WEBVTT - China PMI Expectations, Cigna and Humana Seeking Merger

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<v Speaker 1>Good morning. I'm Brian Curtis. Here are the stories we're

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<v Speaker 1>following today. The current Israel Hamas pause is nearing its

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<v Speaker 1>end as talks continue at Backsha with that story and

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<v Speaker 1>more from San Francisco ed.

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<v Speaker 2>Yeah, well, I've gotten a lot of information out of it, either, Brian.

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<v Speaker 2>Negotiators from Cutter in the US oppressing for the agreement

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<v Speaker 2>to extend Israel's demanding all the remaining hostages be released.

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<v Speaker 2>In US Secretary of State Anthony Blincoln says continuing the

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<v Speaker 2>ceasefire may be the way to get that done.

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<v Speaker 3>It's continuation, by definition, means that more hostages would be

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<v Speaker 3>coming home, more assistants would be getting in, So clearly

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<v Speaker 3>that's something we want and I believe it's also something

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<v Speaker 3>that Israel wants.

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<v Speaker 2>Now more hostages were free today and the hope is

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<v Speaker 2>they're still for a second release before the deadline. But

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<v Speaker 2>it is bittersweet for some. Shanny Siegel was released earlier.

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<v Speaker 2>Her cousin talks about her response.

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<v Speaker 4>We were ecstatic, but the joy only laugh a few

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<v Speaker 4>minutes because many realize she was released without her husband.

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<v Speaker 1>Yeah.

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<v Speaker 2>Hamas is not released to any men as have yet,

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<v Speaker 2>So we'll hope for words soon about that seasfire and

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<v Speaker 2>the US Senate Majority Leader Chuck Schumer has spent about

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<v Speaker 2>forty five minutes on the floor talking about the spike

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<v Speaker 2>and anti Semitism in the United States.

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<v Speaker 5>Any of those marching here in the US do not

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<v Speaker 5>have any evil intent. But when Jewish people here chance,

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<v Speaker 5>like from the River to the sea a founding slogan

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<v Speaker 5>of hamas a terrorist group that is not shy about

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<v Speaker 5>their goal to eradicate the Jewish people in Israel and

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<v Speaker 5>around the globe, we are longed.

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<v Speaker 2>He says. This goes waving on a legitimate debate about

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<v Speaker 2>Israeli policy into a very dark place. Ukraine, NATO Ukraine

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<v Speaker 2>Council in Brussels today renewed call for continued aid for

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<v Speaker 2>Ukraine from Secretary of State Blank.

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<v Speaker 3>And some are questioning whether the United States and other

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<v Speaker 3>NATO allies should continue to stand with Ukraine. We enter

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<v Speaker 3>the second winter at Putin's brutality, But the answer here

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<v Speaker 3>today at NATO is clear and it's some wavering. We

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<v Speaker 3>must and we will continue to support Ukraine.

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<v Speaker 2>The scheduling of the vote for George Santo's expulsion needs

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<v Speaker 2>to be done by tomorrow under terms of the resolution,

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<v Speaker 2>but House Speaker Mike Johnson, well, it doesn't sound a

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<v Speaker 2>whole lot like it.

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<v Speaker 6>I think the good will be product. That's all I'm

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<v Speaker 6>going to say about the Friday.

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<v Speaker 2>But the resolution says tomorrow now earlier in the day.

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<v Speaker 7>I personally have real reservations about doing this. I'm concerned

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<v Speaker 7>about a president that may be set for that. So

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<v Speaker 7>where everybody's working through that, and we'll see how they

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<v Speaker 7>vote tomorrow.

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<v Speaker 2>Yeah, so we'll see where it goes. Santos's schedule a

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<v Speaker 2>news conference for early morning at the Capitol tomorrow. The

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<v Speaker 2>Taiwan's president, Tyan Wing, says she believes China is too

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<v Speaker 2>consumed by domestic economic and political problems to invade Taiwan.

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<v Speaker 2>This even as Beijing rams up military pressure, and as

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<v Speaker 2>Google has struck it deal with a Canadian government over

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<v Speaker 2>contentious law that would force pay for news. It would

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<v Speaker 2>avert the news block schedule for next month. And I

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<v Speaker 2>was searching here a story just up on the Bloomberg terminal.

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<v Speaker 2>Elon Musk says advertisers that have stopped spending on the

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<v Speaker 2>platform due to his endorsement of antisemitic posts can f

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<v Speaker 2>word themselves. He says, what's going to do is kill

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<v Speaker 2>the company Global news twenty four hours a day and

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<v Speaker 2>whenever you want it. With Bloomberg News now in San Francisco,

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<v Speaker 2>I'm Ed Baxter.

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<v Speaker 1>This is Bloomberg, and we tackle now some of the

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<v Speaker 1>top business stories of the hour.

