1 00:00:02,880 --> 00:00:05,560 Speaker 1: This is Bloomberg day Break Weekend, our global look at 2 00:00:05,559 --> 00:00:08,000 Speaker 1: the top stories in the coming week from our Daybreak 3 00:00:08,039 --> 00:00:10,600 Speaker 1: anchors all around the world, and straight ahead on the program, 4 00:00:10,640 --> 00:00:14,400 Speaker 1: here comes some big retail earnings. I'm Tom Busby in 5 00:00:14,480 --> 00:00:14,920 Speaker 1: New York. 6 00:00:15,160 --> 00:00:17,439 Speaker 2: I'm Stephen Carroll in London, where we're looking ahead to 7 00:00:17,480 --> 00:00:20,119 Speaker 2: the next CPI print for the UK amid a gloomy 8 00:00:20,160 --> 00:00:22,560 Speaker 2: economic forecast from a leading think tank. 9 00:00:22,880 --> 00:00:25,680 Speaker 3: I'm Derek Krisner. We'll look at the most rapidly growing 10 00:00:25,760 --> 00:00:27,320 Speaker 3: ev market in the world. 11 00:00:27,480 --> 00:00:30,040 Speaker 4: I'm Kaylie Lines in Washington, where all eyes are on 12 00:00:30,160 --> 00:00:33,960 Speaker 4: Georgia ahead of a potential fourth indictment for former President Trump. 13 00:00:36,920 --> 00:00:40,920 Speaker 5: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 14 00:00:40,960 --> 00:00:43,440 Speaker 5: E love Them for your owner, York, bloombergon ninety nine 15 00:00:43,479 --> 00:00:46,879 Speaker 5: to one, Washington, d C Bloomberg one O six one, Boston, 16 00:00:46,920 --> 00:00:51,720 Speaker 5: Bloomberg nine sixty, San Francisco, DAB Digital Radio, London, Sirius 17 00:00:51,880 --> 00:00:55,120 Speaker 5: XM one nineteen and around the world on Bloomberg Radio 18 00:00:55,200 --> 00:00:57,560 Speaker 5: dot com and via the Bloomberg Business App. 19 00:00:59,320 --> 00:01:01,080 Speaker 1: Well, good day to yank you. I'm Tom Busby, and 20 00:01:01,080 --> 00:01:03,760 Speaker 1: we begin today's program with a big week ahead for 21 00:01:04,000 --> 00:01:06,840 Speaker 1: retail earnings with a look at what that tells us 22 00:01:06,840 --> 00:01:09,640 Speaker 1: about the US consumer and maybe what to expect in 23 00:01:09,640 --> 00:01:12,240 Speaker 1: the months ahead. Now, this week we hear from three giants, 24 00:01:12,520 --> 00:01:15,800 Speaker 1: Home Depot on Tuesday, Target on Wednesday, and the biggest 25 00:01:15,800 --> 00:01:18,880 Speaker 1: of them all, Walmart on Thursday. There are other familiar 26 00:01:18,959 --> 00:01:22,640 Speaker 1: names TJX, Ross Stores, Teen Retailer, Buckle, but we're going 27 00:01:22,720 --> 00:01:25,000 Speaker 1: to focus on the biggies now for what we can 28 00:01:25,080 --> 00:01:28,600 Speaker 1: expect to see. We're joined by Bloomberg News retail reporter 29 00:01:28,680 --> 00:01:31,360 Speaker 1: Brendan Case. Brendan, thank you so much for joining us. 30 00:01:31,600 --> 00:01:32,839 Speaker 6: Thanks for having me on, Tom. 31 00:01:32,920 --> 00:01:36,479 Speaker 1: Well, let's start get right into it. Home Depot HD 32 00:01:36,560 --> 00:01:40,199 Speaker 1: cut its financial forecast in May as shoppers finally post 33 00:01:40,280 --> 00:01:42,880 Speaker 1: pandemic kind of tap the brakes on spending on their 34 00:01:42,880 --> 00:01:46,600 Speaker 1: homes and yards. What do we expect to see from 35 00:01:46,680 --> 00:01:47,240 Speaker 1: Home Depot. 36 00:01:48,160 --> 00:01:51,280 Speaker 6: Yeah, we're going to be looking closely for any clues 37 00:01:51,640 --> 00:01:56,840 Speaker 6: on how the home improvement market is doing. That had 38 00:01:56,840 --> 00:02:01,720 Speaker 6: been such a strong area of consumer spending during the pandemic, 39 00:02:01,840 --> 00:02:04,680 Speaker 6: and even the you know, the few quarters coming out 40 00:02:04,680 --> 00:02:09,400 Speaker 6: of the pandemic, it finally slowed down in the first quarter. 41 00:02:10,160 --> 00:02:12,880 Speaker 6: There were also some some sort of temporary issues like weather, 42 00:02:13,000 --> 00:02:15,920 Speaker 6: but definitely you are starting to see some softness in 43 00:02:15,960 --> 00:02:20,680 Speaker 6: that in that category, and of course the whole outlook 44 00:02:20,760 --> 00:02:23,280 Speaker 6: for housing is wrapped up an interest rates. There's a 45 00:02:23,320 --> 00:02:25,880 Speaker 6: lot of different signals coming out of the sector. What 46 00:02:26,760 --> 00:02:29,919 Speaker 6: Home Depot is going to tell us is, above all, 47 00:02:30,040 --> 00:02:34,000 Speaker 6: how how much people are spending on home improvement projects, 48 00:02:34,919 --> 00:02:38,720 Speaker 6: both in terms of do it yourself projects and also contractors, 49 00:02:38,720 --> 00:02:42,000 Speaker 6: which is an area where Home Depot is really strong. 50 00:02:42,800 --> 00:02:45,040 Speaker 1: Yeah, and it's really a proxy for in a way, 51 00:02:45,240 --> 00:02:48,120 Speaker 1: for the entire housing market because, like you said, the 52 00:02:48,120 --> 00:02:52,320 Speaker 1: home improvement, but also all that building going on the contractors, 53 00:02:52,520 --> 00:02:55,320 Speaker 1: and we have seen, despite the ups and downs in 54 00:02:55,360 --> 00:02:58,560 Speaker 1: the housing market, home construction consistently strong. 55 00:02:59,680 --> 00:03:03,000 Speaker 6: Yeah, that's exactly right. And Home Depot likes to say 56 00:03:03,600 --> 00:03:08,080 Speaker 6: that it can prosper whatever the environment is. If there's 57 00:03:08,120 --> 00:03:10,040 Speaker 6: not a whole lot of new construction, there's going to 58 00:03:10,080 --> 00:03:12,919 Speaker 6: be a lot more renovations. And they went either way 59 00:03:13,280 --> 00:03:16,600 Speaker 6: that are given weekend a little bit in the first quarter, 60 00:03:16,720 --> 00:03:20,600 Speaker 6: especially as the home improvement projects, you know, the remodelings 61 00:03:20,680 --> 00:03:23,040 Speaker 6: kind of you know, there were signs that that it 62 00:03:23,120 --> 00:03:26,600 Speaker 6: was slowing down, especially as reflected in Home Depots business. 63 00:03:27,000 --> 00:03:29,600 Speaker 6: The new construction is certainly something that's going to help 64 00:03:29,639 --> 00:03:32,840 Speaker 6: them though, and we should get a little more information 65 00:03:32,880 --> 00:03:35,040 Speaker 6: from them about how they see that mix kind of 66 00:03:35,040 --> 00:03:38,600 Speaker 6: evolving throughout the year and what their expectations are for 67 00:03:39,360 --> 00:03:41,240 Speaker 6: the remodels and also for the new homes. 68 00:03:41,560 --> 00:03:44,400 Speaker 1: Now, I do have a question about Lows. For a 69 00:03:44,440 --> 00:03:47,360 Speaker 1: long time number two to Home Depot. Home Depot obviously 70 00:03:47,400 --> 00:03:49,240 Speaker 1: the leader and the do it yourself market, but they've 71 00:03:49,240 --> 00:03:51,880 Speaker 1: been making some pretty big gains. They don't report to 72 00:03:51,960 --> 00:03:54,960 Speaker 1: the following week, but are we seeing Lows kind of 73 00:03:55,560 --> 00:03:57,320 Speaker 1: evening the playing field with Home Depot. 74 00:03:57,840 --> 00:04:01,400 Speaker 6: Yeah, and this adds a company specific issue for Home 75 00:04:01,480 --> 00:04:04,280 Speaker 6: Depots earnings next week. Certainly they're going to reflect a 76 00:04:04,280 --> 00:04:07,040 Speaker 6: lot of what's going on in a macro sense, but 77 00:04:07,320 --> 00:04:11,480 Speaker 6: just from a company from a competitive standpoint. You know, 78 00:04:11,520 --> 00:04:15,600 Speaker 6: they've been such a leader for so long, but one 79 00:04:15,640 --> 00:04:18,279 Speaker 6: of the general themes in that part of the retail 80 00:04:18,320 --> 00:04:22,600 Speaker 6: market is that Low's really has been catching up. You know, 81 00:04:22,640 --> 00:04:27,679 Speaker 6: it followed Home Depot by launching same day delivery last month. 