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Speaker 1: This is the Bloomberg Daybak podcast, available every morning on Apples,

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Speaker 1: Spotify or whatever you listen. It's Friday, the seventeenth of

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Speaker 1: May here in London. I'm Caroline Hepka and.

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Speaker 2: I'm Stephen Carroll. Coming up today, Chinese consumption slows as

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Speaker 2: Beijing looks at ways to revive the country's battered property sector.

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Speaker 1: FED officials suggests interest rates should stay higher for longer,

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Speaker 1: as Jamie Diamond warns of inflation risks.

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Speaker 2: Plus, governments and companies want green hydrogen to play a

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Speaker 2: big role in fueling Europe. But what if they're wrong.

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Speaker 2: We have a special report.

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Speaker 1: Let's start with a roundup of our top stories.

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Speaker 2: Chinese retail sales grew by two point three percent in April,

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Speaker 2: the slowest pace since twenty twenty two. At the same time,

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Speaker 2: industrier production in the country rose faster than had been expected.

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Speaker 2: Robin Ching, chief China economist at morganst Stanley, says the

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Speaker 2: numbers highlight the mixed recovery.

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Speaker 3: Hi flavely due to the strength in exports and the

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Speaker 3: manufacturing for production thy the but the domestic consumption side

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Speaker 3: is very weak. Property and the retail sales they both

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Speaker 3: missed expectations. So I think a growth is stabilizing, but

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Speaker 3: that they're unbalanced the pace.

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Speaker 2: Morgan Stanley's Robin Jing speaking their present Choosing Things government

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Speaker 2: has signaled that more economic help is covering is coming now.

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Speaker 1: Staying with China, where the government is planning to speak

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Speaker 1: to key officials about helping the country's declining property sector,

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Speaker 1: Bloomberg has learned that financial regulators, local governments, and housing

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Speaker 1: officials will join a Chinese cabinet meeting today to discuss

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Speaker 1: the matter, including a proposal to clear excess housing inventory.

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Speaker 1: A report suggests authorities will announce new policy measures to

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Speaker 1: tackle the real estate crisis. Winnie Wu China Equity Strates

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Speaker 1: is that Bank of America Security says the government's help

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Speaker 1: is needed for.

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Speaker 4: The demand side. The key is to make property desirable

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Speaker 4: again because for the past few years, you know, with

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Speaker 4: the properties for leaving, not for speculation, home price has

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Speaker 4: been falling and people are not going to buy a

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Speaker 4: depreciating asset, right So the key is to change the

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Speaker 4: expectation to make people have the confidence on property price

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Speaker 4: that is going to stabilize or even have room for

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Speaker 4: long term appreciation. Now you know that probably need a

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Speaker 4: strong momentum in terms of a package of policies.

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Speaker 1: Bank of America's Winnie Wu speaking there, the news comes

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Speaker 1: as defaulted Chinese builds a country guards and begins a

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Speaker 1: major legal battle with a creditor seeking the developer's liquidation. Today,

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Speaker 1: a Bloomberg gauge of Chinese real estate stocks rose as

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Speaker 1: much as seven percent in early morning trading, following an

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Speaker 1: eleven percent gain on Thursday.

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Speaker 2: China's president Chi Jinping and Russian leader of Vladimir Putin

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Speaker 2: have pledged to intensify cooperation against what they see as

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Speaker 2: US containment. Putin is in Beijing for a state visit,

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Speaker 2: and in a joint declaration, the two leaders called Washington's

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Speaker 2: approach destructive and hostile. But JP Morgan CEO Jamie Diamond

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Speaker 2: says that despite growing policy tensions, the US should not

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Speaker 2: turn away from China.

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Speaker 5: I think it's the right thing for America to fully

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Speaker 5: and deeply engaged with China, you know, competitively. You know

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Speaker 5: every nation is going to do it's in their own interest,

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Speaker 5: national security, social America. We should define that frillium properly.

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Speaker 5: If it's unfair trade, you know, negotiate that or do

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Speaker 5: whatever you need to do, but the engagement is the

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Speaker 5: right theyre going to do.

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Speaker 2: Jamie Diamond made the comments and an exclusive interview with

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Speaker 2: Bloomberg at the bank's Global Markets conference in Paris. The

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Speaker 2: CEO of the Wall Street Giant also told us he's

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Speaker 2: still more worried about inflation than markets appear to be well.

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Speaker 1: Jamie Darmond's warning that significant price pressures continue to influence

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Speaker 1: the US economy comes as a slew of FED policymakers

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Speaker 1: repeated your own powers higher for longer message on interest rates.

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Speaker 1: Speaking separately, the Cleveland FED President Lorettamesta, the New York

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Speaker 1: FED President John Williams, and Richmond FED President Thomas Barkin

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Speaker 1: have all been arguing that it may now take longer

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Speaker 1: for inflation to reach the bank's two percent target. Now

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Speaker 1: Here is Loretemester.

