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Speaker 1: Good morning. I'm Brian Curtiz and I'm Doug Krisner. Here

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Speaker 1: are the stories we're following today. On Friday, we had

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Speaker 1: the S and P five hundred up nearly one point

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Speaker 1: six percent. It broke above the one hundred day moving

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Speaker 1: average and closed at a seven week high. This advance,

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Speaker 1: by the way, was led by pretty powerful rally in

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Speaker 1: information tech. The S and P Information Tech Index was

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Speaker 1: up nearly two point six percent. And it's kind of

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Speaker 1: interesting too, because we had yields jumping at the shorter

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Speaker 1: end of the treasury curve that's typically a negative for stocks.

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Speaker 1: We heard from the head of the San Francisco Fed,

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Speaker 1: Mary Daily. She seemed to echo some colleagues in saying

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Speaker 1: the Fed might have to hike again. And at the

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Speaker 1: same time, we had some troubling signs where consumer angst

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Speaker 1: is concerned as it relates to inflation. The University of

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Speaker 1: Michigan reported a year ahead inflation expectation reading of four

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Speaker 1: point four percent. That's up from four point two percent.

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Speaker 1: Despite lower gasoline prices, we had the two year yield

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Speaker 1: jumping roughly six basis points. We closed New York trading

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Speaker 1: at five point zero six percent. Very little movement at

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Speaker 1: the longer end of the curve, and late last Friday,

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Speaker 1: the US was threatened with a loss of its top

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Speaker 1: credit rating. Will take a closer look at that. Momentarily,

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Speaker 1: we had some dollar weakness with a Bloomberg Dollar Spot

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Speaker 1: index down around two tents at one percent. Also a

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Speaker 1: little bit of weakness in the Japanese n viz VI,

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Speaker 1: the greenback down about a tenth of one percent, and

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Speaker 1: we've got the n right now one fifty one forty five.

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Speaker 1: We'll take another look at markets for you in about

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Speaker 1: fifteen minutes. Brian Doug thanks very much.

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Speaker 2: World News is next talks between the leaders of the

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Speaker 2: US and Cotter regarding trying to get the release of

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Speaker 2: hostages from Gaza, and Baxter has that story and more

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Speaker 2: from the nine to sixty News from in San Francisco. Ed.

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Speaker 3: Yeah, that's right, Brian. President Biden first wanted to express

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Speaker 3: his thanks to Shake coming or cooperation and already getting

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Speaker 3: some hostages released and working toward the future. The President

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Speaker 3: the White House has also affirm of this for Palestine

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Speaker 3: as one where Israelis and Palestinians can live side by side. Meanwhile,

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Speaker 3: US National Security Advisor Jake Sullivan says there are active

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Speaker 3: negotiations regarding hostages and those missing. On ABC Has Heard On,

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Speaker 3: Bloomberg says they involved the Israelis and the Kataris.

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Speaker 4: We do not know the precise number of hostages. We

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Speaker 4: know the number of missing, and that's the number the

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Speaker 4: Israelis have given, but we don't know how many of

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Speaker 4: those are still alive.

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Speaker 5: As far as the.

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Speaker 4: Americans are concerned, there are nine missing American citizens as

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Speaker 4: well as a missing legal permanent representative, a green card holder.

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Speaker 3: I mean, while reports at HAMASA suspended prisoner exchange negotiations

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Speaker 3: today citing the bombing at Alshifa Hospital and as really,

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Speaker 3: Prime Minister Benjamin Netanyahu says regarding the hospital, it is

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Speaker 3: achieving victory his campaign and is trying to save and

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Speaker 3: protect civilians.

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Speaker 6: I would say the ground offensive that we began is

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Speaker 6: actually reducing the amount of civilian casualties because the popular,

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Speaker 6: the civilian population in Gaza is heeding our call and vacate.

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Speaker 3: And on NBC has Heard On, Bloomberg says they are

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Speaker 3: trying to avoid civilian deaths.

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Speaker 6: And I think every civilian death that baby is a tragedy,

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Speaker 6: but that tragedy should be placed squarely at the responsibility

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Speaker 6: of Hamas that is, keeping its military installations inside hospitals,

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Speaker 6: its command posts inside hospitals, inside schools, inside unre n facilities,

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Speaker 6: and so on.

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Speaker 3: But Francis Imanuel Maccran, the President on BBC calling for

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Speaker 3: an immediate ceasefire.

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Speaker 7: We know what there is.

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Speaker 1: A means in France, but I think there is no

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Speaker 1: justification precisely to attack civilians.

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Speaker 3: And Australia's Foreign Minister Penny Wong is speaking out asking

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Speaker 3: for a tempering of the Israeli attacks in Gaja.

