1 00:00:02,480 --> 00:00:04,800 Speaker 1: This is Bloomberg day Break Weekend, our global look at 2 00:00:04,800 --> 00:00:07,080 Speaker 1: the top stories in the coming week from our Daybreak 3 00:00:07,080 --> 00:00:09,280 Speaker 1: anchors all around the world, and straight ahead on the 4 00:00:09,280 --> 00:00:11,880 Speaker 1: program Wall Street, kicking off the new week with a 5 00:00:11,920 --> 00:00:15,080 Speaker 1: closely watched jobs report. I'm Tom Busby and I'll have 6 00:00:15,160 --> 00:00:15,640 Speaker 1: that store. 7 00:00:15,800 --> 00:00:18,040 Speaker 2: I'm Stephen Carolyn London. If we're thinking about what's in 8 00:00:18,079 --> 00:00:21,639 Speaker 2: store for London's restaurants and cultural scenes in twenty twenty four. 9 00:00:21,920 --> 00:00:24,720 Speaker 2: Is the economic backdrop in the UK remains gloomy. 10 00:00:24,800 --> 00:00:26,760 Speaker 3: I'm Doug Prisoner with a look at what the new 11 00:00:26,840 --> 00:00:30,080 Speaker 3: year may mean for markets in China, India and Japan. 12 00:00:30,280 --> 00:00:33,000 Speaker 4: I'm Heeley Lyons from Washington, where we're looking ahead to 13 00:00:33,080 --> 00:00:35,080 Speaker 4: a very busy political season. 14 00:00:37,159 --> 00:00:41,239 Speaker 5: That's all straight ahead on Bloomberg Daybreak Weekend, The business 15 00:00:41,280 --> 00:00:45,240 Speaker 5: news you need to wrap up your week, Available on Apple, Spotify, 16 00:00:45,400 --> 00:00:50,800 Speaker 5: The Bloomberg Business Happen everywhere you get your podcasts. 17 00:00:53,560 --> 00:00:55,480 Speaker 1: Good day to you. I'm Tom Busby and we begin 18 00:00:55,520 --> 00:00:59,040 Speaker 1: today's program with a key economic report to begin twenty 19 00:00:59,120 --> 00:01:01,920 Speaker 1: twenty four. This Friday, we get the jobs report for 20 00:01:01,960 --> 00:01:04,600 Speaker 1: the month of December and with the Federal Reserve keeping 21 00:01:04,640 --> 00:01:08,520 Speaker 1: interest rates unchanged since July, each report takes on more 22 00:01:08,560 --> 00:01:12,480 Speaker 1: significance for the Central Bank's next move. For more, we're 23 00:01:12,520 --> 00:01:16,039 Speaker 1: pleased to welcome. Bloomberg News US economist Alisa Winger, Well, 24 00:01:16,080 --> 00:01:18,959 Speaker 1: we've seen a pretty resilient US labor market along with 25 00:01:19,040 --> 00:01:22,399 Speaker 1: continued consumer spending that has kept the economy growing even 26 00:01:22,440 --> 00:01:25,360 Speaker 1: flourishing throughout this past year twenty twenty three. Just this 27 00:01:25,480 --> 00:01:28,240 Speaker 1: past week, their first time jobless claims showing layoffs are 28 00:01:28,280 --> 00:01:31,000 Speaker 1: in check, continuing claims a little higher. What are you 29 00:01:31,120 --> 00:01:34,240 Speaker 1: expecting to see in the December jobs report this Friday? 30 00:01:34,360 --> 00:01:39,240 Speaker 6: We are expecting to see a slow down, soft ter gains. 31 00:01:40,080 --> 00:01:43,679 Speaker 6: What Bloomberg Economics is predicting is one hundred and twenty 32 00:01:43,680 --> 00:01:47,480 Speaker 6: five k jobs being created, which is down from one 33 00:01:47,600 --> 00:01:51,200 Speaker 6: ninety nine prior, and that's our estimate, is below the 34 00:01:51,240 --> 00:01:55,480 Speaker 6: consensus estimate of one hundred and seventy. Also, we are 35 00:01:55,560 --> 00:01:59,760 Speaker 6: expecting higher unemployment rate ticking up to three point nine 36 00:01:59,800 --> 00:02:04,400 Speaker 6: from three point seven prior, and also above the consensus 37 00:02:04,400 --> 00:02:08,839 Speaker 6: which is expecting unemployment rate to uptick to just three 38 00:02:08,840 --> 00:02:09,680 Speaker 6: point eight percent. 39 00:02:10,000 --> 00:02:11,040 Speaker 1: But why the slow down? 40 00:02:11,120 --> 00:02:15,280 Speaker 6: I think the biggest The biggest reason is in the 41 00:02:15,320 --> 00:02:19,280 Speaker 6: month of November, we saw that forty one k jobs 42 00:02:19,360 --> 00:02:22,760 Speaker 6: came from the resolution of a strike. That's just not 43 00:02:22,840 --> 00:02:25,480 Speaker 6: going to happen. That's not going to repeat in December, 44 00:02:25,960 --> 00:02:29,520 Speaker 6: given that, we're just going to see us a much slower, 45 00:02:30,200 --> 00:02:33,000 Speaker 6: much softer growth. Also, what we saw in November and 46 00:02:33,040 --> 00:02:36,880 Speaker 6: what we are expecting in December is that not a 47 00:02:36,880 --> 00:02:40,760 Speaker 6: lot of sectors are creating jobs. In November, although sure 48 00:02:40,960 --> 00:02:45,200 Speaker 6: we got a number that beat the consensus, it was 49 00:02:45,280 --> 00:02:49,040 Speaker 6: mostly the government and healthcare sector that created jobs, and 50 00:02:49,080 --> 00:02:51,800 Speaker 6: that sort of I think we're also going to see 51 00:02:52,120 --> 00:02:57,440 Speaker 6: in December, so overall less jobs being created and probably 52 00:02:57,840 --> 00:03:00,000 Speaker 6: you know we're going to be surprised to the downside. 53 00:03:00,160 --> 00:03:03,400 Speaker 1: Now you spoke about the healthcare sector, government sector, these 54 00:03:03,880 --> 00:03:07,200 Speaker 1: will you see these continued growth in the new year 55 00:03:07,680 --> 00:03:09,560 Speaker 1: and are there other sectors where you really see a 56 00:03:09,600 --> 00:03:10,680 Speaker 1: pullback expected? 57 00:03:11,200 --> 00:03:15,040 Speaker 6: So these are acyclical sectors. They not being affected by 58 00:03:15,080 --> 00:03:20,360 Speaker 6: a downturn or any sort of slow down in economic activity. 59 00:03:20,840 --> 00:03:24,920 Speaker 6: So these sectors could still grow mine as well grow 60 00:03:24,960 --> 00:03:29,320 Speaker 6: in the next year. But as we've seen in the 61 00:03:29,360 --> 00:03:32,280 Speaker 6: November jobs Jobs report, a lot of the sectors were 62 00:03:32,320 --> 00:03:36,280 Speaker 6: either flat or decline, like for example, retail sales is 63 00:03:36,400 --> 00:03:42,000 Speaker 6: very cyclical and jobs in retail sectors decline or whole trade. 64 00:03:42,760 --> 00:03:45,720 Speaker 6: So we're probably going to see a lot less job 65 00:03:45,800 --> 00:03:48,960 Speaker 6: creation in those consumer facing industries. 66 00:03:49,400 --> 00:03:52,720 Speaker 1: And you talked about manufacturing. You know, the UAW strike 67 00:03:52,760 --> 00:03:56,400 Speaker 1: that ended forty one thousand added November's numbers, which skewed 68 00:03:56,440 --> 00:03:58,360 Speaker 1: it a lot higher than maybe than it should have been. 69 00:03:58,720 --> 00:04:01,160 Speaker 1: Where do you see manufacturcturing heading? 70 00:04:01,600 --> 00:04:04,080 Speaker 6: So I think you know, I s A Manufacturing is 71 00:04:04,120 --> 00:04:07,840 Speaker 6: gonna come out on Wednesday and sector is going to 72 00:04:07,880 --> 00:04:13,040 Speaker 6: be in contraction for fourteen straight months. We're probably gonna 73 00:04:13,200 --> 00:04:15,120 Speaker 6: not gonna see a lot of jobs coming. I mean, 74 00:04:15,160 --> 00:04:18,000 Speaker 6: there's packets of strength with and manufacturing coming from the 75 00:04:18,120 --> 00:04:21,080 Speaker 6: Chips Act and AI, but a lot of it is 76 00:04:21,240 --> 00:04:25,000 Speaker 6: just you know, us consumer demand is going to slow 77 00:04:25,560 --> 00:04:30,400 Speaker 6: and we don't expect the holiday season, Like National Federation 78 00:04:30,560 --> 00:04:35,960 Speaker 6: of Retailers came out and they said that overall holiday 79 00:04:36,520 --> 00:04:39,120 Speaker 6: sales are in between three and four percent. Our estimate 80 00:04:39,200 --> 00:04:42,200 Speaker 6: is at the low end of that estimate. So I 81 00:04:42,240 --> 00:04:44,680 Speaker 6: think we're gonna as we head into the new year, 82 00:04:44,720 --> 00:04:49,119 Speaker 6: we're gonna see less consumer demand and those industries within 83 00:04:49,200 --> 00:04:52,240 Speaker 6: manufacturing that produce goods, this is not gonna hire. 84 00:04:52,880 --> 00:04:56,320 Speaker 1: Now, how about housing though we have seen continued demand. 