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Speaker 1: Good morning. I'm Brian Curtis and I'm Doug Krisner. Here

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Speaker 1: are the stories we're following today.

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Speaker 2: The US is increasing strikes against Yemen based Hoothy rebels

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Speaker 2: and MAXA has that story and more from San Francisco.

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Speaker 3: ED welcome back, Hey, Thank you so much, Brian, It's

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Speaker 3: good to be back. More attacks today hitting ship missile

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Speaker 3: facilities in the Third Assault and Iranian proxy strongholds in

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Speaker 3: recent days. National Security Advisor Jake Sullivan A Davos has

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Speaker 3: heard on Bloomberg says well a coalition effort.

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Speaker 4: We mobilized a coalition of countries to take strikes to

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Speaker 4: degrade the Houthy's capabilities so their ability to mount sustained

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Speaker 4: and complex attacks becomes more difficult.

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Speaker 3: Over time, and says attacks will continued as needed.

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Speaker 5: Now.

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Speaker 3: This comes as Houthy's claimed responsibility for a missile attack

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Speaker 3: against a Malta flag bulk carrier in the Red Sea.

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Speaker 3: The White House is confirming National Security Advisor John Kirby

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Speaker 3: there was.

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Speaker 6: The hit today, but no injuries, caused no real significant

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Speaker 6: damage to the By the way, most of the attacks

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Speaker 6: are knocked out of the sky before they can get

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Speaker 6: to the target.

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Speaker 3: And Iran attack to what it says was an Israeli

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Speaker 3: spy base in Iraq. This the first time Tehran has

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Speaker 3: publicly said it's attacked in Israeli target since the beginning

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Speaker 3: of the Israel Hamas War. Ukrainian President Vlatimer Zelenski condemning

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Speaker 3: Vladimir Putin as a predator and told an audience at

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Speaker 3: Davos at any pullback support for Ukraine strengthens Putin.

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Speaker 7: Because every reduction in pressure on the aggressor as years

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Speaker 7: as years to the war, but every investment in the

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Speaker 7: confidence of the defender shortens the war.

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Speaker 3: Zelenski says, if Ukraine's economy is stronger, the world security

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Speaker 3: will be stronger as well. President Joe Biden, inviting House

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Speaker 3: Speaker Mike Johnson, sent up Majority Leader Chuck Schumer and

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Speaker 3: other Congression leaders to a meeting tomorrow to talk Ukraine AID.

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Speaker 3: Bloomberg Zach Cohen says it begins with border talk.

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Speaker 8: The larger issue of coming up with some sort of

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Speaker 8: border agreement that would unlock AID for Ukraine and Israel

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Speaker 8: as they are both engaged in war in Europe in

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Speaker 8: the Middle East.

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Speaker 3: Yeah, and there are hundreds of millions of dollars stalled

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Speaker 3: in Congress waiting for action. With Donald Trump solidifying his

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Speaker 3: position as the overwhelming front rudder in the GOP presidential race,

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Speaker 3: what are the next steps well, Nikki Haley says New

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Speaker 3: Hampshire will correct the Iowa result and is back on

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Speaker 3: the trail.

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Speaker 2: Our campaign is the last best hope of stopping the

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Speaker 2: Trump Biden.

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Speaker 3: Nightmare, and says she will not participate in any further

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Speaker 3: debates unless Donald Trump or Joe Biden do. Ron DeSantis,

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Speaker 3: who finished above her in Iowa, says a mistake you owe.

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Speaker 9: The people of New Hampshire a debate.

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Speaker 10: This is a time honored tradition that you debate in

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Speaker 10: New Hampshire the week before the New Hampshire primaries.

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Speaker 3: But now this is just breaking. In the last hour,

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Speaker 3: ABC's canceled Thursday's debate, and Trump.

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Speaker 9: I want to congratulate Ron and Nicky for having a

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Speaker 9: good time together.

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Speaker 6: We're all having a good time together, and.

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Speaker 9: I think they both actually did very well.

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Speaker 3: Now. Trump carried fifty one percent of the Iowa COUCAS votes,

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Speaker 3: with the SATUS at twenty one, Hailey not far behind

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Speaker 3: at nineteen. Hailey expects to do much better in New

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Speaker 3: Hampshire and the latest polling out of New Hampshire from

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Speaker 3: the American Research Group has Haley and Trump tied at

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Speaker 3: forty percent, Desantus at four percent. Global News twenty four

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Speaker 3: hours a day and whatever you want it with Bloomberg

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Speaker 3: News Now in San Francisco. I met Baxter. This is Bloomberg.

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Speaker 9: All right, Brian, Thanks very much.

