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

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

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Speaker 2: Congress has averted a partial government shut down, sent for

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Speaker 2: this weekend, and back to with that story and more

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Speaker 2: from San Francisco ed.

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Speaker 3: If you want to be a Senate here, Brian, the

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Speaker 3: threat of snow tomorrow motivated congress shut down averted in

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Speaker 3: any case, as you say, Bloomberg's Laura Davison says, the

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Speaker 3: can kick down the road, which presents a whole list

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Speaker 3: of problems.

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Speaker 4: Congress has been able to keep the government open only

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Speaker 4: by kind of kicking the can down the road. The

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Speaker 4: one mild success, if your Mike Johnson, is that you

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Speaker 4: kept your job at least for now in this But

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Speaker 4: looking into March, there's a bunch of different things that

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Speaker 4: get a bit more complicated. As you said, they're about

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Speaker 4: halfway the fiscal year without actually, you know, doing anything

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Speaker 4: beyond just extending last year's budget, and by the time

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Speaker 4: you get to the end of April, that's when mandatory

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Speaker 4: cuts start kicking into effects. So Congress has a more

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Speaker 4: of a real deadline there that they need to act,

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Speaker 4: and you decide on something that they want to do,

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Speaker 4: and of course you know things that got left on

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Speaker 4: the side of the here a tax deal with business

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Speaker 4: tax credits, child tax credits, as well as border Ukraine

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Speaker 4: and other foreign eight.

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Speaker 3: Yeah, so a lot to be done, but done for now. Meanwhile,

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Speaker 3: Donald Trump is in the Ukraine funding phray. He's posted

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Speaker 3: that any deal on Ukraine and border contain every Conservative

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Speaker 3: demand for border and immigration changes. The House planned on

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Speaker 3: working on this next week, but this may force GOP

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Speaker 3: leaders to reject any moves toward compromise. President Joe Biden,

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Speaker 3: en route to Joint Base Andrews this morning, is vowed

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Speaker 3: to continue attacks on Houthy targets until they dismantle the

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Speaker 3: operations that make the attacks on ships in the Red

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Speaker 3: Sea possible.

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Speaker 1: Another stopping the huthis so are they going.

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Speaker 4: To continue yet?

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Speaker 3: Yes, and the Pentagon is clarifying what the operations is about.

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Speaker 3: Spokes when Sabrina Singh says the US is not at war.

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Speaker 5: What we took, the actions that Central Command took last

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Speaker 5: night was to destroy missiles that could be launched and

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Speaker 5: that we're preparing to launch either towards US Navy ships

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Speaker 5: that are in the region that are in that waterway.

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Speaker 5: Or other commercial vessels.

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Speaker 3: Badhuthi chief Abdul Malik al Huthi says it's not direct confrontation.

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Speaker 3: Says the militants are taking concrete steps to improve their

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Speaker 3: military capabilities. He says the US UK strikes will not

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Speaker 3: change his stance, and as Pakistan fires missiles into Iran

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Speaker 3: this morning, US is concerned about potential regional spread there.

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Speaker 3: NSC official John Kirby, these are two.

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Speaker 6: Well armed nations, and again we don't want to see

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Speaker 6: an escalation of any armed conflict in the region, certainly

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Speaker 6: between those two countries.

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Speaker 3: And the spokesman for Pakistan's Ministry of Foreign Affairs Moments Balak,

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Speaker 3: says these were very targeted.

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Speaker 7: Pakistan undertook a series of highly coordinated and specifically targeted,

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Speaker 7: precision military strikes against terrorist hideouts in Sistano Belushistan province

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Speaker 7: of Hiddan.

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Speaker 3: She says, a first strike to halt further violence. NATO

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Speaker 3: military leaders announcing that the Alliance will launch its biggest

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Speaker 3: military exercise in decades next week. NATO military leaders announcing

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Speaker 3: that the Alliance will launch it's the biggest exercise. NATO

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Speaker 3: Supreme Allied Commander US General Christopher Cavolle introduced in the exercise,

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Speaker 3: He's just marvelous at the scale.

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Speaker 8: Steadfast Defender twenty four will be the largest NATO exercise

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Speaker 8: in decades, with participation from approximately ninety thousand forces from

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Speaker 8: all thirty one allies plus our good partner Sweden.

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Speaker 3: Yeah, adding Sweden. The mix global news twenty four hours

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Speaker 3: a day and whenever you want it with Bloomberg News

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Speaker 3: now in San Francisco. I'm at Baxter. This is Bloomberg

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Speaker 3: Brian all.