85 00:04:56,400 --> 00:05:00,160 Speaker 1: We know that existing houses a little uneven, sometimes time 86 00:05:00,400 --> 00:05:02,839 Speaker 1: better than others. But the demand for new houses, which 87 00:05:02,880 --> 00:05:05,640 Speaker 1: is three jobs for every house going up, how does 88 00:05:05,680 --> 00:05:06,680 Speaker 1: that look in the future. 89 00:05:06,760 --> 00:05:10,080 Speaker 6: I do think there is demand for housing and not 90 00:05:10,240 --> 00:05:15,839 Speaker 6: enough supply. Having said that, the affordability is very low. 91 00:05:16,440 --> 00:05:20,040 Speaker 6: So even I think even if we would see more housing, 92 00:05:20,200 --> 00:05:25,120 Speaker 6: more houses being available, there is only so much demand. 93 00:05:25,640 --> 00:05:28,960 Speaker 6: And the demand is being flooded into the new construction 94 00:05:29,120 --> 00:05:32,920 Speaker 6: market only because there is just not enough existing home 95 00:05:33,000 --> 00:05:36,800 Speaker 6: for sales. But if the FED will start cutting rates, 96 00:05:36,880 --> 00:05:40,080 Speaker 6: that will relieve some of the pressure on both the 97 00:05:40,160 --> 00:05:45,240 Speaker 6: existing inventory of homes, which will probably rebalance the demand 98 00:05:45,600 --> 00:05:49,120 Speaker 6: back towards existing home and away from new construction. 99 00:05:49,480 --> 00:05:52,080 Speaker 1: If the FED starts cutting rates, and that's what this 100 00:05:52,240 --> 00:05:58,880 Speaker 1: is all about, whether job growth slows, inflation has slowed 101 00:05:58,920 --> 00:06:01,679 Speaker 1: down quite a bit, it's not exactly at the fed's target. 102 00:06:02,360 --> 00:06:05,359 Speaker 1: We've seen wage growth slow a little bit, all leading 103 00:06:05,400 --> 00:06:07,760 Speaker 1: to the first meeting at the end of January for 104 00:06:07,800 --> 00:06:11,880 Speaker 1: the FED. And if everything is aligned in the jobs report, 105 00:06:12,240 --> 00:06:14,200 Speaker 1: what do you expect the FED to do? Where do 106 00:06:14,240 --> 00:06:16,680 Speaker 1: you see them in the next few months. 107 00:06:16,800 --> 00:06:20,280 Speaker 6: We put out an outlook in December ahead of the 108 00:06:20,440 --> 00:06:24,479 Speaker 6: meeting in December, which was December twelve thirteen, where everybody, 109 00:06:24,640 --> 00:06:27,320 Speaker 6: I think most of us were surprised at the tilt 110 00:06:27,440 --> 00:06:32,320 Speaker 6: dovish tilt that Powell basically said, you know, they've discussed 111 00:06:32,480 --> 00:06:38,120 Speaker 6: a rate cut. We anticipated ahead of that meeting that 112 00:06:38,160 --> 00:06:40,800 Speaker 6: the Fed is going to cut rates in March by 113 00:06:40,839 --> 00:06:44,119 Speaker 6: twenty five basis points and another one hundred throughout twenty 114 00:06:44,200 --> 00:06:48,200 Speaker 6: twenty four, and mostly because that aligns with our forecast. 115 00:06:48,240 --> 00:06:51,440 Speaker 6: We are expecting less jobs this Friday, and we are 116 00:06:51,520 --> 00:06:55,000 Speaker 6: expecting unemployment rate to go up, and we are seeing 117 00:06:55,160 --> 00:06:58,800 Speaker 6: less holiday sales. We are on the lower end of 118 00:06:58,880 --> 00:07:01,880 Speaker 6: the forecast. That data is still not fully out for 119 00:07:02,279 --> 00:07:05,160 Speaker 6: the month of December, but it looks like the holiday 120 00:07:05,240 --> 00:07:09,400 Speaker 6: sales weren't as strong as people are expecting. So all 121 00:07:09,440 --> 00:07:12,720 Speaker 6: of that tells us we should get the Fed to 122 00:07:12,760 --> 00:07:14,080 Speaker 6: cut rates in March. 123 00:07:14,240 --> 00:07:17,720 Speaker 1: We have the likelihood of job creation slowing down. We 124 00:07:17,800 --> 00:07:21,680 Speaker 1: have the unemployment rate notching just a little bit higher 125 00:07:21,760 --> 00:07:24,280 Speaker 1: right now, three seven to three nine. You anticipate it's 126 00:07:24,320 --> 00:07:27,800 Speaker 1: not cataclysmic, it's not the sign of a recession. Is 127 00:07:27,800 --> 00:07:29,280 Speaker 1: it just a little bit of a slowdown. 128 00:07:29,520 --> 00:07:32,960 Speaker 6: What we have actually, so we not only have three 129 00:07:33,000 --> 00:07:37,400 Speaker 6: point nine unemployment rate in December, but if unemployment rate 130 00:07:37,480 --> 00:07:40,920 Speaker 6: goes up to four that will trigger the summ rule 131 00:07:41,320 --> 00:07:44,760 Speaker 6: for identifying a recession. Again, is it going to be 132 00:07:45,080 --> 00:07:48,840 Speaker 6: a hard lending. No, it's going to be a mild recession. 133 00:07:48,920 --> 00:07:53,040 Speaker 6: We still think that's probably in the cards. And with 134 00:07:53,160 --> 00:07:56,040 Speaker 6: the Fed though cutting rates in March, possibly in March, 135 00:07:56,840 --> 00:07:59,840 Speaker 6: that's a smart move and the Feds, you know, that's like, 136 00:08:00,120 --> 00:08:05,280 Speaker 6: that's that's cutting rates against an economy that is showing 137 00:08:05,400 --> 00:08:10,120 Speaker 6: signs of slowdown. And also why Powell pivot as much 138 00:08:10,160 --> 00:08:14,520 Speaker 6: at the December meeting is because inflation surprise to the downside. 139 00:08:14,560 --> 00:08:18,200 Speaker 6: The six month annuallyized core PCE was at one point 140 00:08:18,280 --> 00:08:22,880 Speaker 6: nine percent. So all of that tells you that if 141 00:08:22,920 --> 00:08:27,160 Speaker 6: we're going to get unemployment rate surprising to the to 142 00:08:27,200 --> 00:08:30,400 Speaker 6: the upside, meaning it will go up. I mean, in 143 00:08:30,480 --> 00:08:33,600 Speaker 6: our forecast shows that unemployment rate can go up even 144 00:08:33,640 --> 00:08:36,640 Speaker 6: in Q one to four point three and can pick 145 00:08:36,679 --> 00:08:39,839 Speaker 6: at five percent, that's not a soft lending. That's that's 146 00:08:39,880 --> 00:08:40,760 Speaker 6: a mild recession. 147 00:08:40,960 --> 00:08:43,559 Speaker 1: You predict that we're going to see as much as 148 00:08:43,760 --> 00:08:47,360 Speaker 1: four point five percent in the next three months. 149 00:08:47,360 --> 00:08:49,280 Speaker 6: Four point three in Q one four point five in 150 00:08:49,320 --> 00:08:51,720 Speaker 6: Q two in Q two Okay, so. 151 00:08:51,559 --> 00:08:54,760 Speaker 1: We've got our work cut out for the FED, certainly, 152 00:08:55,160 --> 00:08:58,560 Speaker 1: and they've got in that time. They have three meetings, right, 153 00:08:58,600 --> 00:09:02,320 Speaker 1: the third one ends May first, so we could see 154 00:09:02,559 --> 00:09:08,880 Speaker 1: multiple rate cuts to staunch the reaction from the economy 155 00:09:08,920 --> 00:09:09,640 Speaker 1: and from the markets. 156 00:09:09,720 --> 00:09:14,400 Speaker 6: Right exactly. And even as we mentioned in the beginning 157 00:09:14,400 --> 00:09:19,440 Speaker 6: of the segment that jobless claims, we're seeing sure low layouts, 158 00:09:19,480 --> 00:09:23,160 Speaker 6: but continued claims. If you look at the same the 159 00:09:23,240 --> 00:09:28,800 Speaker 6: same week four week moving average claims, continued claims are 160 00:09:28,920 --> 00:09:33,200 Speaker 6: up seventeen percent between between this year and last year. 161 00:09:33,600 --> 00:09:38,080 Speaker 6: That tells you that it's the duration of unemployment, meaning 162 00:09:38,280 --> 00:09:41,439 Speaker 6: is getting longer and longer. And that's usually the sign 163 00:09:42,000 --> 00:09:45,280 Speaker 6: where the market is changing, where the when the where 164 00:09:45,320 --> 00:09:48,800 Speaker 6: there is a shift going on in the labor market. 