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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the BlueBag Day BAKR podcast failable every morning

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Speaker 2: on Apple, Spotify or wherever you listen. It's Tuesday, the

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Speaker 2: thirteenth of May in London. I'm Caroline Hepka.

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Speaker 1: And I'm Stephen Carroll. Coming up today. UK pension funds

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Speaker 1: agree to invest at least five percent of their assets

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Speaker 1: in Britain in a win for the Chancellor.

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Speaker 2: Rachel Reeves, the S and B five hundred and NASAK

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Speaker 2: make huge gains as US China tariff cuts fuel, the

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Speaker 2: return of a Buy America trade.

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Speaker 1: Glass, police investigator, fire at Prime Minister Kier Starmer's house,

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Speaker 1: and possible links to two other blazers.

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Speaker 2: Let's start with a roundup of our top stories.

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Speaker 1: Britain's largest pension funds are agreeing to invest at least

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Speaker 1: five percent of their assets at home in a new

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Speaker 1: deal with the labor government. The seventeen funds who've signed

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Speaker 1: up to the Mansion House Accords say the deal will

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Speaker 1: inject as much as fifty billion pounds of new investment

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Speaker 1: over the next five years. Bloomberg's James Wilcock has more.

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Speaker 3: It sets funds who manage nine to ten UK savers,

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Speaker 3: direct contribution pension pots a target keep five percent of

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Speaker 3: your assets in Britain's private markets. It's a significant amount

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Speaker 3: of money, but it is voluntary and it's not the

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Speaker 3: first use of the name. A previous mansion House Compact,

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Speaker 3: signed two years ago, has been criticized for only leading

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Speaker 3: to a limited amount of investment. This new version comes

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Speaker 3: as the government weighs legally forcing funds to invest more

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Speaker 3: domestically as it seeks more money for infrastructure projects in London.

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Speaker 3: James Wilcock Bloomberg Radio.

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Speaker 2: Global stocks have made huge gains on optimism that the

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Speaker 2: decision to slash US China reciprocal tariffs for ninety days

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Speaker 2: marks the end of an all our trade war. The

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Speaker 2: S and P five hundred jump to three point three

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Speaker 2: percent to take it back above the level when President

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Speaker 2: Trump first announced those sweeping global levies on the second

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Speaker 2: of April. Meanwhile, a surge in Big Text put then

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Speaker 2: as that one hundred back into a bull market, just

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Speaker 2: about a month after it plunged twenty percent from a

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Speaker 2: previous record high. Investors also moved out of defensive positions

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Speaker 2: and reduced expectations for Federal Reserve interest rate cuts. Kathy Jones,

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Speaker 2: chief fixed income strateist that Charles Schwab says there is

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Speaker 2: reason for traders to feel more confident.

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Speaker 4: The market has been so valerable because it keeps trying

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Speaker 4: to recalibrate what the outlook is right and now it

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Speaker 4: seems as if the worst case scenario is probably behind

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Speaker 4: us because China was the big one to get a

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Speaker 4: deal with. So if we've dialed back the rhetoric, if

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Speaker 4: we've dialed back the limit on China, maybe we dial

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Speaker 4: back limits on everybody else and we get more of

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Speaker 4: a soft landing.

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Speaker 2: Kathy Jones speaking there following the announcement of the US

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Speaker 2: China trade truce. On the markets right now, the MASCI

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Speaker 2: Asia Pacific indexes up by four tenths of one percent,

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Speaker 2: US SOX fifty futures are down two tenths of one percent,

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Speaker 2: and tenure US treasure yields down one and a half

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Speaker 2: basis points are trading at four forty six.

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Speaker 1: The massive gains across equity markets and the dollar follow

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Speaker 1: carefully coordinated joint statements issued yesterday from Beijing and Washington.

