43,120 --> 00:12:46,120 Speaker 1: I think it will probably be seen as a blip. 240 00:12:47,760 --> 00:12:50,520 Speaker 1: And there are sort of two parts of this. One 241 00:12:50,600 --> 00:12:53,920 Speaker 1: part is you're just going to get these what economists 242 00:12:53,960 --> 00:12:57,040 Speaker 1: called base effects, So these these effect these big price 243 00:12:57,160 --> 00:12:59,480 Speaker 1: rises last year, falling out of the annual comparison, and 244 00:12:59,520 --> 00:13:01,760 Speaker 1: that's going to be part of the story in March. 245 00:13:01,800 --> 00:13:05,240 Speaker 1: It's going to become a more significant story in April 246 00:13:05,280 --> 00:13:07,080 Speaker 1: and later in the year when we get the falls 247 00:13:07,360 --> 00:13:11,120 Speaker 1: the rises in gas prices falling out of the annual comparison. 248 00:13:11,240 --> 00:13:13,320 Speaker 1: But I think, looking looking to the March number, we're 249 00:13:13,360 --> 00:13:15,040 Speaker 1: going to we think we're going to see a drop 250 00:13:15,080 --> 00:13:17,079 Speaker 1: back from ten point four percent. We actually think we're 251 00:13:17,080 --> 00:13:19,600 Speaker 1: going to fall a little bit beneath ten percent. So 252 00:13:20,679 --> 00:13:22,280 Speaker 1: it looks like it's going to be a temporary blit 253 00:13:22,559 --> 00:13:25,640 Speaker 1: February figure. Okay, and you mentioned energy prices there, of 254 00:13:25,640 --> 00:13:27,720 Speaker 1: course one of the big drivers that pushed inflation up 255 00:13:27,720 --> 00:13:30,720 Speaker 1: to these levels in the end towards the end of 256 00:13:30,840 --> 00:13:35,200 Speaker 1: last year. Where is inflation looking stickier now or where 257 00:13:35,240 --> 00:13:37,600 Speaker 1: within the detail the number should we be thinking about? Yeah, 258 00:13:37,679 --> 00:13:39,600 Speaker 1: I mean this is this is I mean it goes 259 00:13:39,600 --> 00:13:41,800 Speaker 1: to the Bank of England's thinking as well. So you've 260 00:13:41,840 --> 00:13:43,960 Speaker 1: got you've got this. You're right, you've got this energy 261 00:13:43,960 --> 00:13:46,440 Speaker 1: components and over the course of this year, if wholesale 262 00:13:46,520 --> 00:13:49,680 Speaker 1: energy prices stay where they are at the moment, over 263 00:13:49,720 --> 00:13:51,640 Speaker 1: the course of this year, you're going to get about 264 00:13:51,679 --> 00:13:54,640 Speaker 1: four and a half percentage points off the headline rate 265 00:13:54,640 --> 00:13:56,720 Speaker 1: of inflation, so you're at ten point four at the moment. 266 00:13:56,760 --> 00:13:59,840 Speaker 1: That's going to get you to six, partly mechanically through 267 00:14:00,000 --> 00:14:02,400 Speaker 1: base effects, partly because we've had this fall in gas 268 00:14:02,480 --> 00:14:04,720 Speaker 1: price wholesale gas prices since the start of the year. 269 00:14:06,120 --> 00:14:09,160 Speaker 1: Where the stickiness then comes. I think there are actually 270 00:14:09,200 --> 00:14:12,040 Speaker 1: two bits of it. One is services inflation, and that's 271 00:14:12,040 --> 00:14:14,400 Speaker 1: what the Bank has said it's very focused on. But 272 00:14:14,520 --> 00:14:17,800 Speaker 1: actually what has probably been a bit stickier than most 273 00:14:17,960 --> 00:14:22,240 Speaker 1: including us, that have expected is the good side of 274 00:14:22,280 --> 00:14:27,120 Speaker 1: the basket and where the supply chain disruption really was 275 00:14:27,160 --> 00:14:29,800 Speaker 1: the source of that inflation. But actually it hasn't come 276 00:14:29,840 --> 00:14:33,120 Speaker 1: down as quickly as we'd been expecting all the Bank 277 00:14:33,120 --> 00:14:35,400 Speaker 1: of England has been expecting. So there is some stickiness 278 00:14:35,440 --> 00:14:38,000 Speaker 1: there which is cause for concern. But I think the 279 00:14:38,080 --> 00:14:40,520 Speaker 1: really key area to watch in terms of persistence, and 280 00:14:40,560 --> 00:14:43,080 Speaker 1: going to your question, is services and services inflation, which 281 00:14:43,120 --> 00:14:47,000 Speaker 1: again jump back up in February. We think it's going 282 00:14:47,000 --> 00:14:50,000 Speaker 1: to ease slightly in March. I mentioned as you see 283 00:14:50,080 --> 00:14:52,000 Speaker 1: acts promise of having inflation by the end of the year. 284 00:14:52,040 --> 00:14:54,040 Speaker 1: Your colleague Jamie Rush has the thinkly put it that 285 00:14:54,040 --> 00:14:55,640 Speaker 1: you could put a cutling pig in charge of the 286 00:14:55,640 --> 00:14:58,000 Speaker 1: economy and inflation was still fall by half by the 287 00:14:58,080 --> 00:15:00,640 Speaker 1: end of the year. How does the pick look a 288 00:15:00,680 --> 00:15:04,160 Speaker 1: little bit further out in terms of inflation will Jamie's 289 00:15:04,160 --> 00:15:06,560 Speaker 1: got a much better way of words. I think he 290 00:15:06,600 --> 00:15:09,000 Speaker 1: was a bit embarrassed after he said, of actually he 291 00:15:09,040 --> 00:15:13,000 Speaker 1: should be it's not very becoming. But look, I think 292 00:15:13,360 --> 00:15:15,240 Speaker 1: I think he's going to get He's going to meet 293 00:15:15,280 --> 00:15:18,280 Speaker 1: his target. So I think Jamie's right, You're going to 294 00:15:18,360 --> 00:15:21,600 Speaker 1: get there predominantly through these base effects as we've as 295 00:15:21,640 --> 00:15:25,200 Speaker 1: we've mentioned, but I think there's going to be there 296 00:15:25,320 --> 00:15:28,760 Speaker 1: is going to be somewhat of a slowdown in other components. 