82 00:04:28,360 --> 00:04:32,800 Speaker 6: It's trying really hard to get more professional contractors on board, 83 00:04:32,880 --> 00:04:35,760 Speaker 6: which would help Lows make inroads. And what's been a 84 00:04:35,760 --> 00:04:39,080 Speaker 6: real stronghold for Home Depot. There's a lot of signs 85 00:04:39,120 --> 00:04:42,120 Speaker 6: that it's gaining traction, and you know, that's a real 86 00:04:42,200 --> 00:04:45,720 Speaker 6: sort of direct head to head rivalry. And so just 87 00:04:45,800 --> 00:04:49,200 Speaker 6: as we'll be looking for macro clues in Home Depot, 88 00:04:49,200 --> 00:04:51,360 Speaker 6: we also want to know, you know, if there's any 89 00:04:51,400 --> 00:04:54,640 Speaker 6: kind of signals in there about any ground they might 90 00:04:54,640 --> 00:04:56,800 Speaker 6: be losing to their chief rival. 91 00:04:57,560 --> 00:05:00,120 Speaker 1: Next there's Target. It's likely to post its big a 92 00:05:00,120 --> 00:05:02,120 Speaker 1: sales drop in more than six years. A lot of 93 00:05:02,160 --> 00:05:07,599 Speaker 1: Americans starting to pull back on discretionary spending things like toys, apparel, electronics. 94 00:05:07,920 --> 00:05:11,040 Speaker 1: That shift began abruptly last year. Still weighing heavily on Target. 95 00:05:11,440 --> 00:05:16,279 Speaker 6: Yes, this could be a real milestone quarter for Target 96 00:05:16,360 --> 00:05:19,200 Speaker 6: in a lot of different ways, not necessarily negatively, but 97 00:05:19,680 --> 00:05:23,400 Speaker 6: you know, there is this expectation on Wall Street that 98 00:05:23,520 --> 00:05:26,359 Speaker 6: sales are going to decline in the neighborhood of about 99 00:05:26,360 --> 00:05:29,400 Speaker 6: three or four percent. There are some indications that the 100 00:05:29,480 --> 00:05:31,640 Speaker 6: drop could be could be even worse. People are going 101 00:05:31,680 --> 00:05:35,800 Speaker 6: to be watching that number really closely. And you know, 102 00:05:35,839 --> 00:05:40,000 Speaker 6: the big picture here is that Target was one of 103 00:05:40,040 --> 00:05:44,080 Speaker 6: the big winners in the pandemic. A lot of demand, 104 00:05:44,279 --> 00:05:46,360 Speaker 6: a lot of people buying stuff from Target. They did 105 00:05:46,360 --> 00:05:49,760 Speaker 6: a great job of sort of shifting to e commerce 106 00:05:49,800 --> 00:05:53,000 Speaker 6: as well as stores during the pandemic, and they did 107 00:05:53,040 --> 00:05:57,000 Speaker 6: really well. That really seems to be running out. And 108 00:05:57,440 --> 00:06:00,719 Speaker 6: problem number one is exactly what you said, the pullback 109 00:06:00,800 --> 00:06:07,960 Speaker 6: and consumer spending from discretionary goods, electronics, toys, apparel, home goods, 110 00:06:08,000 --> 00:06:11,919 Speaker 6: all the type of products that Target is typically so 111 00:06:12,200 --> 00:06:16,200 Speaker 6: good at merchandising, with their whole sort of cheap chic 112 00:06:16,560 --> 00:06:21,200 Speaker 6: approach to to to their their product lines. That's just 113 00:06:21,279 --> 00:06:23,720 Speaker 6: been a real tough part of the market for more 114 00:06:23,760 --> 00:06:27,400 Speaker 6: than a year now. People bought so much during the 115 00:06:27,440 --> 00:06:31,400 Speaker 6: pandemic that there's less demand than there was, you know, 116 00:06:31,480 --> 00:06:33,880 Speaker 6: just because they don't need as much new stuff number 117 00:06:33,880 --> 00:06:38,200 Speaker 6: one and number two, with inflation having been so high 118 00:06:38,320 --> 00:06:41,040 Speaker 6: last year and into the into the beginning of this year, 119 00:06:41,800 --> 00:06:45,200 Speaker 6: a lot of consumers had to just focus on, you know, 120 00:06:45,400 --> 00:06:49,839 Speaker 6: buying the essentials, the groceries. That's a business that Target 121 00:06:50,000 --> 00:06:52,760 Speaker 6: you know, does have in some significance, but not to 122 00:06:52,800 --> 00:06:56,320 Speaker 6: the extent that Walmart has or obviously grocery chants have. 123 00:06:57,240 --> 00:06:59,960 Speaker 6: And then, of course the third pressure on their sales 124 00:07:00,120 --> 00:07:03,080 Speaker 6: is the shift in spending towards services. 125 00:07:02,800 --> 00:07:05,839 Speaker 1: And they're also coming off calls for a boycott. This 126 00:07:05,960 --> 00:07:10,520 Speaker 1: is related to their LGBTQ merchandise collection for Pride month 127 00:07:10,560 --> 00:07:12,440 Speaker 1: and that that may have really hurt things. 128 00:07:13,160 --> 00:07:15,320 Speaker 6: Yes, and this is something that we will learn a 129 00:07:15,320 --> 00:07:18,520 Speaker 6: lot more about next week. In detail, the company really 130 00:07:18,520 --> 00:07:23,400 Speaker 6: hasn't commented on exactly what the effect on sales was. 131 00:07:23,520 --> 00:07:26,800 Speaker 6: But as you'll recall, back in May, towards the end 132 00:07:26,800 --> 00:07:30,040 Speaker 6: of May, they got caught up in a big kind 133 00:07:30,080 --> 00:07:33,720 Speaker 6: of culture war controversy where you know, they've always had 134 00:07:34,360 --> 00:07:38,640 Speaker 6: a pretty a pretty big, a pretty significant collection of 135 00:07:38,680 --> 00:07:44,400 Speaker 6: merchandise for Pride months. In June this year, there were 136 00:07:44,640 --> 00:07:49,880 Speaker 6: some some criticisms on social media, particularly around some of 137 00:07:49,920 --> 00:07:53,640 Speaker 6: their their products. There was a bathing suit that that 138 00:07:53,640 --> 00:07:57,000 Speaker 6: that caused a lot of controversy, and there was a 139 00:07:57,040 --> 00:08:00,440 Speaker 6: misinformation there were there There were some some criticism of 140 00:08:00,480 --> 00:08:03,600 Speaker 6: the bathing suit supposedly being designed for kids, which was 141 00:08:03,960 --> 00:08:06,360 Speaker 6: not accurate. It was a it was an adult product, 142 00:08:06,720 --> 00:08:09,800 Speaker 6: but nonetheless it turned into sort of a public relations 143 00:08:09,840 --> 00:08:14,400 Speaker 6: fiasco for Target and a real hit to its brand 144 00:08:14,560 --> 00:08:18,440 Speaker 6: among some shoppers. There were calls in certain parts of 145 00:08:18,480 --> 00:08:22,520 Speaker 6: social media and online, you know, to do a boycott. 146 00:08:22,560 --> 00:08:27,960 Speaker 6: As you said, we do not know exactly what kind 147 00:08:27,960 --> 00:08:30,760 Speaker 6: of hit that delivered. Was it big, was it small, 148 00:08:30,880 --> 00:08:33,800 Speaker 6: was it noticeable, was it you know, we just don't know, 149 00:08:34,080 --> 00:08:36,880 Speaker 6: and we should learn a lot more next week. But 150 00:08:36,920 --> 00:08:40,079 Speaker 6: that you know, clearly had some effect, and so that'll 151 00:08:40,080 --> 00:08:41,120 Speaker 6: be another headwind for them. 152 00:08:41,679 --> 00:08:44,200 Speaker 1: Now Walmart, if there's any chain that's going to benefit 153 00:08:44,240 --> 00:08:47,800 Speaker 1: from high inflation and a pullback in consumer spending, it's 154 00:08:47,880 --> 00:08:51,160 Speaker 1: going to be Walmart. What do we see happening there? 