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Speaker 1: The US announced it would slash duties on Chinese products

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Speaker 1: to thirty percent from one hundred and forty five percent

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Speaker 1: for a ninety day period, while Beijing reduced its levy

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Speaker 1: on most US goods to ten percent. The rollback in

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Speaker 1: tariff s appears to validate Cheating Ping's decision to stand

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Speaker 1: firm against Donald Trump's tariff offensive. Speaking this morning, the

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Speaker 1: Chinese president warns that acts of coercion and dominance ultimately

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Speaker 1: lead to isolation. May there are no winners in tariff

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Speaker 1: wars or trade wars. Bullying or through hegeminism only leads

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Speaker 1: to self isolation. The Chinese President's remark, spoken thereby a translator,

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Speaker 1: come as President Trump said he could speak with she

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Speaker 1: as early asn't it the end of this week, touting

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Speaker 1: what he called a total reset in US China relations.

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Speaker 2: US drug may because meanwhile, have avoided a worst case scenario.

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Speaker 2: After President Donald Trump signed an executive order asking them

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Speaker 2: to lower prices for Americans voluntarily. Farm's futuel companies had

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Speaker 2: feared action on drug prices, but analysts saw the order

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Speaker 2: as less severe and vague, looking for cuts of between

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Speaker 2: sixty and ninety percent. President Trump said that the cost

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Speaker 2: of US drugs should match the lowest prices in developed nations.

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Speaker 5: Starting today, the United States will no longer subsidize the

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Speaker 5: healthcare of foreign countries, countries where they paid a small

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Speaker 5: fraction of what for the same drug that what we

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Speaker 5: pay many many times more for, and were no longer

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Speaker 5: tolerate profiteering and price gouging from Big farmer. But again,

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Speaker 5: it was really the countries that forced big farmer to

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Speaker 5: do things that, frankly, I'm not sure they really felt

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Speaker 5: comfortable doing.

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Speaker 2: President Trump suggesting that other countries should pay more for medicines.

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Speaker 2: Shares of Farm's futul companies have rebounded in Asia this

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Speaker 2: morning after the S and P five hundred Pharmaceutical and

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Speaker 2: Biotech Index, which includes names like Gilead Sciences, Murk and

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Speaker 2: Eli Lilly, close up three point seven percent on Monday.

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Speaker 1: Counter terrorism officers are leading an investigation into a fire

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Speaker 1: at a home owned by the Prime Minister in North London.

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Speaker 1: Emergency services were called to the property in the early

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Speaker 1: hours on Monday, but nobody was hurt. The building has

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Speaker 1: been targeted by protesters in the past. Three people were

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Speaker 1: convicted of public order offenses last year after carrying out

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Speaker 1: a pro Palestine demonstration outside. While the home is owned

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Speaker 1: by Kerstarmar he has not lived there since taking office

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Speaker 1: last year. Police now say they're looking at whether two

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Speaker 1: other fires last week could be connected to the blaze.

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Speaker 2: And lastly, could artificial intelligence be the secret to more

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Speaker 2: efficient phone charging. Apple thinks that the technology could answer

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Speaker 2: a frequent source of customer frustration, the iPhone's battery life.

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Speaker 2: Bloombig cba Adebayo has the story.

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Speaker 6: Howard battery management mode is set to be included in

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Speaker 6: the latest iPhone software update, due in September. Bloomberg understands

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Speaker 6: the enhancement will analyze device use and make adjustments to

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Speaker 6: conserve energy. The move is part of Apple's ongoing bid

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Speaker 6: to integrate AI into its core features, building on the

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Speaker 6: first version of Apple Intelligence, which rolled out last year.

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Speaker 6: Behind the push for battery efficiency is the soon to

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Speaker 6: be released slimmed down iPhone seventeen, which will have fewer

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Speaker 6: hours of life due to its size. In London to

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Speaker 6: at a bio Bloomberg Radio and.

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Speaker 1: Those are our top stories and a moment more on

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Speaker 1: that promise by UK pension funds to invest more here

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Speaker 1: in Britain, plus the US China tariff cut which turbocharged

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Speaker 1: global markets. With another story that caught her eye this morning, Carlin.

