1 00:00:00,240 --> 00:00:07,720 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:10,560 --> 00:00:13,520 Speaker 2: This is Bloomberg Daybreak Weekend, our global look at the 3 00:00:13,560 --> 00:00:16,360 Speaker 2: top stories in the coming week from our Daybreak anchors 4 00:00:16,400 --> 00:00:19,080 Speaker 2: all around the world. Straight Ahead on the program, I'll 5 00:00:19,079 --> 00:00:21,639 Speaker 2: look ahead to keyan fleetionin data in the US and 6 00:00:21,720 --> 00:00:24,800 Speaker 2: earnings from some of Wall Street's biggest banks. I'm Nathan 7 00:00:24,800 --> 00:00:26,040 Speaker 2: Hager in Washington. 8 00:00:26,200 --> 00:00:28,720 Speaker 3: I'm Caroline Hetke in London. When we're asking if the 9 00:00:28,800 --> 00:00:32,080 Speaker 3: UK's property market can survive an exodus of the country's 10 00:00:32,120 --> 00:00:33,479 Speaker 3: wealthiest individuals. 11 00:00:33,640 --> 00:00:37,440 Speaker 4: I'm Doug Krisner looking at the changing trade dynamics for China. 12 00:00:38,360 --> 00:00:42,360 Speaker 1: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 13 00:00:42,400 --> 00:00:46,120 Speaker 1: eleven three YEO, New York, Bloomberg ninety nine to one, Washington, DC, 14 00:00:46,640 --> 00:00:51,640 Speaker 1: Bloomberg ninety two to nine, Boston, DAB Digital Radio, London, Syria, 15 00:00:51,920 --> 00:00:55,440 Speaker 1: XM one twenty one, and around the world on Bloomberg Radio, 16 00:00:55,480 --> 00:00:57,640 Speaker 1: dot Com and the Bloomberg Business App. 17 00:01:02,640 --> 00:01:04,920 Speaker 2: Good day to you. I'm Nathan Hager, and we begin 18 00:01:04,959 --> 00:01:08,120 Speaker 2: today's program with some key economic data in the US. 19 00:01:08,319 --> 00:01:11,880 Speaker 2: The December Consumer Price Index is do out this Tuesday 20 00:01:12,000 --> 00:01:15,319 Speaker 2: at eight thirty am. Wall Street Time for more on 21 00:01:15,360 --> 00:01:18,959 Speaker 2: how the inflation data could impact FED policy moving forward. 22 00:01:19,040 --> 00:01:24,560 Speaker 2: We're joined by Michael McKee, Bloomberg's international economics and policy correspondent. 23 00:01:24,640 --> 00:01:28,320 Speaker 2: Thanks for being here with us, Mike. Are we expecting 24 00:01:28,480 --> 00:01:33,679 Speaker 2: many distortions from this inflation data given that we've just 25 00:01:33,840 --> 00:01:36,920 Speaker 2: come out or recently come out of a government shutdown. 26 00:01:38,280 --> 00:01:40,200 Speaker 5: Let me sound like an economists and say yes. 27 00:01:40,000 --> 00:01:42,240 Speaker 2: And no, thank you two handed. 28 00:01:42,800 --> 00:01:45,200 Speaker 5: The problem is, we didn't get any October data, and 29 00:01:45,240 --> 00:01:49,960 Speaker 5: the BLS just assumed all the numbers were zero, and 30 00:01:50,000 --> 00:01:52,680 Speaker 5: then in November we didn't get a month over month 31 00:01:52,760 --> 00:01:56,200 Speaker 5: number because there was no October number, And so basically 32 00:01:56,240 --> 00:01:59,600 Speaker 5: we're going to have distortions built into the data going 33 00:01:59,640 --> 00:02:03,560 Speaker 5: into any month for several months. So yes, there will 34 00:02:03,600 --> 00:02:06,400 Speaker 5: be distortions in the December data. However, what we will 35 00:02:06,440 --> 00:02:10,440 Speaker 5: get is a full report on prices in December. It's 36 00:02:10,480 --> 00:02:14,240 Speaker 5: the comparisons and how much has changed over the month 37 00:02:14,480 --> 00:02:16,560 Speaker 5: that we're going to have a little trouble parsing out. 38 00:02:16,600 --> 00:02:21,320 Speaker 5: But we will get complete tables for all of what 39 00:02:21,440 --> 00:02:24,400 Speaker 5: the BLS surveys in terms of prices for the month. 40 00:02:24,680 --> 00:02:28,919 Speaker 2: So our first non Swiss cheese consumer price index since 41 00:02:28,960 --> 00:02:32,600 Speaker 2: the shutdown so what is the expectation as far as 42 00:02:33,120 --> 00:02:35,000 Speaker 2: what we're going to see when it comes to price 43 00:02:35,040 --> 00:02:36,520 Speaker 2: pressures here, Well. 44 00:02:36,360 --> 00:02:38,760 Speaker 5: The expectations and because of what I just said, there's 45 00:02:38,760 --> 00:02:41,399 Speaker 5: not a lot of wide confidence banned around this one, 46 00:02:41,440 --> 00:02:43,840 Speaker 5: but people are thinking we're going to see about a 47 00:02:43,880 --> 00:02:45,880 Speaker 5: three tenth increase in both the headline and the core, 48 00:02:46,280 --> 00:02:49,040 Speaker 5: which is a little hot, but it doesn't really move 49 00:02:49,120 --> 00:02:51,520 Speaker 5: the year over year. On the headline stays at two 50 00:02:51,560 --> 00:02:54,320 Speaker 5: point seven percent. Core moves up to two point seven 51 00:02:54,320 --> 00:02:58,160 Speaker 5: percent in the economists consensus forecast from two point six 52 00:02:58,639 --> 00:03:02,000 Speaker 5: And even if we do see distortions, the bottom line 53 00:03:02,040 --> 00:03:05,440 Speaker 5: there is it's not going in the right direction and 54 00:03:05,480 --> 00:03:08,680 Speaker 5: that's what would matter to the Fed. And you combine 55 00:03:08,680 --> 00:03:10,880 Speaker 5: that with the jobs report we got on Friday, which 56 00:03:10,880 --> 00:03:15,840 Speaker 5: showed week job creation and the unemployment rate going down. 57 00:03:17,000 --> 00:03:19,560 Speaker 5: It all would make the case that the Fed doesn't 58 00:03:19,600 --> 00:03:20,800 Speaker 5: need to cut rates again. 59 00:03:21,520 --> 00:03:24,400 Speaker 2: You know, it's interesting because you know, coming ahead of 60 00:03:24,440 --> 00:03:27,839 Speaker 2: this consumer price report, we heard just this past week 61 00:03:27,880 --> 00:03:31,840 Speaker 2: from FED Governor Stephen Myron on Bloomberg Radio and Television 62 00:03:31,880 --> 00:03:37,080 Speaker 2: saying he sees underlying inflation pretty low compared to where 63 00:03:37,240 --> 00:03:40,160 Speaker 2: we've seen it on the consumer price data at two 64 00:03:40,200 --> 00:03:43,000 Speaker 2: point three percent. What's his rationale for that? Does it 65 00:03:43,040 --> 00:03:43,600 Speaker 2: make sense? 66 00:03:45,080 --> 00:03:49,640 Speaker 5: His rationale is there are several aspects to it, one 67 00:03:49,640 --> 00:03:52,120 Speaker 5: of which is that we're seeing a big productivity gain 68 00:03:52,760 --> 00:03:56,720 Speaker 5: and that should mean that there's less inflation, and that 69 00:03:56,840 --> 00:04:00,840 Speaker 5: if you take out the effect of tariffs, you have 70 00:04:00,920 --> 00:04:04,160 Speaker 5: less inflation. That's like the old if you don't go 71 00:04:04,360 --> 00:04:08,120 Speaker 5: food or energy. So there are a number of things 72 00:04:08,120 --> 00:04:12,360 Speaker 5: that he argues that are maybe plausible, but don't make 73 00:04:12,400 --> 00:04:14,800 Speaker 5: sense at the same time because it doesn't seem to 74 00:04:14,840 --> 00:04:17,479 Speaker 5: reflect the real world. It seems to reflect a world 75 00:04:17,520 --> 00:04:20,760 Speaker 5: that he is hoping would happen, but the numbers haven't 76 00:04:20,960 --> 00:04:22,200 Speaker 5: proven that out yet. 77 00:04:22,680 --> 00:04:26,680 Speaker 2: So where are we seeing price pressures at this point. 78 00:04:28,640 --> 00:04:32,920 Speaker 5: We're seeing prices go down in most areas, but there 79 00:04:32,920 --> 00:04:35,760 Speaker 5: are sort of the fearsome five, as Steven Stanley of 80 00:04:35,800 --> 00:04:41,800 Speaker 5: Santanader calls them. That includes things like airfares, rents, medical insurance, 81 00:04:42,720 --> 00:04:46,799 Speaker 5: car insurance, that sort of thing that fly under the radar. 