155 00:08:51,840 --> 00:08:54,320 Speaker 6: So Walmart's really been hitting the cover off the ball 156 00:08:54,400 --> 00:08:59,000 Speaker 6: for about a year now. They had a huge problem 157 00:08:59,080 --> 00:09:04,400 Speaker 6: last year, as did Target in terms of getting overstocked 158 00:09:04,400 --> 00:09:08,840 Speaker 6: on inventories. They both companies guessed wrong and really badly 159 00:09:08,920 --> 00:09:11,320 Speaker 6: wrong on how much of the discretionary products they were 160 00:09:11,360 --> 00:09:13,760 Speaker 6: going to need, and so you know, for both of 161 00:09:13,760 --> 00:09:16,560 Speaker 6: them that led to a lot of markdowns last year 162 00:09:16,600 --> 00:09:19,240 Speaker 6: and a big hit to profits. But for Walmart, at 163 00:09:19,240 --> 00:09:23,080 Speaker 6: the same time, with inflation going up, a lot of 164 00:09:23,160 --> 00:09:27,440 Speaker 6: people were thinking themselves, well, where do I get the 165 00:09:27,440 --> 00:09:30,160 Speaker 6: best prices? You know, prices are going up, but where 166 00:09:30,160 --> 00:09:32,439 Speaker 6: can I find the best prices on food, on other 167 00:09:32,520 --> 00:09:36,160 Speaker 6: basic goods? And a lot of them shows Walmart Walmart 168 00:09:36,160 --> 00:09:39,920 Speaker 6: has talked a lot about upper income households, households with 169 00:09:40,000 --> 00:09:44,160 Speaker 6: incomes over one hundred thousand dollars accounting for you know, 170 00:09:44,400 --> 00:09:48,679 Speaker 6: half to three quarters of the gains in their comparable 171 00:09:48,720 --> 00:09:51,840 Speaker 6: store sales. And so they've been getting a lot of 172 00:09:51,880 --> 00:09:55,719 Speaker 6: trade down activity even as they see some weakness in 173 00:09:56,120 --> 00:09:58,600 Speaker 6: their core customer and in kind of the middle income 174 00:09:59,200 --> 00:10:04,720 Speaker 6: or lower income of consumers. But if you net it 175 00:10:04,760 --> 00:10:07,200 Speaker 6: all out, what they've gotten at the big uptick in 176 00:10:07,320 --> 00:10:12,800 Speaker 6: sales that's expected to continue, But the question is going 177 00:10:12,880 --> 00:10:17,280 Speaker 6: to be how much with inflation coming down, you know, 178 00:10:17,400 --> 00:10:19,800 Speaker 6: one challenge for Walmart is going to be whether they 179 00:10:19,840 --> 00:10:22,920 Speaker 6: can hold on to some of the more affluent shoppers 180 00:10:22,920 --> 00:10:26,840 Speaker 6: that they've gotten at the same time. You know, with 181 00:10:27,280 --> 00:10:29,640 Speaker 6: obviously we're not in a recession. The job market is 182 00:10:29,679 --> 00:10:32,000 Speaker 6: still strong, but there's a lot of pressure on lower 183 00:10:32,040 --> 00:10:37,319 Speaker 6: income consumers right now, and for Walmart, you know, it's 184 00:10:37,320 --> 00:10:39,520 Speaker 6: going to be sort of a question mark how well 185 00:10:39,559 --> 00:10:40,600 Speaker 6: they can hold up well. 186 00:10:40,640 --> 00:10:43,920 Speaker 1: A lot to look forward to. Brendan Case, Bloomberg Retail Reporter, 187 00:10:44,000 --> 00:10:46,120 Speaker 1: thank you so much for joining us and coming up 188 00:10:46,160 --> 00:10:49,440 Speaker 1: on Bloomberg Daybreak weekend. Leading UK think tanks as Britain 189 00:10:49,480 --> 00:10:52,960 Speaker 1: must confront reality rather than reject it when it comes 190 00:10:53,000 --> 00:10:56,240 Speaker 1: to its economic flight. We'll explain. I'm Tom Busby and 191 00:10:56,320 --> 00:11:05,760 Speaker 1: this is Bloomberg. This is Bloomberg Daybreak weekend, our global 192 00:11:05,760 --> 00:11:07,920 Speaker 1: look ahead at the top stories for investors in the 193 00:11:07,920 --> 00:11:10,880 Speaker 1: coming week. I'm Tom Busby in New York. Up later 194 00:11:10,920 --> 00:11:13,440 Speaker 1: in our program. Former President Trump could be in the 195 00:11:13,480 --> 00:11:16,920 Speaker 1: headlines again this coming week. But first, a leading UK 196 00:11:17,120 --> 00:11:21,280 Speaker 1: think tank says Britain must confront reality rather than rejected 197 00:11:21,520 --> 00:11:24,400 Speaker 1: when it comes to its economic plight. This ahead of 198 00:11:24,400 --> 00:11:27,080 Speaker 1: the latest UK inflation data coming in the next few days, 199 00:11:27,120 --> 00:11:30,560 Speaker 1: expected to show price increases continuing to plague the UK 200 00:11:31,160 --> 00:11:33,440 Speaker 1: for more. Let's head to London and bring in Bloomberg 201 00:11:33,480 --> 00:11:36,520 Speaker 1: Daybreak Europe anchors Caroline Hepger and Stephen. 202 00:11:36,200 --> 00:11:39,440 Speaker 7: Carroll Tom we get the next set of consumer price 203 00:11:39,480 --> 00:11:43,160 Speaker 7: inflation data in the coming few days. Prime Minister Rishi Sinak, 204 00:11:43,240 --> 00:11:46,400 Speaker 7: of course, has set himself the goal of harving inflation 205 00:11:46,600 --> 00:11:49,280 Speaker 7: by the end of the year from a starting point 206 00:11:49,400 --> 00:11:52,439 Speaker 7: at that time of ten point seven percent. There was 207 00:11:52,480 --> 00:11:54,720 Speaker 7: a point earlier in the year where that looked really 208 00:11:54,800 --> 00:11:58,280 Speaker 7: quite tricky, like a really tall order. The last inflation 209 00:11:58,360 --> 00:12:02,800 Speaker 7: print has shown prices cooling. The Bank of England Governor 210 00:12:02,840 --> 00:12:06,480 Speaker 7: Andrew Bailey, who spoke to Bloomberg pretty recently, was warning 211 00:12:06,520 --> 00:12:10,160 Speaker 7: Stephen that the last male in the inflation fight is, 212 00:12:10,960 --> 00:12:13,560 Speaker 7: you know, looking very difficult. He was very committed to it, 213 00:12:14,160 --> 00:12:16,040 Speaker 7: but it looks like quite a long mile Carolin. 214 00:12:16,080 --> 00:12:18,200 Speaker 2: This is something we've heard over and over from the 215 00:12:18,320 --> 00:12:21,000 Speaker 2: likes of Dan Hanson from Bloomberg Economics, who tells us 216 00:12:21,000 --> 00:12:23,680 Speaker 2: that the easy bit is coming down the higher level inflation. 217 00:12:23,760 --> 00:12:26,600 Speaker 2: When that number starts to get closer to that two 218 00:12:26,640 --> 00:12:28,959 Speaker 2: percent level, that's going to be the really difficult part, 219 00:12:29,040 --> 00:12:30,800 Speaker 2: and that's the part where you enter into the risk 220 00:12:30,840 --> 00:12:33,480 Speaker 2: of overtightening by the Bank of England. Now, the latest 221 00:12:33,520 --> 00:12:37,400 Speaker 2: forecast from Bloomberg Economics does see the UK CPI coming 222 00:12:37,440 --> 00:12:39,640 Speaker 2: below five percent by the end of this year, but 223 00:12:39,679 --> 00:12:41,920 Speaker 2: as you say, it's a very shaky path and there 224 00:12:41,920 --> 00:12:44,640 Speaker 2: are lots of quite gloomy opinions out there about the 225 00:12:44,640 --> 00:12:46,199 Speaker 2: trajectory for the UK economy. 