297 00:15:28,760 --> 00:15:31,560 Speaker 1: So I think core goods will continue to ease in 298 00:15:31,640 --> 00:15:34,800 Speaker 1: terms of inflation. There. Food inflation I think will come 299 00:15:34,840 --> 00:15:36,920 Speaker 1: off a little bit. It's it's extremely high at the 300 00:15:36,960 --> 00:15:39,120 Speaker 1: moment and it's probably going to pick up again in 301 00:15:39,240 --> 00:15:41,560 Speaker 1: the March report. But I think it's going to come 302 00:15:41,560 --> 00:15:45,240 Speaker 1: off and on our forecast you get to three percent 303 00:15:45,640 --> 00:15:48,320 Speaker 1: by the end of the year headline inflation. But I 304 00:15:48,320 --> 00:15:52,280 Speaker 1: think what that masks is core inflation, which we think 305 00:15:52,440 --> 00:15:53,760 Speaker 1: is going to end the year about four and a 306 00:15:53,800 --> 00:15:57,520 Speaker 1: half percent, so significantly higher, and that again reflects this 307 00:15:57,800 --> 00:16:00,320 Speaker 1: mainly reflects services inflation, but also what I've mentioned on 308 00:16:00,360 --> 00:16:02,720 Speaker 1: the good side as well. Another piece of the economic 309 00:16:02,760 --> 00:16:04,640 Speaker 1: puzzle that we're going to learn more about next week 310 00:16:04,720 --> 00:16:07,120 Speaker 1: is the labor markets. We've got jobs data out the 311 00:16:07,200 --> 00:16:10,560 Speaker 1: UK's had a particular problem with participation post the pandemic 312 00:16:10,560 --> 00:16:12,720 Speaker 1: as well. Are we likely to see any improvement on 313 00:16:12,800 --> 00:16:15,080 Speaker 1: that front? So I think what you're going to see 314 00:16:15,080 --> 00:16:18,720 Speaker 1: from the jobs the job's data is a steady unemployment rate. 315 00:16:18,840 --> 00:16:21,160 Speaker 1: So this has been a bit of a theme this 316 00:16:21,240 --> 00:16:23,440 Speaker 1: year of the economy doing a little bit better, the 317 00:16:23,560 --> 00:16:26,480 Speaker 1: labor markets staying a little bit tighter than people thoward 318 00:16:26,480 --> 00:16:31,040 Speaker 1: and not calling as quickly. But the sort of the 319 00:16:31,600 --> 00:16:34,160 Speaker 1: interesting side of this is how quickly wage growth seems 320 00:16:34,160 --> 00:16:36,320 Speaker 1: to be cooling. So if you look on if you 321 00:16:36,320 --> 00:16:38,440 Speaker 1: look at the headline measures of wage growth, we think 322 00:16:39,280 --> 00:16:41,880 Speaker 1: private sector regular pay is going to fall from seven 323 00:16:41,920 --> 00:16:44,120 Speaker 1: percent to six and a half percent, which is a big, 324 00:16:44,400 --> 00:16:46,400 Speaker 1: big drop down. But actually if you look on an 325 00:16:46,440 --> 00:16:49,400 Speaker 1: underlying basis, so that the headline measures a year on 326 00:16:49,560 --> 00:16:51,560 Speaker 1: year three months moving average, it takes a long time 327 00:16:51,600 --> 00:16:53,880 Speaker 1: for the numbers to sort of cool and fall off. 328 00:16:54,360 --> 00:16:59,840 Speaker 1: But if you look at sort of more timely, more 329 00:17:00,040 --> 00:17:03,320 Speaker 1: timely picture of the underlying wage picture, it's actually it's 330 00:17:03,360 --> 00:17:06,199 Speaker 1: actually calling very quickly. Now. That's obviously not consistent with 331 00:17:06,480 --> 00:17:08,480 Speaker 1: a title what you would expect and a tight labor 332 00:17:08,560 --> 00:17:13,199 Speaker 1: market and with expectations inflation expectations, pay expectations up at 333 00:17:13,240 --> 00:17:16,720 Speaker 1: sort of five percent mark at least in the near term. 334 00:17:16,840 --> 00:17:20,080 Speaker 1: But there is a story there that is really important, 335 00:17:20,119 --> 00:17:22,520 Speaker 1: particularly for the for the Bank of England, and that's 336 00:17:22,560 --> 00:17:24,600 Speaker 1: something that we're going to be really focused on in 337 00:17:24,680 --> 00:17:27,919 Speaker 1: the in the next job's release. Yeah, Lizzie Breddon, you've 338 00:17:27,920 --> 00:17:31,720 Speaker 1: been waiting patiently to listening into this conversation as well. 339 00:17:31,760 --> 00:17:33,480 Speaker 1: But I know the story that you've been following is 340 00:17:33,520 --> 00:17:35,679 Speaker 1: the change in the makeup of the Bank Aving's Monetary 341 00:17:35,680 --> 00:17:38,879 Speaker 1: Policy Committee won't affect the next meeting, But tell us 342 00:17:38,920 --> 00:17:41,560 Speaker 1: about Megan Green who's joining the MPC. Yeah, not the 343 00:17:41,600 --> 00:17:45,520 Speaker 1: meeting after that. It's the replacement for Sylvana turn Railroad. 344 00:17:45,720 --> 00:17:49,320 Speaker 1: She is currently global chief Economist at the Crawl Institute. 