82 00:04:46,920 --> 00:04:50,320 Speaker 5: But see prices going up on a regular basis. We've 83 00:04:50,320 --> 00:04:54,000 Speaker 5: seen a food prices. They're continuing to rise, but at 84 00:04:54,040 --> 00:04:57,600 Speaker 5: a lower rate. It's just that because prices went up 85 00:04:57,600 --> 00:05:01,120 Speaker 5: a lot people see every day that they're paid expensive 86 00:05:01,160 --> 00:05:04,880 Speaker 5: amount for groceries, and that's one reason that they're unhappy, 87 00:05:04,960 --> 00:05:07,800 Speaker 5: even if the inflation rate isn't going up as much. 88 00:05:08,120 --> 00:05:10,680 Speaker 5: One of the things that moves around a lot is 89 00:05:10,960 --> 00:05:15,320 Speaker 5: used car prices, and the feeling is used car prices 90 00:05:15,320 --> 00:05:18,359 Speaker 5: from those who track the wholesale numbers might come in 91 00:05:18,400 --> 00:05:21,040 Speaker 5: a little bit lower and that might hold down some 92 00:05:21,120 --> 00:05:23,040 Speaker 5: of the inflation, but you just never know. 93 00:05:23,920 --> 00:05:26,560 Speaker 2: Of course, this is a holiday month as well. Are 94 00:05:26,560 --> 00:05:30,839 Speaker 2: we expecting much holiday impact around what we could see 95 00:05:30,839 --> 00:05:31,760 Speaker 2: on price pressures. 96 00:05:32,200 --> 00:05:35,920 Speaker 5: It is certainly possible because we saw this in November 97 00:05:36,160 --> 00:05:41,360 Speaker 5: with because you had the Black Friday sales weekend at 98 00:05:41,360 --> 00:05:44,400 Speaker 5: the end of the month that we saw prices go 99 00:05:44,520 --> 00:05:47,760 Speaker 5: down as retailers were discounting, and that shows up in 100 00:05:47,800 --> 00:05:51,040 Speaker 5: the data for consumer goods, toys, things like that, and 101 00:05:51,080 --> 00:05:52,920 Speaker 5: so there's a very good chance that we would see 102 00:05:52,960 --> 00:05:56,160 Speaker 5: something like that again in December. But that happens every year. 103 00:05:56,760 --> 00:06:01,839 Speaker 5: So the BLS would use seasonal adjustment figures to try 104 00:06:01,839 --> 00:06:05,320 Speaker 5: to take any distortions out of the numbers. The problem 105 00:06:05,400 --> 00:06:08,960 Speaker 5: is is that the seasonal adjustment numbers were distorted by 106 00:06:09,000 --> 00:06:11,440 Speaker 5: the fact that we didn't have any government reports for 107 00:06:11,480 --> 00:06:14,440 Speaker 5: a month and a half, so it is possible we 108 00:06:14,480 --> 00:06:15,080 Speaker 5: see something. 109 00:06:15,279 --> 00:06:19,400 Speaker 2: Appreciate this Mike as always, that's Michael McKee, international economics 110 00:06:19,400 --> 00:06:22,720 Speaker 2: and Policy correspondent for Bloomberg News. Let's turn our attention 111 00:06:22,760 --> 00:06:25,839 Speaker 2: to earnings now, because fourth quarter reporting season kicks off 112 00:06:25,880 --> 00:06:28,680 Speaker 2: in a big way next week when we hear from 113 00:06:28,720 --> 00:06:31,800 Speaker 2: some of Wall Street's biggest banks. It all starts with 114 00:06:31,920 --> 00:06:35,600 Speaker 2: JP Morgan Chase Tuesday. Then we'll hear from Bank of America, 115 00:06:35,640 --> 00:06:40,159 Speaker 2: Wells Fargo, and City Group on Wednesday. Herman Chan covers 116 00:06:40,200 --> 00:06:44,200 Speaker 2: all these banks. He's senior banks analysts for Bloomberg Intelligence 117 00:06:44,200 --> 00:06:47,479 Speaker 2: for banks in the US. Herman jog my memory here, 118 00:06:47,520 --> 00:06:50,680 Speaker 2: But it feels like the biggest financial firms on Wall 119 00:06:50,720 --> 00:06:54,240 Speaker 2: Street keep delivering quarter in and quarter out. Is that 120 00:06:54,279 --> 00:06:56,240 Speaker 2: the case? And is that what we're expecting in the 121 00:06:56,240 --> 00:06:56,880 Speaker 2: fourth quarter? 122 00:06:57,120 --> 00:07:00,479 Speaker 6: Yeah, that's right. The big banks have really driven a 123 00:07:00,520 --> 00:07:03,880 Speaker 6: lot of the top line revenue growth for the industry, 124 00:07:03,920 --> 00:07:08,599 Speaker 6: particularly not only in fee areas like trading, investment banking, 125 00:07:08,920 --> 00:07:12,600 Speaker 6: but they're growing their balance sheet faster too, So all 126 00:07:12,640 --> 00:07:15,960 Speaker 6: of that's really driven the outperformance for the biggest banks 127 00:07:16,200 --> 00:07:19,800 Speaker 6: relative to regional banks and smaller community banks. That are 128 00:07:19,880 --> 00:07:23,040 Speaker 6: publicly traded, So we're talking about the biggest banks. The 129 00:07:23,120 --> 00:07:27,000 Speaker 6: KPW index up about sixteen percent over the past three months, 130 00:07:27,080 --> 00:07:30,160 Speaker 6: so a lot of enthusiasm for bank shares heading into 131 00:07:30,280 --> 00:07:31,320 Speaker 6: fourth quarter reporting. 132 00:07:31,640 --> 00:07:33,640 Speaker 2: I have to think that a lot of that enthusiasm 133 00:07:33,720 --> 00:07:37,160 Speaker 2: is driven as well by the way Wall Street ended 134 00:07:37,880 --> 00:07:41,880 Speaker 2: twenty twenty five a pretty strong rally in the fourth quarter. 135 00:07:42,000 --> 00:07:45,000 Speaker 2: How could that be reflected in the results that we 136 00:07:45,080 --> 00:07:46,559 Speaker 2: get from these banks next week? 137 00:07:46,760 --> 00:07:51,160 Speaker 6: Yeah, that's right. So recently at an investor conference, the 138 00:07:51,200 --> 00:07:54,000 Speaker 6: biggest banks like JPM Morgan Bank of America talked up 139 00:07:54,400 --> 00:07:58,520 Speaker 6: their trading prowess and for JP Morgan for example, talking 140 00:07:58,520 --> 00:08:03,440 Speaker 6: about trading up routines year over year. Bank of America 141 00:08:03,520 --> 00:08:06,160 Speaker 6: up high single digits year every year, and so that 142 00:08:06,560 --> 00:08:10,240 Speaker 6: really bodes well for top line performance. And on the 143 00:08:10,280 --> 00:08:14,560 Speaker 6: investment banking side, we're seeing more of the same up 144 00:08:14,640 --> 00:08:17,560 Speaker 6: low single digits for GPM Morgan, flat to modest decline 145 00:08:17,600 --> 00:08:20,600 Speaker 6: for Bank of America. So really strong results on the 146 00:08:20,600 --> 00:08:26,440 Speaker 6: capital market side, and looking at industry indicators, long growth continues. 147 00:08:26,680 --> 00:08:30,480 Speaker 6: We're seeing some healthy activity across some commercial lending to 148 00:08:30,600 --> 00:08:35,360 Speaker 6: businesses and large corporate clients, and really the biggest driver 149 00:08:35,480 --> 00:08:38,640 Speaker 6: for lending in the fourth corridor will be cards, which 150 00:08:38,679 --> 00:08:42,080 Speaker 6: is seasonally strong, and also lending to non banks, which 151 00:08:42,320 --> 00:08:46,040 Speaker 6: has been a growth for the industry throughout twenty twenty five. 152 00:08:46,120 --> 00:08:49,520 Speaker 6: So really positive results on the lending side and also 153 00:08:49,600 --> 00:08:50,840 Speaker 6: trading investment banking. 154 00:08:51,120 --> 00:08:54,000 Speaker 2: Of course, we're in an environment where the FED has 155 00:08:54,080 --> 00:08:57,400 Speaker 2: started cutting interest rates again, coming off three straight interest 156 00:08:57,480 --> 00:08:59,520 Speaker 2: rate cuts to end twenty twenty five. What could that 157 00:08:59,559 --> 00:09:01,480 Speaker 2: mean for net interest income for these banks? 158 00:09:01,559 --> 00:09:05,240 Speaker 6: Yeah, that's right, that's something that should be helpful. Right, 159 00:09:05,840 --> 00:09:09,760 Speaker 6: So two areas two aspects for a lower rate environment 160 00:09:09,800 --> 00:09:13,480 Speaker 6: that should be helpful for banks. One, banks are lowering 161 00:09:13,480 --> 00:09:17,760 Speaker 6: their deposit costs, their funding costs that help support the 162 00:09:17,800 --> 00:09:21,280 Speaker 6: balance sheet. So we're seeing on average about you know, 163 00:09:21,400 --> 00:09:24,640 Speaker 6: fifty percent of the FED rate cuts are passed on 164 00:09:24,760 --> 00:09:28,240 Speaker 6: to your depositors. So that hurts you and me when 165 00:09:28,280 --> 00:09:30,400 Speaker 6: we have savings at a bank, But that's helpful for 166 00:09:31,320 --> 00:09:35,320 Speaker 6: banks and how they generate net interest income. Secondarily, we're 167 00:09:35,360 --> 00:09:37,840 Speaker 6: seeing a steeper ye curve after the rate cuts, so 168 00:09:38,760 --> 00:09:41,200 Speaker 6: particularly within the belly of the curve. So with the 169 00:09:41,360 --> 00:09:44,960 Speaker 6: five year versus the short term interest rates, that's actually 170 00:09:45,000 --> 00:09:50,160 Speaker 6: positive after a long period of negative negative yell curve 171 00:09:50,240 --> 00:09:53,160 Speaker 6: on that front. So that's helpful for when banks reprise 172 00:09:53,240 --> 00:09:56,360 Speaker 6: some of their fixed rate assets, and just big picture, 173 00:09:56,440 --> 00:09:59,000 Speaker 6: that's that's helpful for their net interest margins, and we'll 174 00:09:59,040 --> 00:10:02,720 Speaker 6: see that trickle higher in the fourth quarter in twenty 175 00:10:02,800 --> 00:10:03,400 Speaker 6: twenty six. 176 00:10:03,679 --> 00:10:06,240 Speaker 2: And just to hone in on the banks individually, let's 177 00:10:06,240 --> 00:10:09,080 Speaker 2: talk about JP Morgan Chase, because we've heard recently from 178 00:10:09,160 --> 00:10:13,559 Speaker 2: CEO Jamie Diamond talking about cockroaches in the credit markets. 