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<v Speaker 8>Well.

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<v Speaker 1>US treasuries rose on trader bets that the FED will

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<v Speaker 1>cut interest rates in the first half of twenty twenty four.

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<v Speaker 1>Two FED officials made the case for continuing to hold

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<v Speaker 1>interest rates steady. Let's run through some of these now.

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<v Speaker 1>Cleveland FED President Loretta Mester said that policy is well

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<v Speaker 1>positioned for the FED to be nimble and respond appropriately

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<v Speaker 1>too incoming economic data, and Atlanta FED President Raphael Bostic

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<v Speaker 1>said he's growing increatingly confident that inflation is firmly on

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<v Speaker 1>a downward path. However, Richmond FED chief Thomas Barkin told

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<v Speaker 1>CNBC he is not yet convinced.

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<v Speaker 9>I think you want to have the option of doing

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<v Speaker 9>more on rates, and I guess the bigger point is

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<v Speaker 9>there's no precision that anyone can point to at exactly

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<v Speaker 9>what is the level of rates that exactly handles inflation

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<v Speaker 9>and exactly the way you want to handle it, And

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<v Speaker 9>so you're constantly trying to adjust on the fly as

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<v Speaker 9>you learn more about the economy, as you learn more

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<v Speaker 9>about the impact of demand on inflation. And that's what

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<v Speaker 9>we're learning as we go.

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<v Speaker 1>Thomas Barkin there on CNBC. FED officials meet next December

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<v Speaker 1>twelfth and thirteenth.

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<v Speaker 10>We're hearing too, health insurance giants, emerger talks, Bloomberg's and

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<v Speaker 10>Kites reports.

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<v Speaker 11>Signa and hu Man are working on a potential cash

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<v Speaker 11>and stock combination that would create a giant in the

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<v Speaker 11>health insurance industry that you would become a powerful challenger

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<v Speaker 11>to United Health and CBS Health. The move would also

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<v Speaker 11>shrink the number of publicly traded national health insurance from

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<v Speaker 11>six to five and give the Signa Humanna editing more

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<v Speaker 11>leverage and negotiating with hospitals or Medicare. The tie up

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<v Speaker 11>would likely face antitrust hurdles in Washington, and Kate's Bloomberg Radio.

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<v Speaker 1>Interesting Paul that both stocks went down. You don't often

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<v Speaker 1>see that in one of these merger type stories. Signal

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<v Speaker 1>was down eight percent for the session and Humano was

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<v Speaker 1>down five and a half percent. Well Shares of General

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<v Speaker 1>Motors jumped more than nine percent after the automaker announced

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<v Speaker 1>it would boost its dividend by thirty three percent. GM

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<v Speaker 1>also said it would repurchase ten billion dollars of shares.

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<v Speaker 1>The carmaker is returning billions two investors despite a push

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<v Speaker 1>into electric vehicles. That push has yet to show significant results.

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<v Speaker 1>The buyback also comes despite a new labor agreement with

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<v Speaker 1>the United Auto Workers that adds more than nine billion

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<v Speaker 1>dollars in expenses. GM CEO Mary Barra says the agreement

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<v Speaker 1>was the right call.

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<v Speaker 12>When you look at the suite of benefits that our

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<v Speaker 12>represented team members have, it's very very appropriate package and

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<v Speaker 12>frankly leading from an industry perspective broader than just the

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<v Speaker 12>auto industry. So I think we did the right thing

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<v Speaker 12>to recognize and reward the hard work of our manufacturing

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<v Speaker 12>team members across the board.

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<v Speaker 1>GMCEO Mary Bearra. Separately, the United Autoworkers Union is launching

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<v Speaker 1>an aggressive campaign to unionize thirteen non union automakers. They

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<v Speaker 1>include Toyota, Volkswagen, and also Tesla. The union is hoping

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<v Speaker 1>to capitalize in recent contract victories with the big three automakers.

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<v Speaker 8>In Detroit.

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<v Speaker 10>Salesforce gave a profit forecast for the current core of

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<v Speaker 10>the topped analyst estimates. I've got the story from Bloomberg's

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<v Speaker 10>Charlie Pellett.

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<v Speaker 6>It shows strong momentum in the software giants cost cutting campaign.

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<v Speaker 6>The San Francisco based company said earnings excluding some items,

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<v Speaker 6>will be about two dollars twenty six cents a share

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<v Speaker 6>in the period ending in January. Analysts, on average projected

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<v Speaker 6>two dollars seventeen cents. It said revenue will be from

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<v Speaker 6>nine point one one eight billion dollars to nine point

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<v Speaker 6>two to three billion dollars. That compares with analyst average

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<v Speaker 6>estimate of nine point two to two billion dollars in

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<v Speaker 6>New York. Charlie Pellett Bloomberg Radio.