345 00:17:49,560 --> 00:17:53,360 Speaker 1: She's got a background in financial services, also in academia, 346 00:17:53,760 --> 00:17:56,919 Speaker 1: and you know it's a difficult, delicate moment to be 347 00:17:57,000 --> 00:17:59,960 Speaker 1: joining the MPC because we're nearing the end of the 348 00:18:00,080 --> 00:18:03,400 Speaker 1: tightening cycle. You've had eleven straight hikes so far, and 349 00:18:03,560 --> 00:18:08,240 Speaker 1: this debate currently is between Sylvana ten Rairoa who Green's replacing, 350 00:18:08,240 --> 00:18:10,520 Speaker 1: and Swatty Dingra at the dovish end and then at 351 00:18:10,560 --> 00:18:13,480 Speaker 1: the hawkish end of the spectrum Katherine Mann about whether 352 00:18:13,720 --> 00:18:17,960 Speaker 1: it's time to pause. As Dan says, I noted putting 353 00:18:17,960 --> 00:18:20,639 Speaker 1: a foot in both camps, whether it's going to be 354 00:18:20,680 --> 00:18:25,760 Speaker 1: a hold or a hike. But fortunately Megan Green is 355 00:18:25,760 --> 00:18:28,399 Speaker 1: a regular on Bloomberg TV and radio, so we've had 356 00:18:28,440 --> 00:18:32,000 Speaker 1: a bit of an insight into her thoughts already. Recently 357 00:18:32,080 --> 00:18:34,960 Speaker 1: she's said that she's concerned about the impact of tightening 358 00:18:34,960 --> 00:18:38,119 Speaker 1: monetary policy on the banking system, and she said it 359 00:18:38,200 --> 00:18:40,560 Speaker 1: more in the context of the US, but it's very 360 00:18:40,560 --> 00:18:43,280 Speaker 1: applicable in the UK as well, because of course we've 361 00:18:43,280 --> 00:18:45,920 Speaker 1: had the fallout of Credit Sweets and Silicon Valley Bank. 362 00:18:46,560 --> 00:18:48,960 Speaker 1: This was a question that was raised around the last 363 00:18:49,040 --> 00:18:52,000 Speaker 1: night meeting at the Bank of England. Have financial conditions 364 00:18:52,040 --> 00:18:53,760 Speaker 1: tightened so much that the work of the Bank of 365 00:18:53,800 --> 00:18:57,200 Speaker 1: England has been done for it, and so it's interesting 366 00:18:57,240 --> 00:19:00,600 Speaker 1: that she has already had this view out there, and 367 00:19:00,760 --> 00:19:03,480 Speaker 1: given her financial services background, we know that she's very 368 00:19:03,480 --> 00:19:06,800 Speaker 1: aware of it. How will her appointment affect the balance 369 00:19:06,840 --> 00:19:09,720 Speaker 1: then on the committee? I mean it's hard. I think 370 00:19:09,760 --> 00:19:14,760 Speaker 1: as Dan's colleague Anna noted to be more dovish than 371 00:19:14,880 --> 00:19:18,400 Speaker 1: Sylvana ten Rairo, She's voted to hold at the past 372 00:19:18,440 --> 00:19:22,600 Speaker 1: three meetings. She's even been talking about cutting rates before 373 00:19:22,640 --> 00:19:26,080 Speaker 1: she leaves the committee. So it seems that this appointment 374 00:19:26,160 --> 00:19:28,840 Speaker 1: can be nothing but a tilt to the hawkish side, 375 00:19:28,960 --> 00:19:32,399 Speaker 1: no matter how dovish Meghan Green may be. But the 376 00:19:32,480 --> 00:19:34,680 Speaker 1: reality is she isn't going to take her seat until 377 00:19:34,720 --> 00:19:37,560 Speaker 1: two meetings time. As I say, the hiking cycle could 378 00:19:37,560 --> 00:19:41,960 Speaker 1: be over by then. More interesting perhaps for our UK 379 00:19:42,400 --> 00:19:47,240 Speaker 1: listeners then, is her open criticism of Brexit on Twitter. 380 00:19:48,400 --> 00:19:51,720 Speaker 1: She might have to rein that in her if she 381 00:19:51,800 --> 00:19:55,280 Speaker 1: joins the now that she's joining the MPC. Okay, Lizzie Burden, 382 00:19:55,320 --> 00:19:57,160 Speaker 1: thank you very much, a UK correspondent on our senior 383 00:19:57,280 --> 00:20:00,679 Speaker 1: UK economist at Dan Hansen as well. I'm Stephen in London. 384 00:20:00,720 --> 00:20:02,879 Speaker 1: You can catch us every weekday morning here for Bloomberg 385 00:20:03,000 --> 00:20:05,800 Speaker 1: Daybreak Europe, beginning at six am in London and one 386 00:20:05,840 --> 00:20:08,760 Speaker 1: am on Wall Streets. Tom, thank you, Stephen, And coming 387 00:20:08,840 --> 00:20:12,080 Speaker 1: up on Bloomberg Daybreak weekend. Could be a contentious week 388 00:20:12,280 --> 00:20:14,800 Speaker 1: on Capitol Hill, and we'll tell you why. I'm Tom 389 00:20:14,880 --> 00:20:28,280 Speaker 1: Busby and this is Bloomberg Broadcasting live from the Bloomberg 390 00:20:28,320 --> 00:20:33,080 Speaker 1: Interactive Broker Studio in New York. Bloomberg elvon Freo to Washington, DC, 391 00:20:33,280 --> 00:20:36,680 Speaker 1: Bloomberg ninety nine one to Boston, Bloomberg one O six 392 00:20:36,760 --> 00:20:40,040 Speaker 1: one to San Francisco, Bloomberg nine sixty to the country, 393 00:20:40,119 --> 00:20:44,399 Speaker 1: Sirius XM Channel one nineteen to London, DAB Digital Radio, 394 00:20:44,520 --> 00:20:47,600 Speaker 1: and around the globe the Bloomberg Business app and Bloomberg 395 00:20:47,720 --> 00:20:57,800 Speaker 1: Radio dot Com. This is Bloomberg Daybreak Weekend. I'm Tom 396 00:20:57,840 --> 00:20:59,879 Speaker 1: Busby in New York with your global look ahead at 397 00:20:59,880 --> 00:21:02,720 Speaker 1: the top stories for investors in the coming week. A 398 00:21:02,800 --> 00:21:05,879 Speaker 1: lot of travel this weekend for many Senators and representatives 399 00:21:05,880 --> 00:21:08,640 Speaker 1: as they make their way back to Capitol Hill after 400 00:21:08,680 --> 00:21:11,600 Speaker 1: more than two weeks of spring and Easter break. The 401 00:21:11,640 --> 00:21:13,879 Speaker 1: House and Senate will be back this week for what 402 00:21:14,000 --> 00:21:17,040 Speaker 1: could be a tense session. Now for more, let's head 403 00:21:17,040 --> 00:21:19,879 Speaker 1: to