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Speaker 1: This is Bloomberg Daybreak here for this Wednesday, the first

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Speaker 1: of March in London. Coming up today, Made in China stuck,

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Speaker 1: Soora's manufacturing hits a decade high, losing its luster. Goldman's

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Speaker 1: Investor Day fizzles on consumer banking questions, price rise pain

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Speaker 1: UK sharp inflation hits a record high with little relief

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Speaker 1: a head Tata asked for half a billion pounds from government,

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Speaker 1: Hancock's WhatsApp revelations, and as Americans work from home, Europeans

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Speaker 1: head back to the office. Those are the stories we're

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Speaker 1: looking at in today's papers. And I'm Leanne Gern's plus

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Speaker 1: cash is king US treasuries yield more than a sixty

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Speaker 1: forty portfolio for the first time since two thousand and one.

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Speaker 1: That's on straight Ahead on Bloomberg Daybreak Europe. The business

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Speaker 1: news you need to start your day in just one

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Speaker 1: fifteen minute podcast on Apples, Spotify, the Bloomberg Business app

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Speaker 1: and everywhere you get your podcasts. Good morning, I'm Stephen

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Speaker 1: Carroll and I'm Caroline Hecker. Here are the stories that

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Speaker 1: we're following today. China's economy is showing signs of a

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Speaker 1: strong post COVID recovery. The country's manufacturing PMI hit fifty

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Speaker 1: two points six last months. That's the highest reading since

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Speaker 1: April of twenty twelve and comes after COVID restrictions were

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Speaker 1: dropped late last year. But raou Ghosh, Managing director for

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Speaker 1: Moody's EESG Solutions Group, says it's too early to tell

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Speaker 1: if the recovery will last. I think what we do

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Speaker 1: we need to see though, is how long the data

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Speaker 1: continues to say strong. Clearly we're going to get a

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Speaker 1: boot for GDP in the first half of the year.

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Speaker 1: The real question is what happens into back off of

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Speaker 1: year into twenty twenty four. That was Royal Ghost. China's president.

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Speaker 1: She has given a speech ahead of the National People's

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Speaker 1: Congress talking about the need for sweeping changes to the

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Speaker 1: country's government and more influence within private companies. Now, Goldman

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Speaker 1: CEO David Solomon is struggling to shake off the bank's

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Speaker 1: negative perception amongst investors. Analysts at the bank's Investor Today

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Speaker 1: pushed him for answers on the future of the lender's

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Speaker 1: six billion dollar loss making consumer division. At one point,

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Speaker 1: Solomon got visibly flustered. Here's what he had to say,

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Speaker 1: I appreciate that everyone wants more answers on the consumer

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Speaker 1: platforms and their trajectory going forward. We are focused on

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Speaker 1: executing on what's in front of us, and we're looking

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Speaker 1: at strategic all strategic options available to us. And I

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Speaker 1: know that you want more clarity, but I would ask

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Speaker 1: you to appreciate that I'm just not in a position

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Speaker 1: to say anything more than what we said. Marcus so

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Speaker 1: weren't convinced with Goldman's stock, seeing it's worse performance since

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Speaker 1: it's paul quarterly earnings in January. In a bid to

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Speaker 1: bump up profits, the bank is currently cutting six and

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Speaker 1: a half percent of its headcount. Prices in UK shops

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Speaker 1: are rising at their fastest rate since at least two

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Speaker 1: thousand and five, as the cost of living crisis shows

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Speaker 1: little sign of easing. Boom Brigs James Wilcock reports prices

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Speaker 1: and shops surged by eight point four percent in the

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Speaker 1: year to February, according to the British Retail Consortium. It's

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Speaker 1: the largest reading since the Shop Price Index was created

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Speaker 1: in two thousand and five. Energy bills, tougher trading conditions

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Speaker 1: and a weaker pound are all driving inflation, with food

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Speaker 1: prices hitting a fourteen point five percent increase, and with inflation,

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Speaker 1: every little hurts. Research firm Cantar has found the typical

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Speaker 1: annual bill has increased by a round eight hundred pounds

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Speaker 1: because costs have gone up so much over the last

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Speaker 1: twelve months. In London, I'm James Walcock Bloomberg Daybreak Europe

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Speaker 1: Now to the collapse the cryptocurrency exchange FTX. The firm's

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Speaker 1: former engineering chief has pleaded guilty to criminal charges as

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Speaker 1: part of a cooperation deal with prosecutors. Nichard Singh is

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Speaker 1: the third member of the exchanges in a circle to