165 00:09:49,240 --> 00:09:53,040 Speaker 6: At first it started it's taking longer for people to 166 00:09:53,080 --> 00:09:59,160 Speaker 6: find jobs, and then companies manage headcunt going to manage 167 00:09:59,240 --> 00:10:04,280 Speaker 6: headcunt from a tree to actually layoffs. So that's been 168 00:10:04,360 --> 00:10:07,400 Speaker 6: happening and we see that over and over in jobless 169 00:10:07,400 --> 00:10:08,200 Speaker 6: claims figures. 170 00:10:08,520 --> 00:10:10,920 Speaker 1: Wow, So this Friday a lot to look forward to. 171 00:10:10,960 --> 00:10:14,240 Speaker 1: Our thanks to Bloomberg News US economist Alisa Winger, and 172 00:10:14,320 --> 00:10:16,480 Speaker 1: coming up on Bloomberg day Break weekend, we take you 173 00:10:16,559 --> 00:10:19,679 Speaker 1: to London for a closer look at the UK economy 174 00:10:19,960 --> 00:10:23,520 Speaker 1: in the new year. I'm Tom Busby and this is Bloomberg. 175 00:10:33,960 --> 00:10:36,800 Speaker 1: This is Bloomberg Daybreak weekend, our global look ahead at 176 00:10:36,800 --> 00:10:39,360 Speaker 1: the top stories for investors in the coming week. I'm 177 00:10:39,440 --> 00:10:43,280 Speaker 1: Tom Busby in New York. The UK sliding into twenty 178 00:10:43,360 --> 00:10:46,440 Speaker 1: twenty four with negative growth, with the impact of interest 179 00:10:46,520 --> 00:10:50,280 Speaker 1: rate hikes still feeding into the economy. Consumers feeling the 180 00:10:50,320 --> 00:10:53,000 Speaker 1: pinch from the higher cost of living, but they're still 181 00:10:53,040 --> 00:10:56,680 Speaker 1: spending enough to fuel London's restaurant and cultural scenes. The 182 00:10:56,840 --> 00:11:00,280 Speaker 1: weaker pound versus the dollar also has helped attract more 183 00:11:00,320 --> 00:11:04,240 Speaker 1: big spending tourists, particularly from the US. For more, let's 184 00:11:04,240 --> 00:11:06,680 Speaker 1: go to London and bring in Bloomberg Daybreak Europe banker 185 00:11:06,880 --> 00:11:07,720 Speaker 1: Stephen Carroll. 186 00:11:08,000 --> 00:11:08,520 Speaker 3: Tom. 187 00:11:08,600 --> 00:11:11,480 Speaker 2: Despite the gloomy economic background in the UK this year, 188 00:11:11,520 --> 00:11:14,240 Speaker 2: it's been a busy year for London's restaurants scene, with 189 00:11:14,320 --> 00:11:17,360 Speaker 2: several high profile openings that came after a difficult winter. 190 00:11:17,840 --> 00:11:21,880 Speaker 2: Add to that not one but two billion pound hotel openings. 191 00:11:21,920 --> 00:11:24,240 Speaker 2: So what's in store for twenty twenty four to discuss. 192 00:11:24,280 --> 00:11:26,440 Speaker 2: I'm joined by our food editor Kate Crater and our 193 00:11:26,440 --> 00:11:29,960 Speaker 2: Bloomberg Pursuits UK correspondent Sarah Rappaport. Great to have you 194 00:11:30,040 --> 00:11:33,520 Speaker 2: both with us. You are our eyes and ears in London. So, Kate, 195 00:11:33,559 --> 00:11:35,360 Speaker 2: I wanted to start with a serious question for you. 196 00:11:36,080 --> 00:11:39,000 Speaker 2: Was twenty twenty three a good year for restaurants and 197 00:11:39,040 --> 00:11:40,880 Speaker 2: further hospitality sector here in London? 198 00:11:41,240 --> 00:11:44,920 Speaker 7: I think that the year in hospitality for restaurants, it 199 00:11:45,000 --> 00:11:47,800 Speaker 7: was a sort of glass half fall. So you can 200 00:11:47,840 --> 00:11:51,520 Speaker 7: look at it and say, after COVID and certainly after 201 00:11:51,800 --> 00:11:55,800 Speaker 7: the train strikes that hit restaurants last year, right at 202 00:11:55,840 --> 00:11:59,440 Speaker 7: this time, right when everyone was getting optimistic, this has 203 00:11:59,520 --> 00:12:02,360 Speaker 7: been a much much better year and you're seeing so 204 00:12:02,400 --> 00:12:05,000 Speaker 7: many signs for recovery. Restaurants that have only been opened 205 00:12:05,040 --> 00:12:07,520 Speaker 7: for four days are now open for five, six and 206 00:12:07,600 --> 00:12:10,760 Speaker 7: seven days and that's a really healthy sign, and places 207 00:12:10,800 --> 00:12:15,400 Speaker 7: are packed. On the other hand, it's rest places are 208 00:12:15,440 --> 00:12:19,920 Speaker 7: still struggling. They don't have enough staff and a report 209 00:12:19,920 --> 00:12:23,400 Speaker 7: recently came out from an accounting firm, Hacker Young that said 210 00:12:23,520 --> 00:12:26,199 Speaker 7: restaurants in London are carrying three billion. 211 00:12:25,840 --> 00:12:26,720 Speaker 8: Dollars in debt. 212 00:12:27,400 --> 00:12:30,320 Speaker 7: So as a result of trying to expand too quickly 213 00:12:30,400 --> 00:12:35,600 Speaker 7: and dealing with problems like food inflation. So there might 214 00:12:35,679 --> 00:12:39,000 Speaker 7: be underneath the ice that everyone's sort of happily skating on. 215 00:12:39,080 --> 00:12:40,800 Speaker 7: It might be a little bit thin, so it sort 216 00:12:40,840 --> 00:12:43,000 Speaker 7: of remains to be seen. So there's things to be 217 00:12:43,040 --> 00:12:45,760 Speaker 7: really happy about. As you said, there were some fantastic openings. 218 00:12:45,800 --> 00:12:50,920 Speaker 7: The Wolsey City opened right near our corner, conveniently open 219 00:12:50,960 --> 00:12:54,120 Speaker 7: for breakfast, lunch and dinner. And there's a bunch of 220 00:12:54,160 --> 00:12:56,480 Speaker 7: things coming in twenty twenty four that are gonna be fun. 221 00:12:56,520 --> 00:13:00,360 Speaker 7: So there's definitely optimism. Holiday parties are really booked up 222 00:13:00,400 --> 00:13:04,160 Speaker 7: this year. But I wouldn't say everything's fine and deady. 223 00:13:04,160 --> 00:13:06,160 Speaker 7: I wouldn't tie it up with a little ribbon, okay. 224 00:13:06,240 --> 00:13:08,920 Speaker 2: So things also looking kind of curious as we look 225 00:13:08,960 --> 00:13:12,480 Speaker 2: towards twenty twenty four as well, Sarah. Meanwhile, it's been 226 00:13:12,559 --> 00:13:15,600 Speaker 2: a booming year for luxury hotels in London in particular. 227 00:13:15,679 --> 00:13:18,200 Speaker 2: You've written some great pieces about this. What is driving 228 00:13:18,240 --> 00:13:19,960 Speaker 2: the demand for luxury hotels in London? 229 00:13:20,320 --> 00:13:22,480 Speaker 8: Well, I mean it's been a huge year. In September, 230 00:13:22,760 --> 00:13:24,760 Speaker 8: the raffles London at the Old War Office and the 231 00:13:24,760 --> 00:13:28,240 Speaker 8: Peninsula both opened, both which cost over a billion dollars 232 00:13:28,320 --> 00:13:31,120 Speaker 8: each to build, and room rates start at over one 233 00:13:31,160 --> 00:13:36,199 Speaker 8: thousand pounds a night for both. So certainly, yeah, very expensive. 234 00:13:36,640 --> 00:13:38,560 Speaker 8: And in terms of who's actually staying in them, the 235 00:13:38,600 --> 00:13:41,880 Speaker 8: answer is generally rich Americans than people from the Middle East. 236 00:13:42,040 --> 00:13:42,400 Speaker 2: Okay. 237 00:13:42,679 --> 00:13:45,199 Speaker 8: They're very special hotels that took a really long time 238 00:13:45,240 --> 00:13:45,760 Speaker 8: to build. 239 00:13:46,280 --> 00:13:48,440 Speaker 2: The Old War Office in particular is a fascinating one 240 00:13:48,480 --> 00:13:49,840 Speaker 2: because it's a historical building. 241 00:13:50,400 --> 00:13:52,280 Speaker 8: It is it opened in nineteen oh six. It's a 242 00:13:52,320 --> 00:13:55,120 Speaker 8: grand building. It was the head of you know, the 243 00:13:55,480 --> 00:13:59,000 Speaker 8: Grand Office of War right during both world wars. Now 244 00:13:59,040 --> 00:14:02,280 Speaker 8: there's a site in Churchill's old Office with a rubber 245 00:14:02,280 --> 00:14:04,720 Speaker 8: gloffice desk worries to work. It'll cost you about twenty 246 00:14:04,720 --> 00:14:06,240 Speaker 8: thousand pounds a night if you want to stay there. 