179 00:10:13,600 --> 00:10:18,240 Speaker 2: How are we thinking about JP Morgan's asset quality right now? 180 00:10:18,440 --> 00:10:22,760 Speaker 6: Yeah, sure, that's a great question. So the cockroach concern 181 00:10:22,960 --> 00:10:28,559 Speaker 6: was really within their exposure to Tricolor, which was a 182 00:10:28,600 --> 00:10:34,160 Speaker 6: subprime lender to in autos, and they really stub their 183 00:10:34,160 --> 00:10:37,920 Speaker 6: toe on that one in the third quarter. What's helpful 184 00:10:38,000 --> 00:10:41,000 Speaker 6: is that overall the economy is really strong and try 185 00:10:41,040 --> 00:10:45,680 Speaker 6: Color is a very small exposure relative to the trillion 186 00:10:45,720 --> 00:10:50,679 Speaker 6: dollar asset size that JP Morgan wheel, So it's really, 187 00:10:50,679 --> 00:10:53,439 Speaker 6: in our view, an idiosyncratic, one off type issue for 188 00:10:53,559 --> 00:10:57,520 Speaker 6: jpm Morgan. That's really in the rear view, and commentary 189 00:10:57,920 --> 00:11:01,400 Speaker 6: from the bank in the fourth quarter seems to indicate 190 00:11:01,440 --> 00:11:05,040 Speaker 6: that credit quality has been fairly strong, with consumer continued 191 00:11:05,080 --> 00:11:10,280 Speaker 6: to transact and spend, so healthy consumer activity and really 192 00:11:10,320 --> 00:11:12,880 Speaker 6: boats well for credit quality for the fourth quarter. 193 00:11:13,160 --> 00:11:15,440 Speaker 2: When it comes to banks like a Bank of America 194 00:11:15,480 --> 00:11:18,160 Speaker 2: and City Group, we think of them often is pretty 195 00:11:18,160 --> 00:11:21,800 Speaker 2: closely tied to the consumer. What are we thinking when 196 00:11:21,800 --> 00:11:24,600 Speaker 2: it turned when it comes to the health of the 197 00:11:24,600 --> 00:11:27,040 Speaker 2: consumer right now, what we could learn from those banks? 198 00:11:27,200 --> 00:11:30,560 Speaker 6: Yeah, I would echo what I just said about jpm Morgan, 199 00:11:30,600 --> 00:11:35,439 Speaker 6: where for Bank of America CEO has been on Bloomberg 200 00:11:35,480 --> 00:11:38,840 Speaker 6: TV and has said that the consumer is really strong. 201 00:11:39,559 --> 00:11:41,960 Speaker 6: I think that that's really reflective of who they bank, 202 00:11:42,000 --> 00:11:47,080 Speaker 6: where it's not the customer that's more on the subprime level, 203 00:11:47,120 --> 00:11:52,160 Speaker 6: where they're more affluent, high networth type clients on the 204 00:11:52,760 --> 00:11:55,760 Speaker 6: on the loan side, right, So there's not a lot 205 00:11:55,800 --> 00:12:01,720 Speaker 6: of subprime loan exposure for these large, large across the spectrum. 206 00:12:02,480 --> 00:12:06,599 Speaker 6: And so despite the prognostications of a K shaped economy, 207 00:12:07,640 --> 00:12:11,720 Speaker 6: the actual credit exposure is on the higher end of 208 00:12:11,760 --> 00:12:13,640 Speaker 6: the consumer. So that really bodes well. 209 00:12:14,120 --> 00:12:16,959 Speaker 2: I really appreciate this Herman ahead of a really busy 210 00:12:16,960 --> 00:12:17,600 Speaker 2: week for you. 211 00:12:17,679 --> 00:12:18,480 Speaker 4: I know for sure. 212 00:12:18,520 --> 00:12:23,120 Speaker 2: That's Hermann Chan, senior US Banks analyst for Bloomberg Intelligence. 213 00:12:23,400 --> 00:12:26,040 Speaker 2: Coming up on Bloomberg day Break weekend, we'll discuss whether 214 00:12:26,080 --> 00:12:30,880 Speaker 2: the UK's property market can survive the country's wealthiest individuals leaving. 215 00:12:31,400 --> 00:12:47,120 Speaker 2: I'm Nathan Hager, and this is Bloomberg. This is Bloomberg 216 00:12:47,200 --> 00:12:49,920 Speaker 2: Daybreak weekend, our global look ahead at the top stories 217 00:12:49,920 --> 00:12:53,000 Speaker 2: for investors in the coming week. I'm Nathan Hager in Washington. 218 00:12:53,240 --> 00:12:55,040 Speaker 2: Up later in the program we'll look ahead to the 219 00:12:55,120 --> 00:12:58,800 Speaker 2: latest trade figures in China. But first in the coming days, 220 00:12:58,920 --> 00:13:00,800 Speaker 2: new data will shed light on the state of the 221 00:13:00,920 --> 00:13:04,600 Speaker 2: UK's housing market, with rising living costs and a proposed 222 00:13:04,640 --> 00:13:07,600 Speaker 2: new tax to contend with, how will the country's property 223 00:13:07,640 --> 00:13:10,640 Speaker 2: sector fare in twenty twenty six and the years to come? 224 00:13:11,000 --> 00:13:13,400 Speaker 2: For more, Let's go to London and bring in Bloomberg 225 00:13:13,480 --> 00:13:16,080 Speaker 2: Daybreak euro banker Caroline Hebger Nathan. 226 00:13:16,160 --> 00:13:19,520 Speaker 3: Twenty twenty five was filled with headlines about the ultra 227 00:13:19,600 --> 00:13:23,920 Speaker 3: wealthy leaving London and other parts of the UK, fleeing wealth, 228 00:13:24,000 --> 00:13:29,400 Speaker 3: taxes and broader policy changes. High profile exits included those 229 00:13:29,520 --> 00:13:35,160 Speaker 3: of checkout dot com founder Guillumpuzaz and Egypt's second richest man, 230 00:13:35,360 --> 00:13:39,199 Speaker 3: Nassev Sariris. The measure that has pushed many to seek 231 00:13:39,320 --> 00:13:43,120 Speaker 3: new horizons was the Labour Government's scrapping of the preferential 232 00:13:43,200 --> 00:13:47,480 Speaker 3: tax regime for non domiciled residents that had for years 233 00:13:47,679 --> 00:13:51,359 Speaker 3: allowed them to avoid UK taxes on their overseas earnings 234 00:13:51,559 --> 00:13:54,720 Speaker 3: for as long as fifteen years. In the wake of 235 00:13:54,760 --> 00:13:57,480 Speaker 3: a range of tax changes in Britain since early twenty 236 00:13:57,520 --> 00:14:02,559 Speaker 3: twenty four, London's property market has slumped. Deals for homes 237 00:14:02,600 --> 00:14:05,959 Speaker 3: in the capital valued at five million pounds that's six 238 00:14:06,040 --> 00:14:09,280 Speaker 3: point seven million dollars or more fell by more than 239 00:14:09,480 --> 00:14:13,080 Speaker 3: thirty five percent between August twenty twenty four and August 240 00:14:13,120 --> 00:14:19,080 Speaker 3: twenty twenty five, according to researcher Lnrez. In October last year, 241 00:14:19,320 --> 00:14:22,120 Speaker 3: sales of UK homes worth at least two million pounds 242 00:14:22,200 --> 00:14:25,880 Speaker 3: plunged thirteen percent year on year, according to data from 243 00:14:25,920 --> 00:14:30,760 Speaker 3: the property website right Move. Clementine Munro is private office 244 00:14:30,840 --> 00:14:34,560 Speaker 3: advisor at the real estate broker Allsop and Allsop, and 245 00:14:34,640 --> 00:14:38,560 Speaker 3: told Bloomberg that the country's super rich are losing patients 246 00:14:38,720 --> 00:14:41,119 Speaker 3: with the constantly shifting agenda. 247 00:14:41,440 --> 00:14:45,120 Speaker 7: There is a real sense of fatigue amongst the wealthy 248 00:14:45,240 --> 00:14:48,160 Speaker 7: in the UK. They're used to tax planning, they're used 249 00:14:48,200 --> 00:14:51,280 Speaker 7: to planning for their futures and this constant environment that 250 00:14:51,320 --> 00:14:54,560 Speaker 7: we've had of uncertainty is certainly having a knock on 251 00:14:54,600 --> 00:14:58,520 Speaker 7: effect as people start to look to desterling their portfolios 252 00:14:58,800 --> 00:15:01,560 Speaker 7: and move some of that wealth into landscapes like to 253 00:15:01,600 --> 00:15:04,600 Speaker 7: buy where it's much easier to forecast for the future 254 00:15:04,680 --> 00:15:06,480 Speaker 7: and the tax landscape is so clear. 