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Speaker 1: Recently I did one of those things where you clean

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Speaker 1: out that drawer of technology that you just kind of

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Speaker 1: gather as it just.

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Speaker 2: A draw I've got buckets and buckets of tech at home.

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Speaker 1: But again marveling at how small my old phone was

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Speaker 1: versus the one that I have now. And this is

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Speaker 1: a trend, perhaps not smaller, but definitely thinner phones are

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Speaker 1: coming back. The latest model from Samsung going to be

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Speaker 1: thirty percent thinner. This is the S twenty five edgephone,

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Speaker 1: and sort of creates a nostalgia around Do you remember

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Speaker 1: when phones used to be tiny? Yeah, not to change ourselves,

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Speaker 1: of course, Kyline the nock your.

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Speaker 2: Eight to ten comes to mind. It was absolutely tiny,

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Speaker 2: the buttons were minute, and look, I think this is

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Speaker 2: amazing that the phones are going to be thinner and thinner,

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Speaker 2: and yet of course the perennial problem of never having

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Speaker 2: a pocket large enough for your phone.

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Speaker 1: It gives me a strange sense of like, I feel

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Speaker 1: like my hands are giant when I've changed the size

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Speaker 1: on my phone because I keep dropping it ab it's

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Speaker 1: the wrong size. And I mean, it's worrying how much

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Speaker 1: you've become accustomed to holding one piece of technology in

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Speaker 1: your handholes.

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Speaker 2: Yeah, and it is the race to also lighter phones

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Speaker 2: as well. I mean, okay, so the S twenty five

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Speaker 2: from Samsung is coming out, but then we know that

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Speaker 2: the iPhone, the latest version, is going to come out

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Speaker 2: later this year, and surely that will also be a

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Speaker 2: point of competition. BS phones getting lighter, thinner and with.

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Speaker 1: Good battery life, which is the other challenge of course,

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Speaker 1: as well as we've been reporting. We'll put a link

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Speaker 1: to that article in our podcast show notes. Well, now,

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Speaker 1: the Chancellor ray To Reeves is unveiling a new mansion

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Speaker 1: house accord today with the pension industry that could possibly

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Speaker 1: unlock as much as fifty billion pounds of investment into

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Speaker 1: the UK. Seventeen large workplace pension providers have pledged to

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Speaker 1: voluntarily invest ten percent of assets into private markets and

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Speaker 1: five percent specifically in the UK, joining US now for more,

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Speaker 1: our asset management reporter Leo Ken share earlier, Good morning.

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Speaker 1: What is in this agreement and what is it aiming

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Speaker 1: to do? Yes, good morning, Stephen. So the large pension

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Speaker 1: providers you know, names like Aviva Legal and General Phoenix,

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Speaker 1: they have all signed up to this voluntary commitment to

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Speaker 1: invest ten percent of their assets into private markets, half

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Speaker 1: of which or five percent of the total would be

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Speaker 1: going to the UK, so to you know, on list

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Speaker 1: of businesses and also infrastructure projects and MNG one of

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Speaker 1: the signatories. They have actually sent over some helpful examples

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Speaker 1: of what they already doing, so you know, their lender

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Speaker 1: to Gales, the rather nice bakery chain, if I may

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Speaker 1: say that, and Belfast International Airport, and essentially that's what

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Speaker 1: the government wants to see more of. And I think

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Speaker 1: it's really important to note that this is definitely a

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Speaker 1: step up. The initial compact was signed than a little

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Speaker 1: less than two years ago with the previous Conservative government

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Speaker 1: and there the goal was to invest five percent into

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Speaker 1: private markets, and now that's up to ten percent. There's

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Speaker 1: more signatories as well, and there's also a specific allocation

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Speaker 1: to the UK.

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Speaker 2: So, as you say, it's focused on private assets, so

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Speaker 2: it doesn't include listed stocks I suppose. My question is

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Speaker 2: why not? And it's voluntary not mandatory.

