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Speaker 1: Good morning. I'm Doug Chrisner. Here are the stories we're

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Speaker 1: following today. This from the Bloomberg terminal. TikTok is aiming

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Speaker 1: to grow the size of its US e commerce business tenfold.

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Speaker 1: We are told total merchandise value could rise to as

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Speaker 1: much as seventeen and a half billion dollars this year,

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Speaker 1: and obviously that would pose a bigger threat to Amazon.

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Speaker 1: Let's take a look now at the minutes from the

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Speaker 1: last FED meeting. They seem to indicate officials agreed it

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Speaker 1: would be appropriate to maintain a restrictive stance on interest

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Speaker 1: rates for some time last month. FED officials also viewed

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Speaker 1: the policy rate either at or near its peak at

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Speaker 1: least for this tightening cycle, and officials pretty optimistic about

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Speaker 1: the path of inflation. They noted clear progress. We got

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Speaker 1: reaction to the FED minutes from Ed Your Denny he

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Speaker 1: as president of your Denny Research.

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Speaker 2: I think they're going to be very data dependent, as

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Speaker 2: they always are, and if the economy continues to do well,

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Speaker 2: especially with the drop in long term rates, mortgage rates

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Speaker 2: have come down, that should give us some booster housing

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Speaker 2: activity and housing related retail sales. So it looks to

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Speaker 2: me as though there's no recession in sight. The economy

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Speaker 2: is doing fine, inflation is coming down. What's the rush

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Speaker 2: to lower interest rates? If the economy is demonstrating it

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Speaker 2: can live with these kind of levels.

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Speaker 1: That is ed Yardenny there now. The December minutes gave

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Speaker 1: no indication of easing as soon as March, and that's

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Speaker 1: something that the futures market has been expecting. By the way,

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Speaker 1: the next FOMC meeting later at the month January thirtieth

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Speaker 1: and to thirty first, Paul.

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Speaker 3: Walt Disney CEO Bob IgA is lining up allies and as

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Speaker 3: he looks to stave off pressure from billionaire activist Nelson Peltz.

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Speaker 3: We've got more from Bloomberg's Ed Ludlowe.

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Speaker 4: I has the support of Value Act out right. Disney

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Speaker 4: and Value Acts put out a joint statement in which,

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Speaker 4: you know, Value Acts basically said, at a time where

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Speaker 4: the big tech companies are coming for media companies, Disney's

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Speaker 4: best place to lead the industry. And you know, we

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Speaker 4: don't know the size of Value Act state in Disney,

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Speaker 4: for Bloombergs reported that it is large and growing. Then

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Speaker 4: you have Nelson Peltz. He wants to put himself on

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Speaker 4: the board and address what he sees is overcompensation of

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Speaker 4: Disney executive's misalignment of governance. But you know he's zeroed

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Speaker 4: in on the kind of failures of the last eighteen months,

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Speaker 4: the sort of botching of succession. Bob Chapek didn't last

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Speaker 4: very long in ladload.

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Speaker 3: At the same time, Activistage Fund Blackwell's Capital that's proposing

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Speaker 3: three nominees to the Disney board, and they would champion

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Speaker 3: CEO Bob Byge's growth strategy and offer an alternative to

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Speaker 3: Nelson Peltz's Train Fund Management or Tree and Fund Management.

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Speaker 3: Trean holds about three billion of Disney stock, that's about

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Speaker 3: one point eight percent of shares outstanding.

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Speaker 1: Well, the chairman of Morgan Stanley, James Gorman, is saying

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Speaker 1: new banking rules proposed last year will certainly change now.

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Speaker 1: These rules would require big banks to increase their capital

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Speaker 1: cushion by nearly twenty percent as a way of ensuring

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Speaker 1: they could or would survive another cash crunch. Here is

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Speaker 1: mister Gorman speaking earlier with Bloomberg.

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Speaker 5: It was a proposal that I would say was extremely

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Speaker 5: aggressive and set a marker. It will not go through

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Speaker 5: in that form. If it did, I think it would

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Speaker 5: have very, very negative consequences for corporate lending across this country,

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Speaker 5: which is not what you want. It's not going to

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Speaker 5: help the economy growth.

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Speaker 1: That is the chairman of Morgan Stanley James Gorman. Now

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Speaker 1: bankers have been increasingly vocal in arguing against these new proposals.

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Speaker 1: They have argued the rules will drive up interest rates

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Speaker 1: for first time home buyers as well as underserved and

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Speaker 1: low to moderate income borrowers.