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Speaker 8: How Israel defends itself matters, and when we affirm Israel's

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Speaker 8: right to defend itself, what we have also saying is

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Speaker 8: Israel must comply and observe with international humanitarian law.

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Speaker 3: But Congressman Mike Lawler, who's in Tel Aviv on ABC,

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Speaker 3: says a ceasefire will not work.

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Speaker 9: AMAS is not someone some organization that is going to

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Speaker 9: abide by a ceasefire. They are hell bent on eradicating

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Speaker 9: the state of Israel and eliminating the Jewish people. You're

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Speaker 9: not dealing with rational, reasonable people here.

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Speaker 3: And also this afternoon, the Pentagon says it's conducted air

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Speaker 3: strikes against Iran link targets in Syria, it says, against

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Speaker 3: a training facility and a safe house. US Speaker Mike

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Speaker 3: Johnson is refusing to impose a thirty percent immediate cut

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Speaker 3: to spending and US asylum laws, as well, pushing back

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Speaker 3: on the right wing conservatives of his party that have

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Speaker 3: held up progress to funding. This is a temporary pause

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Speaker 3: on cuts in hopes of getting Democrats on board so

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Speaker 3: that the government can remain open into next weekend. Global

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Speaker 3: News twenty four hours a day and whenever you want

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Speaker 3: it with Bloomberg News Now in San Francisco. I'm Ed Baxter,

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Speaker 3: and this is Bloomberg Brian.

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Speaker 2: All right, Ed, thanks very much.

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Speaker 6: More.

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Speaker 2: Now on US China this week, the White House says

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Speaker 2: that restoring military communications with China is a priority, and

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Speaker 2: it comes ahead of the meetings between President Joe Biden

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Speaker 2: and Shi Jen Ping at the APEX summit in San Francisco.

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Speaker 2: US National Security Advisor Jake Sullivan makes the point here

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Speaker 2: on CNN's State of the Union.

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Speaker 4: When it comes to managing the relationship, ties and communications

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Speaker 4: between our two militaries are critical. The Chinese have basically

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Speaker 4: severed those communication links. President Biden would like to re

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Speaker 4: establish them. And he will look to this summit as

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Speaker 4: an opportunity to try to advance the ball on that.

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Speaker 4: And he's also looking for other practical ways to show

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Speaker 4: the American people that sitting down with Shijimping can defend

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Speaker 4: American interests and also deliver progress on the priorities of

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Speaker 4: the American people.

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Speaker 2: Jake Sullivan heard here on Bloomberg Radio. Kin suspended military

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Speaker 2: communications last year to protest then House Speaker Nancy Pelosi's

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Speaker 2: visit to Taiwan. The military ties were further complicated when

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Speaker 2: Chinese Defense Minister Lee shong Fu was ousted last month,

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Speaker 2: and that left US Defense Secretary Lloyd Austin with no

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Speaker 2: direct counterpart. And also coming up in a few moments,

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Speaker 2: we'll get the expertise of Gregory Corte, Bloomberg White House

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Speaker 2: and Politics correspondent for more on what to expect this week.

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Speaker 1: Meantime, US Treasury Secretary Janet Yellen is planning to visit

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Speaker 1: China again next year. This comes at the invitation of

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Speaker 1: Chinese Vice Premiere Holy fun. Both officials met for two

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Speaker 1: days last week, and they agreed to intensify communication to

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Speaker 1: improve US China relations. On Friday, both sides said communications

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Speaker 1: will help the two countries avoid misunderstandings and unintended escalation.

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Speaker 1: Here is Janet Yellen.

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Speaker 10: I spoke to Vice Premier her about our goal of

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Speaker 10: achieving a healthy economic relationship that benefits both our countries

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Speaker 10: over time. We do not seek to decouple our economy

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Speaker 10: from China's. This would be damaging to both the US

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Speaker 10: and China and destabilizing to the world.

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Speaker 1: That is Treasury Secretary Janet Yellen. Now, this trip to

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Speaker 1: China by Yellen will be the second trip there by

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Speaker 1: a Biden administration Cabinet member Brian Well.

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Speaker 2: China's Ali Baba and JD dot Com reported sales increases

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Speaker 2: for Singles Day, So that's November eleventh. Blomberks David and

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Speaker 2: Glay says more from Hong.

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Speaker 11: Kong, Ali Baba said more than four hundred brands exceeded

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Speaker 11: one hundred million in earnings, but that was after sizeable discounts,

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Speaker 11: and JD dot Com reported its orders hit new records,

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Speaker 11: but neither company provided overall revenue figures for the events

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Speaker 11: for a second year in a row. Meanwhile, the State

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Speaker 11: Post Bureau said Chinese companies handled six hundred and thirty

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Speaker 11: nine million packages nationwide. On No.