our Bloomberg ninety nine one newsroom in Washington, and 404 00:21:19,960 --> 00:21:25,320 Speaker 1: Bloomberg sound on host Kaylee Lines. Kaylee, thanks Tom. That's right, guests, 405 00:21:25,320 --> 00:21:29,080 Speaker 1: who's back back again. Almost Congress is going to get 406 00:21:29,080 --> 00:21:31,320 Speaker 1: back to work here in Washington next week after a 407 00:21:31,400 --> 00:21:35,439 Speaker 1: two week hiatus around the Easter and Passover holidays. But 408 00:21:35,640 --> 00:21:37,880 Speaker 1: as we well know, there are a lot of issues 409 00:21:37,880 --> 00:21:41,879 Speaker 1: that Republicans and Democrats don't agree on, so there remains 410 00:21:41,880 --> 00:21:45,000 Speaker 1: a question of how much work really can get done 411 00:21:45,359 --> 00:21:48,159 Speaker 1: or joined Now by Bloomberg Government reporter Emily Wilkins for 412 00:21:48,280 --> 00:21:51,000 Speaker 1: a look at the top priorities as we get back 413 00:21:51,040 --> 00:21:53,960 Speaker 1: to business on the Hill. And Emily, I say the Hill, 414 00:21:53,960 --> 00:21:56,840 Speaker 1: and I'm talking about lawmakers being back in DC, but 415 00:21:57,240 --> 00:21:59,440 Speaker 1: actually we're going to start the week with one key 416 00:21:59,480 --> 00:22:02,840 Speaker 1: lawmaker in New York, how Speaker Kevin McCarthy getting set 417 00:22:02,880 --> 00:22:04,760 Speaker 1: to give a speech to the New York Stock Exchange 418 00:22:04,800 --> 00:22:09,480 Speaker 1: at ten am on Monday. Why so, I think with 419 00:22:09,600 --> 00:22:12,240 Speaker 1: the debt limit coming up, it is certainly the biggest 420 00:22:12,280 --> 00:22:15,280 Speaker 1: news in Washington, and I think McCarthy is really trying 421 00:22:15,320 --> 00:22:17,920 Speaker 1: to make that clear connection to Wall Street and to 422 00:22:18,119 --> 00:22:21,880 Speaker 1: Washington to say, hey, look, this thing's coming up. Republicans 423 00:22:21,880 --> 00:22:24,560 Speaker 1: are going to hold firm. We absolutely demand that spending 424 00:22:24,640 --> 00:22:26,560 Speaker 1: be cut and that's the only way that we're going 425 00:22:26,640 --> 00:22:28,760 Speaker 1: to move a deal forward. So this is him kind 426 00:22:28,800 --> 00:22:32,240 Speaker 1: of doing a little bit of expectations setting really kind 427 00:22:32,240 --> 00:22:34,480 Speaker 1: of think going up to Wall Street, because sometimes I 428 00:22:34,480 --> 00:22:37,280 Speaker 1: think Wall Street and DC don't always communicate as well 429 00:22:37,280 --> 00:22:39,600 Speaker 1: as they could with each other, and I think McCarthy 430 00:22:39,680 --> 00:22:42,560 Speaker 1: is really trying to make a statement here by delivering 431 00:22:42,640 --> 00:22:46,399 Speaker 1: this speech up in New York. At the same point. 432 00:22:46,400 --> 00:22:49,399 Speaker 1: You know, we learned last week that Republicans are planning 433 00:22:49,440 --> 00:22:52,920 Speaker 1: on putting out a more detailed debt limit proposal. It'll 434 00:22:52,920 --> 00:22:55,919 Speaker 1: be packed with conservative priorities. We certainly don't think that 435 00:22:55,960 --> 00:22:58,040 Speaker 1: this is going to be the thing that actually winds 436 00:22:58,119 --> 00:23:01,280 Speaker 1: up raising the debt limit, but Republicans say, hey, we're 437 00:23:01,280 --> 00:23:03,400 Speaker 1: going to put something together. We'll put it out there, 438 00:23:03,480 --> 00:23:05,920 Speaker 1: and then the ball is in the White House's court. 439 00:23:06,040 --> 00:23:08,840 Speaker 1: They really want Biden and Kevin McCarthy to sit down 440 00:23:08,880 --> 00:23:11,800 Speaker 1: again and begin negotiating, and the White House said, hey, 441 00:23:11,840 --> 00:23:14,359 Speaker 1: if you want to negotiate, we need an actual plan. 442 00:23:14,440 --> 00:23:18,080 Speaker 1: And so this is a Republicans working to deliver on that. Okay, 443 00:23:18,080 --> 00:23:22,320 Speaker 1: so maybe maybe a first step forward, I will bring 444 00:23:22,359 --> 00:23:25,159 Speaker 1: the focus to Washington specifically Emily, I promise, but we 445 00:23:25,200 --> 00:23:26,879 Speaker 1: have to talk about the other thing that's going to 446 00:23:26,920 --> 00:23:29,800 Speaker 1: happen in New York. Also at the beginning of the week, 447 00:23:30,200 --> 00:23:33,639 Speaker 1: Jim Jordan and House Judiciary Republicans holding a field hearing 448 00:23:33,680 --> 00:23:37,879 Speaker 1: in Manhattan, talking in theory about the crime policies of 449 00:23:37,920 --> 00:23:41,159 Speaker 1: District Attorney Alvin Bragg. But this is basically about the 450 00:23:41,160 --> 00:23:45,200 Speaker 1: Trump indictment, right, This is absolutely about the Trump indictment. 451 00:23:45,240 --> 00:23:47,840 Speaker 1: Alvin Bragg was not something that Jim Jordan was interested 452 00:23:47,880 --> 00:23:51,160 Speaker 1: in before the indictment came down. And this is really 453 00:23:51,160 --> 00:23:54,399 Speaker 1: what Republicans strategy has been in terms of how they 454 00:23:54,440 --> 00:23:57,879 Speaker 1: are addressing the fact that one of the leading nominees 455 00:23:58,359 --> 00:24:01,359 Speaker 1: for their party's presidential can it is currently under the 456 00:24:01,359 --> 00:24:05,240 Speaker 1: process of being indicted. And so with that, they've really 457 00:24:05,280 --> 00:24:07,880 Speaker 1: honed in on Alvin Bragg. They've really honed in on 458 00:24:07,960 --> 00:24:10,720 Speaker 1: his policies. And it's also interesting to know, Kayley, the 459 00:24:10,760 --> 00:24:14,520 Speaker 1: strategy that Republicans have taken up of doing these field hearings. 