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Speaker 3: Paul, We're told that Barrett Gold has spoken with some

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Speaker 3: major investors of First Quantum Minerals to gauge support for

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Speaker 3: a potential takeover. We've got more from Bloombeck's Charlie Pallam.

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Speaker 6: Word comes after the sudden closure of First Quantums flagship Mine,

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Speaker 6: left the Canadian copper producer reeling and wiped out more

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Speaker 6: than half its market value, sources tell Bloomberg. Barrack CEO

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Speaker 6: Mark Bristow approached some of First Quantum's largest investors late

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Speaker 6: last year. Gold giant Barrack has been seeking to expand

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Speaker 6: in copper, and a deal with First Quantum would transform

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Speaker 6: the company into one of the world's biggest producers. In

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Speaker 6: New York, Charlie Pallett, Bloomberg Radio.

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Speaker 1: And we go to China next, where workers are suffering

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Speaker 1: from the biggest drop in hiring salaries on record. That

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Speaker 1: story from Bloomberg's Juan Wong.

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Speaker 7: In Hong Kong, average salaries offered by companies to new

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Speaker 7: hires and thirty eight key Chiny cities fell to about

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Speaker 7: one four hundred and fifty dollars last quarter. That's a

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Speaker 7: drop of one point three percent from a year ago.

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Speaker 7: That was also the worst decline since twenty sixteen, when

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Speaker 7: data were first available on recruitment platform Jopping. The figures

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Speaker 7: highlight the mounting deflation risks China faces going into twenty

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Speaker 7: twenty four. A gloomy job market means residents could pare

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Speaker 7: back through spending, adding to downward pressure on consumer prices

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Speaker 7: in Hong Kong. Join Wong, Bloomberg Radio.

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Speaker 1: Let's get to global news next. So let's start with

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Speaker 1: those attacks inside Iran and the US saying it had

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Speaker 1: nothing to do with them. At Baxter has Global News

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Speaker 1: from the Bloomberg News re Ready.

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Speaker 8: Yeah, Douglas and emphatically too says neither did Israel. Iran

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Speaker 8: is characterizing them as terror attacks. More than one hundred

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Speaker 8: people killed. Iran says the attacks were carried out to

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Speaker 8: push its stance against Israel, and now the blast near

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Speaker 8: the grave of Iranian commander Hassam Solomane. US State Department

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Speaker 8: quick to respond, spokesman Matthew Miller.

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Speaker 9: I do want to address some of the irresponsible claims

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Speaker 9: that I have seen circulate and say that number one,

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Speaker 9: the United States was not involved in any way, and

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Speaker 9: any suggestion to the contrary is ridiculous. And number two,

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Speaker 9: we have no reason to believe that Israel was involved

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Speaker 9: in this explosion.

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Speaker 8: Now, Miller says, no one's interest to see the conflict escalate,

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Speaker 8: and note it comes a day after an attack in

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Speaker 8: Beirut that killed in Iran back Commas militant leader so

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Speaker 8: Bloomberg National Security Team leader Nik Wadam says, definite worry

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Speaker 8: for the United States.

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Speaker 10: I think very concerned. I mean, the big issue here,

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Speaker 10: obviously is the administration has sent since the October seventh

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Speaker 10: attack by Hamas, they do not want this conflict between

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Speaker 10: Israel and Hamas to turn into a wider regional war.

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Speaker 10: And whether that means Israel versus Hasblah or Iran entering

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Speaker 10: the conflict, whatever it.

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Speaker 8: Is, Yeah, Nick says US wants to contain Well, there

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Speaker 8: Israel contines this campaign in Gaza. So who then responsible

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Speaker 8: for the attack? Well, nobody's claimed responsibility. And a farmer

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Speaker 8: director for Syria and Lebanon at the National Security Council,

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Speaker 8: Hagar Shamali, says that the definite footprints of ISIS They attacked.

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Speaker 11: A scheite shrine where fifteen people were killed, and that's

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Speaker 11: in addition to other attacks. And so and al Qaida,

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Speaker 11: by the way, still operates in Iran. And the attack

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Speaker 11: that I saw today, it bears a lot of the

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Speaker 11: markings of attacks pursued by ISIS.

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Speaker 8: Yeah, whom she says attacked before one in twenty twenty,

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Speaker 8: and there are now thirteen countries that have signed an

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Speaker 8: agreement warning hoo Thi's against attacks in the Red Sea.

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Speaker 8: C spokesman John Kirby says thirteen at nations.