247 00:14:06,320 --> 00:14:08,679 Speaker 2: Okay, but you're getting a piece of that piece. 248 00:14:08,520 --> 00:14:11,079 Speaker 8: Of history, which is pretty incredible. Kate and I actually 249 00:14:11,120 --> 00:14:13,200 Speaker 8: went to a subterranean bar in the basement called the 250 00:14:13,240 --> 00:14:13,760 Speaker 8: Spy Bar. 251 00:14:14,000 --> 00:14:15,760 Speaker 2: You know, I've actually heard about. 252 00:14:15,440 --> 00:14:20,080 Speaker 8: This as interrogation rooms, right, so now wow, which is 253 00:14:20,120 --> 00:14:21,640 Speaker 8: truly The spices used to go down there and my 254 00:14:21,720 --> 00:14:24,160 Speaker 8: five used to have offices there, and now it's a 255 00:14:24,200 --> 00:14:26,120 Speaker 8: bar with you know, nice twenty pounds martinis. 256 00:14:26,200 --> 00:14:26,680 Speaker 5: Yeah, indeed. 257 00:14:26,720 --> 00:14:28,200 Speaker 2: I mean, look, the strength of the dollars has been 258 00:14:28,200 --> 00:14:29,720 Speaker 2: part of that story as well as that it's been 259 00:14:29,760 --> 00:14:32,160 Speaker 2: helped to support those American tourists that are use. 260 00:14:32,120 --> 00:14:34,760 Speaker 8: For both tourism and for the luxury real estate market. 261 00:14:34,840 --> 00:14:36,600 Speaker 7: Yeah, it is the fact that they opened this year 262 00:14:36,640 --> 00:14:39,400 Speaker 7: because of delays, because of the pandemic where they planned. 263 00:14:39,120 --> 00:14:41,000 Speaker 8: It's because of delays. They were not planned for this year, 264 00:14:41,000 --> 00:14:43,240 Speaker 8: either of them. They're pushedbacks a story. In a lot 265 00:14:43,280 --> 00:14:46,520 Speaker 8: of hotels, they're opening dates a little optimistic, but they 266 00:14:46,600 --> 00:14:48,400 Speaker 8: all open with two weeks of each other. 267 00:14:48,640 --> 00:14:48,880 Speaker 9: Wow. 268 00:14:48,960 --> 00:14:52,000 Speaker 2: Okay, it's a conversation in that space as well. And Kat, 269 00:14:52,000 --> 00:14:54,240 Speaker 2: when we think about trends that we've seen over the 270 00:14:54,240 --> 00:14:56,040 Speaker 2: past year in the food scene, was there anything that 271 00:14:56,040 --> 00:14:57,680 Speaker 2: stood out for you that was kind of something that 272 00:14:57,720 --> 00:15:00,280 Speaker 2: you were like, yes, this is we're now co hosting 273 00:15:00,480 --> 00:15:00,920 Speaker 2: a five. 274 00:15:01,360 --> 00:15:03,600 Speaker 7: Well, Stephen, here's where I remember that. I think we 275 00:15:03,600 --> 00:15:05,400 Speaker 7: were supposed to go have drinks at a wine bar 276 00:15:05,520 --> 00:15:08,680 Speaker 7: because last year at this time I said wine bars 277 00:15:08,680 --> 00:15:10,480 Speaker 7: are going to be big in London. 278 00:15:10,200 --> 00:15:11,600 Speaker 2: Which I was very excited about it. 279 00:15:11,640 --> 00:15:13,920 Speaker 7: And Jerry I'm still excited for this to happen. And 280 00:15:13,960 --> 00:15:16,200 Speaker 7: the good news for us is that wine bars were 281 00:15:16,280 --> 00:15:20,920 Speaker 7: indeed a huge trend in London in twenty twenty three. 282 00:15:21,320 --> 00:15:23,920 Speaker 7: There's so many of them. There's a place, especially in 283 00:15:23,960 --> 00:15:27,360 Speaker 7: North London around Newington Green, a place that opens sort 284 00:15:27,360 --> 00:15:30,160 Speaker 7: of towards the end of last year called Caday has 285 00:15:30,240 --> 00:15:34,440 Speaker 7: been going super strong. It's so popular it's been called 286 00:15:34,480 --> 00:15:37,560 Speaker 7: out all these all these places have recognized the chef. 287 00:15:37,600 --> 00:15:42,280 Speaker 7: They have this charcuderie superstar there. So that's i think 288 00:15:42,320 --> 00:15:44,760 Speaker 7: set the scene for a lot of other places to open. 289 00:15:44,840 --> 00:15:47,720 Speaker 7: A place called one O seven opened I think it's 290 00:15:47,800 --> 00:15:51,600 Speaker 7: around Hackney in Covent Garden. Ten cases has been a 291 00:15:51,600 --> 00:15:54,720 Speaker 7: popular wine bar, and they just opened a place called 292 00:15:54,800 --> 00:15:58,840 Speaker 7: Bawdry Green that's wine bar. And the problem is that 293 00:15:59,000 --> 00:16:01,640 Speaker 7: now it's become such a popular model that I think 294 00:16:01,680 --> 00:16:04,600 Speaker 7: places that are actually restaurants are calling themselves wine bars, 295 00:16:04,680 --> 00:16:06,600 Speaker 7: like yeah, in the way that everyone wants to say 296 00:16:06,680 --> 00:16:08,720 Speaker 7: natural wine, like you don't just pour wine, you pour 297 00:16:08,760 --> 00:16:11,720 Speaker 7: a natural wine. And so it's very quickly become an 298 00:16:11,800 --> 00:16:13,320 Speaker 7: overused concept. 299 00:16:13,440 --> 00:16:15,440 Speaker 2: Interesting, have we reached peak wine bar? 300 00:16:15,600 --> 00:16:16,840 Speaker 8: We've reached peak wine bar. 301 00:16:17,240 --> 00:16:18,920 Speaker 2: You're right, terrible news for those of us. 302 00:16:19,000 --> 00:16:20,840 Speaker 8: About peak natural wine. Are we there yet or is 303 00:16:20,880 --> 00:16:21,400 Speaker 8: that some times? 304 00:16:21,400 --> 00:16:23,760 Speaker 7: Well, I think it's good. That's a good question. I 305 00:16:23,800 --> 00:16:26,760 Speaker 7: think I'm here for natural wine. But everyone, I mean, 306 00:16:26,800 --> 00:16:29,480 Speaker 7: it's sort of like saying something that does need to 307 00:16:29,480 --> 00:16:31,720 Speaker 7: be said, you know, It's just like say that you're 308 00:16:31,720 --> 00:16:34,480 Speaker 7: pouring wine. You don't need to say natural anymore exactly. 309 00:16:34,520 --> 00:16:35,960 Speaker 2: I mean there's a whole other conversation to be hod 310 00:16:35,960 --> 00:16:37,560 Speaker 2: about the evolution of natural wine, which we will have 311 00:16:37,600 --> 00:16:39,680 Speaker 2: to do on another occasion. But I want you to 312 00:16:39,680 --> 00:16:41,400 Speaker 2: look into your crystal bowl for us and tell us 313 00:16:41,440 --> 00:16:44,840 Speaker 2: what you're seeing. Considering you predicted so accurately the trend 314 00:16:44,920 --> 00:16:46,160 Speaker 2: for this year, what do you what are you thinking 315 00:16:46,200 --> 00:16:48,320 Speaker 2: about when it comes to the FI scene in twenty twenty. 316 00:16:48,040 --> 00:16:50,600 Speaker 7: Four, I will say I think I love London. I 317 00:16:50,600 --> 00:16:52,880 Speaker 7: have fallen in love with London. I think Manchester is 318 00:16:52,880 --> 00:16:54,640 Speaker 7: going to get bigger and bigger next year. I think 319 00:16:54,680 --> 00:16:57,240 Speaker 7: we're going to be seeing a lot more energy outside 320 00:16:57,240 --> 00:16:57,680 Speaker 7: of London. 321 00:16:57,760 --> 00:16:58,560 Speaker 8: It's already happening. 322 00:16:58,720 --> 00:17:01,760 Speaker 7: Edinburgh's a super hot food city right now and it's 323 00:17:01,840 --> 00:17:04,359 Speaker 7: just going to be bigger in twenty twenty four. I 324 00:17:04,359 --> 00:17:06,560 Speaker 7: think you're going to see a lot more local ingredients, 325 00:17:06,640 --> 00:17:09,200 Speaker 7: partly because of climate, partly because of all the issues 326 00:17:09,240 --> 00:17:13,040 Speaker 7: people are having and price concerns. So already you've seen 327 00:17:13,080 --> 00:17:17,920 Speaker 7: some really good sushi places like Dinings SW three sourcing 328 00:17:18,000 --> 00:17:20,600 Speaker 7: local food and not necessarily flying it in from Japan. 