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Speaker 2: Right, time now for the top business stories of the hour. Well,

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Speaker 2: Spirit Airlines says it has no plans for a bankruptcy

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Speaker 2: driven restructuring. The airline is now taking a hard look

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Speaker 2: at his balance sheet. We heard from Bloomberg's George Ferguson.

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Speaker 9: Profitability hasn't been good. I'm sure management's lost its focus

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Speaker 9: as it's gone through this potential acquisition by Jet Blue,

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Speaker 9: and now the difficulty will be, yeah, get getting the

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Speaker 9: ship right and getting employees. Management focused on getting this

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Speaker 9: airline back to profitability.

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Speaker 2: Bloomberg's George Ferguson. Spirit shares have been in a tailspin

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Speaker 2: since its merger with Jet Blue was blocked in court.

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Speaker 2: Shares have plunged more than sixty percent over the past

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Speaker 2: three days. Today they closed down seven percent. Jet Blue

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Speaker 2: fared a little bit better. It was up seven point

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Speaker 2: eight percent.

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Speaker 1: Well, US banking regulators are planning to require banks to

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Speaker 1: tap the Fed's discount window at least once a year.

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Speaker 8: Now.

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Speaker 1: The aim here is to reduce the stigma and ensure

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Speaker 1: that these banks are ready for troubled times. Bloomberg's Katanka

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Speaker 1: Johnson tells us how this might play out.

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Speaker 10: It's very clear if FED regulators, including the OCC, the

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Speaker 10: FED and the FCIIC really want to make the discover

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Speaker 10: into more attractive by requiring them not just to tap

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Speaker 10: the window once a year to make it easier somewhat

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Speaker 10: of a fire drill who told me, but also to

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Speaker 10: focus on what plans or preparation for accessing it could

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Speaker 10: be or could mean. Regulars really want to see a

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Speaker 10: number of changes to how banks think about the disco

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Speaker 10: window but liquidity.

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Speaker 1: In general, that is Bloomberg's Catanka Johnson. Now, it was

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Speaker 1: last year the regional banking crisis somewhat revealed that a

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Speaker 1: number of banks were not even set up to quickly

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Speaker 1: borrow from the Fed's discount window in a pinch Brian Well.

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Speaker 2: Blackstone CEO Steve Schwartzman is expecting the FED to cut

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Speaker 2: interest rates, and they said those cuts are going to

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Speaker 2: have an impact on Wall Street.

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Speaker 3: The economy is slowing a bit.

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Speaker 9: That's normal with high interest rates. On the other side

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Speaker 9: of the latcher, the expectation that interest rates are going

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Speaker 9: down is creating animal spirits.

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Speaker 2: Again, as Blackstone CEO Steve Schwartzman. As anticipation builds around

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Speaker 2: the impending rate cuts, not everyone is ready to go

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Speaker 2: all in. Today. Atlanta FED President Raphael Bostik said the

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Speaker 2: worst outcome would be for policymakers to act and to

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Speaker 2: cut rates and then have to raise them again later.

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Speaker 2: That's if inflation were to move higher. Bostik says he

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Speaker 2: sees the Fed's first rate cut coming sometime in the

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Speaker 2: third quarter.

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Speaker 1: Apple was smart watches without that blood oxygen feature are

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Speaker 1: being sold today at Apple's US retail outlets. Now this

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Speaker 1: comes following a legal setback in Apple's patent dispute with

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Speaker 1: the tech startup Massimo. That company makes the blood oxygen sensors. Now,

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Speaker 1: Apple itself cannot sell the watches with this feature. While

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Speaker 1: an appeal of a US band plays out. The CEO

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Speaker 1: of Massimo is Joe Keani. He told us the outcome

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Speaker 1: is best for consumers.

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Speaker 11: The consumers are better off without it. Apple knew their

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Speaker 11: product wasn't good enough to be relied on medically, but

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Speaker 11: literally they said, and this is in twenty twenty and

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Speaker 11: the chaos of COVID. This is quotation in their document.

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Speaker 11: If we launch pulsock symmetry with our we'll gain market

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Speaker 11: share from Fitbit.

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Speaker 1: That is Joe Keane. He is the chief executive officer

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Speaker 1: at Massimo. By the way, Apple believes the appeal process

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Speaker 1: on this particular case will take a year or more.