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Speaker 2: Now we take a look at some of the top

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Speaker 2: business stories of the hour. Well, let's take a closer

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Speaker 2: look here at this Jet Blue decision. A federal judge

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Speaker 2: blocked Jet Blues three point eight billion dollar acquisition of

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Speaker 2: Spirit Airlines. US District Judge William Young sided with the

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Speaker 2: federal government. The Justice Department had challenged the deal, arguing

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Speaker 2: would stifle competition and would drive up airfares. After the decision,

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Speaker 2: shares of Spirit plunged. We get reaction from Bloomberg's George Ferguson.

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Speaker 11: I think it near the end of the trial, it

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Speaker 11: seemed like it was really close to fifty to fifty

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Speaker 11: whether or not the judge was going to deny this

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Speaker 11: purchase or not. So I don't know that it's super surprising,

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Speaker 11: but Spirit, obviously, if you were invested in Spirit, shares

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Speaker 11: I think you were really hanging on, you know, the

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Speaker 11: acquisition by Jet Blue. So I think what you see

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Speaker 11: is a lot of people exiting based on that.

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Speaker 2: Bloomberg's George ferguson Jet Blue and Spirit argued that consolidation

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Speaker 2: is the only way that smaller airlines can effectively compete

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Speaker 2: with the dominant carriers. So we mentioned that Spirit shares plunged,

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Speaker 2: it was a record forty seven percent in New York. Meantime,

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Speaker 2: Jet Blue those shares were up nearly five percent.

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Speaker 9: Well.

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Speaker 1: The US Supreme Court has refused to consider an appeal

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Speaker 1: from Apple in an antitrust lawsuit challenging the company's Lucrati

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Speaker 1: app store. Here's Bloomberg's Karen Moscow.

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Speaker 10: Both Apple and Fortnite maker Epic Games had asked the

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Speaker 10: court to hear an appeal related to the case. The

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Speaker 10: justices turned down both requests without explanation. The High Court's

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Speaker 10: decision will allow an appeals court ruling to go into effect,

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Speaker 10: letting developers direct iPhone users to cheaper purchasing options outside

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Speaker 10: of Apple's system. The company charges developers a commission of

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Speaker 10: as much as thirty percent for digital goods and services

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Speaker 10: sold through its app store. The decision will likely affect

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Speaker 10: billions of dollars in revenue for the iPhone maker. Karen

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Speaker 10: Moscow Bloomberg Radio.

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Speaker 9: Well.

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Speaker 2: Today, FED Governor Chris Waller showed an openness to cutting

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Speaker 2: interest rates, but he also appeared to push back to

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Speaker 2: a degree against market expectations for as many as six

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Speaker 2: rate cuts this year.

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Speaker 5: When the time is right to begin lowering rates, I

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Speaker 5: believe it can and should be lowered methodically and carefully.

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Speaker 5: In many previous cycles, the FMC cut rates reactively and

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Speaker 5: did so quickly and often by large amounts. This cycle, however,

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Speaker 5: with economic activity and labor markets in good shape, and

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Speaker 5: inflation coming down gradually to two percent, I see no

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Speaker 5: reason to move as quickly or cut as rapidly as

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Speaker 5: in the past.

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Speaker 9: I've got Governor Chris Waller.

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Speaker 2: US equity slid and treasury yields jumped following Waller's comments.

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Speaker 1: Well, executives at the big US banks are now expecting

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Speaker 1: to pick up in investment banking in the coming months.

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Speaker 1: Their hopes are really tied to the Fed's apparent pivot

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Speaker 1: away from those aggressive rate hikes that we've seen over

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Speaker 1: the last two years. Today, some of Wall Street's top

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Speaker 1: brass outlined expectations for a turnaround. Here's Goldman Sachs CEO

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Speaker 1: David Solomon.

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Speaker 9: I'm encouraged by capital markets activity. I'm not going to

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Speaker 9: say it's running back to ten year averages right away,

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Speaker 9: but it.

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Speaker 6: Has materially improved. I do think you're going to see

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Speaker 6: some more meaningful IPOs in twenty twenty four.

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Speaker 1: David Solomon. They're the CEO of Goldman Sachs. Separately, both

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Speaker 1: Goldman Sacks and Morgan Stanley wrap up fourth quarter earnings

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Speaker 1: among the big banks today, Goldman topping estimates as the

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Speaker 1: firm's equity trading unit posted a jump in revenue triple

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Speaker 1: what analysts had expected. Meantime, over at Morgan Stanley, the

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Speaker 1: firm's equity trading revenue fell short of forecast. Morgan Stantley

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Speaker 1: executives said lower wealth management margins may stick around Brian Well.

