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Speaker 1: Good morning. I'm Brian Curtiz. Here are the stories we're

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Speaker 1: following today. OPEC plus members did agree to a surprise

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Speaker 1: new supply cutback of about nine hundred thousand barrels a day,

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Speaker 1: and Saudi Arabia also promised to continue with its unilateral

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Speaker 1: one million barrel a day cut through the first quarter.

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Speaker 1: We got reaction from Christian Malik, whose global head of

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Speaker 1: Energy Strategy at JP Morgan.

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Speaker 2: The way I look at this is the Saudi lollipop

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Speaker 2: has become the Opech lollipop, and I think in that vein,

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Speaker 2: what's important here is that all of it bookers recognized

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Speaker 2: that speculators are not conducive to stability in investment, in

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Speaker 2: their controlling that price. Making it conducive within a range

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Speaker 2: that's healthy is the key.

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Speaker 3: I know.

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Speaker 2: We're looking at deficits. I'd sort of say they're not

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Speaker 2: trying to force a deficit. They're not trying to force

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Speaker 2: the price higher. What they're trying to do is protect

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Speaker 2: the price in a range that's healthy for everybody.

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Speaker 1: That's Christian Malik. Still, traders are wary of how far

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Speaker 1: countries will go and will follow through on voluntary production cuts.

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Speaker 1: During today's OPEC PLUS talks. Angola, for instance, that it

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Speaker 1: would reject the diminished output quota and would keep pumping

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Speaker 1: at current levels. Also, in a surprise move, Brazil will

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Speaker 1: join the cooperation Charter of the OPEC Plus Oil Alliance.

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Speaker 1: It's a move that won't bind it to making production cuts.

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Speaker 4: Today, we got more evidence that the US economy is slowing.

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Speaker 4: Inflation adjusted personal spending rose just two tenths of one

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Speaker 4: percent last month after a smaller September gain. This is

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Speaker 4: according to the US Bureau of Economic Analysis. Separate data

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Speaker 4: showed you as jobless claims rose to the highest in

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Speaker 4: about two years, and today's data might help reassure the

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Speaker 4: FED that inflation repressures will continue to fall. We got

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Speaker 4: reaction from Bloomberg's Michael McKee.

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Speaker 5: Nobody is arguing with the idea that the FED is

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Speaker 5: going to cut rates in twenty twenty four. The FED

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Speaker 5: said it was going to cut rates in twenty twenty

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Speaker 5: four in this September dot plot. We'll see what they

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Speaker 5: do on December thirteenth, But it's really a question of

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Speaker 5: how fast inflation comes down, and that'll give you a

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Speaker 5: better idea of when the Fed's going to be thinking

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Speaker 5: about it.

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Speaker 4: That's Bloomberg's Michael McKee. There the fed mates next on

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Speaker 4: December twelve and thirteen.

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Speaker 1: Well, let's take a closer look at this one. We

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Speaker 1: are looking at Tesla and it rolling out its long

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Speaker 1: awaited cybertruck for delivery. Here's Tesla's CEO, Elon Musk, at

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Speaker 1: the unveiling.

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Speaker 6: It's very rare that our product comes along that is

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Speaker 6: seemingly impossible, that people said was impossible, that experts said

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Speaker 6: was impossible, and this is one of those times.

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Speaker 1: That's Elon Musk. The cheapest cybertruck is priced at about

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Speaker 1: sixty one thousand dollars and will be available in twenty

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Speaker 1: twenty five. That's still two years behind schedule. Elon Musk

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Speaker 1: has lamented how quote insanely difficult the cybertruck is to produce.

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Speaker 1: Tesla shares traded down in the regular session one point

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Speaker 1: seven percent, and down another two percent here in late trading.

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Speaker 4: Be Ford has restored its financial guidance for the year.

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Speaker 4: It says will be up to one and a half

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Speaker 4: billion dollars lower than it was before the United Auto

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Speaker 4: Workers strike in October. Ford also said higher labor costs

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Speaker 4: will add about nine hundred dollars to the cost of

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Speaker 4: each car. That compares to the five hundred and seventy

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Speaker 4: five dollar figure that General Motors announced yesterday. We asked

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Speaker 4: Ford's chief financial officer, John Lawla about the discrepancy.

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Speaker 7: I'm not exactly sure why their number is that much

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Speaker 7: lower than ours. That's something that would have unpacked with them.

