Speaker 1: Good morning. I'm Brian Curtiz and I'm Doug Krisner. Here
Speaker 1: are the stories we're following today.
Speaker 2: The White House meeting between the President and congressional leaders
Speaker 2: has ended without a major agreement on funding Ukraine. Let's
Speaker 2: get Ed Baxter in San Francisco, who has the story.
Speaker 3: Ed, Yeah, probably no surprise, how Brian. The issue going
Speaker 3: in was a US southern border, and obviously for House
Speaker 3: Majority Leader Mike Johnson, it was a chance to well
Speaker 3: explain GOP grievances.
Speaker 4: We documented sixty four instances where the President took executive
Speaker 4: action or his agencies took action to create the current
Speaker 4: catastrophe that we have at the border. It is a
Speaker 4: national security and a humanitarian catastrophe, and I articulated that
Speaker 4: to the President in the meeting. Now, we understand that
Speaker 4: there's concern about the safety, security, sovereignty of Ukraine, but
Speaker 4: the American people have those same concerns about our own
Speaker 4: domestic sovereignty.
Speaker 3: Now Johnson does say slight progress, but Senate Majority Leader
Speaker 3: Chuck Schumer, well a difference. Ben.
Speaker 5: These attacks are a clear example of terrorism violation of
Speaker 5: international law.
Speaker 3: Excuse me, that is not mister Schumer. He says. He says, basically,
Speaker 3: there was just very little progress.
Speaker 6: There was democratic and Republican agreement that was essential we
Speaker 6: help Ukraine.
Speaker 3: Yeah, so a little bit different there. And a meeting
Speaker 3: at the White House Friday has been scheduled with Biden
Speaker 3: administration cabinet officials and counterparts from Mexico focus on reducing
Speaker 3: in migration. Meanwhile, the other congressional issue was funding for
Speaker 3: the government, with another deadline this weekend. Schumer says, yeah,
Speaker 3: some progress there.
Speaker 7: If both sides continue to work in good faith, I'm
Speaker 7: hopeful we can pass the seer by tomorrow and avoid
Speaker 7: an unnecessary and costly shut down.
Speaker 3: And that, of course, it needs the House and the President.
Speaker 3: The Biden administration has put the Huthi militant group back
Speaker 3: on Global Terrorism List. It's a turnaround for the administration
Speaker 3: to remove the Houthis as a US ought to East
Speaker 3: tensions during the Umanity Civil War, and the NSC official
Speaker 3: John Kirby underscores the intent here.
Speaker 5: Today's designation targets the Houthis, not the many people. The
Speaker 5: United States remains the world's leading donor of humanitarian assistance
Speaker 5: for Yemen. We recognize that more than fifteen million people
Speaker 5: in Yemen are still in desperate need of food.
Speaker 3: So what does it do well, State Department spokes to
Speaker 3: Matthew Miller.
Speaker 2: The effect that we think it will have will be
Speaker 2: to allow us to deny the Houthi's access to the
Speaker 2: US financial system.
Speaker 3: Yeah, and Miller emphasizes the US could rescind to the
Speaker 3: destination if the Houthi stopped their red Sea attacks. Meanwhile,
Speaker 3: Secretary of State Anthony Blincoln is making his way back
Speaker 3: to the US from Davos, where he says there's a
Speaker 3: definite vision for the future.
Speaker 4: Much of what we're trying to do we can't effectively
Speaker 4: get done alone.
Speaker 6: We have to have partners.
Speaker 3: We have to reimagine it as we've been doing our partnerships. Yes,
Speaker 3: plane had some mechanical issues, but another will ferry him home.
Speaker 3: Philippines says it is planning a more robust, in its words,
Speaker 3: military activity with the US and its allies. Says it
Speaker 3: is facing more and more aggressive activity from China. Says
Speaker 3: it wants to build up capabilities to be more effective
Speaker 3: contributor to regional stability. Global News twenty four hours a
Speaker 3: day and whatever you want it with Bloomberg News Now
Speaker 3: in San Francisco. I'm Had Baxter and this is Bloomberg
Speaker 3: GARB Bliant.