226 00:12:46,320 --> 00:12:50,840 Speaker 7: Absolutely so. That includes the National Institute of Economic and 227 00:12:50,920 --> 00:12:54,360 Speaker 7: Social Research, a think tank here in London, which came 228 00:12:54,400 --> 00:12:56,960 Speaker 7: out in the last few days with a major bit 229 00:12:57,200 --> 00:13:02,240 Speaker 7: of reporting around where they see inflation. Economic growth, inequality 230 00:13:02,440 --> 00:13:05,200 Speaker 7: and on all of those funds, it's pretty bad news. 231 00:13:05,559 --> 00:13:09,680 Speaker 7: NISA sees the UK economy stagnating for years, says the 232 00:13:09,760 --> 00:13:12,680 Speaker 7: UK is actually unlikely to return to pre pandemic levels 233 00:13:12,720 --> 00:13:15,120 Speaker 7: of activity before twenty twenty four. 234 00:13:15,240 --> 00:13:15,440 Speaker 5: Yeah. 235 00:13:15,480 --> 00:13:17,520 Speaker 2: Look, that's something that makes the UK economy an outlier 236 00:13:17,559 --> 00:13:19,600 Speaker 2: in the G seven as well. The outlook for inflation 237 00:13:19,640 --> 00:13:21,960 Speaker 2: as well as a very slow climb down. They're saying 238 00:13:21,960 --> 00:13:25,240 Speaker 2: they're still seeing inflation at two point three percent in 239 00:13:25,360 --> 00:13:29,240 Speaker 2: twenty twenty five. They've also pointed to rising inequality among 240 00:13:29,280 --> 00:13:32,720 Speaker 2: the regions of the UK, falling wages in some places, 241 00:13:32,720 --> 00:13:35,720 Speaker 2: and a government whose hands are tied because if it's 242 00:13:35,720 --> 00:13:39,480 Speaker 2: continually spending more than it's bringing in. We've been speaking 243 00:13:39,520 --> 00:13:42,720 Speaker 2: to the director of NISER, jag Jit Chada about this 244 00:13:42,880 --> 00:13:43,679 Speaker 2: latest report. 245 00:13:44,040 --> 00:13:46,760 Speaker 8: It's not a very pleasant picture. And I think in 246 00:13:46,800 --> 00:13:50,480 Speaker 8: as an economy, as a set of decision makers and policymakers, 247 00:13:50,520 --> 00:13:52,880 Speaker 8: particularly with the election in front of us next year, 248 00:13:53,360 --> 00:13:56,079 Speaker 8: I think it's time to come. The time has come 249 00:13:56,120 --> 00:13:59,640 Speaker 8: to confront reality rather than reject it. So if we 250 00:13:59,640 --> 00:14:02,079 Speaker 8: could think of the report as a plane of another 251 00:14:02,160 --> 00:14:04,920 Speaker 8: description of where we are and where we're likely to go, 252 00:14:05,480 --> 00:14:08,120 Speaker 8: I think our ultimate hope is that could prompt better policy. 253 00:14:08,480 --> 00:14:11,800 Speaker 8: So what we have is an economy that went into 254 00:14:11,960 --> 00:14:16,000 Speaker 8: COVID with a weak structural supply side, as well as 255 00:14:16,000 --> 00:14:20,440 Speaker 8: having just affected Brexit breaking relations with our nearest and 256 00:14:20,520 --> 00:14:24,760 Speaker 8: richest trading neighbors. The COVID crisis revealed all kinds of 257 00:14:24,840 --> 00:14:28,400 Speaker 8: weaknesses in our health service that still haven't been addressed 258 00:14:28,400 --> 00:14:31,360 Speaker 8: that seemed to me to be intimately linked with labour 259 00:14:31,360 --> 00:14:34,600 Speaker 8: supply and the economy. Subsequently, that labour supply has been 260 00:14:34,640 --> 00:14:38,760 Speaker 8: hampered because people fearing ill health haven't returned to labor force. 261 00:14:38,800 --> 00:14:42,960 Speaker 8: That's older people, but as well, we find ourselves short 262 00:14:43,000 --> 00:14:47,640 Speaker 8: in many sectors, with vacancies still at elevated left levels. 263 00:14:48,760 --> 00:14:52,600 Speaker 8: The food and energy crisis, created by the increase in 264 00:14:53,280 --> 00:14:56,000 Speaker 8: by Russia's invasion of Ukraine led to a large increase 265 00:14:56,040 --> 00:14:59,200 Speaker 8: in energy and food prices, which we don't produce largely 266 00:14:59,240 --> 00:15:01,800 Speaker 8: on the margin. That meant that as an economy, we 267 00:15:01,880 --> 00:15:04,520 Speaker 8: suffered a fall in income what economists call the terms 268 00:15:04,520 --> 00:15:06,800 Speaker 8: of trade shock. That was not the same for example, 269 00:15:06,800 --> 00:15:08,880 Speaker 8: for the United States, that is a net producer of 270 00:15:09,360 --> 00:15:11,960 Speaker 8: energy and food, but for us it meant that we 271 00:15:11,960 --> 00:15:14,920 Speaker 8: were importing goods that had become more expensive, and for 272 00:15:14,960 --> 00:15:17,520 Speaker 8: a large time at an exchange rate that had depreciated. 273 00:15:17,560 --> 00:15:20,160 Speaker 8: You remember sterling was in decline for much of twenty 274 00:15:20,240 --> 00:15:25,560 Speaker 8: twenty two. This then upward pressure on inflation as well 275 00:15:25,680 --> 00:15:28,760 Speaker 8: as the constricted supply side. That's meant the Bank of 276 00:15:29,080 --> 00:15:32,440 Speaker 8: had to respond very rapidly to that and raise interest rates. 277 00:15:32,640 --> 00:15:34,920 Speaker 8: And when we had all this up, it leads to 278 00:15:34,960 --> 00:15:37,360 Speaker 8: an economy that on average is not likely to grow 279 00:15:37,480 --> 00:15:39,840 Speaker 8: very much at all, and I think that's something we 280 00:15:40,320 --> 00:15:43,680 Speaker 8: all need to think about hard except and address. 281 00:15:44,120 --> 00:15:47,560 Speaker 7: You are tearing strips off the government as far as 282 00:15:47,600 --> 00:15:51,360 Speaker 7: I can see in this report. You talk about facing reality. 283 00:15:51,840 --> 00:15:54,200 Speaker 7: How much of this is the government's fault. 284 00:15:55,640 --> 00:16:00,440 Speaker 8: Well, we've had an immense amount of political churn in 285 00:16:00,440 --> 00:16:01,840 Speaker 8: the last three or four years. You don't need me 286 00:16:01,920 --> 00:16:04,800 Speaker 8: to go through all the episodes, but I would say 287 00:16:05,720 --> 00:16:08,920 Speaker 8: the height of that was the mini budget crisis of 288 00:16:09,280 --> 00:16:12,040 Speaker 8: September twenty twenty two, which is certainly scarred in my memory, 289 00:16:12,440 --> 00:16:15,720 Speaker 8: if not yours. That demonstrated that there are no quick 290 00:16:15,760 --> 00:16:18,600 Speaker 8: fixes to the problems that we face in the economy. 291 00:16:19,160 --> 00:16:22,720 Speaker 8: Nurturing the supply side, whether it's in the public sector, 292 00:16:22,880 --> 00:16:27,760 Speaker 8: the health sector, transport, or in the private sector by 293 00:16:27,760 --> 00:16:31,600 Speaker 8: getting firms to invest, to encourage them to invest both 294 00:16:31,640 --> 00:16:35,640 Speaker 8: in physical and intangible capital, but also in their workers' 295 00:16:35,640 --> 00:16:39,600 Speaker 8: skills is something that will take a generation or so 296 00:16:39,840 --> 00:16:43,440 Speaker 8: to achieve. No quick boost is going to work here, 297 00:16:43,480 --> 00:16:46,240 Speaker 8: and I think we're kind of at the end of 298 00:16:46,280 --> 00:16:49,760 Speaker 8: those short run political plans a dash for growth or 299 00:16:49,800 --> 00:16:52,440 Speaker 8: some announcement that will quickly lead to growth. It's not 300 00:16:52,600 --> 00:16:55,400 Speaker 8: really the way the supply side of the economy works. 301 00:16:55,920 --> 00:16:58,960 Speaker 8: And we really need our political classes and decision makers 302 00:16:58,960 --> 00:17:02,840 Speaker 8: to accept that the decisions that they now may make, 303 00:17:03,600 --> 00:17:05,760 Speaker 8: ultimately they're going to help the supply side of the economy, 304 00:17:05,840 --> 00:17:09,840 Speaker 8: ones that won't necessarily lead to benefits over the political cycle. 305 00:17:10,320 --> 00:17:12,120 Speaker 8: And one of the problems we have is that we're 306 00:17:12,200 --> 00:17:14,960 Speaker 8: focused always on the next election, which means we're looking 307 00:17:15,000 --> 00:17:17,440 Speaker 8: for quick fixes, which we can see time and time 308 00:17:17,440 --> 00:17:20,879 Speaker 8: and again episode after episode political cycle of the political 309 00:17:20,960 --> 00:17:23,960 Speaker 8: cycle just haven't worked to have five years without growth 310 00:17:24,000 --> 00:17:28,800 Speaker 8: on average, and alongside that widening disparitied. If we look, 311 00:17:28,840 --> 00:17:32,760 Speaker 8: for example, that where we think that on average workers 312 00:17:32,760 --> 00:17:34,880 Speaker 8: in London will be by the end of next year, 313 00:17:35,520 --> 00:17:37,919 Speaker 8: their real wages will be seven percent above the pre 314 00:17:38,040 --> 00:17:41,560 Speaker 8: COVID peak, whereas if I take one region at random, 315 00:17:41,600 --> 00:17:45,600 Speaker 8: the West Midlands, they will be five percent below. There's 316 00:17:45,720 --> 00:17:48,480 Speaker 8: widening disparities when we take the average of That is 317 00:17:48,520 --> 00:17:50,960 Speaker 8: the reason we have such low growth in the economy. 