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Speaker 1: turn on co founder Sam Bankman Freed. Sing admitted that

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Speaker 1: he knew the trading arm Alameda Research was borrowing billions

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Speaker 1: of dollars in funds from FTX without customers knowledge. For

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Speaker 1: the first time since two thousand and one, some of

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Speaker 1: the world's least risky assets are delivering bigger payouts than

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Speaker 1: a sixty forty portfolio. On Tuesday, the yield on the

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Speaker 1: six month US Treasury bills roses high as five point

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Speaker 1: one four percent. That's above the five point zero seven

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Speaker 1: percent yield you'd currently get out of a classic mix

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Speaker 1: of US equities and fixed income securities. The shift underscores

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Speaker 1: just how much the fed's aggressive tightening has upended the

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Speaker 1: investing world and reduced risk incentives. Those are our top

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Speaker 1: stories this morning. A shift on markets, shift too on

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Speaker 1: the property market. An interesting story that caught my eye

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Speaker 1: this morning about how some of the world's richest people

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Speaker 1: are now investing in property while essentially everyone else is

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Speaker 1: doing something else. Yes, I think that if you're a

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Speaker 1: small time property owner and you know, you're probably quite

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Speaker 1: worried about the possibility of jobs, not just in the

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Speaker 1: UK market of you know, the value of property, but

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Speaker 1: some sort of slightly cannier perhaps if you're talking about

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Speaker 1: millions and billions, it's slightly different. Yeah, absolutely, But listen

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Speaker 1: that they've also been investors in London, you know, that

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Speaker 1: have been prepared. Certainly a number of rates have been

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Speaker 1: preparing for the downturn, imprompting prices and they're snapping them up.

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Speaker 1: The Czara founder and Mansia Ortega, of course Spain's richest person.

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Speaker 1: He's brought ten properties in North America and the UK

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Speaker 1: for just a casual two billion dollars, you know, just

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Speaker 1: just just just some small change. But I mean there's

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Speaker 1: the interesting These are figures from the Broker Night Frank

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Speaker 1: written up by our colleague Benjamin's Stopples. But essentially they're

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Speaker 1: saying that, you know, wealthy individuals, family officers, closely hell

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Speaker 1: companies are the active buyers now in commercial re estate.

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Speaker 1: Institutional investors getting out because higher rates mean that it's

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Speaker 1: less of an interesting investment for them. Okay, I think

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Speaker 1: that's that's also interesting. That's a fun one. I think

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Speaker 1: a little bit more serious though. The pm I data

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Speaker 1: out of China is really fascinating. We need to dig

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Speaker 1: into the details a little bit more. The rebound after

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Speaker 1: COVID seems, you know, quite strong. But Shijingping making this

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Speaker 1: speech ahead of the National People's Congress that starts on

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Speaker 1: Sunday goes into next week. I've just got to highlight

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Speaker 1: some of the phraseology that he was using, deepening structural

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Speaker 1: reform in the financial sector, exercising more control over science

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Speaker 1: and technology work. There's a great piece on the Bloomberg

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Speaker 1: terminal this morning about am CHAN, the American Chamber of

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Speaker 1: Commerce saying a lot of US companies now don't see

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Speaker 1: China as a profitable market for them. I think it's

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Speaker 1: quite a significant pitt phon your Caroline's phraseology coronary second

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Speaker 1: right up next Tata asked for half a billion pounds

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Speaker 1: from government. Handcocks, WhatsApp, revelations unders Americans work from home,

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Speaker 1: Europeans head back to the office now the paper review

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Speaker 1: on blue Bird day Break Europe. The news you need

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Speaker 1: to know from today's papers. I'm JOHNI A Snablomberg's lean

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Speaker 1: Garin's let's start with the Financial Times headline Jaguar Landover

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Speaker 1: owner demands five hundred million pounds from the UK for

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Speaker 1: battery factory. Yes, indeed, Caroline now Tata Motors is asking

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Speaker 1: for this vast amount of government aid and this is

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Speaker 1: to fund a new battery factory. The Financial Time says

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Speaker 1: this decision is set to be so pivotal for the

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Speaker 1: future of the UK car industry. Now. Sources close to

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Speaker 1: the Financial Time say the Indian Group is making a

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Speaker 1: decision that's between Spain and Southwest England for its plant

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Speaker 1: and has really given MP's weeks to pledge this vast

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Speaker 1: amount of financial support now as he did mention, Tata

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Speaker 1: is seeking five hundred million pounds of aid and this

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Speaker 1: will include things like grants and support packages such as