255 00:15:06,840 --> 00:15:09,840 Speaker 3: That was Clarentine Monroe from real estate broker Alsop and 256 00:15:09,880 --> 00:15:14,040 Speaker 3: Alsop speaking to Bloomberg's Jumana Bissecci. So we'll wealthy Brits 257 00:15:14,080 --> 00:15:17,760 Speaker 3: continue to depart their native shores and what could the 258 00:15:17,880 --> 00:15:21,880 Speaker 3: lasting impact of their decisions be on the UK's property sector. 259 00:15:22,280 --> 00:15:25,480 Speaker 3: I've been speaking to Bloomberg's real estate reporter Damien Shepherd 260 00:15:25,720 --> 00:15:28,040 Speaker 3: and our ultra wealth reporter Ben Stupples. 261 00:15:28,560 --> 00:15:29,400 Speaker 1: Jamie, can I just. 262 00:15:29,360 --> 00:15:32,560 Speaker 3: Start with you on the data, what we're expecting in 263 00:15:32,640 --> 00:15:35,280 Speaker 3: terms of UK house prices and what the story I 264 00:15:35,320 --> 00:15:36,440 Speaker 3: guess has been so far. 265 00:15:37,120 --> 00:15:39,720 Speaker 8: Yes, We've got some data coming next week from RIX. 266 00:15:39,760 --> 00:15:43,040 Speaker 8: We basically get the sentiment from property professionals in the 267 00:15:43,120 --> 00:15:46,960 Speaker 8: UK around the temperature of the UK housing market. Now, 268 00:15:47,040 --> 00:15:49,760 Speaker 8: they were pretty gloomy last year, particularly in the lead 269 00:15:49,840 --> 00:15:52,000 Speaker 8: up to the budget, where all of the kite flying 270 00:15:52,080 --> 00:15:55,960 Speaker 8: and speculation essentially led to people putting their house moves 271 00:15:55,960 --> 00:15:58,400 Speaker 8: on ice, so it will be really interesting to see 272 00:15:58,440 --> 00:16:01,520 Speaker 8: how they view the prosper the UK housing market in 273 00:16:01,560 --> 00:16:05,160 Speaker 8: twenty twenty six. Now we've finally passed that long wait 274 00:16:05,200 --> 00:16:09,080 Speaker 8: for the budget, my expectation this year is that prices 275 00:16:09,120 --> 00:16:12,600 Speaker 8: across the country won't move dramatically. I think what we'll 276 00:16:12,600 --> 00:16:15,240 Speaker 8: see is a big divide in the prospects of London 277 00:16:15,360 --> 00:16:18,120 Speaker 8: and the rest of the UK, a North South divide 278 00:16:18,160 --> 00:16:21,400 Speaker 8: where those living in the North might see their values 279 00:16:21,440 --> 00:16:24,520 Speaker 8: actually grow a little. What we did see in the 280 00:16:24,560 --> 00:16:28,480 Speaker 8: budget was a mansion tax on homes valued at two 281 00:16:28,520 --> 00:16:31,880 Speaker 8: million pounds or more. Now what we could see this 282 00:16:32,000 --> 00:16:34,200 Speaker 8: year in London is a repricing of up to five 283 00:16:34,240 --> 00:16:39,080 Speaker 8: percent of those homes in terms of value. So those 284 00:16:39,280 --> 00:16:41,880 Speaker 8: sitting on property worth two million pounds or more might 285 00:16:41,960 --> 00:16:45,000 Speaker 8: see sort of a quick repricing across this year in 286 00:16:45,040 --> 00:16:48,240 Speaker 8: London and then see things settle down again. But the 287 00:16:48,280 --> 00:16:50,560 Speaker 8: prospects for London look far gloomier than the rest of 288 00:16:50,600 --> 00:16:52,800 Speaker 8: the UK, which I'm sure Ben will tell us a 289 00:16:52,800 --> 00:16:53,760 Speaker 8: lot more about later on. 290 00:16:54,000 --> 00:16:56,600 Speaker 3: Yeah, absolutely, well, I'll bring you in at this point, Ben, 291 00:16:56,800 --> 00:17:01,040 Speaker 3: just because we're focused on the property market also, as 292 00:17:01,040 --> 00:17:04,080 Speaker 3: a result of all of the discussion and the concern 293 00:17:04,880 --> 00:17:08,600 Speaker 3: about the number of people actually leaving the UK, especially 294 00:17:08,640 --> 00:17:11,480 Speaker 3: on the kind of higher end, how do you think 295 00:17:11,520 --> 00:17:14,639 Speaker 3: that kind of ties together, I suppose property and the 296 00:17:14,720 --> 00:17:17,040 Speaker 3: number of people actually leaving the UK. What do we know? 297 00:17:17,280 --> 00:17:20,240 Speaker 9: It's a really interesting question because anecdotally I can say 298 00:17:20,240 --> 00:17:23,160 Speaker 9: that the non doms and actually the sources I've lost 299 00:17:23,200 --> 00:17:26,520 Speaker 9: to amid the UK wealth termoil, they're not often selling 300 00:17:26,520 --> 00:17:30,320 Speaker 9: their property. I mean it turns from a great place 301 00:17:30,359 --> 00:17:33,920 Speaker 9: to live in central London into actually a pretty good 302 00:17:33,920 --> 00:17:37,480 Speaker 9: asset to own your global portfolio. Right if an Ulgehi 303 00:17:37,600 --> 00:17:39,879 Speaker 9: net worth owning a bit of London property that often 304 00:17:39,920 --> 00:17:43,000 Speaker 9: you've coveted for a long time and you've probably still 305 00:17:43,040 --> 00:17:46,200 Speaker 9: got a lot of your stuff there. Actually you don't 306 00:17:46,240 --> 00:17:48,520 Speaker 9: want to sell it, especially actually is because the market's 307 00:17:48,560 --> 00:17:52,200 Speaker 9: pretty subdued. What is interesting is I've seen a couple 308 00:17:52,200 --> 00:17:56,560 Speaker 9: of billionaires, I mean, these are multi billionaires. They are 309 00:17:56,600 --> 00:17:59,600 Speaker 9: exporting a large part of their households. We actually found 310 00:17:59,640 --> 00:18:02,280 Speaker 9: one mple where one of the guys who owns one 311 00:18:02,280 --> 00:18:05,800 Speaker 9: of the Premier League football clubs, Nasif Sawiris, he turned 312 00:18:05,880 --> 00:18:09,840 Speaker 9: in previous years he imported artwork, paintings, books, you know. 313 00:18:10,160 --> 00:18:13,440 Speaker 9: Imagine that, you know, the top billionaire elite, what you 314 00:18:13,480 --> 00:18:17,159 Speaker 9: would have at your disposal, and it's all being exported 315 00:18:17,280 --> 00:18:19,840 Speaker 9: in twenty twenty five as he builds a new life 316 00:18:19,840 --> 00:18:23,480 Speaker 9: in abby dabi and in Italy having lived here for 317 00:18:23,560 --> 00:18:25,280 Speaker 9: mess a decade. So I think that's maybe a good 318 00:18:25,280 --> 00:18:27,520 Speaker 9: case study of what we're seeing is Okay, they're not 319 00:18:27,560 --> 00:18:30,280 Speaker 9: selling their homes. It's a great asset to have, but 320 00:18:30,359 --> 00:18:32,720 Speaker 9: actually the homes themselves are probably going to be looked 321 00:18:32,720 --> 00:18:35,720 Speaker 9: pretty different, look very different going forward, and actually it 322 00:18:35,760 --> 00:18:38,960 Speaker 9: raises questions in the ancillary services that you have. Is 323 00:18:39,000 --> 00:18:41,520 Speaker 9: a big homes you know, you have staff, you probably 324 00:18:41,520 --> 00:18:44,280 Speaker 9: have a gardener, you probably have I don't know, a driver. 325 00:18:44,720 --> 00:18:47,600 Speaker 9: Now there. I think what we will see more examples 326 00:18:47,600 --> 00:18:50,160 Speaker 9: of this year is the spillover effects into maybe more 327 00:18:50,560 --> 00:18:54,439 Speaker 9: normal types of London's economy that serves that sort of 328 00:18:54,480 --> 00:18:57,080 Speaker 9: segment we often don't think of. But actually these are 329 00:18:57,119 --> 00:18:59,240 Speaker 9: normal people and I'm going to be very interested to 330 00:18:59,280 --> 00:19:01,800 Speaker 9: see how that can sort of continues to play out 331 00:19:01,800 --> 00:19:02,240 Speaker 9: this year. 332 00:19:03,200 --> 00:19:05,760 Speaker 3: I mean, I suppose it's perhaps Damian a little bit 333 00:19:05,840 --> 00:19:09,399 Speaker 3: hard also to feel sorry maybe for people who have 334 00:19:09,520 --> 00:19:13,119 Speaker 3: homes that are out of the reach of most the 335 00:19:13,160 --> 00:19:17,719 Speaker 3: majority of sort of ordinary Londoners or Brits. But as 336 00:19:18,000 --> 00:19:20,600 Speaker 3: we're sort of saying, how important is the luxury end 337 00:19:20,680 --> 00:19:23,320 Speaker 3: of the market actually to the UK economy, I suppose 338 00:19:23,359 --> 00:19:26,160 Speaker 3: why should we care about those those sorts of properties. 