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Speaker 6: Incoming economic information indicates that it's going to take longer

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Speaker 6: to gain that confidence, So holding our restrictive stance for

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Speaker 6: longer is prudent at this point as we gain clarity

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Speaker 6: about the path of inflation.

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Speaker 1: Mester, who votes on policy decisions this year, says that

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Speaker 1: it's too soon to say that progress on inflation has stalled.

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Speaker 1: The comments come after the data released on Wednesday showed

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Speaker 1: a measure of underlying US inflation cooled in April for

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Speaker 1: the first time in six months.

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Speaker 2: Ping Ann is weighing options that would allow it to

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Speaker 2: reduce its thirteen billion dollar steak and HSBC. Bloomberg has

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Speaker 2: learned that the Chinese insurance giant wants to lock in

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Speaker 2: some profits from its eight percent stake in Europe's largest lender,

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Speaker 2: ping An. Has An has had a contentious relationship with

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Speaker 2: HSBC in recent years, as it campaigned for the bank

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Speaker 2: to embark on a series of reforms, including spinning off

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Speaker 2: its Asian arm.

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Speaker 1: Well to the UK, where Chancellor Jeremy Hunt will pledge

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Speaker 1: to reduce taxes if his party wins the next election.

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Speaker 1: Hunts follows major both major party leaders setting out their

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Speaker 1: agendas for a general election earlier this week. Bloomberg's James

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Speaker 1: Wilcock has more.

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Speaker 7: Jeremy Hunt knows the Conservative Party has a problem. His

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Speaker 7: main rivals in labor poll better on the economy, so

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Speaker 7: the Chancellor wants to stress how the government have handled

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Speaker 7: a pandemic and point to tax cuts that would come

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Speaker 7: if his party were re elected.

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Speaker 8: We want to bring down the tax burd and we

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Speaker 8: want to bring down over time when it is affordable

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Speaker 8: and responsible. We want to bring down employees' national insurance

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Speaker 8: to zero. That is a very clear aspiration.

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Speaker 7: That was Jeremy Hunt last week. But with Labour more

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Speaker 7: than twenty points ahead in the polls and keis Starmer

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Speaker 7: making stabilizing the economy his first job, the question many,

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Speaker 7: even in Hunt's own party, are asking is can the

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Speaker 7: public be one over? In London James Wilcock inn Berg Radier.

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Speaker 2: The world's super rich club, now has fifteen members of

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Speaker 2: fourteen's over one hundred billion dollars, the most unrecords. The

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Speaker 2: story from Bloomberg's Charlie Pallace.

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Speaker 9: They are riding the waves of artificial intelligence, luxury goods,

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Speaker 9: and geopolitical shifts. According to the Bloomberg Billionaires Index, the

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Speaker 9: combined net worth of these people is up thirteen percent

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Speaker 9: this year to two point two trillion dollars, beating the

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Speaker 9: pace of inflation and the broader stock market. Between them,

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Speaker 9: they hold nearly a quarter of the wealth of the

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Speaker 9: world's five hundred richest people in New York. Charlie Pellett,

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Speaker 9: Bloomberg Radio.

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Speaker 1: And those are a few of our top stories for

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Speaker 1: you this morning. I think I'm going to have to

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Speaker 1: get used of saying the word Centi billionaire.

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Speaker 2: At the moment, we'll digainst that Chinese economic data and

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Speaker 2: discuss why Europe's pushed to harness hydrogen as a fuel

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Speaker 2: source might be in trouble. Put another story that caught

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Speaker 2: ARI this morning about the value of celebrity memory Rebelia.

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Speaker 2: It's now so big that there's an auction house that

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Speaker 2: specializes in this. It's called Julian's and it's opening its

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Speaker 2: first office in Asia to try and cater to demand there.

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Speaker 2: So they were notably involved in the sale of things

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Speaker 2: like Marilyn Monroe's Happy Birthday Mister President dress. They were

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Speaker 2: involved in getting it sold to Ripley's believe it or not.

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Speaker 2: Kim Kardashian also wore it to the met Ball in

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Speaker 2: twenty twenty two, and they were involved in orchestrating that

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Speaker 2: loan as well. That was a four point six million

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Speaker 2: dollar sale for that particular piece of merchandise. But it's

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Speaker 2: something that they're seeing a big boom in that this

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Speaker 2: was area of the market.

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Speaker 1: Yeah, absolutely, look for more point.

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Speaker 2: Eight million dollars, I should say, notup four point six Yeah,

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Speaker 2: very important to know the value of the dress in twenty.