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Speaker 7: We know what we've done with this contract. We know

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Speaker 7: what the start point is. It's sixty to seventy basis

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Speaker 7: points on our income statement basis. And now what we

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Speaker 7: need to do is we need to work on driving

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Speaker 7: productivity and efficiencies in reducing the labor hours, the hours

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Speaker 7: it takes to build a vehicle, and reducing that cost.

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Speaker 7: And that's what we're going to be focused on going forward.

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Speaker 4: It's Ford CFO John Lawla there and Ford shares closed

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Speaker 4: down about three percents in New York.

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Speaker 2: Well.

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Speaker 1: Disney has declared a dividend of thirty cents a share

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Speaker 1: for the second half of the fiscal year. Disney said

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Speaker 1: the payment will be made on January tenth to shareholders

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Speaker 1: of record on first The payout had been halted during

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Speaker 1: the pandemic, and Disney has been under pressure to improve

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Speaker 1: its performance and restore its dividend by the activist investor

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Speaker 1: Nelson Peltz, who has been seeking board seats at the company.

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Speaker 1: Bloomberg's Geeta Ranganatha and tells us what we can expect

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Speaker 1: next from the company.

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Speaker 8: The other main thing I think that we're looking especially

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Speaker 8: over the next few weeks is how they kind of

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Speaker 8: close out the Hulu deal. This is something that they're

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Speaker 8: currently working with Comcasts there to acquire about thirty three

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Speaker 8: percent of the Hulu stake from Comcast. And then I

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Speaker 8: think the bigger question is going to be the strategy

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Speaker 8: for ESPN moving forward.

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Speaker 1: That's Ranganatha and shares of Disney. In the regular session,

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Speaker 1: we're up about two tenths of a percent, further than

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Speaker 1: in after hours trading up about six tenths of one

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Speaker 1: percent all right. Time now for Global News, Israel and

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Speaker 1: Hamas agreeing to extend the ceasefire again for at least

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Speaker 1: one more day at batch to with that story and

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Speaker 1: the rest of the news from San Francisco.

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Speaker 9: ED, Yeah, that's right, Brian say. Negotiations are continuing. But

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Speaker 9: Bloomberg's Nick Wadams says, very important question is im play.

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Speaker 10: It's not clear how many more hostages Hamas actually has

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Speaker 10: to trade. So the truce has operated under the premise

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Speaker 10: that Hamas would release about ten people every day in

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Speaker 10: exchange for thirty Palestinians and Israeli jails. And how many

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Speaker 10: more people do they have to keep that up?

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Speaker 9: Yeah, But US National Security Council spokesmhen John Kirby says hopes, well,

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Speaker 9: he hopes that it could be extended.

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Speaker 3: We're working on it literally by the hour, to see

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Speaker 3: if we can get this seventh day turned into an

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Speaker 3: eighth and ninth and tenth and beyond. But all I

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Speaker 3: can do is tell you where we are right now,

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Speaker 3: and we're glad that we got a seventh day out

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Speaker 3: of this. The IDF, the Israeli Defense Forces have noted

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Speaker 3: that at least at the time that I came out here,

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Speaker 3: two hostages had made their way back.

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Speaker 9: But with a tenuous nature of it all. Secretary of

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Speaker 9: State Anthony blank And is back in Israel today. Ancest

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Speaker 9: He told Israeli leaders that when the fighting begins again,

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Speaker 9: the way.

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Speaker 11: Israel defense itself matters, it's imperative that is relaxed in

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Speaker 11: accordance with internationally mediterrane law and the laws of war.

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Speaker 11: Even one confronting a terrorist group that respects neither.

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Speaker 9: And this goes side by side as two Palestinian gunmen

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Speaker 9: open fired a Jerusalem at a Jerusalem bus stop, killing

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Speaker 9: three people and wounding six.

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Speaker 11: Today we're reminded yet again by the events in Jerusalem

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Speaker 11: today of the threat from terrorism that Israel and Israeli's

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Speaker 11: face every single day.

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Speaker 9: So as negotiations go on, as does the cease fire,

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Speaker 9: But how long is the question. TikTok's CEO, Schautchou and

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Speaker 9: other top execs met recently with forty influential business leaders

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Speaker 9: who are pushing from moderation of anti Semitic content and

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Speaker 9: questioning why pro Palestine videos are so popular. It looks

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Speaker 9: now as if George Santo's expression motion will be voted

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Speaker 9: on tomorrow. Santos again today, calling it a waste of time.

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Speaker 12: An unfortunate circumstance that I have to sit here and

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Speaker 12: watch American people waste Congress wasted American people's time over

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Speaker 12: and over again on something that is the power of

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Speaker 12: the people, not the power of Congress.