339 00:19:26,520 --> 00:19:28,920 Speaker 8: It's a great question, and people ask me that question 340 00:19:28,960 --> 00:19:31,560 Speaker 8: a lot when they see my stories, you know. But 341 00:19:31,800 --> 00:19:36,320 Speaker 8: I think wealth creation is so important for the UK, 342 00:19:36,480 --> 00:19:39,480 Speaker 8: and with the Labor government, you know, having been seen 343 00:19:39,520 --> 00:19:44,119 Speaker 8: to be pushing a lot of wealthy individuals away, the 344 00:19:44,200 --> 00:19:48,000 Speaker 8: more knock on effects that taxation has on these people 345 00:19:48,040 --> 00:19:50,800 Speaker 8: and their status in the UK will eventually build up 346 00:19:50,840 --> 00:19:53,000 Speaker 8: pressure on the government in the long term in terms 347 00:19:53,040 --> 00:19:56,160 Speaker 8: of the economic advantages that they bring to Great Britain. 348 00:19:56,480 --> 00:19:59,000 Speaker 8: So I mean what Ben mentioned there about how these 349 00:19:59,000 --> 00:20:02,639 Speaker 8: people aren't actually selling but just moving away for a 350 00:20:02,640 --> 00:20:05,399 Speaker 8: little while while they see how the picture in the 351 00:20:05,480 --> 00:20:08,480 Speaker 8: UK pans out. It's kind of similar from the perspective 352 00:20:08,720 --> 00:20:11,480 Speaker 8: of buy to let investors as well. They're under all 353 00:20:11,560 --> 00:20:15,800 Speaker 8: sorts of pressure from taxation, new regulation. But because the 354 00:20:16,920 --> 00:20:19,600 Speaker 8: market is so weak in terms of buyers, even if 355 00:20:19,640 --> 00:20:21,879 Speaker 8: these people did want to sell their property, they'd be 356 00:20:21,920 --> 00:20:25,879 Speaker 8: selling at such a huge discount that it's keeping transactions 357 00:20:25,920 --> 00:20:30,400 Speaker 8: low and we're not actually seeing this exodus in terms 358 00:20:30,440 --> 00:20:33,520 Speaker 8: of sales of these homes that some might think. So 359 00:20:33,720 --> 00:20:37,800 Speaker 8: in some ways, you know, the fact that the market 360 00:20:37,800 --> 00:20:41,360 Speaker 8: has been so weak has prevented us from seeing some 361 00:20:41,400 --> 00:20:44,399 Speaker 8: of these homes sell that perhaps would have in different circumstances. 362 00:20:44,520 --> 00:20:47,600 Speaker 3: Look, historically, it's not unusual for the UK to see 363 00:20:47,680 --> 00:20:50,640 Speaker 3: boom and bus cycles in the housing market. So I'm 364 00:20:50,720 --> 00:20:52,879 Speaker 3: kind of curious that with all of the pressures that 365 00:20:52,920 --> 00:20:56,240 Speaker 3: you've both mentioned that actually you kind of see quite 366 00:20:56,240 --> 00:20:59,399 Speaker 3: a bit of stagnation. Is there even an upside maybe 367 00:20:59,440 --> 00:21:03,199 Speaker 3: that as very sort of inflating You know, a lot 368 00:21:03,200 --> 00:21:05,600 Speaker 3: of people would see them as inflated property prices in 369 00:21:05,640 --> 00:21:09,200 Speaker 3: the southeast of England. If they start to come down overall, 370 00:21:09,720 --> 00:21:12,720 Speaker 3: that there's a positive story there because actually for younger 371 00:21:12,760 --> 00:21:17,080 Speaker 3: people or others, they maybe can get on that ladder. 372 00:21:17,119 --> 00:21:18,680 Speaker 3: Is that another part of the story. 373 00:21:19,080 --> 00:21:21,960 Speaker 8: Well, it's a difficult one because you know, as somebody 374 00:21:21,960 --> 00:21:25,800 Speaker 8: who just about still considers myself young, house prices are 375 00:21:25,840 --> 00:21:28,639 Speaker 8: just so high that it makes it incredibly difficult to 376 00:21:28,640 --> 00:21:30,400 Speaker 8: see any light at the end of the tunnel, even 377 00:21:30,400 --> 00:21:33,280 Speaker 8: when mortgage rates do come down, but if we're looking 378 00:21:33,320 --> 00:21:36,640 Speaker 8: at it from a positive perspective, mortgage rates are lower 379 00:21:36,680 --> 00:21:38,320 Speaker 8: than they were for the past couple of years. The 380 00:21:38,400 --> 00:21:41,920 Speaker 8: damage that we saw in the years after the Mini budget, 381 00:21:42,000 --> 00:21:45,760 Speaker 8: we're really quite catastrophic on the mortgage market. We were 382 00:21:45,800 --> 00:21:48,600 Speaker 8: back to the levels that we were seeing about fifteen 383 00:21:48,680 --> 00:21:52,719 Speaker 8: years ago. So mortgage rates have come down, affordability is improving, 384 00:21:52,960 --> 00:21:55,679 Speaker 8: and if you're looking to buy a property, you know 385 00:21:55,800 --> 00:21:58,840 Speaker 8: in the north of England where the market's looking, you 386 00:21:58,880 --> 00:22:01,760 Speaker 8: know a lot stronger. People are happier up there when 387 00:22:01,760 --> 00:22:05,560 Speaker 8: they're viewing their housing portfolios the potential for their values 388 00:22:05,560 --> 00:22:07,760 Speaker 8: to increase. So there is some light at the end 389 00:22:07,800 --> 00:22:10,200 Speaker 8: of the tunnel in terms of mortgage rates coming down, 390 00:22:11,040 --> 00:22:14,320 Speaker 8: but we really need to see the actual prices of 391 00:22:14,359 --> 00:22:17,399 Speaker 8: these homes come down for first time buyers to really 392 00:22:18,000 --> 00:22:20,280 Speaker 8: shake off that frustration that they have in getting on 393 00:22:20,280 --> 00:22:21,000 Speaker 8: the housing ladder. 394 00:22:21,200 --> 00:22:21,520 Speaker 7: Yeah. 395 00:22:21,560 --> 00:22:23,320 Speaker 3: Absolutely, you're definitely still young. 396 00:22:23,359 --> 00:22:23,840 Speaker 10: I'm sure. 397 00:22:23,960 --> 00:22:28,800 Speaker 3: Thank you for then. I think it's also fascinating that 398 00:22:28,840 --> 00:22:32,600 Speaker 3: the last two, three, even four budgets have been simply 399 00:22:32,760 --> 00:22:37,000 Speaker 3: so important when it comes to sort of dictating the 400 00:22:37,080 --> 00:22:39,280 Speaker 3: landscape not just for property but for lots of things 401 00:22:39,280 --> 00:22:42,640 Speaker 3: in the UK when you're thinking about your reporting, how 402 00:22:42,680 --> 00:22:47,200 Speaker 3: big a factor is the mansion tax, the non dom changes? 403 00:22:47,680 --> 00:22:50,359 Speaker 3: How are you thinking about those now? 404 00:22:51,119 --> 00:22:53,959 Speaker 9: To take that in order? The mansion tax, Actually, if 405 00:22:53,960 --> 00:22:56,320 Speaker 9: you were I mean, if you're a billionaire paying a 406 00:22:56,359 --> 00:22:59,119 Speaker 9: few more thousand pounds a year for owning a home 407 00:23:00,000 --> 00:23:02,360 Speaker 9: you like living in or you still want to hold 408 00:23:02,400 --> 00:23:05,560 Speaker 9: as an asset, that's not such a big deal. And 409 00:23:05,600 --> 00:23:07,919 Speaker 9: I spoke to it, actually a UK billionaire, John Cardwell, 410 00:23:07,960 --> 00:23:10,120 Speaker 9: on the back of that being announced, and he said, look, 411 00:23:10,119 --> 00:23:13,480 Speaker 9: that's fine, I'm a UK taxpayer, happy to pay that. 412 00:23:13,960 --> 00:23:17,600 Speaker 9: The non dom stuff, however, including with that billionaire I 413 00:23:17,640 --> 00:23:19,800 Speaker 9: just mentioned, that's a big deal both for the UK 414 00:23:19,880 --> 00:23:23,920 Speaker 9: billionaires who see actually a lack of maybe an ecosystem, 415 00:23:24,080 --> 00:23:27,440 Speaker 9: an ecosystem shrinking from their perspective, their peers aren't here 416 00:23:27,480 --> 00:23:31,480 Speaker 9: as long as they would otherwise be previously, and the 417 00:23:31,560 --> 00:23:33,800 Speaker 9: non don reforms, I mean, that is the big that 418 00:23:33,880 --> 00:23:36,639 Speaker 9: is the big driver. It's twofold one. It's scrapping the 419 00:23:36,680 --> 00:23:39,200 Speaker 9: fifteen year regime that we had up until eight prior 420 00:23:39,240 --> 00:23:42,439 Speaker 9: twenty twenty five. Now that was long enough. And this 421 00:23:42,480 --> 00:23:44,399 Speaker 9: is the key thing. It's the time you could be 422 00:23:44,680 --> 00:23:48,360 Speaker 9: previously in the UK for fifteen years enjoy put down 423 00:23:48,440 --> 00:23:51,359 Speaker 9: routes here. I think the key thing here why fifteen 424 00:23:51,400 --> 00:23:53,160 Speaker 9: years is sort of asking the question why the eighteen 425 00:23:53,160 --> 00:23:55,320 Speaker 9: holes on a golf course. I'm not exactly sure why 426 00:23:55,400 --> 00:23:58,040 Speaker 9: the UK settled on that time about a decade ago 427 00:23:58,200 --> 00:24:01,680 Speaker 9: for a previous reform. The general thinking is that it 428 00:24:01,720 --> 00:24:04,080 Speaker 9: allowed you to come here and put your kids through 429 00:24:04,119 --> 00:24:06,639 Speaker 9: school and by the time you get to fifteen years, 430 00:24:06,760 --> 00:24:08,840 Speaker 9: maybe your kids by then or at a UK university, 431 00:24:09,040 --> 00:24:11,040 Speaker 9: maybe in Oxbridge, and they're like, you know what, actually 432 00:24:11,080 --> 00:24:13,720 Speaker 9: we quite like life in the UK and what we've 433 00:24:13,760 --> 00:24:16,600 Speaker 9: done instead now is bring in a four year regime 434 00:24:16,880 --> 00:24:18,800 Speaker 9: and the UK Treasury Rachel Reeve said this makes the 435 00:24:18,920 --> 00:24:21,320 Speaker 9: UK more competitive, but there are growing doubts about that 436 00:24:21,400 --> 00:24:23,280 Speaker 9: four years. What does that allow you to do? 437 00:24:23,640 --> 00:24:24,040 Speaker 8: Really? 