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Speaker 2: Chinese Premier Lie Chung said that China's economy grew around

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Speaker 2: five point two percent in twenty twenty three. He spoke

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Speaker 2: earlier at the World Economic Forum in Davos. He emphasized

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Speaker 2: the efforts that China has taken to inspire confidence in

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Speaker 2: its economy and government.

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Speaker 12: Jingji the quoting dinz one in promoting economic development Jin,

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Speaker 12: we did not resort to massive stimulus. We did not

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Speaker 12: seek short term growth accumulating long.

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Speaker 2: Term risks, That's Chinese Premier Lee Chung. The premier's remarks

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Speaker 2: confirmed economist sections that China would surpass the official growth

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Speaker 2: target of five percent for the year. The focus now

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Speaker 2: is for Beijing on how it will keep the momentum

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Speaker 2: going this year as it grapples with what is in

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Speaker 2: erosion of confidence. Official data showed foreign investment in the

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Speaker 2: third quarter of last year turn negative for the first

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Speaker 2: time since nineteen ninety eight.

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Speaker 1: And interestingly, China is considering more stimulus via some special

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Speaker 1: bonds worth one hundred and thirty nine billion dollars. That

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Speaker 1: story from Bloomberg savon Men in Hong Kong.

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Speaker 13: The new debt issuance would be under a so called

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Speaker 13: special Sovereign Bond Plan. We hear the plan would involve

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Speaker 13: the sale of ultra long sovereign bonds. The funds would

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Speaker 13: be for projects related to food, energy supply chains and urbanization.

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Speaker 13: This would only be the fourth such sale in the

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Speaker 13: past twenty six years. It highlights China's efforts to shift

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Speaker 13: spending responsibility from debt laiden local officials to central authorities.

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Speaker 13: The plan is another move to stimulate an economy that

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Speaker 13: is struggling to get momentums. The discussions are ongoing and

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Speaker 13: the plan could be changed.

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Speaker 9: In Hong Kong.

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Speaker 13: I'm von Mann Bloomberg Radio.

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Speaker 9: This is Bloomberg Daybreak Asia.

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Speaker 2: I'm Brian Curtis here in Hong Kong along with Vonnie

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Speaker 2: Quinn in New York, and our guest is Jennifer Ree

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Speaker 2: at Bloomberg Intelligence, senior litigation analyst.

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Speaker 9: For How to Trust No.

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Speaker 2: We wanted to take a closer look at this second win,

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Speaker 2: Jennifer for the Justice Department. In the airline industry. If

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Speaker 2: we include the court blocking the alliance of Jet Blue

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Speaker 2: and American, it appears the Biden administration is simply not

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Speaker 2: going to allow airline mergers and the courts are backing them.

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Speaker 2: So does it make it less likely that we'll see

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Speaker 2: an appeal? Do you think we will see an appeal?

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Speaker 14: You know, in this case, I'd be surprised if there's

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Speaker 14: an appeal. I think that the opinion is very careful

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Speaker 14: and thorough and really based on an assessment of the

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Speaker 14: evidence that was presented and in that kind of a decision.

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Speaker 14: It's a really high standard to get it reversed on

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Speaker 14: appeal because the appellate panel has to get done reference

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Speaker 14: to that decision and the way the lower court judge

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Speaker 14: interpreted the witness's evidence and the documents. And so I

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Speaker 14: think it's a really tough thing to do, and it's

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Speaker 14: going to push them very close to their deal end

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Speaker 14: date because it could really take another six months.

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Speaker 15: What does it mean for the individual airlines now, is

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Speaker 15: Spirit's your probably stop by almost half.

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Speaker 14: Yeah, you know, which is something I think that judge

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Speaker 14: was worried about. You know, this was a really close

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Speaker 14: case throughout trial. I thought it was a close call

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Speaker 14: in reading the decision. It was a close call because

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Speaker 14: the airlines did make an argument that Spirit was what's

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Speaker 14: called a flailing firm. In other words, it might be

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Speaker 14: better for JetBlue to buy the Spirit and maybe cause

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Speaker 14: some harm to markets than Spirit being weakened if it's

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Speaker 14: left on its own, which looks basically today like what's happening.

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Speaker 14: And the judge simply said, you know, they didn't make

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Speaker 14: that defense. They didn't establish the elements they needed to

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Speaker 14: actually make that defense to justify an otherwise anti competitive deal.

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Speaker 14: But one of the things he did that was very

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Speaker 14: interesting is that he limited the injunction to just this

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Speaker 14: deal signed in July twenty twenty two, So if market

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Speaker 14: dynamics change, maybe it could come back.

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Speaker 2: And it also does raise question about Alaska airs yes,

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Speaker 2: acquisition of Hawaiian holdings, right, what happens next there?

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Speaker 9: Do you think?

