1 00:00:00,240 --> 00:00:07,680 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:10,680 --> 00:00:13,720 Speaker 2: This is Bloomberg Daybreak Weekend, our global look at the 3 00:00:13,760 --> 00:00:16,280 Speaker 2: top stories in the coming week from our Daybreak anchors 4 00:00:16,360 --> 00:00:18,920 Speaker 2: all around the world. Straight Ahead on the program, we'll 5 00:00:18,920 --> 00:00:21,639 Speaker 2: look at some delayed economic data in the US and 6 00:00:21,680 --> 00:00:25,560 Speaker 2: how they may impact FED policy. I'm Nathan Hager in Washington. 7 00:00:25,680 --> 00:00:28,200 Speaker 3: I'm Caroline Hedkit in London, where we're looking at the 8 00:00:28,240 --> 00:00:29,680 Speaker 3: global energy sector. 9 00:00:29,960 --> 00:00:33,680 Speaker 4: I'm Dot Krisner looking at softbanks approaching earnings, as well 10 00:00:33,720 --> 00:00:36,440 Speaker 4: as the company's bets on artificial intelligence. 11 00:00:38,360 --> 00:00:42,400 Speaker 1: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 12 00:00:42,440 --> 00:00:46,120 Speaker 1: eleven three zero, New York, Bloomberg ninety nine to one, Washington, DC, 13 00:00:46,640 --> 00:00:50,879 Speaker 1: Bloomberg ninety two to nine, Boston, DAB Digital Radio, London, 14 00:00:51,280 --> 00:00:54,520 Speaker 1: Sirius XM one twenty one, and around the world on 15 00:00:54,560 --> 00:00:57,720 Speaker 1: Bloomberg Radio, dot Com and the Bloomberg Business App. 16 00:01:03,000 --> 00:01:05,720 Speaker 2: Good day to you. I'm Nathan Hager. We begin today's 17 00:01:05,720 --> 00:01:08,960 Speaker 2: program with some key economic data in the US. It's 18 00:01:09,080 --> 00:01:12,080 Speaker 2: coming a little late thanks to the recent government shutdown, 19 00:01:12,120 --> 00:01:14,800 Speaker 2: but we do expect to get the January employment report 20 00:01:14,800 --> 00:01:18,800 Speaker 2: this Wednesday, so no jobs Friday this month. The Consumer 21 00:01:18,840 --> 00:01:21,960 Speaker 2: Price Index that had been scheduled for this Wednesday is 22 00:01:21,959 --> 00:01:25,560 Speaker 2: coming out this Friday, so we get a CPI Friday instead. 23 00:01:25,640 --> 00:01:27,520 Speaker 2: Here to get us ready for the figures and how 24 00:01:27,560 --> 00:01:31,119 Speaker 2: they may affect FED policy. Is Stuart paul Us, economist 25 00:01:31,160 --> 00:01:34,160 Speaker 2: with Bloomberg Economics, starting to get a little used to 26 00:01:34,200 --> 00:01:37,759 Speaker 2: this data coming a touch late with these recent government shutdowns. 27 00:01:37,760 --> 00:01:41,039 Speaker 2: Are we expecting any distortions in the data due to 28 00:01:41,120 --> 00:01:45,200 Speaker 2: the slight lapse in timing on these numbers? 29 00:01:45,240 --> 00:01:49,120 Speaker 5: Stuart, The distortions will probably be pretty limited. Data collection 30 00:01:49,440 --> 00:01:53,440 Speaker 5: continued pretty much uninterrupted, so I think that the quality 31 00:01:53,480 --> 00:01:57,160 Speaker 5: of the data should be about fine. What we're expecting, though, 32 00:01:57,360 --> 00:02:01,680 Speaker 5: is a pretty poor reading for headline job gains. We're 33 00:02:01,720 --> 00:02:04,800 Speaker 5: expecting the January report to show just about fifteen thousand 34 00:02:05,000 --> 00:02:08,280 Speaker 5: jobs added during the month of January, and that's about 35 00:02:08,760 --> 00:02:13,440 Speaker 5: a quarter of what the consensus estimates it estimates we're 36 00:02:13,480 --> 00:02:16,200 Speaker 5: going to see. The