Speaker 2: All right, thanks very much, said well. The FED says
Speaker 2: strong consumer spending has helped lift the US economy in
Speaker 2: recent weeks. That's according to the Beige Book survey. The
Speaker 2: report said that consumer has delivered some seasonal relief over
Speaker 2: the holidays and that generally helped meet spending expectations. Nearly
Speaker 2: all the FED districts reported one or more signs of
Speaker 2: a cooling labor market. And today we also got US
Speaker 2: retail data that showed sales rising by the most in
Speaker 2: three months.
Speaker 1: Well, JP Moore, Caan Chase CEO Jamie diamond was saying
Speaker 1: today it's a fine line to walk for investors, but
Speaker 1: China is open for American business. Diamonds sat down with
Speaker 1: CNBC on the sidelines of the World Economic Forum in Davos.
Speaker 8: They've been very consistent in opening up. Took a long time,
Speaker 8: so we have full license there now. But I think,
Speaker 8: you know, anyone who is looking to invest in there
Speaker 8: has to be a little worried. So and you know,
Speaker 8: the riginal ward has changed dramatically, you know, and of
Speaker 8: course you know it's coming. Like JP Morgan I always
Speaker 8: so when it comes to foreign policy, Blincoln decides and
Speaker 8: the president. You know, I salute. I'm an American patriot,
Speaker 8: but they want us there. They're not asking America companies
Speaker 8: to leave.
Speaker 1: Jamie Diamond there, the CEO of JP Morgan Chase. You know,
Speaker 1: he is the longest serving CEO of a major US bank,
Speaker 1: and he has long pointed to geopolitical tensions as a
Speaker 1: major challenge for the global economy.
Speaker 2: Ryan and the Treasury Secretary Janet Yellen is calling on
Speaker 2: the US Congress to pass a temporary spending bill this
Speaker 2: week and avert a partial US government shutdown. He's Yellen
Speaker 2: speaking before Washington lawmakers.
Speaker 7: Failing to fund the government by this Friday's deadline with
Speaker 7: harm American families and small businesses across the country. I'm
Speaker 7: heartened there's bipartisan agreement and urge members of Congress to
Speaker 7: meet the deadline to prevent an unnecessary shutdown and protect
Speaker 7: the critical domestic and national priorities we've advanced over the
Speaker 7: past three years.
Speaker 2: Jennie Yellen, A short term spending measure would fund some
Speaker 2: US agencies that were set to run out of money
Speaker 2: at the end of the week. Well, it would fund
Speaker 2: them through March first.
Speaker 1: Shares and Charles Schwab were down about one point three
Speaker 1: percent in the regular session. This is after the company
Speaker 1: reported a drop in profit for the fourth quarter. Here's
Speaker 1: Bloomberg's and Kate's new.
Speaker 9: Assets, said Charles schwabbalt forty eight percent in the fourth quarter,
Speaker 9: Bank deposits declined twenty one percent, and Schwab's total retail
Speaker 9: brokerage accounts missed analyst expectations. Schwab had navigated tumultuous year
Speaker 9: of interest rate hikes that doned its balance sheet and
Speaker 9: eroded the value of its investments. Consumers also pulled their
Speaker 9: deposits in search of higher yielding alternatives. Schwab calls it
Speaker 9: the most challenging time since the bursting of the Internet
Speaker 9: bubble in two thousand. Washer and Kate's Bloomberg Radio.
Speaker 2: Meantime, Apple has to stop selling its Series nine and
Speaker 2: Ultra two smart watches with a blood oxygen feature in
Speaker 2: the United States. It's another legal setback in a patent
Speaker 2: dispute with Massimo. Bloomberg's Ed Ludlow says this is far
Speaker 2: from the end of the story.
Speaker 10: What the US Court of Appeals for the Federal Circus
Speaker 10: is saying is they are rejecting Apple's requests for a
Speaker 10: longer pause on what was the intentional Trade Commission ban
Speaker 10: that was put in place. The mechanics of that are
Speaker 10: that they will have to stop selling the Series nine
Speaker 10: in Ultra two, but a much longer appeals process will
Speaker 10: play out, and Apple has said that that appeals process
Speaker 10: can last for about a year.
Speaker 2: That's Bloomberg's Ed Ludlow. Apple says the appeals process could
Speaker 2: last a year or more. And we did see Apple
Speaker 2: trade lower today, down about a half a percent. That
Speaker 2: was more or less in line with the market.