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Speaker 12: So?

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Speaker 14: It does? And I do think this DOJ is dug

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Speaker 14: in in terms of trying to prevent airline consolidation. But

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Speaker 14: what I'll say about that deal is I think it's

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Speaker 14: easier to fix than this deal was, because this judge

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Speaker 14: did say that the market is these origin and destination pairs,

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Speaker 14: and to the extent that you can divest those pairs

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Speaker 14: where you overlap, you fix that problem here. They couldn't

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Speaker 14: do that because they also had a problem in the

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Speaker 14: routes that spiritflow Flu and Jet Blue didn't where the prices.

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Speaker 3: Would go up.

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Speaker 14: So Alaska and Hawaiian have an ability to fix their

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Speaker 14: deal in a way that a judge might accept if

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Speaker 14: they get challenged.

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Speaker 15: Well, the interesting thing here is that now Spirit is

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Speaker 15: a nolflaw cheaper. I mean thinks for a day or two,

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Speaker 15: we'll see what happens. But I mean, could one of

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Speaker 15: the other carriers come in and you know, be a

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Speaker 15: accepted very differently than a Jet Blue, which is a

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Speaker 15: more direct competitor.

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Speaker 14: So remember that Frontier wanted this acquisition prior to Jet

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Speaker 14: Blue and jet Blue won out. So certainly there's a

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Speaker 14: possibility here that Frontier could come back. And as I said,

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Speaker 14: because of the way the injunction was narrowly written, it

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Speaker 14: leaves spirit open to do another deal. Now that's from

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Speaker 14: the judge. It doesn't mean the dj won't do their

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Speaker 14: thorough investigation which takes a year, and then again try

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Speaker 14: to sue the deal in court.

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Speaker 9: But at that.

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Speaker 14: Point maybe a judge would be more open to allowing

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Speaker 14: the deal to go through with the appropriate remedy.

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Speaker 2: What were some of the other promises that Jet Blue

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Speaker 2: made to try to make this deal work.

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Speaker 14: You know, the interesting thing is that what Jet Blue

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Speaker 14: argued was essentially accepted by the judge. That's why this

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Speaker 14: was such a difficult prediction to make. They said, look,

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Speaker 14: coming together will make us will exert a bigger competitive

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Speaker 14: influence on the legacy carriers that have eighty percent of

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Speaker 14: the market, you know, the Deltas and the Americans United Southwest.

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Speaker 14: We can compete against them better if we're combined with Spirit,

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Speaker 14: and that puts pressure on their pricing. And the judge agreed.

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Speaker 14: The judge said, yes, that's true, and that is a

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Speaker 14: pro competitive aspect of this deal, but it's not enough

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Speaker 14: to fix the harm that will be caused by removing

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Speaker 14: Spirit as an option for certain consumers that fly certain routes.

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Speaker 15: Is it the case now that the FTC has a

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Speaker 15: win for consumers, do you think, Jen? I mean, can

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Speaker 15: we definitively say the FTC to the right thing here?

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Speaker 14: Well, this one's the DOJ And I know it gets

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Speaker 14: confusing because they're both so aggressive and they're both in

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Speaker 14: court challenging mergers right now. But this one is DJ

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Speaker 14: And I think it's debatable. I think there are people

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Speaker 14: out there that would have preferred as a consumer that

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Speaker 14: this deal that the airlines are combined. On the other hand,

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Speaker 14: I think it's absolutely true that for some routes there

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Speaker 14: are probably consumers that depended on that very low, unbundled

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Speaker 14: fear that Spirit offered to go home to see mom

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Speaker 14: or to take a vacation, and would lose that option

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Speaker 14: if those planes were retrofitted to become Jet Blue planes

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Speaker 14: and the fairs went up, So it does help some people.

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Speaker 2: I think the thrust of Vonnie's question probably was does

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Speaker 2: this sort of put the wind in the sails behind.

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Speaker 9: The Justice Department now? Perhaps in some other areas.

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Speaker 14: You know, I think the DJ has had the wind

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Speaker 14: behind their sales for a while now, because, as you

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Speaker 14: mentioned right at the beginning, they did win in challenging

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Speaker 14: the Northeast Alliance right between American and Jet Blue, and

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Speaker 14: they also won before that when they challenged the Penguin

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Speaker 14: Random House, Simon and Schuster deal.

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Speaker 9: So there has been the case for the under Trade Commission,

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Speaker 9: has it they have not done as well.

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Speaker 14: They're still fighting Microsoft Activision though they're still going to

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Speaker 14: appeal that one.

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Speaker 2: This is Bloomberg Daybreak Asia, your morning brief on the

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Speaker 2: stories making news from Hong Kong to Singapore and Wall Street.

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