thing that's most interesting, Nathan, is 37 00:02:16,200 --> 00:02:19,880 Speaker 5: that beyond the actual monthly job gains number, we're just 38 00:02:19,919 --> 00:02:22,440 Speaker 5: going to have a lot of technical adjustments that are 39 00:02:22,480 --> 00:02:26,320 Speaker 5: included in the January report. We're gonna have an adjustment 40 00:02:26,360 --> 00:02:29,320 Speaker 5: of the birth death model. We're gonna have the official 41 00:02:29,480 --> 00:02:33,320 Speaker 5: rebenchmarking of the data. We've already seen a preliminary rebench 42 00:02:33,400 --> 00:02:37,400 Speaker 5: marking showing that about nine hundred eleven thousand jobs are 43 00:02:37,400 --> 00:02:40,480 Speaker 5: going to get stripped out of the data. So the 44 00:02:40,600 --> 00:02:43,880 Speaker 5: job total job number is going to be revised down 45 00:02:44,080 --> 00:02:47,280 Speaker 5: by about nine hundred eleven thousand jobs. So there's just 46 00:02:47,360 --> 00:02:49,760 Speaker 5: gonna be a lot of quirks in the report itself, 47 00:02:50,200 --> 00:02:54,120 Speaker 5: beyond even the slow pace of hiring that we're expecting 48 00:02:54,160 --> 00:02:54,960 Speaker 5: the report to show. 49 00:02:55,600 --> 00:02:58,960 Speaker 2: We got some clues into that slow hiring in some 50 00:02:59,040 --> 00:03:01,560 Speaker 2: of the latest data leading up to this report. The 51 00:03:01,639 --> 00:03:04,919 Speaker 2: latest weekly jobless claims came in a little bit higher 52 00:03:04,919 --> 00:03:09,079 Speaker 2: than expected. And that pretty eye popping number on layoff 53 00:03:09,160 --> 00:03:12,600 Speaker 2: notices from Challenger Gray and Christmas as well. Does that 54 00:03:12,680 --> 00:03:15,440 Speaker 2: factor into some of your analysis on why you're a 55 00:03:15,480 --> 00:03:18,880 Speaker 2: little bit below consensus on the top line number for payrolls. 56 00:03:19,360 --> 00:03:21,880 Speaker 5: It just paints a picture of a cooling labor market 57 00:03:21,960 --> 00:03:24,680 Speaker 5: and that's been one of our major themes for several 58 00:03:24,720 --> 00:03:28,200 Speaker 5: months now. So, as you mentioned, Challenger job cuts number 59 00:03:28,200 --> 00:03:31,120 Speaker 5: shows about one hundred and twenty percent increase year on 60 00:03:31,200 --> 00:03:35,080 Speaker 5: year in total job cut announcement. The initial jobless claims 61 00:03:35,160 --> 00:03:38,440 Speaker 5: data popped last week, and when we also think back 62 00:03:38,440 --> 00:03:42,120 Speaker 5: to last week's December JAULT report, it really showed a 63 00:03:42,320 --> 00:03:45,880 Speaker 5: major cooling in labor demand in the month of December. 64 00:03:45,960 --> 00:03:50,560 Speaker 5: So December through January, all the way through January, labor 65 00:03:50,560 --> 00:03:53,360 Speaker 5: demand had just been cooling pretty dramatically. So we think 66 00:03:53,400 --> 00:03:58,280 Speaker 5: that when we finally see this nonfarm payrolls report in 67 00:03:58,320 --> 00:04:01,040 Speaker 5: the middle of the next week, it's going to add 68 00:04:01,080 --> 00:04:03,640 Speaker 5: to our conviction that the labor market is cooling and 69 00:04:03,680 --> 00:04:05,880 Speaker 5: it's not a material source of inflation pressure. 70 00:04:05,920 --> 00:04:09,920 Speaker 2: Right now, the theme we've been hearing is low, higher, 71 00:04:10,080 --> 00:04:14,400 Speaker 2: low fire labor market. What's driving the dynamics in the 72 00:04:14,480 --> 00:04:16,880 Speaker 2: labor market right now, we're starting to see a little 73 00:04:16,920 --> 00:04:18,720 Speaker 2: bit more evidence of this weakness. 