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<v Speaker 1>Saudi Arabia is getting more involved in diplomatic efforts around

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<v Speaker 1>the Israel Hamas war. We hear the Kingdom is offering

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<v Speaker 1>to invest more in Iran, its traditional adversary, if Iran

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<v Speaker 1>would keep its proxies out of the fight. We get

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<v Speaker 1>more from Bloomberg's Sam Dagger.

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<v Speaker 8>I've been speaking to a number of experts and they

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<v Speaker 8>told me that for Iran, Hamas is less important than

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<v Speaker 8>the others, particularly has Bulah, which is the pillar so

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<v Speaker 8>to speak, of this whole forward defense strategy of Iran

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<v Speaker 8>in the region. So Iran is very careful not to

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<v Speaker 8>provoke a wider conflict in which has Bulah would be enmeshed.

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<v Speaker 1>It's not clear yet how Iran might respond to the

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<v Speaker 1>Saudi offer.

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<v Speaker 10>Pmis fall November likely to show the manufacturing sector extending

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<v Speaker 10>its contraction. Bloomberg's von Mann has more from Hong Kong.

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<v Speaker 13>The consensus at a Bloomberg survey of economists is for

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<v Speaker 13>a mile pickup in manufacturing. The economists pegged the index

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<v Speaker 13>at forty nine point eight, indicating the sector remains in

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<v Speaker 13>contraction early in leading indicators point to some softening in production.

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<v Speaker 13>Meantime in a non manufacturing sector, economists adjusts the index.

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<v Speaker 13>We'll pick up to fifty point nine for fifty point

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<v Speaker 13>six in October, but Bloomberg Economics expects the index to

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<v Speaker 13>decelerate further. That's likely to do with the extended slump

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<v Speaker 13>in the property sector and cooling tourism related businesses after

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<v Speaker 13>the October holiday in Hong Kong. I'm von Mann Bloomberg Radio.

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<v Speaker 1>Twelve minutes now past the hour. Joining us is Edward Harrison, Bloomberg,

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<v Speaker 1>team leader for the America's FX and Rates team, and

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<v Speaker 1>he's with us here live on the show, Edward, thank

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<v Speaker 1>you for joining us. I want to revisit a sort

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<v Speaker 1>of non consensus call in the marketplace that the hard

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<v Speaker 1>part is over on inflation, that actually the last mile

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<v Speaker 1>of disinflation won't actually be that hard. Goldman Sachs made

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<v Speaker 1>that point a couple of weeks back. I'm not sure

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<v Speaker 1>that many buy into it, do you.

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<v Speaker 14>You know, I would say that I'm on the other

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<v Speaker 14>side of that. But there are some people, Bill Ackman

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<v Speaker 14>in particular, who are talking about this very much. In

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<v Speaker 14>particular Bill Ackman, who was very vocal about this in

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<v Speaker 14>the David Ruminstide interview that he just did here on Bloomberg,

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<v Speaker 14>he said that the Fed concerned about the real rate

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<v Speaker 14>of interest, that is, you know, the nominal rate minus inflation,

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<v Speaker 14>will eventually see very quickly, actually in the beginning of

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<v Speaker 14>twenty twenty four, that they're too tight because inflation has

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<v Speaker 14>fallen so much.

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<v Speaker 10>We're still well outside the target ban though, so you

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<v Speaker 10>know how I have for longer. Something we keep thinking

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<v Speaker 10>about is the market getting a bit ahead of itself

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<v Speaker 10>in terms of when it's anticipating easing.

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<v Speaker 14>I would say it is getting ahead of itself in

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<v Speaker 14>terms of when it's anticipating easy and in part this

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<v Speaker 14>is due to the uncertainty involved in where we are,

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<v Speaker 14>because if you think in the last three cycles, we've

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<v Speaker 14>had five hundred basis points or more of cuts, and

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<v Speaker 14>then there's the potential that we have a soft landing,

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<v Speaker 14>how do you hedge, you know, zero cuts versus five

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<v Speaker 14>hundred You come out somewhere in between. But to the

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<v Speaker 14>degree that you think that there is the possibility of

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<v Speaker 14>a recession, then it's likely to be coming in a

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<v Speaker 14>very short period of time, say twenty twenty four, and

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<v Speaker 14>that's why we're seeing this bidding up of cuts coming forward.

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<v Speaker 1>I wonder if there's a little bit of goldilocks in

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<v Speaker 1>some of the retail activity that we've seen here of

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<v Speaker 1>late with Black Friday or Monday, in that you have

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<v Speaker 1>discerning consumers. You have retailers that to make their numbers,

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<v Speaker 1>the numbers were good, but to make those numbers they

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<v Speaker 1>did have to offer discounts and it wasn't like rampant,

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<v Speaker 1>but they were definitely there. And to me, that indicates

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<v Speaker 1>that companies find that they cannot continue raising prices, that

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<v Speaker 1>consumers are becoming more discerning.

