Speaker 1: Good morning.
Speaker 2: I'm Brian Curtis and I'm Doug Krisner. Here are the
Speaker 2: stories we're following today.
Speaker 3: Congressional leaders have agreed on a spending deal. We get
Speaker 3: more from Bloomberg's Dan Schwartzman. Dan, that is correct, Brian.
Speaker 4: A deal has been announced on a top line spending
Speaker 4: level for the current fiscal year. The agreement lessening the
Speaker 4: likelihood of a partial government shutdown, which would occur on
Speaker 4: January twentieth. Republican House Speaker Mike Johnson and Democratic Senate
Speaker 4: Majority Leader Chuck Schumer negotiated the package, which now heads
Speaker 4: to the appropriations committees in both chambers to negotiate detailed
Speaker 4: spending bills that now have an overall spending limit. The
Speaker 4: cap for the twelve annual appropriations bills is one point
Speaker 4: five to nine trillion dollars. The country is facing two
Speaker 4: government shutdown deadlines. One is January nineteenth and the other
Speaker 4: February second. President Biden welcoming the news of a deal
Speaker 4: being agreed to, saying it provides a pathway to full
Speaker 4: year funding bills. Snowstorms hit the northeast portion of the country,
Speaker 4: leaving more than a foot of snow in New York'
Speaker 4: Hudson Valley, while Blank getting Boston and New England with
Speaker 4: heavy snow. Areas west of New York City in New
Speaker 4: Jersey got strong accumulation as well. City mostly just got
Speaker 4: hit by some rain. A second storm is now moving
Speaker 4: across the Western States, winter storm warnings and advisories being
Speaker 4: issued from Arizona all the way to Illinois their blizzard
Speaker 4: warnings in Colorado and New Mexico. That storm is expected
Speaker 4: to dump nine inches of snow west of Chicago starting
Speaker 4: Monday night, with parts of New York and New Jersey
Speaker 4: getting in an additional one to three inches on top
Speaker 4: of what came down today. The winter storms, also, by
Speaker 4: the way, have just retavock on the transportation industry, six
Speaker 4: hundred and ninety two flights being canceled across the country. Boston, Newark, Chicago,
Speaker 4: and Seattle were hit particularly hard. That was according to
Speaker 4: airline tracking company flight Aware. Amtrak also having to cancel
Speaker 4: some trains to Boston as well as across the Midwest.
Speaker 4: Secretary of State Anthony Blinken continuing his World Win tour
Speaker 4: of the Middle East with a stop off in Doha
Speaker 4: Cutter on Sunday, Blinken warning that the Israel Hamas conflict
Speaker 4: could easily spiral into a regional conflict.
Speaker 5: This is not just a regional issue, it's a matter
Speaker 5: of global concern, and that's certainly the case when it
Speaker 5: comes to the Hoofi attacks on freedom of navigation in
Speaker 5: one of the world's busiest trade corridors, the Red Sea.
Speaker 4: Blanken, speaking from Cutter, which maintains ties with Hamas and
Speaker 4: has been key and hostage negotiations which have freed more
Speaker 4: than one hundred Israeli so far. Blinken earlier in the
Speaker 4: day meeting with Jordan's King Abdullah the Second, as well
Speaker 4: as the Foreign Minister I'man Safadi. The Secretary of State
Speaker 4: has already made stopovers in Turkey and Greece, and he
Speaker 4: is planning to visit the UAE, Saudi Arabia, Israel, the
Speaker 4: West Bank and Egypt. Some good news in London, Mayor
Speaker 4: Sadik Khan announcing earlier this afternoon that a planned strike
Speaker 4: in the subway system had been called off. The London Tube,
Speaker 4: as it's known, has more than two hundred and seventy
Speaker 4: stations covering around two hundred and fifty miles and accommodates
Speaker 4: around four million rides per day. The National Union of Rail,
Speaker 4: Maritime and Transport Workers were planning to strike over dispute
Speaker 4: over working conditions and pay right was called off due
Speaker 4: to positive discussions on both sides. Global News twenty four
Speaker 4: hours a day and whenever you want it with Bloomberg News.
Speaker 1: Now.
Speaker 4: I'm Dan Schwartzman, and this is Bloomberg.
Speaker 3: Dan, Thanks very much. Five and a half minutes here
Speaker 3: past the hour. I'm Brian Curtis, along with Doug Krisner
Speaker 3: and Paul Allen will join us a little bit later.