460 00:24:14,880 --> 00:24:17,520 Speaker 1: This is a thought that Republicans have had sort of 461 00:24:17,560 --> 00:24:20,640 Speaker 1: making sure that they are going out to various communities 462 00:24:20,840 --> 00:24:23,600 Speaker 1: and places around the country that they're kind of getting 463 00:24:23,600 --> 00:24:26,400 Speaker 1: face time with voters that they're able to have these offens. 464 00:24:26,640 --> 00:24:28,719 Speaker 1: This is kind of a way that, you know, Republicans, 465 00:24:28,720 --> 00:24:30,120 Speaker 1: they're not going to be able to move a lot 466 00:24:30,160 --> 00:24:32,960 Speaker 1: of their priorities through with a Democratic Senate and of 467 00:24:32,960 --> 00:24:35,240 Speaker 1: course Biden in the White House, and so this is 468 00:24:35,280 --> 00:24:37,159 Speaker 1: a way for them to kind of almost in a way, 469 00:24:37,240 --> 00:24:39,920 Speaker 1: hit the campaign trail early. And of course New York 470 00:24:40,119 --> 00:24:44,120 Speaker 1: is absolutely key for Republicans. Republicans would not have the 471 00:24:44,160 --> 00:24:47,040 Speaker 1: majority that they have right now if a number of 472 00:24:47,080 --> 00:24:50,840 Speaker 1: Republicans representing New York had flipped seats, and so it's 473 00:24:50,960 --> 00:24:53,680 Speaker 1: really a key state for them. It's not surprising that 474 00:24:54,000 --> 00:24:56,960 Speaker 1: they picked to go there, and certainly with Alvin Bragg, 475 00:24:57,119 --> 00:24:59,640 Speaker 1: that plays right into the narrative that Republicans are trying 476 00:24:59,680 --> 00:25:02,240 Speaker 1: to put, which is kind of lets of a focus 477 00:25:02,320 --> 00:25:04,920 Speaker 1: on what Trump did and more of a focus on 478 00:25:05,200 --> 00:25:07,879 Speaker 1: what Alvin Bragg has done and whether or not he 479 00:25:07,960 --> 00:25:11,040 Speaker 1: should have pressed those charges to be in with. Okay, 480 00:25:11,040 --> 00:25:14,520 Speaker 1: so if the House Judiciary Committee is focused on Alvin 481 00:25:14,560 --> 00:25:16,879 Speaker 1: Bragg and the Trump issue, let's talk about what the 482 00:25:16,920 --> 00:25:19,520 Speaker 1: Senate Judiciary Committee may be focused on as well, and 483 00:25:19,520 --> 00:25:23,440 Speaker 1: whether or not that really translates to the House. While 484 00:25:23,480 --> 00:25:27,280 Speaker 1: Congress was away the pro publica piece on Supreme Court 485 00:25:27,320 --> 00:25:31,920 Speaker 1: Justice Clarence toomic ethics around him and his dealings with 486 00:25:32,240 --> 00:25:35,920 Speaker 1: a billionaire. We know that the Senate Judiciary is saying 487 00:25:35,920 --> 00:25:37,879 Speaker 1: they want to hold hearings about it. They are highly 488 00:25:38,240 --> 00:25:40,800 Speaker 1: engaged with this, it seems, but the House is under 489 00:25:40,880 --> 00:25:45,840 Speaker 1: different leaderships, so could anything really happen there. I'm not 490 00:25:45,840 --> 00:25:47,720 Speaker 1: really sure we're going to see a big focus on this, 491 00:25:47,800 --> 00:25:50,639 Speaker 1: and the House Republicans have plenty of other things that 492 00:25:50,680 --> 00:25:52,920 Speaker 1: they'd like to focus on at this point in time, 493 00:25:53,640 --> 00:25:56,200 Speaker 1: and I just don't really see what motivation, if any, 494 00:25:56,240 --> 00:25:59,440 Speaker 1: they would have now. Certainly that kind of when we're 495 00:25:59,480 --> 00:26:03,800 Speaker 1: talking into of hearings an official legislation moving on the floor, 496 00:26:04,119 --> 00:26:06,920 Speaker 1: I would not be surprised at all if Democrats tried 497 00:26:06,960 --> 00:26:08,920 Speaker 1: to make this a talking point. If you saw them 498 00:26:08,960 --> 00:26:14,400 Speaker 1: reintroduce legislation that deals with transparency and reporting for judges 499 00:26:14,680 --> 00:26:17,840 Speaker 1: in terms of what donations they're getting, you know, kind 500 00:26:17,840 --> 00:26:20,199 Speaker 1: of trying to bring some more transparency there. There was 501 00:26:20,240 --> 00:26:23,200 Speaker 1: something that was discussed in the previous Congress. It didn't 502 00:26:23,240 --> 00:26:26,080 Speaker 1: wind up moving through, partly because there are just so 503 00:26:26,119 --> 00:26:29,440 Speaker 1: many other priorities at this point, but it certainly could 504 00:26:29,440 --> 00:26:31,760 Speaker 1: be something that we wind up hearing more about. I 505 00:26:31,800 --> 00:26:34,439 Speaker 1: just think at this time, between the debt limit, between 506 00:26:34,480 --> 00:26:37,479 Speaker 1: border security, between nominees that need to go through the Senate, 507 00:26:38,160 --> 00:26:41,240 Speaker 1: between just other issues in general, this is one that 508 00:26:41,320 --> 00:26:44,800 Speaker 1: I can easily see falling through the cracks. Yeah, it's 509 00:26:44,800 --> 00:26:47,120 Speaker 1: a very good point on how there's all these competing 510 00:26:47,119 --> 00:26:50,080 Speaker 1: priorities here potentially, But it strikes me as well, Emily, 511 00:26:50,160 --> 00:26:52,960 Speaker 1: that the piece about Clarence Thomas was just one of 512 00:26:53,000 --> 00:26:56,679 Speaker 1: the real kind of newsmaking events that happened while we 513 00:26:57,640 --> 00:27:00,800 Speaker 1: While Congress was on recess, you also had a meeting 514 00:27:00,920 --> 00:27:05,400 Speaker 1: between McCarthy and Taiwan's president siying Wang. You had another 515 00:27:05,520 --> 00:27:08,960 Speaker 1: mass shooting in Louisville, Kentucky. You had the expelling of 516 00:27:09,040 --> 00:27:13,320 Speaker 1: lawmakers in the Tennessee House, who of course now have returned. 