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Speaker 1: assistance for energy costs and also for research funding. Now

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Speaker 1: Tata is considering a partnership with a Chinese battery maker

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Speaker 1: in Vision, which would involve running a factory in Somerset

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Speaker 1: to supply Jagular Landrover's new range of electric cars. So

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Speaker 1: this is all about just wanting investment to move things

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Speaker 1: on in the car industry, and a UK government official

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Speaker 1: has told the FT we are engaging with them. Whether

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Speaker 1: or not the talks go anywhere depends on whether the

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Speaker 1: final amount can be agreed. But here we are a

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Speaker 1: huge amount of money. But we also know that we

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Speaker 1: want investment in electric cars in this country. So we're

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Speaker 1: going to be watching this with great interest. Yeah, I

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Speaker 1: think it is very very important. It's an absolute scandal

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Speaker 1: that UK car manufacturing has slunt in the way that

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Speaker 1: it has. We had the lowest output since like nineteen

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Speaker 1: fifty six. Last year according to the SMMT data, you

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Speaker 1: had the closure of the Honda factory and so on.

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Speaker 1: But yes, five hundred million pounds for a battery factory.

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Speaker 1: Mean that's five times what the government had pledged to

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Speaker 1: the collapse British vault. Is it going to get it

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Speaker 1: in a matter of weeks. I think that's so doubtful.

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Speaker 1: But leam, that's an interesting story. But we also know

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Speaker 1: that British Vault is now being bought out by an

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Speaker 1: Australian company that deals underway but Caroline, as you did say,

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Speaker 1: UK car production is dwindled last year to its lowest

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Speaker 1: level since the nineteen fifties, and that's following the closure

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Speaker 1: of the Honda plant over in Swindon. So is this

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Speaker 1: investment necessary to pick up? Now? Okay, let's churn to

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Speaker 1: the Telegraph next ly and the Lockdown Files as their headline,

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Speaker 1: Hancock rejected expert advice on care home testing. WhatsApp messages

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Speaker 1: revealed tell us, I just want to say the journalist

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Speaker 1: who has revealed this is about oak shot. It's trending

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Speaker 1: all over Twitter today, so if you click on your

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Speaker 1: Twitter trends you'll see that. But yes, this revelation comes

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Speaker 1: after leak messages seen by the Telegraph and these have

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Speaker 1: now been revealed. So Chris Whitty told the Health Secretary

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Speaker 1: early in April twenty twenty, so that was about a

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Speaker 1: month into the pandemic that there should be testing for

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Speaker 1: all going into care homes. Now, Matt Hancock apparently according

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Speaker 1: to these messages, rejected the Chief Medical Officers advice. Instead,

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Speaker 1: the advice from the government appears to have been tailored

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Speaker 1: to what was possible, rather than saving the most lives

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Speaker 1: or medical advice. So let me give you an example

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Speaker 1: for Matt Hancock express concerns that expanding testing in home

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Speaker 1: in care homes could get in the way of a

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Speaker 1: self and post target of one hundred thousand COVID tests

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Speaker 1: per day. Now I do remember that figure and then

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Speaker 1: pledging to do that just so they could track and

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Speaker 1: trace COVID more accurately. Now, in the first two years

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Speaker 1: of the pandemic, there was more than forty thousand coviddests

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Speaker 1: in care homes in England, and we did really see

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Speaker 1: the most vulnerable really bore the brunt. And the Telegraph

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Speaker 1: has obtained more than ten thousand WhatsApp messages sent between

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Speaker 1: Matt Hancock and other ministers at that time. Now, as

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Speaker 1: I said, Isabel Oakshot is a journalist who is writing

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Speaker 1: this series of Lockdown Files, and she was also the

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Speaker 1: ghostwriter who wrote Matt Hancock's autobiography. Hancock is also I

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Speaker 1: just think that we need to give his side of

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Speaker 1: the story. You know, Hancock is considering all options, and

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Speaker 1: a source close to the House Secretary says she's broken

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Speaker 1: illegal NDA and her behavior is outrageous, So important to

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Speaker 1: put that there. But there we are elite text messages

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Speaker 1: about what was going on during those early days of

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Speaker 1: the pandemic, especially when it came to care homes. Yeah. Absolutely,

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Speaker 1: I think that's very interesting. Wall Street Journal work from home,

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Speaker 1: Americans working from home, Europeans and Asians are heading back

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Speaker 1: to the office apparently, Yeah, this is a that's right.