Speaker 3: Let's take a look at some of the top business
Speaker 3: stories of the hour.
Speaker 1: Now.
Speaker 3: Airlines around the globe are pulling there Boeing seven thirty
Speaker 3: seven Max nines from service. It follows the Federal Aviation
Speaker 3: Administration's call to temporarily ground all one hundred and seventy
Speaker 3: one planes. The FAA order comes after a section of
Speaker 3: the main body on a brand new Alaska Airlines jet
Speaker 3: blew out mid flight. Bloomberg's Mary Schwangenstein says that Boeing
Speaker 3: is pushing to get these planes inspected and back in
Speaker 3: operations soon.
Speaker 6: They want the operators of certain of these Max nine
Speaker 6: to take them out of service. Do the inspections, which
Speaker 6: don't take all that long. They take a number of
Speaker 6: hours to do them, and to do those inspections before
Speaker 6: they fly them again if they fall within certain inspection timeframes,
Speaker 6: and so Alaska said they've already done quite a few
Speaker 6: of their aircraft. You know, it's not a good look
Speaker 6: for any aircraft operator or manufacturer. Rather, when you have
Speaker 6: to stop and take the planes out of service to
Speaker 6: look for some particular defect that could, you know, be
Speaker 6: a major problem of this aircraft had been higher.
Speaker 3: In the air Bloomberg's Mary Schwoangenstein. The grounding is a
Speaker 3: major setback for Boeing. The company has grappled with manufacturing
Speaker 3: defects and costly repairs in recent years. Most recently, the
Speaker 3: FAA said that it is monitoring some inspections of Boeing
Speaker 3: airplanes to look for a possible loose bolt in the
Speaker 3: rudder control system. And coming up in a few moments,
Speaker 3: we'll be chatting with Julie Johnson, who is Bloomberg Senior
Speaker 3: aerospace reporter on the latest from Boeing.
Speaker 2: Doug Elon Musk's drug use is reportedly causing worry among
Speaker 2: executives and board members at the company's led by Musk.
Speaker 2: The story from Bloomberg's Denise Pellegrini.
Speaker 7: Wall Street Journal reporting Musk has used LSD, cocaine, ecstasy,
Speaker 7: and psychedelic mushrooms, often at private parties, and people close
Speaker 7: to the Tesla and SpaceX ceo tell the journal his
Speaker 7: drug use is ongoing. In particular, he's consuming ketamine. Musk
Speaker 7: said in August he had a prescription to use a
Speaker 7: drug as an antidepressant, and after Musk puffed on a
Speaker 7: blunt containing marijuana on Joe Rogan's podcast in twenty eighteen,
Speaker 7: the Pentagon reviewed the federal security clearance tied to Musk's roll,
Speaker 7: a CEO of Space Exploration Technologies, which is certified to
Speaker 7: launch military spy satellites. Musk didn't respond to a request
Speaker 7: for comment from Bloomberg News to this story, but Alex Spiro,
Speaker 7: an attorney for the billionaire, told the journal his client
Speaker 7: is regularly and randomly drug tested at SpaceX. It has
Speaker 7: never failed a test. Denise Pellegrini Bloomberg Radio.
Speaker 3: In the latest US jobs report, we saw gains in
Speaker 3: jobs and wage increases, and both exceeded expectations, But as
Speaker 3: Doug pointed out early, a number of caveats. We'll get
Speaker 3: to that a bit later. US payrolls rose by two
Speaker 3: hundred and sixteen thousand. Randy Krasner is professor of economics
Speaker 3: at the University of Chicago Booth School of Business. He
Speaker 3: tells us what these numbers might mean to FED policymakers.
Speaker 8: I think the FED focuses a lot on wage growth,
Speaker 8: and we've seen wage growth above expectations. I think it's
Speaker 8: really clear that the FED is going to be waiting
Speaker 8: a while before it starts cutting rates because the labor
Speaker 8: market is still quite strong, the wage growth is still
Speaker 8: quite strong, and just the key thing that then feed
Speaker 8: into services as well as manufacturing inflation.
Speaker 1: Randy Krasner is there.
Speaker 3: In the coming week, the FED will have some key
Speaker 3: economic data to analyze, be getting a big report on
Speaker 3: consumer prices on Thursday and then producer prices on Friday.