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Speaker 1: Sixteen, absolutely yes, And also I mean obviously it was

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Speaker 1: hugely valuable as well to Kim Kardashian, given that it

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Speaker 1: just the pictures went absolutely Ever, look, the whole idea

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Speaker 1: is and we often talk about alternative investments art and

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Speaker 1: wine and so on, but apparently memorabilia is now having

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Speaker 1: its moment, and Deloitte's Art and Finance report showing age

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Speaker 1: has been the growth driver actually for this type of

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Speaker 1: luxury collectible. But it's really a very particular type of collectible.

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Speaker 1: You know, it's really got to have like a big

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Speaker 1: name attached, you know, John Lennon's guitar and things like that.

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Speaker 2: Yeah, I mean it's the star power that essentially adds

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Speaker 2: the value to this, but it also is a bet

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Speaker 2: on the future value of that celebrity, whether or not

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Speaker 2: something that they touched ten twenty thirty years ago is

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Speaker 2: still going to be worth something. It's a very risky

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Speaker 2: investment from that point of view.

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Speaker 1: Sure, yeah it is, and I mean we were having

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Speaker 1: a chat about this earlier. Look, I think it's also

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Speaker 1: to do with people's memory. You know, when that memory

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Speaker 1: is significant, and then you get the cash and it's

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Speaker 1: your memory and you want to buy it. Then that's

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Speaker 1: when perhaps the MEMORYIDIA goes up.

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Speaker 2: And what happens if someone gets to use internet parliamce

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Speaker 2: canceled for something later on? Just the value of that investment, Plumb,

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Speaker 2: I see. Anyway, that's the things that I worry about.

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Speaker 1: Okay, let's get some more details now. In the latest

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Speaker 1: round of Chinese economic data, which showed slowing growth in

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Speaker 1: retail sales but a pickup in factory product auction, Big

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Speaker 1: News edits a Jill d System. It's just now for more, Hi, Jill,

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Speaker 1: good morning. What do these numbers tell us then about

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Speaker 1: the state of the Chinese economy? Really was quite a

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Speaker 1: big data.

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Speaker 10: Dump, Mourning, Yes, I think that what it's telling us

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Speaker 10: is that this is very much a two track recovery,

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Speaker 10: and we are seeing a pretty substantial imbalance between supply

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Speaker 10: and demand. As you said, on the one side, you're

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Speaker 10: looking at those industrial output figures growing six point seven

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Speaker 10: percent in April from a year earlier. That's better than

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Speaker 10: a lot of economists were expected and actually attracts pretty

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Speaker 10: well with some of the recent data we've seen out

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Speaker 10: of the manufacturing sector, including some pretty solid export growth

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Speaker 10: of you know, showing improvement for April. So all of that,

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Speaker 10: I think, you know, indicates that the manufacturing side of

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Speaker 10: the equation is doing pretty well, the supply side of

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Speaker 10: the equation, but then you look at the demand side,

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Speaker 10: and that's really where a lot of these issues are

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Speaker 10: still continuing to persist. I mean, those consumer sales figures,

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Speaker 10: I think it was somewhere around two point three percent

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Speaker 10: expansion in April. That was pretty significantly lower than what

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Speaker 10: a lot of economists were expecting. That also comes on

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Speaker 10: the heels of some pretty anemic consumer inflation data that

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Speaker 10: we just got recently. So all of that's telling us

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Speaker 10: that there's still these issues within domestic demand that are

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Speaker 10: really weighing on the economy and sort of threatening growth

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Speaker 10: for the year. And I think what that's all pointing

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Speaker 10: to is that there's still a lot of issues within

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Speaker 10: the property sector, in particular in China that are really

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Speaker 10: really weighing on demand and sentiments.

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Speaker 2: Jill, we got this data as China also launched the

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Speaker 2: first of its special bond sales. What did that tell

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Speaker 2: us about in vaster confidence in the Chinese economy.

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Speaker 10: Yeah, so, actually, I think the issuance of the special

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Speaker 10: sovereign bonds was pretty solid today. So they started with

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Speaker 10: a thirty year auction it to redemand of almost four

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Speaker 10: times the amount on offer. Of course, the sale of

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Speaker 10: these ultralong special sovereign bonds are going to continue throughout

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Speaker 10: the rest of the year, so this just marks a

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Speaker 10: portion of that. But I think that's some you know,

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Speaker 10: you know, obviously some fairly significant news for how this

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Speaker 10: form of stimulus is going to take place. I remember

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Speaker 10: when this was announced back the beginning of March. You know,

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Speaker 10: there wasn't a massive market reaction, just the fact that

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Speaker 10: you know, these were going to be issued, but it

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Speaker 10: does indicate that the government cares to a certain extent

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Speaker 10: about building up some stimulus. This is the kind of

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Speaker 10: thing that's usually used for like infrastructure investments, so sort

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Speaker 10: of spurring activity that way. But we'll see how, you know,

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Speaker 10: the rest of that carries throughout the year. But a

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Speaker 10: pretty decent start so far.