329 00:17:21,280 --> 00:17:24,159 Speaker 7: And I think you're going to see even more chefs 330 00:17:24,240 --> 00:17:28,639 Speaker 7: highlighting the fact that they've got vegetables from cornwall and 331 00:17:28,960 --> 00:17:32,320 Speaker 7: seafood from you know, from that coast as well. That's 332 00:17:32,359 --> 00:17:33,960 Speaker 7: gonna be You're going to see more and more of that. 333 00:17:34,520 --> 00:17:37,840 Speaker 7: And I think also this is very bold, so you 334 00:17:37,840 --> 00:17:39,720 Speaker 7: can fact check me on it. I think we're going 335 00:17:39,800 --> 00:17:42,480 Speaker 7: to start seeing the end of small plates. We've eaten 336 00:17:42,520 --> 00:17:45,640 Speaker 7: so many small plates, so much food has been eatn 337 00:17:45,640 --> 00:17:49,399 Speaker 7: off small plates, I think Webb, Oh my god, Stephen, 338 00:17:49,640 --> 00:17:52,560 Speaker 7: you will keep talking. I know, Sarah's big plates. 339 00:17:52,600 --> 00:17:55,280 Speaker 2: I know, because inevitably you just end up spending three 340 00:17:55,280 --> 00:17:57,000 Speaker 2: times as much money because you think I'm going to 341 00:17:57,000 --> 00:17:57,800 Speaker 2: need loads more. 342 00:17:58,000 --> 00:18:00,560 Speaker 7: That's exactly right, exactly, And I think there is more 343 00:18:00,760 --> 00:18:03,119 Speaker 7: like the Wolsely City just open, and they don't have 344 00:18:03,160 --> 00:18:05,720 Speaker 7: like a small plate section. It's a place where you 345 00:18:05,880 --> 00:18:08,919 Speaker 7: get you know, regular size plates of food. So and 346 00:18:08,960 --> 00:18:11,760 Speaker 7: you have like food food, and you have like three courses, 347 00:18:12,160 --> 00:18:14,399 Speaker 7: you know. So I think that sort of idea that 348 00:18:14,520 --> 00:18:18,080 Speaker 7: not everything is a snackathon is is going to be prevalent. 349 00:18:18,160 --> 00:18:21,200 Speaker 2: The three course is coming back. You heard it here first, Yes, 350 00:18:21,200 --> 00:18:24,240 Speaker 2: she did. Sarah talk to us about the cultural scene 351 00:18:24,320 --> 00:18:25,919 Speaker 2: in London this year. What stood out for you? What 352 00:18:25,960 --> 00:18:26,679 Speaker 2: was your big highlight? 353 00:18:27,000 --> 00:18:28,960 Speaker 8: Well, I was just talking about this with my letters 354 00:18:29,000 --> 00:18:31,280 Speaker 8: at Business Week and we're saying between me and my 355 00:18:31,359 --> 00:18:34,199 Speaker 8: boss in New York, Chris, the editor of Pursuits, we've 356 00:18:34,200 --> 00:18:36,120 Speaker 8: seen over one hundred plays and musicals this year. 357 00:18:36,240 --> 00:18:36,520 Speaker 2: Wow. 358 00:18:36,720 --> 00:18:38,720 Speaker 8: So we've seen quite a lot, and there's some really 359 00:18:38,760 --> 00:18:41,919 Speaker 8: amazing shows on in London. And my favorite actually is 360 00:18:41,960 --> 00:18:44,040 Speaker 8: Operation mince Meat with Sharks. Have you seen it? 361 00:18:44,119 --> 00:18:44,399 Speaker 10: No? 362 00:18:44,480 --> 00:18:46,639 Speaker 2: I haven't. Sorry I could have gasped there about it. 363 00:18:46,680 --> 00:18:48,240 Speaker 2: No I haven't, but it's very high on my list. 364 00:18:48,280 --> 00:18:49,160 Speaker 2: Go on, tell me about its. 365 00:18:49,040 --> 00:18:50,439 Speaker 8: Going on till June, so you have plenty of time 366 00:18:50,480 --> 00:18:52,960 Speaker 8: to book, both you and your listeners. But it's actually 367 00:18:53,040 --> 00:18:55,880 Speaker 8: about an I five intelligence operation during World War Two. 368 00:18:56,200 --> 00:18:59,280 Speaker 8: They stole a corpse m I five, dressed it up 369 00:18:59,320 --> 00:19:02,760 Speaker 8: as a army officer, washed it up ashore and Spain 370 00:19:02,800 --> 00:19:05,439 Speaker 8: with fake invasion plans of Sicily right, this sounds like 371 00:19:05,480 --> 00:19:07,720 Speaker 8: it's a stranger than fiction story. Yeah, but it makes 372 00:19:07,720 --> 00:19:11,399 Speaker 8: for a really hilarious musical with some really touching sad 373 00:19:11,400 --> 00:19:13,600 Speaker 8: scenes as well. So who would have thought this crazy 374 00:19:13,640 --> 00:19:15,920 Speaker 8: World War two operation would be the best musical on stage? 375 00:19:15,920 --> 00:19:16,480 Speaker 8: But it really is. 376 00:19:16,640 --> 00:19:18,520 Speaker 2: Thank you to you both, Kate Creator, our food editor 377 00:19:18,560 --> 00:19:22,679 Speaker 2: and Sarah Rappaport, our Bloomberg Pursuits UK correspondent. I'm Stephen 378 00:19:22,720 --> 00:19:25,040 Speaker 2: Carroll in London. You can catch us every weekday morning 379 00:19:25,080 --> 00:19:27,520 Speaker 2: here for Bloomberg day Break Europe're gonna at six am 380 00:19:27,600 --> 00:19:30,120 Speaker 2: in London and one am on Wall Streets. 381 00:19:30,160 --> 00:19:33,160 Speaker 1: Tom Our thanks to Bloomberg day Break Europe Banker Steven 382 00:19:33,240 --> 00:19:35,560 Speaker 1: Carroll and coming up on Bloomberg day Break weekend, and 383 00:19:35,600 --> 00:19:38,359 Speaker 1: look at what's ahead for the Asian markets in twenty 384 00:19:38,400 --> 00:19:51,960 Speaker 1: twenty four. I'm Tom Busby and this is Bloomber I'm 385 00:19:52,000 --> 00:19:54,040 Speaker 1: Tom Busby in New York with your global look ahead 386 00:19:54,040 --> 00:19:56,160 Speaker 1: at the top stories for investors in the coming week. 387 00:19:56,680 --> 00:19:59,080 Speaker 1: As year twenty twenty three comes to a close, we 388 00:19:59,119 --> 00:20:01,159 Speaker 1: take a look at what's ahead for markets in China, 389 00:20:01,440 --> 00:20:05,199 Speaker 1: India and Japan in twenty twenty four, Let's get to 390 00:20:05,200 --> 00:20:08,399 Speaker 1: Bloomberg Daybreak Asia co host Doug Krisner. 391 00:20:08,040 --> 00:20:11,920 Speaker 3: Tom The challenges ranged from a flopped reopening trade to 392 00:20:12,080 --> 00:20:15,760 Speaker 3: faltering economic growth, as well as an unprecedented outflow of 393 00:20:15,760 --> 00:20:18,680 Speaker 3: foreign capital. So as we wrap up twenty twenty three, 394 00:20:19,280 --> 00:20:21,720 Speaker 3: we turn to the outlook for the year ahead. Bloomberg's 395 00:20:21,760 --> 00:20:25,400 Speaker 3: Felipe Pacheco is with us. He is the capital markets 396 00:20:25,440 --> 00:20:28,480 Speaker 3: reporter for APAC Equity. He joins us from our studios 397 00:20:28,520 --> 00:20:31,080 Speaker 3: in Hong Kong. I think we can agree, Philip that 398 00:20:31,119 --> 00:20:33,800 Speaker 3: for China, the major problem, not only for the economy 399 00:20:33,800 --> 00:20:36,240 Speaker 3: but for markets as well, has been this weak sentiment. 400 00:20:36,880 --> 00:20:40,720 Speaker 3: Maybe there was some initial excitement around a strong recovery 401 00:20:40,760 --> 00:20:45,000 Speaker 3: post pandemic that never materialized. Is there any optimism that 402 00:20:45,040 --> 00:20:46,960 Speaker 3: we can expect in the new year that will mean 403 00:20:47,000 --> 00:20:49,520 Speaker 3: that twenty twenty four is better than twenty three? 