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Speaker 12: Countries are more and more becoming aware of this increasing

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Speaker 12: threat to the free flow of commerce in the Red

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Speaker 12: Sea by the UTIs and are increasingly being willing to

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Speaker 12: express their discomfort with that.

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Speaker 8: Yeah, and Singapore was not a part of the original

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Speaker 8: group but now has signed on. Donald Trump's attorneys have

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Speaker 8: file with the US Supreme Court to keep his name

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Speaker 8: on the Colorado batot. Colorado Supreme Court had ruled that

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Speaker 8: Trump was an insurrectionist and therefore ineligible to serve as president.

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Speaker 8: Bloomberg's Gregory Courty says a legal issue as well as

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Speaker 8: political every.

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Speaker 13: Time he gets indicted. Every time one of these legal

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Speaker 13: issues comes up, there is sort of a rally around

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Speaker 13: Trump effect among Republicans, and we're going to have the

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Speaker 13: first true test of that in just under two weeks

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Speaker 13: with the Iowa concases.

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Speaker 8: Yeah, that's right, and this, of course would be front

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Speaker 8: and center when Congress gets back as well.

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Speaker 14: Well.

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Speaker 8: In the face of multiple calls for him to drop

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Speaker 8: out of the presidential race, Chris Christy does not sound

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Speaker 8: like somebody who is going to do that, not at all.

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Speaker 13: If the polls were right, Hillary Clinton would be in

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Speaker 13: her second term, right, I mean, so polls these days

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Speaker 13: I think are even more problematic because who wants to answer.

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Speaker 8: Polster also says Trump would lose to President Biden and

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Speaker 8: that Nikki Haley hasn't said that she would not run

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Speaker 8: with Trump as vice president. Global News twenty four hours

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Speaker 8: a day and whenever you want it with Bloomberg News

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Speaker 8: Now in San Francisco. I met Baxter. This is Bloomberg.

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Speaker 1: Daybreak Asia, where eleven minutes past the hours, we take

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Speaker 1: a closer look at today's release of the FED minutes

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Speaker 1: from the last meeting with Bloomberg. Steve Matthews, our economics

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Speaker 1: reporter who joins us from our bureau in Atlanta. Steve

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Speaker 1: always a pleasure. Was there anything surprising, anything that you

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Speaker 1: learned in reviewing these minutes that we didn't know after

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Speaker 1: the statement was released in the December meeting.

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Speaker 14: Yeah, I would say there is. I mean, this is

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Speaker 14: kind of repositioning where the FMC was. You know, three

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Speaker 14: weeks ago when fedscher Now spoke to the press, he

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Speaker 14: was viewed as being very dubvish. I mean he talked

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Speaker 14: about there being the committee discussed, you know, rate cuts,

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Speaker 14: and a number of people on Wall Street took that

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Speaker 14: to mean wealth they're discussing, right cuts now, that must

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Speaker 14: mean you know, they're looking at it in the fairly

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Speaker 14: near term and maybe March and the markets have moved

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Speaker 14: to putting it, you know, March as in play with

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Speaker 14: the likelihood of cuts in and these set of minutes

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Speaker 14: basically throw a lot of cold water on the idea

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Speaker 14: of March, it says that rather than March, it says

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Speaker 14: that the committee agrees that there will likely be rate

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Speaker 14: touch by the end of the year. December is the

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Speaker 14: end of the year. That's a lot lot longer than

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Speaker 14: people are looking for. And it notes that the participants,

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Speaker 14: basically the entire committee agrees that their scenarios which would

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Speaker 14: require more increases, not you know, cuts, but actually increases

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Speaker 14: in plural, they use the word increases. And then finally

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Speaker 14: they said that several of the committee thinks that rates

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Speaker 14: could have to be higher for longer than the previously anticipated.

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Speaker 14: So basically the entire discussion of what's going to happen

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Speaker 14: with rates came across with a very hawkish wording compared

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Speaker 14: to where the markets are right now, and also compared

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Speaker 14: to where Chair Powell was speaking just three weeks.

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Speaker 3: Ago, perhaps compared to which Chip Powell, well, what Chip

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Speaker 3: Palell was saying, but you know, he's just one member

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Speaker 3: of the FED board and is a board and the

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Speaker 3: minutes but pretty consistent with what some of the other

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Speaker 3: FED speakers have been saying. But the market just seems

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Speaker 3: to keep hearing what it wants to right.