318 00:17:51,280 --> 00:17:56,399 Speaker 8: We need consistency of planning to help the other parts 319 00:17:56,440 --> 00:18:00,160 Speaker 8: of the economy outside of London and the Southeast catch up, 320 00:18:00,760 --> 00:18:06,680 Speaker 8: create productivity, high level, high income jobs that will propel 321 00:18:06,800 --> 00:18:09,639 Speaker 8: this economy onto a better path. And we've been stuck 322 00:18:09,640 --> 00:18:11,280 Speaker 8: at this level for quite some time. 323 00:18:12,080 --> 00:18:13,679 Speaker 7: There are a couple of points that I think are 324 00:18:13,760 --> 00:18:16,680 Speaker 7: really important though, to pull out of your report. One 325 00:18:16,760 --> 00:18:21,160 Speaker 7: the idea that the UK is at nearly full employment, 326 00:18:21,520 --> 00:18:24,200 Speaker 7: a very very low unemployment, and that we still haven't 327 00:18:24,240 --> 00:18:28,280 Speaker 7: managed to grow, and that also there isn't actually much 328 00:18:28,400 --> 00:18:30,919 Speaker 7: fiscal leeway, are you The amount of money that the 329 00:18:30,960 --> 00:18:34,000 Speaker 7: government is bringing in in order to achieve its goals 330 00:18:34,280 --> 00:18:37,640 Speaker 7: because we're not growing is very very little, And that 331 00:18:37,840 --> 00:18:41,840 Speaker 7: crunch I'm not sure people necessarily understand. Why is that 332 00:18:41,880 --> 00:18:45,040 Speaker 7: so important? You know, to understand that, I mean that 333 00:18:45,119 --> 00:18:47,720 Speaker 7: we would be a real outlier in the G seven, 334 00:18:48,080 --> 00:18:50,120 Speaker 7: you know, to have so little fiscal headroom. 335 00:18:50,359 --> 00:18:53,119 Speaker 8: I think that's absolutely right, and that's the critical question 336 00:18:53,240 --> 00:18:56,920 Speaker 8: that any government will have to face when it wins 337 00:18:56,960 --> 00:18:59,400 Speaker 8: the election next year. We see unemployment rising a bit, 338 00:19:00,160 --> 00:19:03,639 Speaker 8: something like just slightly over five percent in a year 339 00:19:03,680 --> 00:19:06,760 Speaker 8: and a half or so. That's not high by historical 340 00:19:06,800 --> 00:19:09,520 Speaker 8: standards at all, and what you would expect under the 341 00:19:09,560 --> 00:19:12,120 Speaker 8: circumstances if we were at full employment, with people paying 342 00:19:12,160 --> 00:19:14,959 Speaker 8: taxes on their income, that we were then being in 343 00:19:15,080 --> 00:19:18,560 Speaker 8: fiscal balance or a small fiscal surplus. Sadly, of course, 344 00:19:18,640 --> 00:19:22,000 Speaker 8: because in part because of these income inequalities that I've 345 00:19:22,040 --> 00:19:25,959 Speaker 8: been talking about, even those high levels of employment don't 346 00:19:26,080 --> 00:19:29,840 Speaker 8: generate sufficient taxes to lead to the balance budget or 347 00:19:29,880 --> 00:19:33,480 Speaker 8: the fiscal surplus that we would require that would then 348 00:19:33,520 --> 00:19:37,040 Speaker 8: give us funds to address the fundamental lack of public 349 00:19:37,080 --> 00:19:40,280 Speaker 8: investment in the economy and also to help grow the 350 00:19:40,320 --> 00:19:42,760 Speaker 8: skills base that we see around the country. 351 00:19:43,119 --> 00:19:45,680 Speaker 7: That was Professor jag Jitchado, who is director of the 352 00:19:45,760 --> 00:19:49,760 Speaker 7: National Institute of Economic and Social Research, speaking to us 353 00:19:49,760 --> 00:19:52,280 Speaker 7: here on Bloomberg Radio as we get ready, of course 354 00:19:52,280 --> 00:19:55,480 Speaker 7: for the next UK inflation reading at what it means 355 00:19:55,480 --> 00:19:56,280 Speaker 7: for the economy. 356 00:19:56,720 --> 00:19:57,879 Speaker 2: I'm Stephen Carroll. 357 00:19:57,680 --> 00:19:59,359 Speaker 7: And I'm Caroline Hepgar here in London. 358 00:19:59,440 --> 00:20:01,600 Speaker 2: You can catch us every weekday warning here for Bloomberg 359 00:20:01,680 --> 00:20:04,360 Speaker 2: Daybreak Europe, beginning at six am in London and one 360 00:20:04,400 --> 00:20:05,439 Speaker 2: am on Wall Streets. 361 00:20:05,640 --> 00:20:09,080 Speaker 1: Tom, thank you, Steven and Caroline, and coming up on 362 00:20:09,119 --> 00:20:12,480 Speaker 1: Bloomberg day Break weekend. Former President Trump in the headlights 363 00:20:12,520 --> 00:20:16,399 Speaker 1: once again. I'm Tom Busby. This is Bloomberg. 364 00:20:22,400 --> 00:20:26,880 Speaker 5: Broadcasting live from the Bloomberg Interactive Brokers Studio in New York. 365 00:20:27,000 --> 00:20:30,400 Speaker 5: Bloomberg Elemon three oh to Washington, d C, Bloomberg ninety 366 00:20:30,480 --> 00:20:33,560 Speaker 5: nine one to Boston, Bloomberg one oh six one to 367 00:20:33,640 --> 00:20:37,280 Speaker 5: San Francisco, Bloomberg nine sixty to the country, Serrius XM 368 00:20:37,359 --> 00:20:41,359 Speaker 5: Channel one nineteen to London DAB Digital Radio, and around 369 00:20:41,359 --> 00:20:45,200 Speaker 5: the globe the Bloomberg Business app in Bloomberg Radio dot Com. 370 00:20:45,240 --> 00:20:47,600 Speaker 5: This is Bloomberg Daybreak Weekend. 371 00:20:53,800 --> 00:20:55,920 Speaker 1: I'm Tom Busby in New York with your global look 372 00:20:55,920 --> 00:20:58,440 Speaker 1: ahead at the top stories for investors in the coming week. 373 00:20:59,000 --> 00:21:02,520 Speaker 1: Another indictment could be coming for President Trump. For more, 374 00:21:02,600 --> 00:21:05,000 Speaker 1: let's add to our Bloomberg ninety nine one newsroom in 375 00:21:05,119 --> 00:21:08,720 Speaker 1: Washington and Bloomberg Sound On. Co host Kaylee Lines. 376 00:21:09,119 --> 00:21:11,960 Speaker 4: That's right, Tom, the former president has already been indicted 377 00:21:12,000 --> 00:21:14,560 Speaker 4: three times, first in the state of New York related 378 00:21:14,560 --> 00:21:17,680 Speaker 4: to hush money payments to adult film actress Stormy Daniels, 379 00:21:17,880 --> 00:21:20,040 Speaker 4: then in Florida, where he was shit with federal charges 380 00:21:20,080 --> 00:21:23,840 Speaker 4: in the classified documents case, and most recently another federal 381 00:21:23,880 --> 00:21:27,080 Speaker 4: indictment brought in Washington over efforts to overturn the results 382 00:21:27,080 --> 00:21:29,959 Speaker 4: of the twenty twenty election and obstruct the transition of power. 383 00:21:30,440 --> 00:21:33,080 Speaker 4: And now a fourth indictment could be coming. The district 384 00:21:33,119 --> 00:21:36,680 Speaker 4: attorney in Fulton County, Georgia, Fannie Willis, is widely expected 385 00:21:36,720 --> 00:21:39,560 Speaker 4: to bring charges related to efforts to overturn the election 386 00:21:39,680 --> 00:21:43,240 Speaker 4: results in that state. President Trump was actually talking about 387 00:21:43,280 --> 00:21:45,679 Speaker 4: that this past week in an interview on Newsmax. 