404 00:20:49,720 --> 00:20:52,760 Speaker 9: Well, that's correct. I think that it's very hard to 405 00:20:52,840 --> 00:20:56,040 Speaker 9: find that optimism out there, especially at this time of 406 00:20:56,080 --> 00:20:58,919 Speaker 9: the year. We usually do a ton of talks with 407 00:20:59,160 --> 00:21:02,800 Speaker 9: bankers get their outlook for what they're expecting, at least 408 00:21:02,800 --> 00:21:05,840 Speaker 9: for the first quarter of the following year. When we 409 00:21:05,920 --> 00:21:09,640 Speaker 9: had these conversations last year. Most of them were very 410 00:21:09,760 --> 00:21:13,520 Speaker 9: very positive about the outlook for China, especially because at 411 00:21:13,520 --> 00:21:16,359 Speaker 9: that point we knew that the country was opening up. 412 00:21:16,440 --> 00:21:21,119 Speaker 9: There was the whole excitement towards the fact that China's 413 00:21:21,119 --> 00:21:23,760 Speaker 9: economy would be way more open than it was during 414 00:21:24,000 --> 00:21:26,960 Speaker 9: the COVID years, and what we saw in equity capital 415 00:21:27,000 --> 00:21:32,080 Speaker 9: markets was this gigantic frustration. For example, China was responsible 416 00:21:32,200 --> 00:21:35,520 Speaker 9: mainly in China mostly for about half of all of 417 00:21:35,560 --> 00:21:39,439 Speaker 9: the deals within ECM that happened in twenty twenty two. 418 00:21:39,840 --> 00:21:42,600 Speaker 9: This time this year we have China representing less than 419 00:21:42,760 --> 00:21:47,080 Speaker 9: thirty percent for global offerings. So it's very hard to 420 00:21:47,119 --> 00:21:50,320 Speaker 9: say when this is going to actually improve. There's no 421 00:21:50,840 --> 00:21:54,560 Speaker 9: perspective that there is a better first half of twenty 422 00:21:54,800 --> 00:21:57,639 Speaker 9: twenty four than what we saw in the two final 423 00:21:57,720 --> 00:22:01,840 Speaker 9: quarters of twenty three. And I think that what investors, 424 00:22:01,960 --> 00:22:06,320 Speaker 9: bankers and companies are looking for right now is indication 425 00:22:06,560 --> 00:22:09,200 Speaker 9: from the Chinese government that there will be support, that 426 00:22:09,240 --> 00:22:12,639 Speaker 9: there will be measures to actually bring back optimism towards 427 00:22:12,640 --> 00:22:15,520 Speaker 9: the economy, and therefore they will be looking for money again. 428 00:22:15,680 --> 00:22:17,800 Speaker 3: Yeah, I think the slump in the property market has 429 00:22:17,800 --> 00:22:20,680 Speaker 3: been the central problem in restoring confidence. Is there any 430 00:22:20,880 --> 00:22:23,959 Speaker 3: signal that the government is sending that it understands the 431 00:22:23,960 --> 00:22:25,320 Speaker 3: severity of the problem. 432 00:22:25,359 --> 00:22:27,600 Speaker 9: I think that that are signals that they are willing 433 00:22:27,680 --> 00:22:31,280 Speaker 9: to address such problems. There has been an indication is 434 00:22:31,320 --> 00:22:34,760 Speaker 9: of support in different ways, especially to the real state sector. 435 00:22:35,040 --> 00:22:37,359 Speaker 9: Is it enough? I don't think so. When we talk 436 00:22:37,400 --> 00:22:41,360 Speaker 9: to bankers they say that they need more, like the 437 00:22:41,400 --> 00:22:44,840 Speaker 9: market needs more. They need like a bazooka, something that 438 00:22:44,880 --> 00:22:48,760 Speaker 9: would send a clear message of support, that would give 439 00:22:49,080 --> 00:22:52,280 Speaker 9: indications that there is a turnaround, that we've hit the 440 00:22:52,320 --> 00:22:54,959 Speaker 9: bottom and from now on things should get better. I 441 00:22:54,960 --> 00:22:57,560 Speaker 9: don't think anyone has seen that yet. I don't think 442 00:22:57,560 --> 00:23:00,520 Speaker 9: there is indication that this is on the way. For example, 443 00:23:00,560 --> 00:23:03,760 Speaker 9: when we talk to bankers looking at IPOs, they say 444 00:23:03,760 --> 00:23:05,960 Speaker 9: that we need to see bigger deals. We need to 445 00:23:06,000 --> 00:23:10,640 Speaker 9: see those blackbusters, deals with names that cash the headlines, 446 00:23:10,720 --> 00:23:13,320 Speaker 9: and we need to see a few of them performing 447 00:23:13,400 --> 00:23:17,480 Speaker 9: quite well for a while. We cannot see deals flopping. 448 00:23:17,560 --> 00:23:21,120 Speaker 9: We cannot see IPOs coming to market and then just 449 00:23:21,200 --> 00:23:24,480 Speaker 9: grabbing negative attention. This is the worst that you can 450 00:23:24,520 --> 00:23:27,120 Speaker 9: have for a market that is very sensitive to sentiment. 451 00:23:27,359 --> 00:23:29,280 Speaker 3: And that's one of the things that I think has 452 00:23:29,400 --> 00:23:33,240 Speaker 3: contributed to foreign investors removing a lot of capital out 453 00:23:33,280 --> 00:23:35,800 Speaker 3: of the markets. Not a lot of evidence that the 454 00:23:35,840 --> 00:23:38,879 Speaker 3: government really understands what the problem is to the extent 455 00:23:38,920 --> 00:23:41,199 Speaker 3: that they're really willing to throw as you mentioned the 456 00:23:41,280 --> 00:23:46,080 Speaker 3: Pazuka behind it. To what extent is that lack of 457 00:23:46,160 --> 00:23:49,640 Speaker 3: foreign capital creating difficulty for capital markets? 458 00:23:49,720 --> 00:23:52,920 Speaker 9: More broadly, I think that it creates a lot of gaps. 459 00:23:53,000 --> 00:23:55,879 Speaker 9: Let's say within equity capital markets. For example, you have 460 00:23:55,960 --> 00:23:59,880 Speaker 9: all flows for all kinds of Chinese investments, including equities 461 00:24:00,520 --> 00:24:03,080 Speaker 9: in the secondary market. Hong Kong's market is going through 462 00:24:03,119 --> 00:24:05,880 Speaker 9: a very very hard time. The index here in Hong Kong, 463 00:24:05,920 --> 00:24:09,440 Speaker 9: the HCI, is now more than fifteen percent for the year. 464 00:24:09,680 --> 00:24:12,920 Speaker 9: We also have the bench markets in the mainland down 465 00:24:13,000 --> 00:24:17,480 Speaker 9: by a similar percentage. So it's just a very very 466 00:24:17,760 --> 00:24:21,000 Speaker 9: heart scenario, and you see money just getting out of 467 00:24:21,080 --> 00:24:23,719 Speaker 9: Chinese assets as a whole. Of course, that impacts the 468 00:24:23,760 --> 00:24:27,199 Speaker 9: way companies that are considering to tap the markets to 469 00:24:27,320 --> 00:24:29,800 Speaker 9: make their plans as well. Companies are pretty much on 470 00:24:29,840 --> 00:24:33,199 Speaker 9: that state right now. They are on pause, they're on 471 00:24:33,280 --> 00:24:37,840 Speaker 9: hold because they do not know if this improvement will come. 472 00:24:38,240 --> 00:24:39,680 Speaker 9: And then at the end of the day, of course, 473 00:24:40,280 --> 00:24:43,000 Speaker 9: if you have money flowing out of China. This money 474 00:24:43,040 --> 00:24:45,399 Speaker 9: is going somewhere else. We see a lot of optimism, 475 00:24:45,480 --> 00:24:48,720 Speaker 9: for example, when it comes to assets trading in India 476 00:24:48,800 --> 00:24:51,399 Speaker 9: and also activity in ECM for India because this is 477 00:24:51,520 --> 00:24:54,400 Speaker 9: a huge emerging market that's just like bringing a lot 478 00:24:54,400 --> 00:24:57,040 Speaker 9: of positive headlines. And then another market that's catching a 479 00:24:57,040 --> 00:25:00,720 Speaker 9: lot of attention for this particular segment is also so Japan. 480 00:25:01,040 --> 00:25:04,040 Speaker 9: Japan is a developed economy, it's a completely different economy 481 00:25:04,040 --> 00:25:06,200 Speaker 9: than what you would see in China. But of course 482 00:25:06,240 --> 00:25:09,719 Speaker 9: it's been a great year for Japanese assets, especially equities. 483 00:25:09,960 --> 00:25:12,080 Speaker 3: Yeah, it's been a very good year for the market 484 00:25:12,160 --> 00:25:14,760 Speaker 3: in India. I think the major market measures are up 485 00:25:14,760 --> 00:25:17,840 Speaker 3: double digits in US taller terms. But if you look 486 00:25:17,880 --> 00:25:21,560 Speaker 3: at the year ahead, are analyst assuming that this positivity 487 00:25:21,600 --> 00:25:23,639 Speaker 3: is going to continue or might we see a bit 488 00:25:23,680 --> 00:25:25,920 Speaker 3: of a pause. Is it a market that is maybe 489 00:25:25,960 --> 00:25:27,040 Speaker 3: a little overextended. 