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Speaker 2: Let's turn to another story that we're looking at this morning.

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Speaker 2: European companies and governments are banking on green hydrogen to

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Speaker 2: replace fossil fuels, but the dream may have to be

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Speaker 2: scaled back as hydrogen is much more expensive and there's

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Speaker 2: still no proven method yet to safely store, transport and

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Speaker 2: burn it. The danger is if Europe waits too long

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Speaker 2: for the so called green gas to materialize, it could

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Speaker 2: be hooked on fossil fuels for longer. This is something

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Speaker 2: that our energy transition reporter Petrosga has been reporting on

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Speaker 2: and she joined us from Berlin now for more. Petro

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Speaker 2: good morning. Is hydrogen being hyped too much?

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Speaker 11: Yes, clearly. I mean it is seen as a great

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Speaker 11: alternative for natural which is used in homes and power

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Speaker 11: plants everywhere. So it's a very easy solution just to

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Speaker 11: swap one gas with the other. The problem is that

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Speaker 11: hydrogen has only why the time you're producing hydrogen, you're

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Speaker 11: losing seventy percent of the efficiency, and of course it's

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Speaker 11: much more expensive.

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Speaker 1: So what's the risk if the bet on green hydrogen

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Speaker 1: doesn't materialize and there is a big bet in Europe

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Speaker 1: on it isn't there.

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Speaker 11: It's exactly that we will just delay the transition that

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Speaker 11: we can already make, like for example, installing heat pumps

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Speaker 11: or using the renewable energy that's already there from a

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Speaker 11: solar wind and other sources, and waiting on something that

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Speaker 11: still hasn't materialized yet. The IEA has done a research

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Speaker 11: last year that only four percent of the projects announced

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Speaker 11: on hydrogen have actually reached a final investment decision, So

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Speaker 11: there's a huge gap between the announcements and the actual

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Speaker 11: projects on the ground.

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Speaker 2: Talk to us about of the German government is thinking

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Speaker 2: about that. They're looking at building gas power plants that

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Speaker 2: could then later be converted to hydrogen.

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Speaker 11: That's a huge trial because Germany, as you know, has

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Speaker 11: switched off its last nuclear power plants last year. It

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Speaker 11: also wants to fade out coal, but you need something

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Speaker 11: when wind and solar are not available, especially in the winters.

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Speaker 11: So they're backing on these hydrogen ready new gas power

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Speaker 11: plants to produce that energy and eventually switch to full

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Speaker 11: hydrogen by the end of the twenty thirties. And that

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Speaker 11: means actually building new fossil fuel infrastructure in the next years.

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Speaker 11: Yet there's not yet any government scheme available. We don't

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Speaker 11: know when is this coming. They want to build ten

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Speaker 11: gigawatts of capacity, which is more than twenty large power plants.

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Speaker 11: There's one such utility in place which we visited in

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Speaker 11: East Germany's Leipzig. They have the turbine that with a

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Speaker 11: few tweaks can actually run one hundred percent hydrogen, although

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Speaker 11: there has never been a test yet. They want to

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Speaker 11: do that first test in twenty twenty six. Yet they

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Speaker 11: don't have a connection to the hydrogen grid which is

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Speaker 11: still on the drawing board in Germany. They don't have

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Speaker 11: actualizers on site, so it has to be tracked. And

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Speaker 11: then the question is how safe is that and how

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Speaker 11: especially economic economically viable. Even the utility did not answer

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Speaker 11: these questions when we went there.

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Speaker 1: Yeah, and that sounds like a long list of issues.

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Speaker 1: Here in the UK, there was also a proposal to

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Speaker 1: try to get people in towns and cities. Redcar, for example,

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Speaker 1: had a pilot scheme around using hydrogen in homes. We

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Speaker 1: saw a lot of protests in the UK and the

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Speaker 1: end that didn't happen. What did you take away from that?

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Speaker 11: Yeah, my colleague Raga Morrison went to the town where

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Speaker 11: Northern Gas Networks tried to basically replace natural gas one

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Speaker 11: hundred percent hydrogen and people were really scared because suddenly

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Speaker 11: on stoves and in the heating boilers, which some of

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Speaker 11: them also had to be replaced. You're having a gas

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Speaker 11: where you don't know is it combustible. They have to

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Speaker 11: put even fans to make sure there's no danger in

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Speaker 11: the house. People also weren't told about the pricing of hydrogen.

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Speaker 11: If they have to pay for a fuel that's now

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Speaker 11: way more expensive than natural gas, of course that will

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Speaker 11: be dramatic for small households. So eventually, after these protests,

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Speaker 11: the test was called off.

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