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Speaker 1: Are we more diligent? Do you think? I don't know,

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Speaker 1: But returned to the office rates in Paris and Tokyo

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Speaker 1: have climbed to over seventy five percent. Well, the US

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Speaker 1: sits at around half. So Americans are embracing remote working

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Speaker 1: and are also turning their backs on officers compared to

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Speaker 1: US overseas. Basically now, bigger homes, longer commutes, and a

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Speaker 1: tighter laport market helped explain why Americans spend less time

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Speaker 1: in the office than both your European and Asians. But

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Speaker 1: something interesting. Tony Danka, we know that name, he's the

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Speaker 1: director of the CBI, is going to give a speech

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Speaker 1: today and he's going to say that UK companies basically

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Speaker 1: need to strike a new deal with workers, and they

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Speaker 1: need to give them the chance to have more flexible

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Speaker 1: working or risk losing the wharf talent. Okay, Leanne, thank

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Speaker 1: you very much for that. Let's turn now to Goldman

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Speaker 1: Sachs and their investor Day. They'd been hoping it would

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Speaker 1: reset the narrative around the bank. Instead, the CEO, David

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Speaker 1: Solomon came under pressure over the performance of their consumer business. Binbrigs.

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Speaker 1: Charlie Wells joins us now for more. Good morning to you, Charlie.

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Speaker 1: So did Goldman executives accomplish any of what they set

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Speaker 1: out to do yesterday, which was to change the narrative

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Speaker 1: around the bank stock? Not really. So they had a

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Speaker 1: really big task ahead of them, which was really to

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Speaker 1: try to make the story about Goldman Sacks change. They

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Speaker 1: had a really bad twenty twenty two. Profits fell by half,

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Speaker 1: they had a lot of bad news about a foura

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Speaker 1: and a consumer banking that just really didn't work and

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Speaker 1: they had to retrench from And so the goal yesterday

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Speaker 1: was to project confidence and to highlight a particular unit,

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Speaker 1: the asset and wealth management unit. It's a two point

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Speaker 1: five trillion dollar business that promises to bring in more

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Speaker 1: stable revenue, more stable profits, but that didn't necessarily change

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Speaker 1: at least sentiment in markets. Yeah, we mentioned that Solomon

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Speaker 1: looked at one point flustered. He was kind of repeatedly questioned,

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Speaker 1: it was, you know, quite tricky. How did markets and

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Speaker 1: analysts respond to what we heard yesterday? Frustration? Flustered, He

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Speaker 1: said that in some senses he was, you know, not

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Speaker 1: happy by a lot of the negativity coming, you know,

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Speaker 1: about the bank from partners as well inside that bank.

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Speaker 1: And look when you look at the market reaction, the

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Speaker 1: stock fell four percent yesterday. That was the worst performer

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Speaker 1: in the Dow Jones Industrial Average. Analysts were also confused

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Speaker 1: because the messaging seemed to be a bit muddled. So

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Speaker 1: on one hand, when they were talking about this consumer unit,

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Speaker 1: they were saying, look, this is you know, doing all right.

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Speaker 1: You know, we could potentially break even in two years,

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Speaker 1: you know, not a great time frame there. But then

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Speaker 1: of course there's this phrase strategic alternatives that kept being

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Speaker 1: bandied about yesterday, which some took to me, you know,

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Speaker 1: maybe some aspects, some elements of that consumer it could

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Speaker 1: be sold off. People familiar with the matter talking about

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Speaker 1: one particular business Green Sky, an installment lending business that

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Speaker 1: they acquired for I believe it was about two point

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Speaker 1: two billion dollars last year that potentially being up for sale. Okay,

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Speaker 1: what will the buyan can need to do then to

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Speaker 1: turn its story and its share price? Ryan Charlie, Wow,

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Speaker 1: I wish I had the magic I wish I had

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Speaker 1: the magic solution there. I think I do not, but

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Speaker 1: I do think that, you know, providing more specifics here

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Speaker 1: really will be key. One of the solutions that executives

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Speaker 1: talked about was relying more on asset and wealth management.

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Speaker 1: But that is something in essence as they've been talking

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Speaker 1: about since this bank ipoed in nineteen ninety nine. Mike Mayo,

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Speaker 1: a really veteran analyst of banking at Wells Fargo, said,

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Speaker 1: you know, he really wanted to see actions instead of

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Speaker 1: just words on that idea of bringing in more stable

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Speaker 1: revenue in good markets and bad and so trying to

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Speaker 1: kind of home in on how specifically they will do this.

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Speaker 1: I think we'll be key for the s bank going forward.

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Speaker 1: This is Bloomberg Daybreak Europe. You're morning brief on the

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