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<v Speaker 14>They really are, and it is amazing what will happen

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<v Speaker 14>when you give a fifty percent discount. How many people

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<v Speaker 14>will come and buy your products?

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<v Speaker 8>The quest?

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<v Speaker 6>I mean, it does.

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<v Speaker 1>It does have some implications for inflation coming down, doesn't it.

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<v Speaker 14>It definitely does. I think that it shows that at

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<v Speaker 14>a minimum, on the good side of things, that we've

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<v Speaker 14>seen the peak, and then the question now becomes the

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<v Speaker 14>sticky part, the services part. That's where the real tough

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<v Speaker 14>nut to crack is. The question is is how sticky

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<v Speaker 14>is inflation on the services side of the ledger and

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<v Speaker 14>how much of that will satisfy the FED before they

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<v Speaker 14>start cutting. I think that the market is a little

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<v Speaker 14>bit ahead of itself and if we don't have a

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<v Speaker 14>recession in terms of expecting any cuts in the near term.

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<v Speaker 14>Even Bostic of the Atlanta FED, who's one of the

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<v Speaker 14>more dubbish members, isn't talking about this. But nonetheless I

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<v Speaker 14>think that's where the sticky wicket is.

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<v Speaker 10>We have seen pretty impressive decline and yields this week.

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<v Speaker 10>The you are still a weakening as well. You're an

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<v Speaker 10>FX and rights guy. How much further that he's going

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<v Speaker 10>to fold?

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<v Speaker 8>Yeah?

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<v Speaker 14>I think that on the long end of the curve,

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<v Speaker 14>it's very difficult to go much further from here. We're

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<v Speaker 14>at about four to twenty five.

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<v Speaker 1>Now.

0:12:42.760 --> 0:12:44.760
<v Speaker 14>When you look at the FED funds, the top end

0:12:44.800 --> 0:12:46.960
<v Speaker 14>of the range is five point fifty, So that's one

0:12:47.040 --> 0:12:50.000
<v Speaker 14>hundred and twenty five basis points differential there that you're

0:12:50.040 --> 0:12:54.800
<v Speaker 14>giving up. Certainly, you're locking in for twenty five and

0:12:55.280 --> 0:12:57.920
<v Speaker 14>you rue the fact that you didn't lock in five percent,

0:12:58.040 --> 0:13:01.839
<v Speaker 14>and that's a very nice coupon clip. But the reality

0:13:02.000 --> 0:13:04.160
<v Speaker 14>is is that you are giving up one hundred and

0:13:04.240 --> 0:13:07.440
<v Speaker 14>twenty five basis points by moving all the way out there.

0:13:07.440 --> 0:13:10.959
<v Speaker 14>So the question then becomes how much more can these

0:13:11.040 --> 0:13:15.800
<v Speaker 14>yields go down given that were firmly anchored at five

0:13:15.840 --> 0:13:18.200
<v Speaker 14>point five percent on the upper end of the FED phones.

0:13:19.080 --> 0:13:21.240
<v Speaker 1>Yeah, quite interesting to note that the short end falling

0:13:21.280 --> 0:13:23.200
<v Speaker 1>a little faster now than the long end, So that's.

0:13:23.080 --> 0:13:24.440
<v Speaker 8>Something to keep in mind.

0:13:24.679 --> 0:13:27.480
<v Speaker 1>One other issue that hasn't been talked about too much

0:13:27.720 --> 0:13:30.920
<v Speaker 1>is China exporting deflation.

0:13:31.080 --> 0:13:34.880
<v Speaker 14>Now, Yeah, that is a good question. I would say

0:13:35.080 --> 0:13:40.200
<v Speaker 14>that a corollary of that question is whether or not

0:13:40.720 --> 0:13:44.720
<v Speaker 14>China has matters less in the sense that other Asian

0:13:44.760 --> 0:13:48.600
<v Speaker 14>countries are now picking up the baton from China, and

0:13:48.600 --> 0:13:51.040
<v Speaker 14>that what we're seeing in terms of China and their

0:13:51.080 --> 0:13:56.920
<v Speaker 14>exportation deflation is offset by, you know, a pickup in

0:13:57.040 --> 0:14:01.600
<v Speaker 14>demand in other countries within Asia, in particular Japan, which

0:14:01.640 --> 0:14:06.559
<v Speaker 14>has done relatively well for the first time in a

0:14:06.679 --> 0:14:07.400
<v Speaker 14>very long time.

0:14:08.880 --> 0:14:11.760
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