438 00:24:24,480 --> 00:24:26,440 Speaker 9: Maybe it allows you to take a job. If you're 439 00:24:26,440 --> 00:24:29,240 Speaker 9: a top banker, you could maybe take a C suite job, 440 00:24:29,600 --> 00:24:32,080 Speaker 9: turn your team around and then go back to wherever 441 00:24:32,080 --> 00:24:34,600 Speaker 9: you've came from. But are you able to put down 442 00:24:34,640 --> 00:24:37,040 Speaker 9: the same routes you could before? No, you can't. In general, 443 00:24:37,200 --> 00:24:40,320 Speaker 9: so the UK people have left because of the non 444 00:24:40,400 --> 00:24:43,400 Speaker 9: dom regime and now people are less likely to come 445 00:24:43,400 --> 00:24:46,720 Speaker 9: and put down routes here. That's the crucial thing. Some 446 00:24:46,760 --> 00:24:49,280 Speaker 9: people are coming, but they're already and this is the 447 00:24:49,320 --> 00:24:51,840 Speaker 9: crucial point. They're already thinking about where they're going to 448 00:24:51,840 --> 00:24:55,120 Speaker 9: go next. So the UK has gone from being a 449 00:24:55,160 --> 00:24:57,399 Speaker 9: permanent global wealth hub for a lot of folks in 450 00:24:57,440 --> 00:25:01,200 Speaker 9: the global ultra wealth communit to being what I would 451 00:25:01,200 --> 00:25:04,520 Speaker 9: maybe term a stepping stone, and that's a significant change. 452 00:25:04,600 --> 00:25:06,880 Speaker 3: Thank you so much for being with me. Bloomberg's Ben 453 00:25:06,920 --> 00:25:10,960 Speaker 3: Stupples and Damian Shepherd. Will the UK's housing sector show 454 00:25:11,000 --> 00:25:13,679 Speaker 3: shoots of recovery or has an exodus of the wealthy 455 00:25:13,720 --> 00:25:17,760 Speaker 3: prompted a longer slump maybe than anticipated. We'll have full 456 00:25:17,800 --> 00:25:21,399 Speaker 3: coverage and analysis of all that important market data in 457 00:25:21,440 --> 00:25:24,800 Speaker 3: the coming days on Bloomberg platforms. I'm Caroline Hepge here 458 00:25:24,800 --> 00:25:27,439 Speaker 3: in London. You can catch us every weekday morning for 459 00:25:27,480 --> 00:25:30,800 Speaker 3: Bloomberg Daybreak Europe, beginning at six am in London. That's 460 00:25:31,080 --> 00:25:32,359 Speaker 3: one am on Wall Street. 461 00:25:32,440 --> 00:25:36,160 Speaker 2: Nathan, Thanks Caroline, and coming up on Bloomberg day Break weekend, 462 00:25:36,200 --> 00:25:39,479 Speaker 2: we'll discuss what we could expect from trade data in China. 463 00:25:39,920 --> 00:25:54,080 Speaker 2: I'm Nathan Hager and this is Bloomberg. This is Bloomberg 464 00:25:54,119 --> 00:25:56,840 Speaker 2: Daybreak Weekend, our global look ahead at the top stories 465 00:25:56,840 --> 00:25:59,920 Speaker 2: for investors in the coming week. I'm Nathan Hager in Washington. 466 00:26:00,080 --> 00:26:02,720 Speaker 2: We'll get the latest trade figures for China in the 467 00:26:02,720 --> 00:26:05,840 Speaker 2: week ahead. Let's get more on that from Bloomberg's Doug Chrisner, 468 00:26:05,880 --> 00:26:07,840 Speaker 2: host of the Daybreak Asia podcast. 469 00:26:08,320 --> 00:26:11,320 Speaker 4: Nathan, These trade figures may provide a sense of how 470 00:26:11,359 --> 00:26:14,840 Speaker 4: well the Chinese economy is performing, but the more important 471 00:26:14,920 --> 00:26:18,480 Speaker 4: question seems to center on what geopolitics will do to 472 00:26:18,520 --> 00:26:22,680 Speaker 4: determine China's future trade relations now. That surprise US raid 473 00:26:22,720 --> 00:26:27,520 Speaker 4: and capture of Venezuelan President Nicholas Maduro has serious implications 474 00:26:27,560 --> 00:26:31,560 Speaker 4: not just for rules based international order, but access to 475 00:26:31,640 --> 00:26:35,840 Speaker 4: natural resources and supply chains as well. Now. Venezuela had 476 00:26:35,880 --> 00:26:40,280 Speaker 4: boasted an all weather strategic partnership with Beijing, and the 477 00:26:40,359 --> 00:26:43,200 Speaker 4: Chinese were quick to frame this raid as an example 478 00:26:43,240 --> 00:26:46,199 Speaker 4: of US overreach. For a closer look, I'm joined by 479 00:26:46,200 --> 00:26:50,320 Speaker 4: Bloomberg's John Louhi is our chief China correspondent. John joins 480 00:26:50,320 --> 00:26:53,400 Speaker 4: from our studios in Beijing. Thank you for being here, John, 481 00:26:53,440 --> 00:26:56,520 Speaker 4: and happy New Year. There are so many threads to 482 00:26:56,640 --> 00:26:59,919 Speaker 4: this story and hopefully we can touch on each specially 483 00:27:00,240 --> 00:27:04,000 Speaker 4: the angle on Venezuela and the reaction from Beijing. I'd 484 00:27:04,080 --> 00:27:08,600 Speaker 4: like to begin with the simmering tensions between China and Japan, 485 00:27:08,720 --> 00:27:11,560 Speaker 4: since this seemed to be the bigger concern for markets 486 00:27:11,560 --> 00:27:13,920 Speaker 4: in Asia over the course of the last week. Now 487 00:27:13,920 --> 00:27:17,880 Speaker 4: we know this traces back to late last year, when 488 00:27:17,960 --> 00:27:21,880 Speaker 4: newly elected Japanese Prime Minister take Iichi said a Chinese 489 00:27:21,960 --> 00:27:26,280 Speaker 4: invasion of Taiwan could be deemed a survival threatening situation, 490 00:27:26,640 --> 00:27:29,760 Speaker 4: and now it seems as though there's this low level 491 00:27:30,080 --> 00:27:34,320 Speaker 4: economic warfare happening. How would you describe the state of affairs. 492 00:27:35,119 --> 00:27:39,200 Speaker 10: Yeah, I think China is pulling out all the stops 493 00:27:39,440 --> 00:27:44,240 Speaker 10: to express how upset it is with what the Prime 494 00:27:44,280 --> 00:27:47,560 Speaker 10: Minister Takeichi said at the end of last year. I 495 00:27:47,600 --> 00:27:51,240 Speaker 10: think part of that has to do with that she 496 00:27:51,480 --> 00:27:53,960 Speaker 10: is a new prime minister in Japan, that she has 497 00:27:54,040 --> 00:27:57,359 Speaker 10: a background of being relatively hawkish when it comes to 498 00:27:57,440 --> 00:28:01,720 Speaker 10: relationship with China, and it also comes in this context 499 00:28:01,800 --> 00:28:04,359 Speaker 10: of the Chinese economy not doing great, and so I 500 00:28:04,359 --> 00:28:07,320 Speaker 10: think that puts more onus on the Chinese government to 501 00:28:07,400 --> 00:28:11,320 Speaker 10: be strong when it comes to geopolitical issues. And first 502 00:28:11,320 --> 00:28:13,679 Speaker 10: and foremost in that arena is Taiwan for Beijing. 503 00:28:13,960 --> 00:28:16,960 Speaker 4: So Beijing is banning exports of what is being termed 504 00:28:17,040 --> 00:28:20,560 Speaker 4: dual use items to Japan that could be used for 505 00:28:20,840 --> 00:28:25,600 Speaker 4: some sort of military application. What are the economic risk 506 00:28:25,680 --> 00:28:29,520 Speaker 4: here if this tension becomes a protracted situation. 