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Speaker 6: Eleven.

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Speaker 11: That's an increase of sixteen percent from last year. Both

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Speaker 11: Ali Baba and JD dot Com will report earnings next week,

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Speaker 11: offering further clues on consumption in Hong Kong. I'm David

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Speaker 11: Ingless Bloomberg Radio.

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Speaker 1: Late on Friday, the US credit rating outlook was cut

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Speaker 1: to negative from stable by Moody's Investors' Service. The firm

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Speaker 1: said the downgrade risk essentially are the result of a

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Speaker 1: problem with US physical strength. Here is Bloomberg's Michael McKee.

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Speaker 5: Moody certainly with a negative outlook could take additional action

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Speaker 5: if the US were to have a government shutdown. Maybe

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Speaker 5: this could be Moody's is looking at as a sort

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Speaker 5: of a warning shot over the bow of the USS

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Speaker 5: Congress or something like that.

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Speaker 1: That is Bloomberg's Michael McKee. Now Moody's is expecting US

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Speaker 1: fiscal deficits to remain very large, that without effective fiscal

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Speaker 1: policy measures to reduce government spending or increase revenues. Moody

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Speaker 1: cited polarization within the US Congress as a major risk

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Speaker 1: to paying debt.

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Speaker 2: Brian Well, on the economic front, investors will be looking

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Speaker 2: very closely this week at a report on consumer prices.

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Speaker 2: Bloombridge Denise Pellegreene has the.

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Speaker 12: Story economists are expecting the consumer price index to signal

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Speaker 12: we are stuck with inflation for now because the so

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Speaker 12: called core CPI excluding food and fuel, well, it's expected

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Speaker 12: to increase a third of a percent for a third

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Speaker 12: straight month, and compared with October of last year, the

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Speaker 12: core CPI is projected to rise four point one percent.

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Speaker 12: That would match the annual advance in September and snap

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Speaker 12: a six month stretch of slowing price growth. All this

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Speaker 12: could help explain why the Fed isn't ruling out further

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Speaker 12: rate hikes in the current cycle. Central bankers slated to

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Speaker 12: speak in the coming week include Chicago Fed President Austin

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Speaker 12: Gilsby and FED Governor Philip Jefferson. Denise Pellegrine, Bloomberg Radio.

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Speaker 2: This is Bloomberg Daybreak Asia. I'm Brian Curtis along with

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Speaker 2: Doug Prisner and Paul Allen. Joined now and our guest.

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Speaker 2: We're taking a closer look here at the US China

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Speaker 2: meetings this week and the APAX generally with Greg grey Corti,

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Speaker 2: who is Bloomberg White House and Politics correspondent. So the

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Speaker 2: US as the focus will be on military communications, and

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Speaker 2: we haven't heard exactly from China what they think the

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Speaker 2: focus will be. But I think for US, broadly speaking,

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Speaker 2: even more broadly than that, is this intersection between national

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Speaker 2: secuity or security issues and commercial interests. This is what

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Speaker 2: really drives US China relations more so than fearing either

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Speaker 2: side would go to war with each other.

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Speaker 7: Greg Yeah, that's absolutely it. And this is but this

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Speaker 7: military to military communication issue, which US National Security ad

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Speaker 7: by the Jake Sullivan Tees would be possibly one of

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Speaker 7: the deliverables from the sidelines of this summit in San

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Speaker 7: Francisco this week. It definitely has some commercial implications given that,

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Speaker 7: you know, one of the major friction points is freedom

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Speaker 7: of navigation in the South China Sea, which the United

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Speaker 7: States is continuing to try to protect with exercises there,

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Speaker 7: and of course you have the Chinese trying to assert

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Speaker 7: their territorial dominance in that sphere, and the worry is

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Speaker 7: certainly on both sides, but it's articulated from the United

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Speaker 7: States is that, you know, those kinds of things can

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Speaker 7: go wrong if there's not a hotline that each side

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Speaker 7: can take up to deconflict, to explain themselves and to

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Speaker 7: make sure that any there aren't any mistakes or misunderstandings

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Speaker 7: between the two. That's been on hold for a while.

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Speaker 7: The Chinese pulled out of that arrangement last year after

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Speaker 7: Ben House Speaker Nancy Pelosi visited Taiwan so in protest.

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Speaker 7: China bugged out, And so now the question is whether

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Speaker 7: they can come to some kind of an agreement to

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Speaker 7: restore that hotline.

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Speaker 13: Yeah, and give us a sense of how necessary that is,

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Speaker 13: because it was just a couple of weeks ago that

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Speaker 13: you know, we had a report of a Chinese fighter

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Speaker 13: jet coming to within three meters of an Air Force

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Speaker 13: B fifty two bomba flying over the South China Sea.