Speaker 1: From Apple, We go to its South Korean rivals. Samsung
Speaker 1: is turning to artificial intelligence to revamp its flagship Galaxy smartphones.
Speaker 1: We have more from Bloomberg Yvon Man.
Speaker 11: In Hong Kong, Samsung unveiled it's Galaxy S twenty four
Speaker 11: phones that it's unpacked conference. All the phones have AI
Speaker 11: tools based on Gemini technology from Google. The devices can
Speaker 11: translate phone calls live and transcribe voice recordings. They can
Speaker 11: also summarize web articles, fixed handwriting, and fill in parts
Speaker 11: of photos. The launch is one of the most ambitious
Speaker 11: attempts to weave AI into smartphones interface and features. Previously
Speaker 11: AI software will be mostly in the cloud. Now it's
Speaker 11: on the phones. Samsung is targeting double digit growth for
Speaker 11: its latest smartphone series.
Speaker 9: In Hong Kong. I'm von Mann Bloomberg Radio.
Speaker 2: I'm Brian Curtis, along with Vonnie Quinn, and our guest
Speaker 2: is Michael McKee, Bloomberg International Economics and Policy Correspondent, to
Speaker 2: take a closer look here at the base book and
Speaker 2: the US economy. Mike, thanks very much for joining us
Speaker 2: on balance, because there's always conflicting signals, but on balance
Speaker 2: from all these districts, is the US economy tilting a
Speaker 2: little hot, or tilting a little cool, or somewhere more neutral.
Speaker 6: It's I guess you'd call it somewhat neutral compared to
Speaker 6: where we've been in the sense that the economy has
Speaker 6: been very strong. People were expecting it to slow down
Speaker 6: and cool off quite a bit, But the latest data
Speaker 6: show the slow down is happening, but not as much
Speaker 6: as people thought might. The retail sales numbers today very strong,
Speaker 6: and in general the economy is continuing to perform at
Speaker 6: a very good level. There is no sign of recession there,
Speaker 6: so overall kind of status quo to where we have been.
Speaker 12: Michael, How on earth is the consumer this resilient? Are
Speaker 12: these all the stock market gains from last year?
Speaker 6: Well, really, it's funny because you've been out shopping a
Speaker 6: lot that's on. We don't really know. The stock market
Speaker 6: gains may fuel a little bit of it, but it's
Speaker 6: not keeping people. It's not keeping the numbers all the
Speaker 6: way up because the people who are making big gains
Speaker 6: in the stock market, they've already been spending and it's
Speaker 6: not really going to make a change in their day
Speaker 6: to day lifestyle. It just seems that people have I
Speaker 6: would say it seems that people have jobs now, more
Speaker 6: people are working than ever, and each month we get
Speaker 6: another two hundred thousand or so on pay rolls, and
Speaker 6: that money is going into their pockets and then going
Speaker 6: back out again. Is less being spent on gasoline, so
Speaker 6: there can be more spent on other things. And overall
Speaker 6: it's just a sign of a reasonably healthy economy that
Speaker 6: unemployment's low and people are able to keep spending.
Speaker 2: Yeah, you would think that from the FED standpoint, The
Speaker 2: fact that firms noted some easing and inflationary pressures that
Speaker 2: that coupled with pretty healthy spending is a pretty good combination.
Speaker 6: Yeah, that's the good news for the fat When they
Speaker 6: look at this, they see the economy is in pretty
Speaker 6: good shape. It's hard to know exactly if they feel.
Speaker 6: The retail sales numbers suggest that maybe things are overheating.
Speaker 6: We'll have to see how January goes, but for right now,
Speaker 6: it looks like the economy is chugging along at a
Speaker 6: level it can be sustained because inflation continues to go down.
Speaker 6: There seem to be lower and lower inflation pressures. We
Speaker 6: see it reflected in the basebook. And then next week
Speaker 6: we're going to get the PCEE inflation numbers and there's
Speaker 6: some forecasts from economists that they will be below three percent.
Speaker 12: Yeah, Michael, can I ask you about industrial production because
Speaker 12: the overall rate went up, it's an expansion even though
Speaker 12: economists were expecting a contraction of December, but the Empire
Speaker 12: state fell into a trough in the last month's stay.