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Speaker 9: The House Minority Leader Hakim Jeffreys expects it to succeed.

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Speaker 13: I expect that there'll be a bipartisan vote tomorrow likely

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Speaker 13: to expel Jeorde Santos, but at the moment that remains

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Speaker 13: to be seen, and we'll see what happens on the floor.

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Speaker 9: Yes, Santos, I did say it's not goodbye forever. In

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Speaker 9: some of China's A list tore flocking to Hong Kong

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Speaker 9: for Louis Vatan's first show. Guest list includes boy band

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Speaker 9: stars and popular Asian actors. The brand has transformed the

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Speaker 9: avenue of the Stars Harbor Point Promenade into a beach

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Speaker 9: in the city, including a sandy runway. A major thrust

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Speaker 9: is a focus on younger generation's interest in the iconic brand.

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Speaker 9: I don't know whether Brian got an invite or not.

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Speaker 9: Global News twenty four hours a day and whenever you

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Speaker 9: want it with Bloomberg News Now in San Francisco. I'm

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Speaker 9: ed Baxter, this is.

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Speaker 1: Bloomberg joining us now. Is Mike mcgloone Bloomberg Intelligence senior

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Speaker 1: commodity strategists on the OPEC plus decision today. So I

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Speaker 1: think it was heard in that clip and as many

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Speaker 1: are saying that perhaps not really to push the oil

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Speaker 1: price significantly higher, but perhaps to stem the losses at

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Speaker 1: the moment WTI is trading at seventy five dollars and

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Speaker 1: sixty one cents. And what about those fears that some

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Speaker 1: of these members will not fully implement these guys Mike, Well, that's.

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Speaker 14: The standard fare. It's usually the significant fair we've had

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Speaker 14: in the past, but they've been really impressive with their

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Speaker 14: diligence in keeping to the quota. Is the significance is

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Speaker 14: the macro for crude oil is really bad. And part

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Speaker 14: of that is we started off the segment we're talking

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Speaker 14: about the set Tesla cyber trucks. Now ten years ago

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Speaker 14: we didn't talk about, you know, revolutionary vehicles that don't

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Speaker 14: burn any any fossil fuels. But the key thing to

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Speaker 14: remember about OPEK is they would not be able to

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Speaker 14: institute their cuts if they had strong demand from their

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Speaker 14: customers ie China in Europe. And that's just indicative what's

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Speaker 14: happening in the broad market for commodities. It's on the

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Speaker 14: back end of a very big pump from last year

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Speaker 14: and now it's in the dumb face, so that supplying

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Speaker 14: demand elasticity is very bad, and then you look at

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Speaker 14: the macro, it's overwhelming. We have a recessionary tilt in Europe,

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Speaker 14: we have China's property crisis and diminishing and deteriorating growth,

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Speaker 14: and then the recession that you ask us to me.

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Speaker 14: This host tilt for Kruel is just part of the

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Speaker 14: beginning of a normal cycle to go lower, and Ope's

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Speaker 14: doing everything they can to support it. But it's almost

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Speaker 14: a futile event partly. Here's one example is when they

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Speaker 14: boosted prices up to the peak in July, which actually

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Speaker 14: peaked in September, most central banks kept cutting and part

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Speaker 14: of that reason was higher oil and energy prices. Now

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Speaker 14: we have the macro effects of those great cuts and

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Speaker 14: oil doing what it typically does when it gets too expensive.

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Speaker 14: It's probably heading towards two cheep. The question is how

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Speaker 14: low is that.

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Speaker 4: Maybe we can come back to the demand side in

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Speaker 4: a minute, but just on the supply side, how does

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Speaker 4: discipline look? And I pick plus at the moment, because

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Speaker 4: we'll just give you the case of Angola, for example,

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Speaker 4: gets us quite a down grade about two hundred thousand

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Speaker 4: barrels of dayana. Gooler immediately says, now we're not doing that.

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Speaker 4: Where's the unity here?

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Speaker 14: Well, I think that's the key thing. While you're reaching

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Speaker 14: the limits of the discipline. So there's a metric I

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Speaker 14: love to watch. Is the show really where oil is going?