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Speaker 2: Brian Well, TSMC is expecting a return to solid growth

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Speaker 2: this quarter. It gave itself some room to raise capital

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Speaker 2: spending in twenty twenty four. It suggests that TSMC anticipates

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Speaker 2: a recovery in smartphone and computing demand. Bloomberg's Ian King

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Speaker 2: says industry shifts toward AI could be fueling the confidence.

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Speaker 12: Roll back two years ago, and the chip industry executive

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Speaker 12: was saying, this time it's different. We're on a path.

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Speaker 12: Oh you look at last year and that really wasn't

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Speaker 12: the case. Again, we were down. What is different though?

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Speaker 12: This time is how some of the end markets are behaving.

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Speaker 2: And that's i in king TSMC shares, the eight rs

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Speaker 2: in New York were up nine point eight percent, their

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Speaker 2: biggest intra day jump since May. And it's quite a

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Speaker 2: change from the way it's doc traded in in Taipei yesterday,

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Speaker 2: where it was only up a little more than one percent.

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Speaker 2: This is Bloomberg Daybreak Asia and right now I'm joined

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Speaker 2: by Paul Allen in Sydney, and our guest is joining

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Speaker 2: us here live on the program, Chester Dawson, Bloomberg's North

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Speaker 2: American Transportation editor, to take a closer look here at

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Speaker 2: Spirit Air. So it's one thing for the stock to

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Speaker 2: struggle as much as it has, you know, it might

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Speaker 2: make it more difficult to raise money. It's a slightly

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Speaker 2: soate topic to be talking about bankruptcy, but it's clear

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Speaker 2: that that the board now has an issue at hand.

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Speaker 2: And what are we learning about how close Spirit could

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Speaker 2: get to bankruptcy?

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Speaker 13: Well, that is the question de jour, and as you

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Speaker 13: noted earlier, the stock has been paying a heavy price

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Speaker 13: for it. The company, however, did say in a statement

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Speaker 13: that came out late today that it is not pursuing

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Speaker 13: or involved in a statuary with structuring, which is a

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Speaker 13: kind of a jargonistic and legalists way of saying that

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Speaker 13: they're not planning for bankruptcy. It has been a matter

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Speaker 13: of a lot of speculation. A number of analysts on

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Speaker 13: Wall Street have openly said that that is a very

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Speaker 13: real possibility. But the company says it's taking measures to

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Speaker 13: shore up its balance sheet and is hoping to you know,

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Speaker 13: right the ship.

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Speaker 6: All right, taking measures? What does that mean?

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Speaker 9: Are we talking about job cuts, slashing roots?

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Speaker 3: What's the plan?

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Speaker 13: Well, that is also a very good question. They have

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Speaker 13: not said much more beyond what they had kind of

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Speaker 13: previously outlined in terms of efforts to for example, ground

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Speaker 13: parts of its fleet, delay the ontake of some airplanes,

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Speaker 13: and other measures, you know, perhaps involving it's stet load.

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Speaker 13: So it's a little vague exactly what that means, but

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Speaker 13: you're you're right, Typically when you hear that language, you

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Speaker 13: do think about drastic cost cuts, including job reductions. If

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Speaker 13: they're thinking that, they're not saying so publicly.

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Speaker 2: Yes, so they're not even talking about bankruptcy protection, much

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Speaker 2: less liquidation, but certainly people in the market have been

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Speaker 2: at least thinking about that. The possibility of liquidation. And

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Speaker 2: it's ironic because you know what that would do for

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Speaker 2: you know, for prices. One only knows, but it probably

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Speaker 2: wouldn't be what the judge was expecting. I'm just musing

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Speaker 2: aloud a little bit here. I mean, is there any

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Speaker 2: chance that to raise funds, that Spirit could raise prices?

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Speaker 2: You know it's a low cost carrier, but could he

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Speaker 2: raise prices?

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Speaker 13: Well, you put your finger on it. The whole point

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Speaker 13: of Spirit is to be an ultra low cost carrier,

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Speaker 13: so in theory it might be able to try. But

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Speaker 13: you know, the whole reason you go to Spirit is

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Speaker 13: to get a super cheap fare and kind of a

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Speaker 13: no frills flight experience. Now you know the But he

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Speaker 13: hasn't said whether it plans to appeal the court ruling

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Speaker 13: that broke up plans for the takeover by Jet Blue. However,

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Speaker 13: it's very unclear, you know, if it can survive as

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Speaker 13: an independent entity, not just because of it kind of

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Speaker 13: planned to be taken over by Jet Blue, but because

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Speaker 13: the environment has deteriorated so much since that deal was announced.