507 00:28:30,400 --> 00:28:33,760 Speaker 10: I think the spectrum of potential outcomes is quite broad 508 00:28:33,880 --> 00:28:37,520 Speaker 10: because of the vague wording that Beijing is using this 509 00:28:38,160 --> 00:28:41,880 Speaker 10: dual use technologies, because in some sense almost everything could 510 00:28:41,920 --> 00:28:45,080 Speaker 10: potentially be dual use, and so I think it gives 511 00:28:45,120 --> 00:28:48,880 Speaker 10: Beijing the room to either be very tight in terms 512 00:28:48,880 --> 00:28:53,000 Speaker 10: of how it controls exports or be relatively loose, depending 513 00:28:53,000 --> 00:28:55,360 Speaker 10: on how the situation goes. And I think that injects 514 00:28:55,440 --> 00:29:01,480 Speaker 10: this uncertainty, which actually right now in the media aftermath, 515 00:29:01,600 --> 00:29:05,040 Speaker 10: is probably more troubling for Japanese companies than anything else. 516 00:29:05,480 --> 00:29:09,320 Speaker 4: It's very interesting too, because last week, obviously, we had 517 00:29:09,320 --> 00:29:11,880 Speaker 4: the visit of South Korean President Lee J M jung 518 00:29:12,280 --> 00:29:15,760 Speaker 4: in Beijing. I think it was his first state visit, 519 00:29:15,800 --> 00:29:20,240 Speaker 4: although there was a meeting earlier with President Chi in 520 00:29:20,320 --> 00:29:24,560 Speaker 4: the Republic of Korea. If I'm not mistaken, talk to 521 00:29:24,600 --> 00:29:27,600 Speaker 4: me a little bit about what unfolded in this state 522 00:29:27,760 --> 00:29:31,960 Speaker 4: visit and the significance here of closer ties perhaps between 523 00:29:32,320 --> 00:29:33,720 Speaker 4: Beijing and Seoul. 524 00:29:34,680 --> 00:29:37,920 Speaker 10: Well, from Seoul's perspective, it wants to open up the 525 00:29:38,000 --> 00:29:42,560 Speaker 10: Chinese market for many of its products, Electronics from Samson, 526 00:29:43,600 --> 00:29:46,880 Speaker 10: chips from high necks, all of these things, but especially 527 00:29:47,560 --> 00:29:52,840 Speaker 10: the ability of Korean cultural export so k pop, for example, 528 00:29:53,040 --> 00:29:56,000 Speaker 10: Korean TV dramas, for those sorts of things to be 529 00:29:56,080 --> 00:29:59,120 Speaker 10: able to again come into the Chinese market to be 530 00:29:59,240 --> 00:30:03,760 Speaker 10: sold here, which has been extremely limited for many years, 531 00:30:03,840 --> 00:30:06,880 Speaker 10: all the way back to maybe a decade ago when 532 00:30:07,040 --> 00:30:10,120 Speaker 10: Korea agreed to put in the THAD missile system from 533 00:30:10,160 --> 00:30:13,200 Speaker 10: the United States, and so that was first and foremost 534 00:30:13,480 --> 00:30:17,560 Speaker 10: on President Lee's agenda for Shijiping. This was an opportunity 535 00:30:17,640 --> 00:30:20,240 Speaker 10: to try and get Korea, to try and get Lee 536 00:30:20,760 --> 00:30:24,520 Speaker 10: onto China side. In terms of that dispute over Taiwan 537 00:30:24,640 --> 00:30:25,600 Speaker 10: with Japan. 538 00:30:25,720 --> 00:30:29,200 Speaker 4: How would you describe the relations between Soul and Tokyo 539 00:30:29,320 --> 00:30:32,560 Speaker 4: at the moment and the extent to which South Korean 540 00:30:32,600 --> 00:30:37,000 Speaker 4: President Lee has to balance relations with Prime Minister Takeiichi 541 00:30:37,160 --> 00:30:41,040 Speaker 4: while at the same time trying to improve relations with 542 00:30:41,160 --> 00:30:42,360 Speaker 4: Chinese President Chi. 543 00:30:42,920 --> 00:30:48,120 Speaker 10: So Korea and Japan have a difficult relationship as well 544 00:30:48,400 --> 00:30:53,880 Speaker 10: because of the World War Two history, Japanese occupation of 545 00:30:54,000 --> 00:30:58,800 Speaker 10: Korea during and before World War Two, but since then 546 00:30:58,920 --> 00:31:04,360 Speaker 10: the post war World War World. Both countries are important 547 00:31:04,440 --> 00:31:06,920 Speaker 10: key allies of the United States in Asia. They both 548 00:31:07,000 --> 00:31:10,200 Speaker 10: depend on the United States for security. They both want 549 00:31:10,240 --> 00:31:12,760 Speaker 10: to do business with China, but they're both also very 550 00:31:12,840 --> 00:31:15,480 Speaker 10: keen to make sure they're not overly dependent on China, 551 00:31:15,520 --> 00:31:17,920 Speaker 10: So in that respect they're in the same position, and 552 00:31:18,000 --> 00:31:20,840 Speaker 10: so there is a push. There is a motivation for 553 00:31:21,000 --> 00:31:23,680 Speaker 10: Korea and Japan to be aligned in terms of how 554 00:31:23,720 --> 00:31:26,240 Speaker 10: they deal with China, just because of the pure size 555 00:31:26,240 --> 00:31:31,120 Speaker 10: of the Chinese market, the Chinese economy, the Chinese military. 556 00:31:31,320 --> 00:31:34,520 Speaker 10: But at the same time, Lee is also cognizant of 557 00:31:34,880 --> 00:31:38,720 Speaker 10: how that relationship plays domestically for him in Korea. 558 00:31:38,840 --> 00:31:41,920 Speaker 4: And each of those countries Japan, South Korea, and China 559 00:31:41,960 --> 00:31:45,640 Speaker 4: are all major oil importers. And that kind of takes 560 00:31:45,680 --> 00:31:47,720 Speaker 4: us to the major story of the last week, the 561 00:31:47,760 --> 00:31:52,040 Speaker 4: ouster of Nicholas Maduro as leader of Venezuela China, as 562 00:31:52,040 --> 00:31:55,920 Speaker 4: we both know, has been the largest buyer of Venezuelan crewed. 563 00:31:56,080 --> 00:31:59,680 Speaker 4: So give me a sense of what the economic ties 564 00:32:00,080 --> 00:32:03,479 Speaker 4: had been like between these two countries and what we 565 00:32:03,520 --> 00:32:07,120 Speaker 4: are likely to see going forward in relations between Venezuela 566 00:32:07,160 --> 00:32:08,560 Speaker 4: and China. 567 00:32:08,680 --> 00:32:11,280 Speaker 10: So, as you said, Doug, China is the biggest buyer 568 00:32:11,440 --> 00:32:15,720 Speaker 10: of Venezuelan crude, but Venezuelan crude as a percentage of 569 00:32:15,760 --> 00:32:19,680 Speaker 10: total Chinese oil imports is relatively small, It's about four percent, 570 00:32:20,280 --> 00:32:23,360 Speaker 10: and so I think in the immediate aftermath, the implications 571 00:32:23,400 --> 00:32:27,440 Speaker 10: are not that great because not only does Venezuela account 572 00:32:27,480 --> 00:32:30,840 Speaker 10: for a relatively small portion of Chinese demand, it's actually 573 00:32:31,360 --> 00:32:34,840 Speaker 10: been exporting oil that's sitting in tankers off the Chinese 574 00:32:34,920 --> 00:32:38,200 Speaker 10: coast or off of the coast of various Asian countries 575 00:32:38,240 --> 00:32:40,160 Speaker 10: waiting to be delivered. So there's a bit of an 576 00:32:40,240 --> 00:32:43,560 Speaker 10: excess at the moment. I think the more important consideration 577 00:32:43,640 --> 00:32:45,720 Speaker 10: for China is what it means for the future, because 578 00:32:45,800 --> 00:32:51,040 Speaker 10: Venezuela does have the world's largest reserves of crude, and 579 00:32:51,120 --> 00:32:54,440 Speaker 10: so Chinese companies have been very active in Venezuela trying 580 00:32:54,440 --> 00:32:57,960 Speaker 10: to secure access to that future potential crude, and so 581 00:32:58,120 --> 00:33:01,040 Speaker 10: what this means for their ability to do that, I 582 00:33:01,120 --> 00:33:03,520 Speaker 10: think that is the thing Beijing is most concerned about 583 00:33:03,520 --> 00:33:04,160 Speaker 10: this moment. 584 00:33:03,960 --> 00:33:06,240 Speaker 4: And I'm also curious about what it may mean for 585 00:33:06,480 --> 00:33:10,040 Speaker 4: China's attempt to do business not only in Venezuela, but 586 00:33:10,240 --> 00:33:13,960 Speaker 4: in other countries in South America, whether you're looking to 587 00:33:14,080 --> 00:33:18,320 Speaker 4: extract natural resources, whether China is looking to make major 588 00:33:18,360 --> 00:33:22,080 Speaker 4: investments in these countries, or whether China is looking to 589 00:33:22,480 --> 00:33:27,160 Speaker 4: market Chinese goods. And I'm thinking of evs and Brazil 590 00:33:27,280 --> 00:33:27,880 Speaker 4: for example. 591 00:33:28,520 --> 00:33:30,720 Speaker 10: So this is where trade comes into the picture. I 592 00:33:30,800 --> 00:33:34,720 Speaker 10: think that because you know, Chinese exports have been booming 593 00:33:35,520 --> 00:33:39,320 Speaker 10: in twenty four and twenty five, and they've been booming 594 00:33:39,440 --> 00:33:42,040 Speaker 10: as Chinese exports to the United States have been falling 595 00:33:42,040 --> 00:33:44,400 Speaker 10: off a cliff. So the Chinese exports to the United 596 00:33:44,440 --> 00:33:47,840 Speaker 10: States fell twenty nine percent in November. That was the 597 00:33:47,960 --> 00:33:51,400 Speaker 10: eighth consecutive month that they had fallen by double digit figures. 