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Speaker 14: Well, I mean yes and no, I mean, it is

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Speaker 14: true that since Powell's press conference, a number of Committee

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Speaker 14: members have kind of pushed back against that narrative, and

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Speaker 14: they've suggested they're not anywhere close to looking at right cuts.

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Speaker 14: Although it would be wrong to dismiss share Pal as

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Speaker 14: just one member of the committee. The way the FED operates,

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Speaker 14: the one member of the committee controls the committee. I mean,

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Speaker 14: they're rarely the sets and he operates with consensus. But

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Speaker 14: it's just it's very much a chair led committee. I mean,

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Speaker 14: it's a dominated dominated by the chair. You know, it's

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Speaker 14: really unusual that there's any kind of rebellion against the

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Speaker 14: chair's views.

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Speaker 1: Steve, I want to broad in the conversation if we

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Speaker 1: can to go beyond the committee itself, because there's the

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Speaker 1: FED staff to consider in this, and I guess they

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Speaker 1: reviewed the financial sector and warning here that kind of

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Speaker 1: struck me. Given the large volume of commercial mortgage backed

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Speaker 1: securities coming toe in the next few quarters, delinquencies would

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Speaker 1: likely surge again. And I'm wondering to go back to

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Speaker 1: the committee, whether some FED officials are going to take

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Speaker 1: note of the fact that it's possible that there could

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Speaker 1: be a lot of tension created in the credit markets

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Speaker 1: if rates do remain elevated at a time when a

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Speaker 1: lot of this debt has to be rolled over. And

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Speaker 1: they may be when I say they A'm talking about

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Speaker 1: policymakers on the committee, they may be in a client

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Speaker 1: if they're comfortable with the trajectory of inflation, to try

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Speaker 1: to get to a more accommodative policy sooner rather than later.

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Speaker 1: Is that kind of reasonable to read into that a bit.

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Speaker 14: There has been concern about commercial real estate, and people

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Speaker 14: have been talking about this for really more than a

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Speaker 14: year now, but from the Committee's standpoint, their view has

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Speaker 14: been that what's happening with CII is pretty limited. I mean, today,

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Speaker 14: for example, we heard the head of the Richmond said

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Speaker 14: Tom Barkin, talk about ci and what he said was,

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Speaker 14: you know, it's kind of there are issues with offices,

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Speaker 14: and there are issues with offices in downtown areas, but

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Speaker 14: that's like a very small part of the entire real

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Speaker 14: estate market. And also, you know, there may be issues

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Speaker 14: for investors that hold commercial real estate and for banks

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Speaker 14: that hold real estate. That is problematic, but it's not

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Speaker 14: clear that any of this raises systemic issues. And we

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Speaker 14: had three bank failures in March last year and including

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Speaker 14: a couple of sizable ones and the Committee one and

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Speaker 14: raised rates that month anyway, So it's pretty clear that

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Speaker 14: they are trying to separate monetary policy and regulatory policy,

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Speaker 14: and they've used view what's happening with real estate, and

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Speaker 14: particularly with the banking industry and the non banks as well.

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Speaker 14: It's kind of a separate issue that has to be

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Speaker 14: managed separately.

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Speaker 3: Oh, we hear from the IMF yesterday is saying that

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Speaker 3: the Fed's definitely securing a soft landing. But you mentioned

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Speaker 3: Thomas back in there. He's not so sure why the disconnect.

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Speaker 10: Yeah.

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Speaker 14: I mean he laid out and I was in Raleigh earlier,

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Speaker 14: earlier today, and he laid out a bunch of scenarios

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Speaker 14: for things that could happen that, you know, we could

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Speaker 14: have some kind of shock, we could have a hard landing.

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Speaker 14: We could have you know, the consumers could run into

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Speaker 14: a wall and having spent their COVID savings, you know,

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Speaker 14: basically cut back in a cliff effect. I mean, he

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Speaker 14: raised a bunch of different scenarios other than you know,

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Speaker 14: the ideal soft landing. And what he was emphasizing was

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Speaker 14: not that he disagreed with the soft landing, but that

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Speaker 14: there's a lot of uncertainty about it, and you just

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Speaker 14: except to watch the data as it come.

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Speaker 1: And to that point, bark And said, buckle up. That's

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Speaker 1: the proper safety protocol, even if you do expect a

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Speaker 1: soft lending. Steve, thanks for being with us. Steve Matthews,

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Speaker 1: Bloomberg's economics reporter, joining us here on day break. Gaisha,

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Speaker 14: Mm hmm