517 00:27:14,280 --> 00:27:18,000 Speaker 1: There has been so many things, including competing court rulings 518 00:27:18,000 --> 00:27:21,480 Speaker 1: on abortion pills as well. Is any of that likely 519 00:27:21,520 --> 00:27:24,359 Speaker 1: to get immediate attention in Congress or are these bigger, 520 00:27:24,400 --> 00:27:27,399 Speaker 1: overarching issues that have been hanging over their heads for 521 00:27:27,440 --> 00:27:31,600 Speaker 1: a while going to take priority. I think at this point, 522 00:27:31,680 --> 00:27:34,199 Speaker 1: when we look at what we know that the House had, 523 00:27:34,240 --> 00:27:36,880 Speaker 1: Senate are going to be handling next week. They're kind 524 00:27:36,880 --> 00:27:40,040 Speaker 1: of almost picking up where they left off several weeks ago. 525 00:27:40,440 --> 00:27:43,119 Speaker 1: So these are things where even the House, they're planning 526 00:27:43,200 --> 00:27:46,560 Speaker 1: on doing a vote on a bill about transgender student athletes, 527 00:27:47,160 --> 00:27:50,520 Speaker 1: trying to ban them from playing sports and schools that 528 00:27:50,560 --> 00:27:54,280 Speaker 1: receive federal funding, or at least, you know, not it 529 00:27:54,320 --> 00:27:56,399 Speaker 1: would have to be to the team to the gender 530 00:27:56,440 --> 00:27:59,119 Speaker 1: that they were born born rather than the gender that 531 00:27:59,440 --> 00:28:03,119 Speaker 1: they IDENTI fias, and you know, that's something that you know, 532 00:28:03,359 --> 00:28:06,119 Speaker 1: isn't really you know, one of the big things that 533 00:28:06,200 --> 00:28:09,040 Speaker 1: happened over the last two weeks. I mean, we know 534 00:28:09,080 --> 00:28:11,360 Speaker 1: that the Senate is going to be holding some hearings 535 00:28:11,480 --> 00:28:14,240 Speaker 1: on trained railment bills. They still have to deal with 536 00:28:14,320 --> 00:28:17,560 Speaker 1: that from a couple months ago. And we know that 537 00:28:17,600 --> 00:28:21,480 Speaker 1: they're taking a look at authorization for military funding. So 538 00:28:21,520 --> 00:28:24,159 Speaker 1: a lot of the stuff I think sometimes with the 539 00:28:24,160 --> 00:28:27,160 Speaker 1: House and the Senate and just Congress in general, it 540 00:28:27,200 --> 00:28:30,640 Speaker 1: takes a while to get up and running, especially since 541 00:28:30,680 --> 00:28:32,800 Speaker 1: everyone wants to go through regular orders. So they hold 542 00:28:32,800 --> 00:28:34,800 Speaker 1: the hearings and the bills go through committee and then 543 00:28:34,840 --> 00:28:37,040 Speaker 1: they come to the floor. It just takes a little 544 00:28:37,040 --> 00:28:39,600 Speaker 1: bit of time. So I don't think we can count 545 00:28:39,600 --> 00:28:41,800 Speaker 1: out that we're not going to be seen or hearing 546 00:28:41,880 --> 00:28:45,600 Speaker 1: anything about some of these issues. I think, particularly in 547 00:28:45,760 --> 00:28:49,840 Speaker 1: terms of the pristone pill, the pill that is used 548 00:28:49,840 --> 00:28:52,760 Speaker 1: in some medically induced A portions, that might be something 549 00:28:52,800 --> 00:28:55,680 Speaker 1: that we well see taken up by Democrats in the 550 00:28:55,720 --> 00:28:59,680 Speaker 1: Senate and potentially becomes a rallying point for Democrats and 551 00:28:59,720 --> 00:29:02,360 Speaker 1: the how as well. But just in terms of what 552 00:29:02,400 --> 00:29:04,240 Speaker 1: we're going to see with the next couple of weeks, 553 00:29:04,520 --> 00:29:07,200 Speaker 1: I think, you know, the priorities that we're already on 554 00:29:07,240 --> 00:29:08,720 Speaker 1: the play are going to be big. And I think 555 00:29:08,760 --> 00:29:10,880 Speaker 1: of course the dead limit too. You know, if Republicans 556 00:29:10,920 --> 00:29:13,120 Speaker 1: are serious that they want to move something within the 557 00:29:13,120 --> 00:29:16,440 Speaker 1: coming month, they have vowed to do so via regular order, 558 00:29:16,840 --> 00:29:18,800 Speaker 1: that's going to take a couple of weeks to get 559 00:29:18,880 --> 00:29:21,640 Speaker 1: legislation together, move it through the process, get it to 560 00:29:21,640 --> 00:29:24,880 Speaker 1: the floor, do the amendments. Like that, that's really going 561 00:29:24,920 --> 00:29:28,000 Speaker 1: to have to be their main focus rather than a 562 00:29:28,080 --> 00:29:30,480 Speaker 1: number of the news the events that we've seen. But 563 00:29:30,640 --> 00:29:33,320 Speaker 1: on the subject of the dead limit, EMILYA, I mean, 564 00:29:33,440 --> 00:29:36,520 Speaker 1: really we're not quite at crunch time in theory right 565 00:29:36,560 --> 00:29:38,680 Speaker 1: If we're talking about an X state in the summer. 