388 00:21:45,960 --> 00:21:47,080 Speaker 9: And I don't know what she'said. 389 00:21:47,200 --> 00:21:47,959 Speaker 5: I really don't know. 390 00:21:48,000 --> 00:21:50,280 Speaker 9: All I know is she could have done it two 391 00:21:50,320 --> 00:21:52,800 Speaker 9: and a half years ago if she was going to 392 00:21:52,840 --> 00:21:55,440 Speaker 9: do something. And this is about a perfect phone call, 393 00:21:55,520 --> 00:21:59,240 Speaker 9: a call where I'm questioning the election. I'm telling them 394 00:21:59,280 --> 00:22:03,000 Speaker 9: that in my op the election was rigged, and this 395 00:22:03,160 --> 00:22:05,119 Speaker 9: saying that I was I did something in Greek I 396 00:22:05,119 --> 00:22:07,480 Speaker 9: didn't do or anything wrong. I believe I won that 397 00:22:07,520 --> 00:22:09,879 Speaker 9: election by many, many votes. 398 00:22:10,480 --> 00:22:13,080 Speaker 4: Of course, he's referring to that phone call between himself 399 00:22:13,119 --> 00:22:16,120 Speaker 4: and Brad Raffensberger, the Georgia Secretary of State, in which 400 00:22:16,160 --> 00:22:19,480 Speaker 4: he said, quote, I just want to find eleven seven 401 00:22:19,640 --> 00:22:22,880 Speaker 4: and eighty votes. So let's get more on this potential 402 00:22:22,880 --> 00:22:26,840 Speaker 4: indictment that is seemingly just around the corner. David Wriaco's 403 00:22:27,040 --> 00:22:30,639 Speaker 4: Bloomberg Legal reporter and Wendy benjamins in Bloomberg Washington Senior 404 00:22:30,720 --> 00:22:34,120 Speaker 4: editor are joining me now. So David, just to you first, 405 00:22:34,520 --> 00:22:37,560 Speaker 4: what are we expecting this coming week in Fulton County? 406 00:22:37,560 --> 00:22:39,320 Speaker 4: What charges could we be looking at here? 407 00:22:40,400 --> 00:22:44,440 Speaker 10: Well, the prosecutors who work for Fulton County District Attorney 408 00:22:44,480 --> 00:22:48,119 Speaker 10: Fannie Willis have been investigating this case for two and 409 00:22:48,200 --> 00:22:52,679 Speaker 10: a half years and they are expected in the coming 410 00:22:52,720 --> 00:22:56,760 Speaker 10: week to present evidence to a grand jury that could 411 00:22:56,800 --> 00:23:00,320 Speaker 10: return an indictment against Trump and his ally as it 412 00:23:00,320 --> 00:23:03,160 Speaker 10: could be this coming week or the week after that. 413 00:23:04,240 --> 00:23:07,880 Speaker 10: But they have spent a lot of time assembling evidence. 414 00:23:07,960 --> 00:23:12,040 Speaker 10: There was an advisory grand jury convened last year that 415 00:23:12,160 --> 00:23:16,120 Speaker 10: heard from seventy five different witnesses, and so now they're 416 00:23:16,160 --> 00:23:19,120 Speaker 10: presenting it to a different grand jury that can actually 417 00:23:19,160 --> 00:23:24,399 Speaker 10: bring criminal charges. And what we're hearing is that Fannie 418 00:23:24,400 --> 00:23:30,000 Speaker 10: Willis could go big, as many legal observers in Atlanta 419 00:23:30,119 --> 00:23:33,679 Speaker 10: believe she will, and in so doing, she would probably 420 00:23:33,720 --> 00:23:38,439 Speaker 10: bring charges under the state racketeering law, or perhaps just 421 00:23:38,640 --> 00:23:44,800 Speaker 10: under election fraud and conspiracy laws, and such an indictment 422 00:23:45,320 --> 00:23:49,840 Speaker 10: could involve Trump and a number of his allies, as 423 00:23:49,880 --> 00:23:55,000 Speaker 10: many as twelve different people, we have heard, and there's 424 00:23:55,040 --> 00:23:57,720 Speaker 10: a variety of different incidents that they're looking at. 425 00:23:58,960 --> 00:24:01,280 Speaker 4: Yeah, and we've also heard from the sheriff in Fulden 426 00:24:01,320 --> 00:24:04,280 Speaker 4: County who's indicated that the former president would be treated 427 00:24:04,400 --> 00:24:08,720 Speaker 4: just like anyone else, mugshot included, and David, that could 428 00:24:08,720 --> 00:24:11,320 Speaker 4: make this case a little different than the others we 429 00:24:11,359 --> 00:24:11,720 Speaker 4: have seen. 430 00:24:12,480 --> 00:24:14,840 Speaker 10: Right in the other cases in which he was criminally 431 00:24:14,960 --> 00:24:19,480 Speaker 10: charged in federal court in Washington and in Florida, and 432 00:24:19,560 --> 00:24:23,720 Speaker 10: in the state case in New York, he was not mugshotted. 433 00:24:24,119 --> 00:24:27,080 Speaker 10: And I would just say that the sheriff said that 434 00:24:27,080 --> 00:24:30,119 Speaker 10: that would be their plan unless the judge who receives 435 00:24:30,200 --> 00:24:31,840 Speaker 10: the case tells them otherwise. 436 00:24:32,880 --> 00:24:34,760 Speaker 4: So Wendy to bring you in here on kind of 437 00:24:34,800 --> 00:24:39,000 Speaker 4: the political implications of all of this. This, if the 438 00:24:39,040 --> 00:24:42,000 Speaker 4: pattern follows, is likely just going to fire up the 439 00:24:42,040 --> 00:24:45,240 Speaker 4: former president's base even more. He has said multiple times 440 00:24:45,240 --> 00:24:47,400 Speaker 4: in the last week and change that he just needs 441 00:24:47,440 --> 00:24:50,240 Speaker 4: one more indictment to since the twenty twenty four race. 442 00:24:50,640 --> 00:24:53,920 Speaker 11: Yeah, and like I said before, I don't think he's 443 00:24:53,960 --> 00:24:58,240 Speaker 11: necessarily wrong on that, at least on the presidential nomination. 444 00:24:58,800 --> 00:25:02,440 Speaker 11: He has a you know, raised more money every time 445 00:25:02,560 --> 00:25:06,080 Speaker 11: he's indicted, or raised money every time he's indicted. It 446 00:25:06,080 --> 00:25:10,400 Speaker 11: does seem to be tapering off as they become sadly 447 00:25:10,600 --> 00:25:15,359 Speaker 11: routine for him to do this, but it's you know, 448 00:25:16,440 --> 00:25:19,320 Speaker 11: it seems like the indictments are emboldening him. But I 449 00:25:19,400 --> 00:25:23,159 Speaker 11: think the more he talks about the case, the more 450 00:25:23,400 --> 00:25:27,560 Speaker 11: that things happen not in his favor, either through pre 451 00:25:27,640 --> 00:25:32,840 Speaker 11: trial rulings or later on convictions. If those happen, that 452 00:25:33,000 --> 00:25:36,760 Speaker 11: may begin to chip away at everything but the die 453 00:25:36,880 --> 00:25:40,439 Speaker 11: hard base, which is still only about a third of 454 00:25:40,520 --> 00:25:42,080 Speaker 11: Republican primary voters. 455 00:25:42,560 --> 00:25:45,040 Speaker 4: But he's still going to face the challenge even if 456 00:25:45,040 --> 00:25:47,440 Speaker 4: there are people who want to show up and vote 457 00:25:47,480 --> 00:25:49,560 Speaker 4: for him in the primaries, that he's going to be 458 00:25:49,640 --> 00:25:52,879 Speaker 4: trying to campaign in all of these primary states that 459 00:25:52,920 --> 00:25:54,800 Speaker 4: are critically important at the same time that he's also 460 00:25:54,880 --> 00:25:58,199 Speaker 4: going to be dealing with court dates with trials and Wendy, 461 00:25:58,240 --> 00:26:01,320 Speaker 4: that's just calendar wise, very difficult. 462 00:26:01,520 --> 00:26:05,400 Speaker 11: Calendar wise, very difficult. Although Trump is not a traditional candidate, 463 00:26:05,440 --> 00:26:07,760 Speaker 11: and that he'll stand next to a buttercow at the 464 00:26:07,800 --> 00:26:10,239 Speaker 11: Iowa State Fair and all of that. He likes to 465 00:26:10,240 --> 00:26:12,720 Speaker 11: do his rallies. He likes to fly in on his jet, 466 00:26:12,840 --> 00:26:14,639 Speaker 11: you know, keep the jet in the background, do the 467 00:26:14,720 --> 00:26:18,520 Speaker 11: rally and all of that. And so he may be 468 00:26:18,680 --> 00:26:22,760 Speaker 11: able to, you know, given his wealth and private jet 469 00:26:22,800 --> 00:26:26,480 Speaker 11: and all that, be able to maintain both schedules, although 470 00:26:26,520 --> 00:26:30,080 Speaker 11: it's going to be nutty and completely unprecedented in American history. 