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Speaker 1: Why Yes, that's a good point.

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Speaker 7: So the goal of the accord is really to boost

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Speaker 7: companies and projects that don't have the access to significant

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Speaker 7: capital that a member of the foot Sea one hundred

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Speaker 7: sort of already has and a really important point to

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Speaker 7: make here, uh. In the in the new agreement, it

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Speaker 7: says if pension funds buy shares in companies listed on

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Speaker 7: the London Stock Stock Exchanges aim Market for growth companies

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Speaker 7: and also from aquis in another exchange for smaller companies basically,

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Speaker 7: then that will count toward their allocation target into UK

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Speaker 7: private markets.

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Speaker 1: So it's it's it's quite fascinating.

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Speaker 7: That they've found they found a way here to include

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Speaker 7: a sizable part of the of the stock market here.

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Speaker 1: One of the criticisms that has been made of the

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Speaker 1: previous version of this acord is that it was voluntary

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Speaker 1: and not mandatory. This still isn't going to be a

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Speaker 1: mandatory commitment from these funds.

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Speaker 7: No, that's that's right, And I think the key issue

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Speaker 7: is the fugutiary duty of the trustees of the of

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Speaker 7: those pension funds. You know, they have to act in

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Speaker 7: the best interests of their customers make the best possible investments,

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Speaker 7: and being forced to invest in a particular sector or region,

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Speaker 7: you know, really runs against that. And it's quite interesting

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Speaker 7: also in the statement of Treasury said, you know, programs

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Speaker 7: progress against that voluntary commitment will be monitored and the

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Speaker 7: initiative will be reinforced by measures to be announced in

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Speaker 7: the upcoming final report of the Pensions Investment Review. So

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Speaker 7: that doesn't sound like outright mandation, but it sounds a

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Speaker 7: bit like a backstop where the government plans potentially legislation

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Speaker 7: that will allow it to tell pension funds, you know,

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Speaker 7: if you don't follow through with your commitments, we can

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Speaker 7: make you do it.

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Speaker 2: That's interesting, isn't it that they're being pressed a little

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Speaker 2: bit harder. But then the question is whether it will

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Speaker 2: really work. So the first mansion house compact, they did

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Speaker 2: a review after a year, and actually it was it

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Speaker 2: was the ABI that did a review, and they hadn't

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Speaker 2: found that it had made a huge difference. They said

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Speaker 2: that there were quite a lot of barriers actually to investment,

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Speaker 2: and there's also quite a big kind of get out

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Speaker 2: of free jail card. I suppose assuming a sufficient supply

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Speaker 2: of suitable investable assets.

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Speaker 7: Yes, that's a great that's a very great point. And

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Speaker 7: this is you know what most asset managers and pension

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Speaker 7: funds I talk to keep telling me. You know, it

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Speaker 7: comes down to having that pipeline of investable assets. And

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Speaker 7: this ultimately depends on other government policies, you know, like

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Speaker 7: the Industrial strategy, you know, where the government identifies priority

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Speaker 7: sectors for growth, and also the planning reform that's supposed

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Speaker 7: to make it easier to build more homes in this country.

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Speaker 7: So ultimately the ball is again with the government and

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Speaker 7: the government's call.

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Speaker 1: Okay, Leo Kenchapper, Asset Management reporter, thank you very much

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Speaker 1: for joining us.

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Speaker 2: Now, let's move on and talk about US. China. Chi

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Speaker 2: Jinping's decision to stand firm against Donald Trump resulted in

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Speaker 2: a massive de escalation in taris. The Chinese president has

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Speaker 2: been speaking this morning saying that bullying and hegeminism only

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Speaker 2: lead to isolation and that there are no winners in

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Speaker 2: tariff wars or trade wars. In a further sign of

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Speaker 2: the improvement though in relations, China is removing its ban

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Speaker 2: on Boeing deliveries. Joining us now as our senior editor,

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Speaker 2: Bill ferries to discuss all of this. So we're a

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Speaker 2: day on from the tariff deal. We've heard from Xijiping today.