566 00:29:38,720 --> 00:29:41,720 Speaker 1: So does that take some of the pressure off or 567 00:29:41,840 --> 00:29:44,320 Speaker 1: is this just self inflicted pressure Now? I think to 568 00:29:44,360 --> 00:29:47,120 Speaker 1: a certain extent, some of the pressure is not on yet, 569 00:29:47,160 --> 00:29:49,200 Speaker 1: And I wonder if that's kind of why McCarthy is 570 00:29:49,200 --> 00:29:52,200 Speaker 1: headed up to New York when he is. Because in Congress, 571 00:29:52,360 --> 00:29:54,320 Speaker 1: they love to move at the last minute, they love 572 00:29:54,360 --> 00:29:56,880 Speaker 1: to move on a deadline. But McCarthy knows, and I 573 00:29:56,880 --> 00:29:59,760 Speaker 1: think Biden knows that that's not great. That when we've 574 00:29:59,760 --> 00:30:01,880 Speaker 1: moved too close to the deadline in the past on 575 00:30:02,040 --> 00:30:04,760 Speaker 1: raising the debt limit, that's when the US credit sort 576 00:30:04,800 --> 00:30:08,240 Speaker 1: of gets hit and gets impacted. All right, Emily Wilkins 577 00:30:08,240 --> 00:30:10,760 Speaker 1: of Bloomberg Government, thank you so much. We're excited for 578 00:30:10,760 --> 00:30:13,240 Speaker 1: the next week coming up here in Washington, Tom, and 579 00:30:13,240 --> 00:30:15,920 Speaker 1: I'll send it back over to you. Kaylee Lines, reporting 580 00:30:15,920 --> 00:30:20,200 Speaker 1: from our Bloomberg newsroom in Washington. Thanks Kaylee. Coming up 581 00:30:20,240 --> 00:30:24,200 Speaker 1: on Bloomberg Daybreak weekend, Tesla's coming earnings and how Elon 582 00:30:24,320 --> 00:30:28,080 Speaker 1: Musk's company is sparing in China. I'm Tom Busby, and 583 00:30:28,240 --> 00:30:43,160 Speaker 1: this is Bloomberg. This is Bloomberg Daybreak weekend, our global 584 00:30:43,200 --> 00:30:45,280 Speaker 1: look ahead at the top stories for investors in the 585 00:30:45,320 --> 00:30:48,160 Speaker 1: coming week. I'm Tom Busby in New York. Some of 586 00:30:48,200 --> 00:30:50,800 Speaker 1: the focus is going to be on Tesla's earnings and 587 00:30:50,840 --> 00:30:55,040 Speaker 1: the company's big opportunities and challenges in China. For more, 588 00:30:55,160 --> 00:30:57,800 Speaker 1: let's go to Hong Kong and Bloomberg Daybreak Asia host 589 00:30:57,840 --> 00:31:01,520 Speaker 1: Brian Curtis and his colleague Doug Tom. We look forward 590 00:31:01,520 --> 00:31:04,360 Speaker 1: to Tesla's earnings in the coming week, with at least 591 00:31:04,400 --> 00:31:07,200 Speaker 1: part of the focus on China. The numbers of the 592 00:31:07,240 --> 00:31:10,280 Speaker 1: commentary from executives will be coming after a slew of 593 00:31:10,320 --> 00:31:13,640 Speaker 1: recent developments involving the company. Yes, we've seen big price 594 00:31:13,680 --> 00:31:18,160 Speaker 1: cuts by Tesla and its competitors. We've also seen relentless 595 00:31:18,240 --> 00:31:21,200 Speaker 1: gains in the share price of Tesla and recently the 596 00:31:21,200 --> 00:31:25,160 Speaker 1: announcement of a new megapac battery plant in Shanghai. Now 597 00:31:25,200 --> 00:31:29,719 Speaker 1: this will build cells for grid scale energy storage. In addition, 598 00:31:29,760 --> 00:31:32,720 Speaker 1: the Biden administration is in the process of rolling out 599 00:31:32,720 --> 00:31:36,280 Speaker 1: the toughest ever curbs in the United States on car pollution. 600 00:31:36,800 --> 00:31:40,400 Speaker 1: Joining US now is Dana Hall, senior reporter in San Francisco, 601 00:31:40,520 --> 00:31:45,160 Speaker 1: covering Tesla and its chief Elon musk So. Danna Doug 602 00:31:45,200 --> 00:31:48,120 Speaker 1: mentioned the price cuts and the stock price gains. There 603 00:31:48,160 --> 00:31:50,280 Speaker 1: are trying to put those two together. On the one hand, 604 00:31:50,840 --> 00:31:54,800 Speaker 1: the cuts make the cars more competitive and more affordable, 605 00:31:54,840 --> 00:31:58,600 Speaker 1: particularly in places like China, But then on the other hand, 606 00:31:58,600 --> 00:32:02,720 Speaker 1: it speaks to perhaps weaker demand. How badly will these 607 00:32:02,720 --> 00:32:05,680 Speaker 1: price cuts hit margins. The fact that they've cut prices, 608 00:32:05,680 --> 00:32:07,520 Speaker 1: you know, so much in the first quarter and then 609 00:32:07,560 --> 00:32:11,280 Speaker 1: again just last Thursday, does kind of spook people about 610 00:32:11,280 --> 00:32:13,840 Speaker 1: the demand question, like how much farther are they going 611 00:32:13,920 --> 00:32:17,080 Speaker 1: to go down? And if you're a consumer thinking of 612 00:32:17,120 --> 00:32:18,960 Speaker 1: buying a Tesla, I mean, are you going to buy 613 00:32:18,960 --> 00:32:20,320 Speaker 1: one now or are you going to wait to see 614 00:32:20,360 --> 00:32:22,840 Speaker 1: if they lop off another one or five thousand dollars? 615 00:32:22,840 --> 00:32:25,240 Speaker 1: I mean, that's that's sort of a big question for 616 00:32:25,800 --> 00:32:28,120 Speaker 1: the consumer, like why, you know, I don't want to 617 00:32:28,120 --> 00:32:30,080 Speaker 1: buy a car if if Elon Musk is going to 618 00:32:30,120 --> 00:32:32,200 Speaker 1: turn around and cut the prices again next week. One 619 00:32:32,240 --> 00:32:35,000 Speaker 1: of the things that was also interesting in this note 620 00:32:35,040 --> 00:32:36,840 Speaker 1: that I read is that the move here on the 621 00:32:36,880 --> 00:32:41,520 Speaker 1: part of Tesla maybe about expediting the demise of gasoline vehicles. 