471 00:26:30,520 --> 00:26:32,680 Speaker 11: But I think one of the larger issues for him, 472 00:26:32,720 --> 00:26:36,840 Speaker 11: and why his attorneys are talking so much in their 473 00:26:36,840 --> 00:26:39,800 Speaker 11: defense about this was my first Amendment right to say 474 00:26:39,840 --> 00:26:42,600 Speaker 11: all of this is because they know they will not 475 00:26:42,680 --> 00:26:44,840 Speaker 11: be able to control him on the campaign trail. And 476 00:26:44,880 --> 00:26:48,040 Speaker 11: if the first Amendment is their defense, then he can 477 00:26:48,640 --> 00:26:54,000 Speaker 11: call the judges nasty women, he can call the prosecutor deranged, 478 00:26:54,080 --> 00:26:57,920 Speaker 11: he can talk about the case in a way that 479 00:26:58,840 --> 00:27:01,280 Speaker 11: you know, we'll probably drive everyone with a law degree 480 00:27:01,359 --> 00:27:05,440 Speaker 11: absolutely crazy. But Hill insists it's his first Amendment right 481 00:27:05,600 --> 00:27:09,040 Speaker 11: until a judge, and David, you may predict this better 482 00:27:09,080 --> 00:27:11,119 Speaker 11: than I can slaps a gag order on him. 483 00:27:13,880 --> 00:27:17,280 Speaker 10: Judges are loath to put a gag order on a defendant, 484 00:27:17,359 --> 00:27:21,840 Speaker 10: but Trump has a long career of pushing the boundaries, 485 00:27:21,880 --> 00:27:25,480 Speaker 10: and he's trying to push the boundaries now in this case. 486 00:27:25,520 --> 00:27:30,440 Speaker 10: I mean, as you said, when his defenses so far 487 00:27:30,520 --> 00:27:36,480 Speaker 10: that he's articulated are mostly First Amendment. In the Jack 488 00:27:36,560 --> 00:27:41,600 Speaker 10: Smith case relating to the election, Jack Smith said, this 489 00:27:41,680 --> 00:27:48,120 Speaker 10: goes well beyond his free speech rights. But judges want 490 00:27:48,119 --> 00:27:53,560 Speaker 10: to be careful not to put two title leash on Trump. 491 00:27:54,000 --> 00:27:56,560 Speaker 10: And so that makes him much different than your average 492 00:27:56,560 --> 00:28:00,680 Speaker 10: criminal defendant because he has such a big platform, and 493 00:28:01,800 --> 00:28:06,880 Speaker 10: it's quite extraordinary and unprecedented for a defendant to be 494 00:28:07,040 --> 00:28:13,280 Speaker 10: attacking the prosecutors, attacking the judges, attacking witnesses in the 495 00:28:13,320 --> 00:28:17,879 Speaker 10: way that Trump is. And you know, it presents a 496 00:28:18,080 --> 00:28:21,480 Speaker 10: real challenge for everyone in the criminal justice system to 497 00:28:21,560 --> 00:28:22,680 Speaker 10: know how to deal with that. 498 00:28:23,080 --> 00:28:25,520 Speaker 4: Well, there's so many ways in which this is unprecedented. 499 00:28:25,560 --> 00:28:28,720 Speaker 4: Because also I may be wrong on this, but this 500 00:28:28,800 --> 00:28:32,400 Speaker 4: could be the first time that we could see Theoretically, 501 00:28:32,800 --> 00:28:34,840 Speaker 4: we're still a long ways out from November of twenty 502 00:28:34,880 --> 00:28:37,800 Speaker 4: twenty four, but the defendant in all of these cases, 503 00:28:37,800 --> 00:28:40,160 Speaker 4: if found guilty, could be in a position to pardon 504 00:28:40,240 --> 00:28:43,400 Speaker 4: himself in the future. But David, there is a distinction 505 00:28:43,480 --> 00:28:46,120 Speaker 4: to be made there. That's not the case in Georgia 506 00:28:46,160 --> 00:28:47,760 Speaker 4: with the state indictment, right. 507 00:28:48,280 --> 00:28:53,040 Speaker 10: Right, he cannot pardon himself on state charges in either 508 00:28:53,240 --> 00:28:55,960 Speaker 10: Georgia or New York. He could do it on the 509 00:28:56,000 --> 00:29:04,280 Speaker 10: federal charges, and so those two cases loom over him 510 00:29:04,560 --> 00:29:10,040 Speaker 10: and present a real threat to him and his future 511 00:29:10,080 --> 00:29:12,520 Speaker 10: in the way that the federal cases don't. 512 00:29:13,200 --> 00:29:15,360 Speaker 4: Wendy, it seemed like you had a thought on that. 513 00:29:15,760 --> 00:29:18,360 Speaker 11: Actually, David said exactly what I was thinking is that 514 00:29:19,000 --> 00:29:21,840 Speaker 11: I think there will be an exploration if he becomes 515 00:29:21,880 --> 00:29:25,680 Speaker 11: president again and if there are convictions on his record, 516 00:29:26,240 --> 00:29:30,680 Speaker 11: there will be a real study of the so called 517 00:29:30,760 --> 00:29:34,360 Speaker 11: absolute powers of pardoning of the president, because the Constitution 518 00:29:34,560 --> 00:29:38,720 Speaker 11: says a president can grant a pardon, and that will 519 00:29:38,760 --> 00:29:41,600 Speaker 11: take some judicial interpretation to decide if you can grant 520 00:29:41,640 --> 00:29:44,760 Speaker 11: a pardon to yourself. If there's any president who would 521 00:29:44,760 --> 00:29:47,920 Speaker 11: do that, it is certainly Donald Trump. But on state 522 00:29:48,360 --> 00:29:51,240 Speaker 11: that's only on federal cases. On a state case, there's 523 00:29:51,320 --> 00:29:52,600 Speaker 11: not a thing he can do about it. 524 00:29:52,960 --> 00:29:55,400 Speaker 4: Well, of course, all of this is assuming he may 525 00:29:55,520 --> 00:29:58,400 Speaker 4: be found guilty of any of these allegations, and he 526 00:29:58,480 --> 00:30:01,440 Speaker 4: still has to go through the full judicial process that 527 00:30:01,440 --> 00:30:04,320 Speaker 4: everyone else is entitled to here in this country. Thank 528 00:30:04,360 --> 00:30:07,240 Speaker 4: you so much, Wendy benjamins In Bloomberg Washington Senior editor 529 00:30:07,440 --> 00:30:10,680 Speaker 4: and David Voorakis, Bloomberg Legal Reporter. We appreciate it. And 530 00:30:10,720 --> 00:30:13,720 Speaker 4: Tom all our eyes turned to Georgia this coming week. 531 00:30:13,960 --> 00:30:16,800 Speaker 1: Thank you, Kaylee. That was Bloomberg's sound on co host 532 00:30:16,880 --> 00:30:19,600 Speaker 1: Kaylee Lines reporting from our Bloomberg ninety nine to one 533 00:30:19,680 --> 00:30:22,880 Speaker 1: newsroom in Washington, and you can hear sound on weekdays 534 00:30:22,960 --> 00:30:26,560 Speaker 1: one to three pm on Bloomberg Radio. I'm Tom Busby. 