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Speaker 2: He does seem to clearly come out on top of

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Speaker 2: the tariff for with the US.

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Speaker 8: Yeah, it's hard to see. It's hard to see what

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Speaker 8: the argument is for what the US has gotten out

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Speaker 8: of this when you go back to maybe where the

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Speaker 8: US was before or on April second, that Liberation Day,

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Speaker 8: when the Trump administration announced these tariffs on a whole

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Speaker 8: bunch of countries, but which really started this escalation in

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Speaker 8: the China China trade war, where tariffs went to thirty

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Speaker 8: four percent and then up to one hundred and forty

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Speaker 8: five percent and China responded with one hundred and twenty

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Speaker 8: five percent tariffs. In return, China's got basically, you know,

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Speaker 8: back to square one. The tariffs are down to thirty percent.

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Speaker 8: That's ten percent and the baseline that all countries have

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Speaker 8: now and additional twenty percent for fentanyl. But you know,

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Speaker 8: we know both countries were feeling some pain. Chinese factory

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Speaker 8: orders were down, cargo ships orders were declining as well,

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Speaker 8: and the US was looking at the potential of good shortages.

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Speaker 8: So both sides had a lot of reason to go

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Speaker 8: into these talks in Switzerland. But it does seem that

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Speaker 8: China's gotten most of its demands and that Chi Jinping's

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Speaker 8: policy of basically standing firm worked out pretty well for him.

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Speaker 1: So what does that mean about the strategy from here?

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Speaker 1: We've just had this news that China's removing this month

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Speaker 1: long band that it had on airlines taking delivery of

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Speaker 1: Boeing planes. So that's clearly a sign of China moving

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Speaker 1: towards the US on this as well. But in terms

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Speaker 1: of what we think about next, where should we be looking.

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Speaker 8: Well, there's supposed to be this ninety day window where

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Speaker 8: they continue to talk, for instance, about things like the

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Speaker 8: actions against the fentanyl precursor producers. If the US sees

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Speaker 8: progress on that front, you have the potential for up

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Speaker 8: to twenty percent of these extra tariffs coming off of China.

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Speaker 8: So that's one area I think both sides will try

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Speaker 8: to make some progress there. Scott Bessent, the Treasury Secretary,

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Speaker 8: say that he sees the ten percent tariff at this

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Speaker 8: point as the floor on China. It's the floor on

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Speaker 8: every country, even that the deal they announced last week

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Speaker 8: with the UK includes the ten percent tariff. I think

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Speaker 8: we'll continue to see some of these sectoral tariffs, and

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Speaker 8: you could see tweaks in that. Donald Trump has changed

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Speaker 8: his tariff policy a lot in the last few months.

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Speaker 8: So whether China stays at thirty percent may depend on

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Speaker 8: how well talks are going or not.

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Speaker 1: Going.

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Speaker 8: But I think one thing that has come out of

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Speaker 8: this that both sides would applaud is that there is

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Speaker 8: this channel for negotiation now that's been created with Scott

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Speaker 8: Bessett and Jamison Greer and their counterparts from Beijing. That's

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Speaker 8: I think a channel that's expected to stay open and

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Speaker 8: continue talking.

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Speaker 2: And lastly, of course, markets hugely relieved at de escalation,

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Speaker 2: and China may well be able to hit its growth target.

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Speaker 2: Five percent growth target looks perhaps a bit more possible. Yeah.

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Speaker 8: Absolutely, we saw ing upgrade their target to about four

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Speaker 8: point seven percent for Chinese GDP. I was looking at

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Speaker 8: the SMP before coming in here. It's basically at the

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Speaker 8: level it was at I think in November around election

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Speaker 8: day last year. So a lot of the losses have

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Speaker 8: been wiped out so far. But again it's you have

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Speaker 8: to wonder kind of what the US has gotten out

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Speaker 8: of this. I think that endgame remains to be seen.

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