490 00:25:27,560 --> 00:25:30,040 Speaker 9: That's a very interesting point because we do know that 491 00:25:30,080 --> 00:25:33,360 Speaker 9: India is training at very expensive levels right now when 492 00:25:33,359 --> 00:25:36,560 Speaker 9: it comes to equities trading. But one of the binkers 493 00:25:36,560 --> 00:25:39,280 Speaker 9: that I talked to with someone that is close to 494 00:25:39,280 --> 00:25:42,600 Speaker 9: the Indian market, he said, we do know that India 495 00:25:42,680 --> 00:25:46,040 Speaker 9: is expensive, and we hear that from our clients, but 496 00:25:46,119 --> 00:25:49,119 Speaker 9: at the same time we ask are you willing to buy? 497 00:25:49,200 --> 00:25:51,320 Speaker 9: Are you willing to invest at this price, and they 498 00:25:51,359 --> 00:25:54,600 Speaker 9: say yes. You can see things performing well. You can 499 00:25:54,640 --> 00:25:57,040 Speaker 9: see acids just from the fixed income sign and also 500 00:25:57,040 --> 00:26:00,480 Speaker 9: from the equity side doing quite well. That's what investors 501 00:26:00,520 --> 00:26:03,160 Speaker 9: are looking for in a tough year like this. For example, 502 00:26:03,200 --> 00:26:06,119 Speaker 9: if you look just of all of the names that 503 00:26:06,280 --> 00:26:09,920 Speaker 9: so big steaks in Indian companies listed Indian companies this year. 504 00:26:10,160 --> 00:26:14,680 Speaker 9: We're talking about soft Bank, the Canada Pension Plan Investment Board. 505 00:26:15,040 --> 00:26:18,320 Speaker 9: We have Tensen that had several stakes in companies that 506 00:26:18,480 --> 00:26:22,080 Speaker 9: listed in India. So these are big global investors that 507 00:26:22,160 --> 00:26:25,440 Speaker 9: they are coming to market to sell big chunks, let's 508 00:26:25,440 --> 00:26:28,560 Speaker 9: say five to ten percent of the stakes that they 509 00:26:28,640 --> 00:26:31,920 Speaker 9: own in such companies because price is good and they 510 00:26:31,960 --> 00:26:34,920 Speaker 9: are making money out of it. When those companies put 511 00:26:34,960 --> 00:26:37,680 Speaker 9: those blocks and those placements out in the market and 512 00:26:37,880 --> 00:26:40,960 Speaker 9: you see them trading up two days after, this is 513 00:26:41,080 --> 00:26:44,480 Speaker 9: very rare. You clearly see demand coming from the domestic 514 00:26:44,520 --> 00:26:48,280 Speaker 9: market in Indian and also from foreigners. So there is appetite, 515 00:26:48,280 --> 00:26:51,880 Speaker 9: there is a lot of interest. This is India's moment 516 00:26:52,560 --> 00:26:55,920 Speaker 9: is it going to last whenever China is back, whenever 517 00:26:56,040 --> 00:26:59,840 Speaker 9: activity in China picks up. That's the main question for 518 00:27:00,119 --> 00:27:03,000 Speaker 9: Indian as it's and for Indian issuers. 519 00:27:03,320 --> 00:27:05,520 Speaker 3: I think one of the surprises this year in the 520 00:27:05,560 --> 00:27:08,720 Speaker 3: Asia Pacific has been the performance of the Japanese equity market. 521 00:27:08,800 --> 00:27:10,720 Speaker 3: I don't know how much of that has to do 522 00:27:10,800 --> 00:27:14,240 Speaker 3: with anticipation of some type of change in policy from 523 00:27:14,280 --> 00:27:17,520 Speaker 3: the Bank of Japan, but I think the Nike in 524 00:27:17,640 --> 00:27:21,320 Speaker 3: dollar terms is up more than seventeen percent year to date. 525 00:27:22,119 --> 00:27:25,760 Speaker 3: The outlook for Japan is it contingent the positivity contingent 526 00:27:26,280 --> 00:27:31,600 Speaker 3: upon the boj maybe adjusting policy, or is there something 527 00:27:31,600 --> 00:27:35,200 Speaker 3: else going on with Japan inc that's driving the gains. 528 00:27:35,400 --> 00:27:37,720 Speaker 9: I think Japan is a very very very curious cause, 529 00:27:37,760 --> 00:27:39,400 Speaker 9: as you mentioned, there's a lot of it that is 530 00:27:39,840 --> 00:27:43,639 Speaker 9: related to the bog the moment in Japan's economy. This 531 00:27:43,840 --> 00:27:46,520 Speaker 9: is a turning point for a country that hasn't seen 532 00:27:46,560 --> 00:27:50,119 Speaker 9: inflation for like decades, and there is a lot of 533 00:27:50,160 --> 00:27:52,520 Speaker 9: attention that's going towards it. I think when it comes 534 00:27:52,600 --> 00:27:55,640 Speaker 9: specifically to the equities market and all of these companies 535 00:27:55,640 --> 00:28:01,960 Speaker 9: that are actually trying to raise funds through equities It's 536 00:28:02,080 --> 00:28:04,840 Speaker 9: very interesting to see that this comes in combination with 537 00:28:04,960 --> 00:28:07,240 Speaker 9: a lot of measures that are being done by the 538 00:28:07,280 --> 00:28:11,280 Speaker 9: local stock exchange to actually boost governess and to make 539 00:28:12,240 --> 00:28:16,879 Speaker 9: maybe combine this particular moment in the macro aspects of 540 00:28:16,880 --> 00:28:21,880 Speaker 9: the country to what's happening within the corporate sectors. So 541 00:28:21,960 --> 00:28:25,320 Speaker 9: you have, for example, the Stock Exchange in Tokyo asking 542 00:28:25,400 --> 00:28:28,840 Speaker 9: companies to just improve all of the governance levels that 543 00:28:28,880 --> 00:28:31,440 Speaker 9: they have. They are trying to attract more names to 544 00:28:31,560 --> 00:28:36,840 Speaker 9: the market, and they are also trying to improve the 545 00:28:36,880 --> 00:28:40,480 Speaker 9: holdings what they call in Japane's crossholdings. Basically, a lot 546 00:28:40,520 --> 00:28:44,800 Speaker 9: of Japanese big conglomerates the own shares of their sister 547 00:28:44,880 --> 00:28:47,800 Speaker 9: companies and this is not seeen in a good way 548 00:28:47,840 --> 00:28:52,560 Speaker 9: when it comes to governance aspects. So the local regulator 549 00:28:52,600 --> 00:28:56,920 Speaker 9: in the also the exchange, is just trying to unwind 550 00:28:57,040 --> 00:28:59,520 Speaker 9: such traits, and there's a lot of companies that are 551 00:28:59,600 --> 00:29:02,160 Speaker 9: coming to market to actually execute it. 552 00:29:02,200 --> 00:29:04,200 Speaker 3: Philip, great that you could be with us and to 553 00:29:04,520 --> 00:29:07,200 Speaker 3: share your expertise on what's happening in these various equity 554 00:29:07,240 --> 00:29:10,400 Speaker 3: markets across the APEX. That is, Felipe Pacheco, who covers 555 00:29:10,440 --> 00:29:13,760 Speaker 3: APAC Equity Capital Markets from our bureau in Hong Kong. 556 00:29:14,200 --> 00:29:16,680 Speaker 3: I'm Doug Prisner. You can join Brian Curtis and myself 557 00:29:16,720 --> 00:29:19,480 Speaker 3: weekdays here for Bloomberg day Break Asia, beginning at seven 558 00:29:19,520 --> 00:29:23,440 Speaker 3: am in Hong Kong six pm on Wall Street Tom. 559 00:29:23,320 --> 00:29:26,320 Speaker 1: Our thanks to Bloomberg day Break Asia co host Doug Krisner, 560 00:29:26,720 --> 00:29:29,680 Speaker 1: and coming up here on Bloomberg day Break Weekend, look 561 00:29:29,720 --> 00:29:32,200 Speaker 1: at some of the big political items on the agenda 562 00:29:32,240 --> 00:29:35,120 Speaker 1: in Washington in the new year. I'm Tom Busby, and 563 00:29:35,240 --> 00:29:48,920 Speaker 1: this is Bloomberg. This is Bloomberg day Break Weekend, our 564 00:29:48,920 --> 00:29:51,120 Speaker 1: global look ahead at the top stories for investors in 565 00:29:51,160 --> 00:29:54,680 Speaker 1: the coming week. I'm Tom Busby. In New York, lawmakers 566 00:29:54,680 --> 00:29:57,280 Speaker 1: will start the new year running with a full slate 567 00:29:57,320 --> 00:30:00,080 Speaker 1: of legislative priorities as soon as they get back and 568 00:30:00,160 --> 00:30:04,480 Speaker 1: their holiday break that includes another possible government shutdown. For more, 569 00:30:04,720 --> 00:30:07,880 Speaker 1: we turned to Bloomberg's Sound Down co host Kaylee Lines. 570 00:30:08,360 --> 00:30:10,520 Speaker 4: Yeah, thanks Tom. Twenty twenty four is looking to be 571 00:30:10,640 --> 00:30:14,440 Speaker 4: a very busy year in and around Washington, between the 572 00:30:14,480 --> 00:30:17,240 Speaker 4: primary contest for the Republican Party really kicking off in 573 00:30:17,320 --> 00:30:19,800 Speaker 4: earnest and the threat of a government shutdown. And that's 574 00:30:19,880 --> 00:30:22,120 Speaker 4: just in January. There's a lot more that's going to 575 00:30:22,200 --> 00:30:24,080 Speaker 4: come throughout the year, so we wanted to get more 576 00:30:24,320 --> 00:30:26,680 Speaker 4: on what we can expect in the year ahead. For politics, 577 00:30:26,760 --> 00:30:29,360 Speaker 4: I caught up with Henrietta Tre's of Beta Partners, and 578 00:30:29,360 --> 00:30:32,680 Speaker 4: we started with her thoughts on the likelihood of a shutdown. 