535 00:30:26,680 --> 00:30:34,200 Speaker 1: This is Bloomberg. This is Bloomberg day Break, Weekend, our 536 00:30:34,240 --> 00:30:36,600 Speaker 1: global look ahead at the top stories for investors in 537 00:30:36,640 --> 00:30:40,240 Speaker 1: the coming week. I'm Tom Busby in New York. China's 538 00:30:40,280 --> 00:30:43,720 Speaker 1: EV market is fast growing. We just had Chinese electric 539 00:30:43,760 --> 00:30:47,400 Speaker 1: car maker Lee Auto reporting better than expected quarterly results 540 00:30:47,480 --> 00:30:50,400 Speaker 1: earlier in the week. Let's get to Doug Krisner, co 541 00:30:50,480 --> 00:30:52,640 Speaker 1: host of Bloomberg Daybreak Asia. 542 00:30:53,000 --> 00:30:55,000 Speaker 3: Tom and the week ahead. We'll get earnings from the 543 00:30:55,080 --> 00:30:58,080 Speaker 3: Chinese ev maaker x Pong. So we thought it would 544 00:30:58,080 --> 00:31:00,160 Speaker 3: be a good time to check in on China is 545 00:31:00,240 --> 00:31:04,280 Speaker 3: EV market, where the adoption of electric cars has been 546 00:31:04,440 --> 00:31:07,240 Speaker 3: rapidly growing. You know, in twenty twenty two, more than 547 00:31:07,280 --> 00:31:11,440 Speaker 3: half of all global EV sales occurred in China. For 548 00:31:11,480 --> 00:31:14,160 Speaker 3: a closer look, I'm joined now by Bloomberg's Danny Lee 549 00:31:14,240 --> 00:31:17,520 Speaker 3: Bloomberg Asia Transport Reporter, joining us from our studios in 550 00:31:17,560 --> 00:31:20,440 Speaker 3: Hong Kong. Danny, It's always a pleasure, and I want 551 00:31:20,440 --> 00:31:24,480 Speaker 3: to begin with the big picture first, the domestic EV 552 00:31:24,560 --> 00:31:29,200 Speaker 3: producers in China are clearly beating their foreign rivals. Eighty 553 00:31:29,240 --> 00:31:32,800 Speaker 3: percent of all battery evs in China are now coming 554 00:31:32,880 --> 00:31:36,360 Speaker 3: from domestic producers. And among the top sellers, I think 555 00:31:36,360 --> 00:31:40,000 Speaker 3: that only the top ten. I think only Tesla is 556 00:31:40,040 --> 00:31:43,480 Speaker 3: in the ranks, and German brands no longer play any 557 00:31:43,600 --> 00:31:46,240 Speaker 3: role in the top ten. We can remember a time 558 00:31:46,280 --> 00:31:49,400 Speaker 3: when foreign car makers were setting up joint ventures in China. 559 00:31:49,520 --> 00:31:52,040 Speaker 3: Now they seem to be fading into the background. How 560 00:31:52,080 --> 00:31:52,920 Speaker 3: did we get here? 561 00:31:53,120 --> 00:31:55,920 Speaker 12: Yeah, it's a bit of a role reversal from the time, 562 00:31:55,960 --> 00:31:58,959 Speaker 12: maybe they said twenty years ago, where you saw a 563 00:31:59,000 --> 00:32:02,920 Speaker 12: lot of the foreign auto makers like your Volkswagens, looking 564 00:32:02,960 --> 00:32:05,840 Speaker 12: at China as a huge growth market potential, but they 565 00:32:05,920 --> 00:32:10,200 Speaker 12: had fossil fuel engines, and then we've seen the Chinese 566 00:32:10,240 --> 00:32:14,200 Speaker 12: auto makers coming in with big bets, spurred on by 567 00:32:14,800 --> 00:32:17,680 Speaker 12: the central government to look at new technologies. This is 568 00:32:17,680 --> 00:32:21,120 Speaker 12: why we've seen huge state support in the likes of 569 00:32:21,320 --> 00:32:26,320 Speaker 12: battery technology and the future, which is battery electric powered vehicles. 570 00:32:26,760 --> 00:32:29,400 Speaker 12: And what China has done is managed to have a 571 00:32:29,520 --> 00:32:34,120 Speaker 12: huge headstart ten fifteen years ahead of anyone else in 572 00:32:34,160 --> 00:32:38,320 Speaker 12: the market to develop initially not the best looking, not 573 00:32:38,480 --> 00:32:43,760 Speaker 12: the best spec powered electric vehicles. Now they have market leading, 574 00:32:44,440 --> 00:32:49,520 Speaker 12: very stylish, very affordable at scale, very affordable evs and 575 00:32:49,560 --> 00:32:53,480 Speaker 12: you look at where the competention is now in globally, 576 00:32:53,760 --> 00:32:56,320 Speaker 12: they're nowhere to be seen in terms of in terms 577 00:32:56,360 --> 00:32:58,560 Speaker 12: of matching up to what China has to offer, apart 578 00:32:58,600 --> 00:33:02,000 Speaker 12: from Tesla, who's made a lot of the same kind 579 00:33:02,040 --> 00:33:07,000 Speaker 12: of footprints of early bets into battery electric technology and 580 00:33:07,240 --> 00:33:08,320 Speaker 12: battery evs. 581 00:33:08,560 --> 00:33:11,680 Speaker 3: Wondering now about how sales are distributed. If you look 582 00:33:11,720 --> 00:33:14,360 Speaker 3: at the premium category we just heard from Liato in 583 00:33:14,360 --> 00:33:17,240 Speaker 3: the last week, the numbers seem to be very good. 584 00:33:17,240 --> 00:33:20,200 Speaker 3: In revenue guidance was also very strong. More of a 585 00:33:20,240 --> 00:33:23,640 Speaker 3: mainstream brand, and I'm thinking, like a Byd or a Glie, 586 00:33:24,360 --> 00:33:26,800 Speaker 3: is there a real like split in the market here 587 00:33:27,040 --> 00:33:28,800 Speaker 3: premium versus mainstream? 588 00:33:29,120 --> 00:33:32,400 Speaker 12: I think there is a There is a consistent group 589 00:33:32,720 --> 00:33:36,360 Speaker 12: of brands in particularly around the top ten, who in 590 00:33:36,400 --> 00:33:40,360 Speaker 12: the last month in July reported sales that are near 591 00:33:40,400 --> 00:33:43,360 Speaker 12: record hised or were record highsed. So you saw your Byds, 592 00:33:43,400 --> 00:33:46,800 Speaker 12: you saw your your NEOs, and your your Li Auto's 593 00:33:47,320 --> 00:33:49,760 Speaker 12: touching those highs. And then if you look at the 594 00:33:49,800 --> 00:33:53,000 Speaker 12: wider market, even in just the wider auto space, the 595 00:33:53,000 --> 00:33:58,120 Speaker 12: figures we saw in China showed the market contracting two 596 00:33:58,160 --> 00:34:01,880 Speaker 12: point two percent. So you and yes, So in a way, 597 00:34:02,360 --> 00:34:07,000 Speaker 12: there's a sales are coalescing around major brands because they 598 00:34:07,080 --> 00:34:10,040 Speaker 12: have either the best price or the best lineup. And 599 00:34:10,480 --> 00:34:13,600 Speaker 12: it's helped that some of the ev makers of late, 600 00:34:13,840 --> 00:34:17,399 Speaker 12: like your Li Auto's and your Neo's have brought out 601 00:34:17,520 --> 00:34:21,320 Speaker 12: new and more appealing models. And it's been quite a 602 00:34:21,920 --> 00:34:24,719 Speaker 12: trial and error phase for them of late where they've 603 00:34:24,719 --> 00:34:27,120 Speaker 12: brought out new models and they haven't always been well 604 00:34:27,160 --> 00:34:31,320 Speaker 12: received or they haven't added in technology that everyone always likes. 605 00:34:31,520 --> 00:34:34,000 Speaker 12: So with their most recent models they have been well 606 00:34:34,040 --> 00:34:36,759 Speaker 12: received and what we have seen is higher numbers of 607 00:34:36,800 --> 00:34:39,919 Speaker 12: sales coming through, so which is why you see someone 608 00:34:39,960 --> 00:34:43,239 Speaker 12: like the Li Auto, who's gaining the confidence of raising 609 00:34:43,280 --> 00:34:47,160 Speaker 12: its revenue guidance into the third quarter, also estimating higher 610 00:34:47,239 --> 00:34:50,040 Speaker 12: sales in the third quarter. Although as we've seen in 611 00:34:50,080 --> 00:34:54,160 Speaker 12: the market reaction last week, Le Auto's le Auto's stock 612 00:34:54,200 --> 00:34:56,120 Speaker 12: reaction was pretty lackluster. 613 00:34:56,560 --> 00:35:00,520 Speaker 3: Right, good stuff. Danny Lee is Bloomberg's Asia Transport reporter. 614 00:35:01,000 --> 00:35:04,160 Speaker 3: I'm Doug Prisner. You can join Brian Curtison myself weekdays 615 00:35:04,160 --> 00:35:06,840 Speaker 3: here for Bloomberg day Break Asia beginning at six am 616 00:35:06,840 --> 00:35:09,720 Speaker 3: in Hong Kong six pm on Wall Street. 617 00:35:09,960 --> 00:35:12,480 Speaker 1: Tom, Thank you, Doug, and that does it for this 618 00:35:12,640 --> 00:35:15,440 Speaker 1: edition of Bloomberg day Break Weekend. Join us again Monday 619 00:35:15,440 --> 00:35:18,040 Speaker 1: morning at five am Wall Street time for the latest 620 00:35:18,040 --> 00:35:20,520 Speaker 1: on markets overseas and the news you need to start 621 00:35:20,560 --> 00:35:23,840 Speaker 1: your day. I'm Tom Buzzby. Stay with us. Top stories 622 00:35:23,840 --> 00:35:27,399 Speaker 1: and global business headlines are coming up right now.