Speaker 2: China has sanctioned five US defense firms in response to
Speaker 2: deals for arm sales to Taiwan. We have more from
Speaker 2: Bloomberg sivon Men in Hong Kong.
Speaker 9: Orn Ministries says the sanctions are a result of what
Speaker 9: it calls gravely wrong actions taken by the US. The
Speaker 9: companies affected include BAE Systems, Land and Armament Alliance Tech Systems,
Speaker 9: Operation Aero Vironment via SAT and data link solutions. The
Speaker 9: decision is seen as the latest retaliation to US military
Speaker 9: sales to Taiwan. The latest arms deal amounted to about
Speaker 9: three hundred million dollars. China responded immediately by intensifying military
Speaker 9: training around the Taiwan Strait. These new sanctions freeze the
Speaker 9: five companies. Properties in China and entities there are banned
Speaker 9: from any transactions with those firms. In Hong Kong, I'm
Speaker 9: von Mann Bloomberg Radio.
Speaker 3: Saudi Arabia will cut crude prices in all regions, including
Speaker 3: its main Asia market. Bloomberg's Juan Wong has more on that.
Speaker 10: The cuts will begin next ones amit persistent weakness in
Speaker 10: the market cuts and supply by Opec Plus are another
Speaker 10: part of the story. The cuts were aimed at prevent
Speaker 10: hending a build up of oil and storage. Saudi Arabia
Speaker 10: is taking on the bulk of the burden. It has
Speaker 10: set voluntary cuts of two million barrels a day through
Speaker 10: the first quarters, hoped that that will offset otherwise strong
Speaker 10: global supply that is hurting prices that may push the
Speaker 10: OPEC Plus group to extend output cuts into this year
Speaker 10: in Hong Kong. Joined Wong Bloomberg Radio.
Speaker 3: This is Bloomberg Daybreak Asia. I'm Brian Curtis along with
Speaker 3: Paul Allen in Sydney. Well.
Speaker 1: Our top story.
Speaker 3: Boeing this morning, the FAA ordering the grounding of some
Speaker 3: one hundred and seventy one planes in the States, and
Speaker 3: global airlines have taken many of the seven thirty seven
Speaker 3: Max nine.
Speaker 1: Jets out of service as well.
Speaker 3: Joining us now is Julie Johnson, Bloomberg Senior Aerospace reporter
Speaker 3: with more on this. So I guess the basic question is, Julie,
Speaker 3: what does this say about Boeing's manufacturing standards and controls?
Speaker 11: Well, you know, this just has to be very dismaying
Speaker 11: for people at Boeing. The company. You know, the company
Speaker 11: once again is under immense scrutiny and and you know,
Speaker 11: just just a blizzard of really bad headlines and just
Speaker 11: a you know a lot of reputational damage to them
Speaker 11: from this incident. In fact, that's probably going to be
Speaker 11: what lingers more so than the grounding, But we'll see
Speaker 11: on that. But anyway, Boeing's put it just put a
Speaker 11: huge effort into improving quality and safety. They they had
Speaker 11: definitely seemed to be making progress, and that was one
Speaker 11: reason why you know, their shares shot up more than
Speaker 11: forty percent through Friday from the end of October. You know,
Speaker 11: Wall Street was starting to buy the story. And then
Speaker 11: and then you have another very scary incident involving a
Speaker 11: Max that points to a manufacturing flaw most likely, and
Speaker 11: it's it's just deja vu all over again.
Speaker 12: Yeah, you say most likely a manufacturing floor. I mean,
Speaker 12: the investigation is still under way, but why is it
Speaker 12: that we seem to be leaning that way at the moment.
Speaker 11: Well, this design has been used by Boeing across the
Speaker 11: previous generation or I guess more selectively, but it was
Speaker 11: in a previous generation of Max. The design's been in
Speaker 11: place since around two thousand and six without any incident,
Speaker 11: and it was so so this you know, analysts are
Speaker 11: thinking this is probably a one off incident, and it's interesting.