622 00:32:41,520 --> 00:32:44,000 Speaker 1: And when I read that, I was reminded of what 623 00:32:44,080 --> 00:32:46,640 Speaker 1: happened with some of these ride sharing companies where they 624 00:32:46,720 --> 00:32:50,600 Speaker 1: were purposely undercutting the market for taxis as a way 625 00:32:50,600 --> 00:32:52,640 Speaker 1: of pushing them out of business. Yeah. I mean, when 626 00:32:52,680 --> 00:32:55,880 Speaker 1: you're when you're aggressively chasing volume, you will pull out 627 00:32:55,920 --> 00:32:58,520 Speaker 1: all the stops to kind of gain as many customers 628 00:32:58,560 --> 00:33:01,400 Speaker 1: as you can. And you know, policy incentives are on 629 00:33:01,520 --> 00:33:05,560 Speaker 1: Tesla side. I mean, the world is transitioning away from 630 00:33:05,600 --> 00:33:08,560 Speaker 1: gas powered cars. Tesla doesn't make a gas powered car, 631 00:33:08,680 --> 00:33:11,480 Speaker 1: so there's only sort of upside from for them. And 632 00:33:11,960 --> 00:33:14,600 Speaker 1: you know, at their investor day in March, they made 633 00:33:14,600 --> 00:33:17,400 Speaker 1: a huge show of how they're going to relentlessly focus 634 00:33:17,480 --> 00:33:21,640 Speaker 1: on costs across their supply chain in their operations, and 635 00:33:22,320 --> 00:33:24,959 Speaker 1: you know, their average transaction price has been kind of 636 00:33:25,240 --> 00:33:27,840 Speaker 1: you know, coming down over the years, and they and 637 00:33:27,880 --> 00:33:30,920 Speaker 1: they really feel like that's the path that they're on 638 00:33:31,040 --> 00:33:32,800 Speaker 1: and it's a part of their whole mission. I mentioned 639 00:33:32,880 --> 00:33:36,280 Speaker 1: China in the intro. Byd is out selling a Tesla 640 00:33:36,360 --> 00:33:39,600 Speaker 1: in China, how's that competition going. Certainly BYD is a 641 00:33:39,640 --> 00:33:43,280 Speaker 1: formidable competitor in China, and you're seeing Tesla cut prices 642 00:33:43,280 --> 00:33:46,600 Speaker 1: in China as well. I mean, Tesla does have kind 643 00:33:46,600 --> 00:33:50,960 Speaker 1: of this aspirational brand lure in the country, and the 644 00:33:51,000 --> 00:33:53,400 Speaker 1: fact that they just announced that they're building this megapac 645 00:33:53,480 --> 00:33:56,160 Speaker 1: facility in Shanghai. Is there's a sign that they're really 646 00:33:56,240 --> 00:33:58,600 Speaker 1: kind of doubling down on their investment. We did see 647 00:33:58,640 --> 00:34:02,400 Speaker 1: some political pressure coming from Mike Gallagher, the congressman, on 648 00:34:02,600 --> 00:34:06,360 Speaker 1: Tesla and its commitment to China. You mentioned that commitment 649 00:34:06,440 --> 00:34:11,759 Speaker 1: earlier with this megapac factory. Is that something that investors 650 00:34:11,760 --> 00:34:15,040 Speaker 1: will be paying close attention to or not so much? Yeah, 651 00:34:15,080 --> 00:34:17,879 Speaker 1: I mean the Gallagher's comment was that he was concerned. 652 00:34:18,000 --> 00:34:21,080 Speaker 1: I don't know how much pressure that really, you know, holds. 653 00:34:21,120 --> 00:34:23,240 Speaker 1: But China has always been a big part of Tesla's 654 00:34:23,239 --> 00:34:26,959 Speaker 1: business model, and they just announced that Tom Jou, who 655 00:34:27,080 --> 00:34:30,439 Speaker 1: kind of led operations in China, is now an executive officer. Danna, 656 00:34:30,520 --> 00:34:33,560 Speaker 1: we mentioned the pollution curbs coming from the Biden administration. 657 00:34:33,640 --> 00:34:35,560 Speaker 1: What can you tell us on that front. It's great 658 00:34:35,560 --> 00:34:38,000 Speaker 1: for Tesla. I mean, you have a Biden administration that 659 00:34:38,120 --> 00:34:41,400 Speaker 1: is trying to accelerate ev adoption. Then you have Tesla, 660 00:34:41,440 --> 00:34:44,960 Speaker 1: which is like the pure player EV carmakers. There's a 661 00:34:45,160 --> 00:34:47,960 Speaker 1: sort of only there's only upside from policies kind of 662 00:34:47,960 --> 00:34:50,960 Speaker 1: designed to accelerate this. Danna, thanks for helping us look 663 00:34:51,000 --> 00:34:53,279 Speaker 1: at Tesla as we prepare for the earnings in the 664 00:34:53,280 --> 00:34:56,400 Speaker 1: coming week. Dana Hall is senior reporter in San Francisco 665 00:34:56,760 --> 00:35:01,560 Speaker 1: covering Tesla and Elon Musk. I'm prisoner along with Brian Curtis. 666 00:35:01,560 --> 00:35:03,800 Speaker 1: He's in Hong Kong and you can catch us weekdays 667 00:35:03,840 --> 00:35:06,880 Speaker 1: here from Bloomberg Daybreak Asia beginning at six am in 668 00:35:07,000 --> 00:35:10,279 Speaker 1: Hong Kong six pm on Wall Street. Tom, thank you, 669 00:35:10,360 --> 00:35:12,719 Speaker 1: Brian and Doug. And that does it for this edition 670 00:35:12,760 --> 00:35:16,040 Speaker 1: of Bloomberg Daybreak Weekend. Join us again Monday morning at 671 00:35:16,120 --> 00:35:18,560 Speaker 1: five am Wall Street time for the latest on markets 672 00:35:18,560 --> 00:35:21,680 Speaker 1: overseas and the news you need to start your day. 673 00:35:21,800 --> 00:35:24,760 Speaker 1: I'm Tom Buzzby. Stay with us stop stories and global 674 00:35:24,800 --> 00:35:27,160 Speaker 1: business headlines coming up right now.