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Speaker 14: If you take OPEC fare capacity and add that to

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Speaker 14: the excess of supply versus demand out of the US

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Speaker 14: and Canada, it's significantly heading towards a greater portion of

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Speaker 14: global production. It's still tent tilting bear. So I think

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Speaker 14: what you're finding here and seeing here in the market

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Speaker 14: says okay, well, that's about the limits to their cuts

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Speaker 14: unless lower prices make them cut more by reducing their

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Speaker 14: incentive to produce. So I think that's where the oil

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Speaker 14: price is. So let's look at it right now. In

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Speaker 14: the year, the high price for wtos around ninety five

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Speaker 14: and the low is right around sixty five. So it's

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Speaker 14: starting to get close to that low for the year,

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Speaker 14: and the question is what's going to make it go higher.

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Speaker 14: The global tilt towards recession is quite bad, and OPEK

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Speaker 14: is just they're a small or small part of production.

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Speaker 14: So to give you an exact sample, two thousand and eight,

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Speaker 14: there may be about forty percent of total production. Now

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Speaker 14: they're tilting less than thirty percent of total global production.

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Speaker 14: It's non OPEC US Canada are key sources of Brazil

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Speaker 14: and Gola are keeping up that supply, and a lot

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Speaker 14: of it is on the back of the big pumping

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Speaker 14: prices from last year.

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Speaker 1: Angola kind of a small producer. I wonder though, I mean,

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Speaker 1: particularly given the environment you just suggested, would Angola possibly

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Speaker 1: be pushed out like Ecuador was once.

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Speaker 14: Well, I'm glad you mentioned that it's they are small producer.

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Speaker 14: But that's the key thing I pointed out and wanted

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Speaker 14: to point out last year when Kruell pumped up to

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Speaker 14: one thirty last year, there are almost seventy countries that

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Speaker 14: can and do export kudu ol, and that big riseing

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Speaker 14: price game the most incentive in a good decade to

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Speaker 14: do so. So that's what's happening. Also, it's squashing demand.

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Speaker 14: We've really seen that Europe. You're seeing that in US.

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Speaker 14: Unleaded gas, diesel gas, natural gas all are declining. The

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Speaker 14: demand for that are declining on a euro year basis.

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Speaker 14: In the US, those indications are recessionary and prices are

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Speaker 14: just kind of tilting that way. So right now in

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Speaker 14: the year, Kruiell's only down about six percent. It's caught

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Speaker 14: up the copper copperence bounce, but the Bloomer, Commodi and

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Speaker 14: Nex is down eight percent. So to me, this is

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Speaker 14: just part of that tilt towards global recession and on

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Speaker 14: the back of the farmers stay is the higher price

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Speaker 14: cure is the key cure for higher prices. So that's

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Speaker 14: what's happening now. And I like to say, what stopped

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Speaker 14: this is just another indication is I don't think they

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Speaker 14: can cut much more and even if they try to,

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Speaker 14: the market's not going to I'm not going to believe them.

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Speaker 4: With also got Brazil joining the cooperation shotter of Ipickplus

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Speaker 4: how significant is that It's.

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Speaker 14: It's a tilt in the right way. I've read through that.

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Speaker 14: It's like they're not going to be constrained by cutting supply.

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Speaker 14: But it's also again global free market capitalism. If they

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Speaker 14: need money and revenues are low and they have this

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Speaker 14: free source to do it, it's kind of hard to

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Speaker 14: say we're not going to do it anymore. And also

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Speaker 14: OPEK needs more and more memories because they are a

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Speaker 14: diminishing part of global supply. Like I said, to be

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Speaker 14: around forty percent and now it's less than thirty percent.

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Speaker 14: See that trend, It's just not this cartel has actually

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Speaker 14: pushed themselves out of business by keeping prices too high

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Speaker 14: for too long.

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Speaker 1: I know you touched on this a little bit earlier

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Speaker 1: about demand and if we get a recession, obviously you

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Speaker 1: know we're going to see a lot less oil being purchased.

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Speaker 1: But to what degree does oil kind of give us

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Speaker 1: a message about global growth?

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Speaker 14: Keithing, I'm glad you went there, because they are it

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Speaker 14: is giving us a message. In addition to the inverted

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Speaker 14: yield kerk, the flack demand in the US or diesel

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Speaker 14: and leaded gas and natural gas. What industrial metals have

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Speaker 14: been one of the worst performers this year. The Bloomberg

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Speaker 14: Dustrial Metals indexes down about thirteen percent. Oil's catching up

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Speaker 14: to that. So from a commodity standpoint, oil down, dustrial

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Speaker 14: metals down, grains down, gold up, that's a clear recessionary trajectory.

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Speaker 1: All right, Mike, thanks very much. Good Intel. Mike mcgloone

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Speaker 1: Bloomberg Intelligence Senior commodity strategist. This is Bloomberg Daybreak Asia,

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