Speaker 11: I don't know if we want to get into an
Speaker 11: explanation of the door plug feature on the Max nine,
Speaker 11: which is now being scrutinized by the FAA, and you know,
Speaker 11: it's at the brunt of these inspections but the Alaska
Speaker 11: Airline jet had two of these. They're cutouts for emergency
Speaker 11: exits if airlines want to put them in there. Alaska
Speaker 11: used what's called a plug in the fuselage to cover
Speaker 11: the exits that didn't need them for the configuration that
Speaker 11: it flies. So anyway, there are two of these behind
Speaker 11: the wing. One blew out, the other was fine and
Speaker 11: Friday night, and so it's more than likely you know,
Speaker 11: a bolt failure or or you know, who knows, but
Speaker 11: it's looking like a manufacturing issue.
Speaker 3: Only two US airlines operate this seven thirty seven model.
Speaker 3: I mean, it's still said to be a popular plane,
Speaker 3: and we mentioned that other global airlines are affected. You
Speaker 3: wonder if it's only two US airlines, and since it
Speaker 3: was only this one incident, whether there is the strong
Speaker 3: possibility that this passes quickly, that they.
Speaker 1: Get a handle on this. Are you are you seeing
Speaker 1: and hearing much about that?
Speaker 11: Well, you know, again it's early days and and so
Speaker 11: you know, we'll see what the NTSB and the FAA
Speaker 11: find and Boeing's part of this as well as they
Speaker 11: do as they do their inspection.
Speaker 3: I mean, it's probably not a fair comparison, but we
Speaker 3: see we see car recalls all the time, Yet the
Speaker 3: standards for air flight and for driving need to be
Speaker 3: very different.
Speaker 1: Maybe you can just flesh that out a little bit.
Speaker 11: Well, yeah, I mean, if you're at altitude, you know,
Speaker 11: if you're climbing in an airplane, it's just a very
Speaker 11: unforgiving environment if something fails. And so I think the
Speaker 11: standards for safety are just so much higher for you know,
Speaker 11: for aircraft than automobiles for example, just for that very reason. Well,
Speaker 11: just back to your earlier you know, this is the
Speaker 11: Max nine is the lowest selling of the family, so
Speaker 11: from that perspective, and it's January when US airlines have
Speaker 11: generally fairly light flying schedules, So this is I think
Speaker 11: those are the two reasons why people are thinking this
Speaker 11: probably is going to be relatively minor in terms of
Speaker 11: impact to the industry and financial impact, but the reputational
Speaker 11: hit for Boeing just really is bad.
Speaker 12: Yeah, And there have been a number of other smaller
Speaker 12: manufacturing issues as well that we've heard about. Nothing as
Speaker 12: dramatic as a door plug blowing out in mid air,
Speaker 12: but misaligned hals, a loose rud a bolt. What is
Speaker 12: going on at Boeing? Is there an underlying calls to
Speaker 12: what's to the sorts of manufacturing defics.
Speaker 11: Oh yeah, absolutely, you know, and we could I could
Speaker 11: spend the next hour talking about this because it's fascinating
Speaker 11: and it's really complicated, and both Boeing and Airbus have
Speaker 11: really struggled to recover from from COVID and when they
Speaker 11: had Boeing stopped work on it seven thirty seven for
Speaker 11: a few months, and while Airbus slowed its rate down,
Speaker 11: Boeing was also dealing with the max grounding at the
Speaker 11: same time. But I'm recovering has just been incredibly difficult,
Speaker 11: and a lot of it has to do with for Boeing,
Speaker 11: especially really skilled people who just you know, when the
Speaker 11: buyouts came in twenty twenty, they just said I've had enough,
Speaker 11: no more, no no more, you know, turbulence and job
Speaker 11: and security. I'm I'm going to retire, and I'm so
Speaker 11: Replacing that generation of workers, especially in aerospace, has been
Speaker 11: a problem.
Speaker 1: Julie, thanks so much for joining us.
Speaker 3: We know that Chinese regulators are taking a close look
Speaker 3: at this too. We had an emergency meeting that was
Speaker 3: called that sources are telling us about no direct action yet,
Speaker 3: but we'll be watching that Julie Johnson has been with us.
Speaker 3: Bloomberg Senior Aerospace Report. This is Bloomberg Deabreak Gasia, your
Speaker 3: morning brief on the stories making news from Hong Kong
Speaker 3: to Singapore and Wall Street.
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Speaker 1: I'm Brian Curtis.
Speaker 2: And I'm Doug Chrisner. Join us again tomorrow for all
Speaker 2: the news you need to start your day right here
Speaker 2: on Bloomberg day Break Asia