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Speaker 13: You know, it's been very bad for all low cost carriers,

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Speaker 13: including Jet Blue, which isn't quite an ultra low cost

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Speaker 13: carrier like Spirit, but is still you know, kind of

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Speaker 13: a more of a discount carrier than say, Delta is.

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Speaker 13: But but those companies, you know, being very domestic and

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Speaker 13: very fair focused, have not been doing well. The environment

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Speaker 13: has deteriorated a lot. So if it's left to stand

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Speaker 13: on its own two legs, so to speak, Spirit faces

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Speaker 13: a very difficult future. So it's kind of unclear, you know,

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Speaker 13: what comes next. Everybody's kind of waiting for the next

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Speaker 13: shooter drop. Clearly the company has got to do more,

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Speaker 13: you know, but investors aren't waiting, as you noted, they're bailing.

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Speaker 6: Yeah, they sure.

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Speaker 9: Uh the ship Rice down sixty two percent and three days.

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Speaker 9: Is there any feeling that we're at the bottom yet

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Speaker 9: or is there the potential for further losses here?

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Speaker 13: Well, it's a little hard to say, but it is

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Speaker 13: interesting that when the company finally came out with its

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Speaker 13: statement after the close of trading in New York, the

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Speaker 13: shares you know, basically traded unchanged in the post market. Obviously,

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Speaker 13: they were down during the day, kind of in a

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Speaker 13: free fall. But I guess there's some hope that maybe

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Speaker 13: this you know, this kind of very late in the

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Speaker 13: day statement by the company that it's not preparing for

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Speaker 13: bankruptcy at least not immediately, will be some solace to investors,

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Speaker 13: But we really won't know, I guess until the market

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Speaker 13: opens in New York tomorrow. But it does feel like

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Speaker 13: the company is in kind of a desperate struggle to survive.

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Speaker 2: You wonder what's a message that would send to the

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Speaker 2: Justice Department and to the FTC and just generally too.

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Speaker 2: And I trust, you know, the antitrust regulators that they're

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Speaker 2: concerned about people. They don't care about the shareholders. I mean,

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Speaker 2: that's for other people to worry about. But if the

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Speaker 2: result of this is that the airline goes busted, I

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Speaker 2: wonder what sort of message it would send to to

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Speaker 2: the anti trust people.

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Speaker 13: Well, it would be an incredible irony, wouldn't it if

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Speaker 13: you know, by by saving or trying to save spirit

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Speaker 13: uh spirits independence, that actually was a death sentence. You know,

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Speaker 13: I think you're right. I think basically, you know, the

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Speaker 13: legal eagles and the court you know, uh clearly was

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Speaker 13: thinking about you know, the spirit of your not maybe

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Speaker 13: so much about what would happen if if the deal

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Speaker 13: was unraveled. And of course, you know, we want to

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Speaker 13: be careful. The company has not declared bankruptcy and it's

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Speaker 13: still flying. And you know, even if it were to

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Speaker 13: do something like that, and I'm just speculating now, chances

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Speaker 13: are they would continue operations. But you know, obviously, whenever

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Speaker 13: the B word has floated, it scares investors quite a bit,

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Speaker 13: and you know, the bad news keeps coming. We just

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Speaker 13: got word late of some action by the rating agencies

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Speaker 13: which are also sitting up and taking notice, and that

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Speaker 13: doesn't bode too well for Spirit either. Just quickly, just

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Speaker 13: what's the legacy of Spirits management going to be? Well,

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Speaker 13: that's a good question too, because when you know they

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Speaker 13: were initially approached by jet Blue, they were buff the offer.

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Speaker 13: In fact, they were in favor of a rival takeover

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Speaker 13: bid from Frontier, which is another ultra low cost carrier,

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Speaker 13: and effectively there was something of a shareholder revolt and

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Speaker 13: the board had to backtrack and did accept a sweetened

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Speaker 13: bid from Jet Blue. But now you've got to look

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Speaker 13: back and wonder about culpability because there is some question

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Speaker 13: whether the board made the right call there on the

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Speaker 13: way the events have played out.

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Speaker 2: And all right, Leicester Wels Yeah, yeah, absolutely, a very

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Speaker 2: good point. This is Bloomberg Daybreak Asia Your morning brief

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