579 00:30:32,760 --> 00:30:33,800 Speaker 8: You know, I think that. 580 00:30:33,760 --> 00:30:37,320 Speaker 10: We have staved off a shutdown because shutting down is 581 00:30:37,360 --> 00:30:40,440 Speaker 10: actually worse than taking the votes to keep things functioning 582 00:30:40,480 --> 00:30:44,080 Speaker 10: at their current levels. So I think January nineteenth and 583 00:30:44,160 --> 00:30:48,120 Speaker 10: February second are just going to roll into March and April, 584 00:30:48,480 --> 00:30:52,320 Speaker 10: June and July probably two to six times through the 585 00:30:52,360 --> 00:30:55,480 Speaker 10: first half of twenty twenty four. The most important date 586 00:30:55,520 --> 00:30:59,040 Speaker 10: for investors since we've sort of vibracated the appropriations bills 587 00:30:59,080 --> 00:31:02,520 Speaker 10: and only had a partial shutdowns of pieces of the government. 588 00:31:03,200 --> 00:31:05,160 Speaker 10: In the event that there are shutdowns, I think the 589 00:31:05,160 --> 00:31:07,160 Speaker 10: most important day for investors is sort of the run 590 00:31:07,240 --> 00:31:10,560 Speaker 10: up to May first, particularly in the defense space, because 591 00:31:10,600 --> 00:31:13,240 Speaker 10: they don't think they're going to avoid the sequester early, 592 00:31:13,480 --> 00:31:14,960 Speaker 10: and I don't think they're going to come up with 593 00:31:15,000 --> 00:31:17,479 Speaker 10: some grand bipartisan deal as y'all are sort of alluding 594 00:31:17,480 --> 00:31:21,480 Speaker 10: to earlier. There is no bipartisanship on Capitol Hill around 595 00:31:21,520 --> 00:31:24,720 Speaker 10: anything other than hey, let's just not shut down. So 596 00:31:24,760 --> 00:31:28,680 Speaker 10: I think as we get into mid April, investors in 597 00:31:28,720 --> 00:31:31,280 Speaker 10: the defense space who are looking down the barrel of 598 00:31:31,280 --> 00:31:34,560 Speaker 10: a one percent spending cut for defense are probably going 599 00:31:34,600 --> 00:31:36,440 Speaker 10: to get a little acious a lot of headline risks 600 00:31:36,520 --> 00:31:38,720 Speaker 10: as they seek to avoid that at the eleventh hour. 601 00:31:39,240 --> 00:31:41,880 Speaker 10: So maybe keep May first on your radar and maybe 602 00:31:42,000 --> 00:31:44,520 Speaker 10: April fifteenth around then for headline risk to start. 603 00:31:44,280 --> 00:31:46,440 Speaker 4: Moving before we can even get to twenty twenty five. 604 00:31:46,480 --> 00:31:49,760 Speaker 4: To your point, Henrietta, people need to last twenty twenty four, 605 00:31:49,800 --> 00:31:52,040 Speaker 4: which brings me to the Mike Johnson question. Of course, 606 00:31:52,080 --> 00:31:55,040 Speaker 4: the relatively newly minted Speaker of the House who has 607 00:31:55,080 --> 00:31:57,880 Speaker 4: passed a continuing resolution with Democratic support, which is what 608 00:31:57,920 --> 00:31:59,720 Speaker 4: got Kevin McCarthy kicked out of the job in the 609 00:31:59,720 --> 00:32:02,600 Speaker 4: first place earlier in this fall. So I just wonder 610 00:32:03,400 --> 00:32:05,640 Speaker 4: how much longer he's really got if he's going to 611 00:32:05,680 --> 00:32:07,600 Speaker 4: need to fund the government and potentially does need to 612 00:32:07,680 --> 00:32:12,120 Speaker 4: kick the can and House conservatives don't like it, right, and. 613 00:32:12,000 --> 00:32:15,240 Speaker 10: You've already seen the House Conservatives say, you know, the 614 00:32:15,320 --> 00:32:18,560 Speaker 10: deal that was negotiated last May with Kevin McCartney. A, 615 00:32:18,720 --> 00:32:19,840 Speaker 10: he's not even a speaker. B. 616 00:32:19,920 --> 00:32:21,360 Speaker 8: He's not even a congressman anymore. 617 00:32:21,360 --> 00:32:23,360 Speaker 2: And then the next question is how long is Johnson 618 00:32:23,360 --> 00:32:25,040 Speaker 2: going to be the speaker in DC? 619 00:32:25,160 --> 00:32:26,840 Speaker 10: If you go to meetings with staff, they'll say, is 620 00:32:26,840 --> 00:32:28,560 Speaker 10: it going to be six months or six years? The 621 00:32:28,640 --> 00:32:31,200 Speaker 10: verdict the jury is very much out on that one, 622 00:32:31,240 --> 00:32:33,080 Speaker 10: and it's a popular power of the game, which does 623 00:32:33,120 --> 00:32:36,000 Speaker 10: not bode well. I think the honeymoon phase is over. 624 00:32:36,760 --> 00:32:38,640 Speaker 10: I'm going to be really interested to see how members 625 00:32:38,640 --> 00:32:42,280 Speaker 10: start reacting when they get back into town. It's impossible 626 00:32:42,560 --> 00:32:45,600 Speaker 10: for about eight to twenty members of the far right 627 00:32:45,680 --> 00:32:48,080 Speaker 10: to agree to any spending level. And we're not talking 628 00:32:48,120 --> 00:32:51,560 Speaker 10: about huge chunks of change right now. The difference between 629 00:32:51,600 --> 00:32:55,160 Speaker 10: the far right and the moderates in the Senate, which 630 00:32:55,160 --> 00:33:00,400 Speaker 10: have overwhelmingly passed all twelve appropriations bills, is like five 631 00:33:00,440 --> 00:33:04,760 Speaker 10: billion dollars, and we're talking about a one point five ish. 632 00:33:04,600 --> 00:33:06,000 Speaker 8: Trillion dollar package. 633 00:33:06,080 --> 00:33:08,600 Speaker 10: So for the difference to be twenty five billion dollars, 634 00:33:08,600 --> 00:33:10,560 Speaker 10: it's like you know, me asking you for five bucks 635 00:33:10,560 --> 00:33:13,320 Speaker 10: and should know. But they literally just don't have the 636 00:33:13,400 --> 00:33:16,240 Speaker 10: votes for anything that sounds like yes. So those guys 637 00:33:16,240 --> 00:33:18,520 Speaker 10: are always going to be voting no, which forces Speaker 638 00:33:18,600 --> 00:33:22,120 Speaker 10: Johnson to constantly be negotiating with Democrats, which is of 639 00:33:22,120 --> 00:33:24,920 Speaker 10: course anathma to the far right, but they are ironically 640 00:33:25,000 --> 00:33:28,080 Speaker 10: the ones that are enforcing that reality on Speaker Johnson. 641 00:33:28,200 --> 00:33:31,480 Speaker 10: So I hope you can make it through April. Obviously, 642 00:33:31,520 --> 00:33:34,680 Speaker 10: we've seen how long a series of votes can go 643 00:33:35,040 --> 00:33:37,880 Speaker 10: on the potential for another speaker, so I can tell 644 00:33:38,440 --> 00:33:41,520 Speaker 10: drawn out. Nobody wants to do that, but memories stayed 645 00:33:41,680 --> 00:33:44,720 Speaker 10: and maybe they've forgotten how uncomfortable that was in October. 646 00:33:44,760 --> 00:33:48,160 Speaker 4: That's Henrietta Tree's managing partner at Veda Partners, and Tom, 647 00:33:48,240 --> 00:33:50,680 Speaker 4: it looks like we're in for a wild ride in 648 00:33:50,720 --> 00:33:51,360 Speaker 4: the coming year. 649 00:33:51,600 --> 00:33:53,880 Speaker 1: Thank you, Kaylee. That was Bloomberg Sound on co host 650 00:33:53,920 --> 00:33:56,520 Speaker 1: Kaylee Lines, and you can hear sound on weekdays one 651 00:33:56,560 --> 00:33:59,680 Speaker 1: to three pm on Bloomberg Radio. And that does it 652 00:33:59,720 --> 00:34:02,400 Speaker 1: for this edition of Bloomberg day Break Weekend. Join us 653 00:34:02,400 --> 00:34:04,440 Speaker 1: again Monday morning at five am Wall Street Time for 654 00:34:04,480 --> 00:34:07,400 Speaker 1: the latest on markets overseas and the news you need 655 00:34:07,440 --> 00:34:10,359 Speaker 1: to start your day. I'm Tom Busby. Stay with us. 656 00:34:10,520 --> 00:34:14,800 Speaker 1: Top stories and global business headlines are coming up right now.