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Speaker 13: And that's just one of a number of similar sorts

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Speaker 13: of incidents. What's the what are the sorts of risks here?

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Speaker 13: Because there's one thing to have leadership contact, But these

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Speaker 13: mistakes happened at a far lower down the chain, don't

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Speaker 13: they Absolutely.

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Speaker 7: That's why it's important for that communication channel to be

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Speaker 7: open all the way up to the highest levels, but

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Speaker 7: also down to Jake Sullvin said today the tactical operational level,

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Speaker 7: so that yes, people in the theater are talking to

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Speaker 7: each other and deconflicting because, yeah, these these somewhat aggressive

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Speaker 7: maneuvers by China to the buzz Us ships in the

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Speaker 7: South China Sea can look there. As you point out,

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Speaker 7: there's if there's only three meters of worth of slack there,

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Speaker 7: things can go very very quickly. Obviously we're dealing with

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Speaker 7: well trained pilots on both sides, but there's not a

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Speaker 7: lot of margin of error.

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Speaker 2: Yeah, and as you say, it's a possible deliverable, which

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Speaker 2: would be good. It's always good to get some tangible

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Speaker 2: outcomes from these meetings. So what about Iran? Is Iran

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Speaker 2: likely to be on the agenda.

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Speaker 7: Yeah, that's another thing that Jake Sullivan identified as an issue.

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Speaker 7: Of course, you know, anytime you're talking about really any

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Speaker 7: part in the world that China's influence is working in

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Speaker 7: the background is an issue for the US, but especially

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Speaker 7: right now with the Middle East and the Israel Hamas

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Speaker 7: war being the hotspot. Obviously, the US is trying to

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Speaker 7: curtail Iran's influence in the region and its ability to

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Speaker 7: finance Hamas and other terrorist groups in the Middle East,

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Speaker 7: and one of the ways it's able to do that

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Speaker 7: is to sell cheap, high quality oil to the Chinese

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Speaker 7: who have found themselves willing buyers. The US is going

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Speaker 7: to try to find some way to curtail that demand,

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Speaker 7: but it's kind of hard to see how China can

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Speaker 7: resist the cheap oil that they can get from her

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Speaker 7: in because there aren't many other buyers, and so the

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Speaker 7: issue becomes sort of a cat and mouse game of

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Speaker 7: sanctions as the US tries to identify the ships that

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Speaker 7: are transporting this and the port and the companies, but

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Speaker 7: they would rather see if there's a deal that they

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Speaker 7: can be made to cut it off from the source.

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Speaker 13: We've also heard from Treasury Secretary Janet Yellen, who has

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Speaker 13: been saying that the US doesn't seek the coupling from

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Speaker 13: China in terms of getting the economic relationship a little closer.

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Speaker 13: What's a good starting point, what does a win look

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Speaker 13: like at the end of this.

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Speaker 7: Yeah, and she also said that she's planning to visit

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Speaker 7: China next year. And so you kind of have to

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Speaker 7: feel that in this freeze faw cycle of US China relationships,

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Speaker 7: maybe we're getting just a little bit of a thaw.

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Speaker 7: Of course, as you pointed out earlier, the military and

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Speaker 7: the geopolitical and the commercial interests are all intertwined here,

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Speaker 7: and certainly the geopolitical issues sometimes are a prerequisite to

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Speaker 7: making progress on the commercial side. But certainly, yeah, that's

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Speaker 7: one of the issues that Janet Yellen has been working on.

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Speaker 7: And we'll see how much time Joe Biden has to

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Speaker 7: devote those issues when he meets with President g Of course,

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Speaker 7: anytime the US and China meets, there's a whole hour.

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Speaker 7: The first hour is to vote to just sort of

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Speaker 7: reiterating the policy towards Taiwan and the China policy, so

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Speaker 7: there's often not a whole lot of time to get

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Speaker 7: done into liberty details.

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Speaker 2: But The People's Daily summed it up pretty well in

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Speaker 2: their editorial, basically of China's use saying that China won't

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Speaker 2: become another US, and by that I mean a hedgehm

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Speaker 2: on the paper says the US should give up its

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Speaker 2: aggressive mindset and increased strategic mutual trust, knowing that two

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Speaker 2: it doesn't seem like under this president and that General

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Speaker 2: Secretary that it's likely to get too much better anytime soon.

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Speaker 7: Well, and of course President Biden has some domestic political

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Speaker 7: constraints here. The US train of relationship is one of

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Speaker 7: the top issues in the Republican presidential primary, with each

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Speaker 7: Republican candidate seemly trying to out hawk the next in

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Speaker 7: terms of their position on China.

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