598 00:33:51,560 --> 00:33:55,200 Speaker 10: But still China's trade surplus is hitting a new record 599 00:33:55,360 --> 00:33:57,880 Speaker 10: in twenty twenty five of more than a trillion dollars. 600 00:33:58,240 --> 00:34:00,400 Speaker 10: And that's because China has been exporting all lot more 601 00:34:00,400 --> 00:34:04,640 Speaker 10: stuff to Europe, to Africa, to Asia, but also key 602 00:34:04,680 --> 00:34:07,520 Speaker 10: here to Latin America. And so I think China is 603 00:34:07,640 --> 00:34:12,320 Speaker 10: very keen to keep its access to Latin American markets. 604 00:34:12,960 --> 00:34:16,400 Speaker 10: What Venezuela means for that access I think is nuanced 605 00:34:16,440 --> 00:34:21,440 Speaker 10: because Venezuela is very different from many of the other markets. 606 00:34:21,440 --> 00:34:24,839 Speaker 10: It's very different from Brazil, which China has very very 607 00:34:24,880 --> 00:34:29,200 Speaker 10: close relationship with. It's very different from Peru, where China 608 00:34:29,239 --> 00:34:32,320 Speaker 10: has a very important deep water port that they've built 609 00:34:32,680 --> 00:34:37,000 Speaker 10: in the recent past. And so whether the rest of 610 00:34:37,040 --> 00:34:40,040 Speaker 10: Latin America goes the way of Venezuela, I think is 611 00:34:40,239 --> 00:34:40,920 Speaker 10: very hard to tell. 612 00:34:41,000 --> 00:34:43,880 Speaker 4: The monk. So we're now hearing the Trump administration is 613 00:34:43,960 --> 00:34:48,359 Speaker 4: demanding that Venezuela reduce its relationship with China, and I'm 614 00:34:48,360 --> 00:34:52,760 Speaker 4: wondering how this may affect the relationship between Washington and Beijing. 615 00:34:53,040 --> 00:34:57,400 Speaker 4: These two powerhouses are still involved in many sensitive issues, 616 00:34:57,480 --> 00:35:01,200 Speaker 4: whether it's trade or Taiwan, and I'm wondering what this 617 00:35:01,239 --> 00:35:04,279 Speaker 4: will do, the incursion by the US into Venezuela and 618 00:35:04,360 --> 00:35:08,040 Speaker 4: the removal of Maduro, what this will do to US 619 00:35:08,160 --> 00:35:10,080 Speaker 4: China relations. 620 00:35:10,120 --> 00:35:13,640 Speaker 10: It's obviously going to inject an additional level of uncertainty. 621 00:35:14,920 --> 00:35:19,160 Speaker 10: We've seen the reaction from Beijing. It's been very pointed. 622 00:35:19,280 --> 00:35:22,600 Speaker 10: It's been very strong in its condemnation of the actions 623 00:35:22,600 --> 00:35:26,840 Speaker 10: in Venezuela. I think that is more Beijing taking advantage 624 00:35:26,840 --> 00:35:30,440 Speaker 10: of an opportunity to make itself look like the responsible 625 00:35:30,680 --> 00:35:35,399 Speaker 10: superpower on the planet versus the US, which Beijing would 626 00:35:35,400 --> 00:35:39,839 Speaker 10: say is the less dependable, more irresponsible player on the 627 00:35:39,880 --> 00:35:43,440 Speaker 10: global stage. But what it means for the bilater relationship, 628 00:35:43,600 --> 00:35:48,320 Speaker 10: I think there are so many mutual dependencies and mutual needs. 629 00:35:48,719 --> 00:35:52,080 Speaker 10: The United States needs China for its rare earth. China 630 00:35:52,160 --> 00:35:56,120 Speaker 10: needs the US for its export markets. Even though exports 631 00:35:56,120 --> 00:35:59,240 Speaker 10: have been following, still a huge market for Chinese goods, 632 00:35:59,520 --> 00:36:02,399 Speaker 10: either to directly from China or secondarily re routed through 633 00:36:02,400 --> 00:36:05,920 Speaker 10: other countries. The United States is also a place where 634 00:36:06,040 --> 00:36:09,680 Speaker 10: technology is still coming into China. We've had the Nvidia 635 00:36:09,840 --> 00:36:13,040 Speaker 10: H two hundred chips approved by the Trump administration for 636 00:36:13,120 --> 00:36:16,200 Speaker 10: export to China. And so I think those dependencies, those 637 00:36:16,280 --> 00:36:19,919 Speaker 10: mutual needs is they will probably act as a stabilizer 638 00:36:20,440 --> 00:36:24,000 Speaker 10: and around that you're going to have marginal tensions, be 639 00:36:24,120 --> 00:36:26,440 Speaker 10: it Latin America be at other parts of the world. 640 00:36:26,640 --> 00:36:29,840 Speaker 4: So in the coming week, Canadian Prime Minister Mark Karney 641 00:36:29,960 --> 00:36:32,560 Speaker 4: will be visiting China. I think it's the first visit 642 00:36:32,640 --> 00:36:36,680 Speaker 4: to China by a Canadian Prime minister since twenty seventeen. 643 00:36:37,360 --> 00:36:40,239 Speaker 4: What's his objective here? And what is likely to unfold. 644 00:36:40,280 --> 00:36:41,000 Speaker 4: Do you think. 645 00:36:42,000 --> 00:36:47,399 Speaker 10: I expect that the mister Carney will come here primarily 646 00:36:47,480 --> 00:36:51,240 Speaker 10: wanting to talk trade, primarily wanting to open up Chinese 647 00:36:51,239 --> 00:36:58,480 Speaker 10: markets for Canadian energy, Canadian agricultural goods. Those relationships have 648 00:36:58,600 --> 00:37:02,800 Speaker 10: been really strained. They were especially strained during the Trudeau 649 00:37:02,800 --> 00:37:09,279 Speaker 10: administration after Canada arrested the CFO of Huawei at the 650 00:37:09,320 --> 00:37:13,440 Speaker 10: behest of the United States. That plunged the relationship between 651 00:37:13,480 --> 00:37:17,719 Speaker 10: Canada and China into a really terrible state, and it's 652 00:37:17,760 --> 00:37:21,040 Speaker 10: still slowly trying to climb back. And I think the 653 00:37:21,160 --> 00:37:25,319 Speaker 10: change in administration in Canada offers an opportunity now that 654 00:37:25,960 --> 00:37:29,720 Speaker 10: Prime mister Carney is in place, Prime Minister Trudeau has left, 655 00:37:30,360 --> 00:37:32,719 Speaker 10: I think it offers an opportunity for a reset, and 656 00:37:32,840 --> 00:37:35,520 Speaker 10: I would expect that both sides, both Canada and China 657 00:37:35,560 --> 00:37:37,719 Speaker 10: are looking trying to figure out if they can do that. 658 00:37:38,200 --> 00:37:40,640 Speaker 4: Do you think that has the potential to upset the 659 00:37:40,680 --> 00:37:41,600 Speaker 4: Trump administration. 660 00:37:43,360 --> 00:37:45,919 Speaker 10: I think it certainly has the potential. But I would 661 00:37:46,000 --> 00:37:52,640 Speaker 10: expect that Prime mister Carney understands quite clearly where the 662 00:37:52,719 --> 00:37:55,760 Speaker 10: minds are in terms of what he might accidentally step 663 00:37:55,800 --> 00:37:59,480 Speaker 10: into that sets President Trump off and I think he 664 00:37:59,560 --> 00:38:02,439 Speaker 10: will be mary very mindful and careful of avoiding those. 665 00:38:02,760 --> 00:38:06,120 Speaker 10: I also do not think in terms of the relationship 666 00:38:06,160 --> 00:38:08,279 Speaker 10: that Canada would be open to with China when it 667 00:38:08,280 --> 00:38:11,759 Speaker 10: comes to investment, when it comes to the military, when 668 00:38:11,760 --> 00:38:15,080 Speaker 10: it comes to sensitive technologies, I would expect Canada's position 669 00:38:15,200 --> 00:38:17,640 Speaker 10: to be much more aligned with the United States than 670 00:38:18,160 --> 00:38:19,800 Speaker 10: how Venezuela was, for example. 671 00:38:19,960 --> 00:38:22,160 Speaker 4: John will leave it there. It's always a pleasure. Thank 672 00:38:22,200 --> 00:38:25,839 Speaker 4: you so very much. John lou Is Bloomberg's chief China correspondent. 673 00:38:25,920 --> 00:38:29,240 Speaker 4: Joining from our studios in Beijing, and I'm Doug Prisner. 674 00:38:29,280 --> 00:38:32,120 Speaker 4: You can catch us weekdays for the Daybreak Asia podcast. 675 00:38:32,480 --> 00:38:36,719 Speaker 4: It's available wherever you get your podcast. Nathan, Thanks Doug. 676 00:38:36,880 --> 00:38:40,160 Speaker 2: Man. That does it for this edition of Bloomberg Daybreak Weekend. 677 00:38:40,280 --> 00:38:42,839 Speaker 2: Join us again Monday morning at five am Wall Street 678 00:38:42,920 --> 00:38:45,560 Speaker 2: Time for the latest non markets overseas and the news 679 00:38:45,600 --> 00:38:48,640 Speaker 2: you need to start your day. I'm Nathan Hager. Stay 680 00:38:48,680 --> 00:38:51,719 Speaker 2: with us. Top stories and global business headlines are coming 681 00:38:51,800 --> 00:38:55,839 Speaker 2: up right now.