Speaker 12: How do we account for both of those?
Speaker 6: Well, the Empire numbers reflect only manufacturing in New York
Speaker 6: State and it is a very volatile number. It tends
Speaker 6: to go up and down a lot. Now, this was
Speaker 6: an extreme variation on that. But what mostly commis do
Speaker 6: is looked at the various regional manufacturing indexes from around
Speaker 6: the country and then we'll get Philadelphia tomorrow and see
Speaker 6: if they all match up or if somebody is an outlier.
Speaker 6: And the general feeling is that this was an outlier.
Speaker 6: Overall manufacturing production rose in December, so the idea of
Speaker 6: a big drop off in early January doesn't seem correct.
Speaker 6: So we'll see when we get Philadelphia and we start
Speaker 6: to get the others coming in. The feeling is maybe
Speaker 6: it's just kind of a noise from this indicator.
Speaker 2: Mike. You know, we cover markets aggressively. I mean all
Speaker 2: throughout the day on Bloomberg. We're doing updates about every
Speaker 2: fifteen minutes. So I have to ask you this kind
Speaker 2: of question. You've got inflation coming down, You've got consumers
Speaker 2: still spending in a reasonably robust fashion, and earnings are
Speaker 2: up this year. There's not really all that much at
Speaker 2: the moment to knock the bulls off their purchase.
Speaker 6: There nothing other than psychology, and of course that plays
Speaker 6: a big role in the markets. And it's been a
Speaker 6: feeling that we were due for some sort of correction,
Speaker 6: which seems to be what's happening. It doesn't seem to
Speaker 6: be a reason for any kind of gloom on the
Speaker 6: part of equity investors, except for whatever their view of
Speaker 6: valuations is. And maybe they felt things ran up too high,
Speaker 6: But it doesn't look like there is an economic problem,
Speaker 6: an economic aspect to the down tread that we've seen.
Speaker 12: Can I ask about Chris Waller, Michael, Is he the
Speaker 12: only person we should be listening to right now? I
Speaker 12: like Neil Dotta's comment that he opened the doors to
Speaker 12: a March coton. Perhaps he's the only one who can
Speaker 12: close it, and maybe he did that yesterday.
Speaker 6: Maybe it does seem that the markets have started to
Speaker 6: reprice after his speech. There's still a majority of view
Speaker 6: that we could get a rate cut in March, but
Speaker 6: that is gradually slowing down, and Chris S. Waller does
Speaker 6: seem to be the new intellectual center of the FED.
Speaker 11: Now.
Speaker 6: What we don't know is how Jay powelfields. Because he
Speaker 6: only speaks once or twice a quarter, we don't hear
Speaker 6: very much from him. But in terms of those who
Speaker 6: do speak regularly, Waller's been the one that's been out front.
Speaker 6: He was the first one to suggest rapecuts could be
Speaker 6: coming in twenty twenty four before the FED changed its views,
Speaker 6: and now he's talking about definitely rake cuts, but let's
Speaker 6: be careful about when and how much.
Speaker 2: Yeah, he made those comments in November that the chair
Speaker 2: have sort of had to walk back a little bit.
Speaker 2: Was there anything he said yesterday that the chair might
Speaker 2: need to walk back on.
Speaker 6: I don't think so. I mean, I think what he
Speaker 6: said made a lot of sense. The FED is very
Speaker 6: good at saying something that sounds like it's new and
Speaker 6: it's not my idea of we're probably going to cut rigs. Okay,
Speaker 6: we knew that and we should do it carefully and
Speaker 6: not coming too fast. Well, that makes a lot of
Speaker 6: sense as well. For years on the FED beat, I
Speaker 6: used to laugh when FED officials would come out and
Speaker 6: say we're going to be vigilant on inflation. People ran
Speaker 6: that as a headline and it's sort of like, well,
Speaker 6: that's your job, that's what you're supposed to be doing.
Speaker 6: So a lot of times people feel like there's something
Speaker 6: new there and it really isn't.
Speaker 2: This is Bloomberg Daybreak Asia, your morning brief on the
Speaker 2: stories making news from Hong Kong to Singapore and Wall Street.
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