74 00:04:19,160 --> 00:04:22,839 Speaker 5: Firms are really reassessing their labor needs right now. I 75 00:04:22,839 --> 00:04:27,599 Speaker 5: don't think that firms are fully realizing the efficiency gains 76 00:04:27,640 --> 00:04:30,400 Speaker 5: to be had from AI. I don't think that they 77 00:04:30,600 --> 00:04:34,640 Speaker 5: know what to even expect as they deploy AI. But 78 00:04:34,800 --> 00:04:38,760 Speaker 5: right now they're really hitting the brakes on headcount. And 79 00:04:38,880 --> 00:04:43,359 Speaker 5: when we look at first, especially small business hiring plans, 80 00:04:43,440 --> 00:04:47,440 Speaker 5: right now they're really just hitting the brakes and looking 81 00:04:47,480 --> 00:04:51,000 Speaker 5: to see how much they could expand how much AI 82 00:04:51,120 --> 00:04:54,800 Speaker 5: will crowd out their need for additional headcount and ultimately 83 00:04:54,839 --> 00:04:57,359 Speaker 5: what they'll need. And at this point, this sort of 84 00:04:57,400 --> 00:05:02,400 Speaker 5: turn of the year business plan reassessment point in time, 85 00:05:02,880 --> 00:05:05,560 Speaker 5: that's really what we're seeing from firms. They're just reassessing 86 00:05:05,640 --> 00:05:08,359 Speaker 5: how much labor they're actually going to need and so 87 00:05:08,480 --> 00:05:10,800 Speaker 5: how much they're going to need to hire throughout this year. 88 00:05:11,120 --> 00:05:13,440 Speaker 2: Is this payrolls report going to raise questions for you 89 00:05:13,720 --> 00:05:17,160 Speaker 2: about whether the FED was right to pause on interra 90 00:05:17,240 --> 00:05:18,600 Speaker 2: straight cuts last month. 91 00:05:19,400 --> 00:05:22,040 Speaker 5: Well, I think that the FED is focused right now 92 00:05:22,120 --> 00:05:24,520 Speaker 5: on the balance in the labor market and whether that 93 00:05:24,640 --> 00:05:27,400 Speaker 5: balance in the labor market is feeding through into inflation. 94 00:05:28,120 --> 00:05:30,559 Speaker 5: They knew going into the January meeting that the labor 95 00:05:30,600 --> 00:05:36,680 Speaker 5: market was tilted toward an excess supply of workers. That 96 00:05:36,839 --> 00:05:40,200 Speaker 5: point was only confirmed in the December Jolts report, which 97 00:05:40,200 --> 00:05:47,040 Speaker 5: showed about one point two unemployed workers per job opening, 98 00:05:47,640 --> 00:05:51,520 Speaker 5: and so the FED already understood that there was this 99 00:05:51,680 --> 00:05:54,719 Speaker 5: excess supply of workers. I think that the decision to 100 00:05:54,800 --> 00:06:00,239 Speaker 5: pause is really uh more contingent on what's going on 101 00:06:00,040 --> 00:06:03,000 Speaker 5: on the goods side of the market, whether we're going 102 00:06:03,040 --> 00:06:06,760 Speaker 5: to see additional inflation pressure coming from tariff passed through, 103 00:06:07,200 --> 00:06:09,440 Speaker 5: and I think that the jury is still a little 104 00:06:09,440 --> 00:06:13,279 Speaker 5: bit out on that front. When we dig into corporate data, 105 00:06:13,640 --> 00:06:17,920 Speaker 5: it looks as though we're passing through peak tariff pass through, 106 00:06:18,279 --> 00:06:20,640 Speaker 5: but it seems like the Fed is taking this cautious 107 00:06:20,640 --> 00:06:24,240 Speaker 5: approach on the inflation side, really worried about goods more 108 00:06:24,240 --> 00:06:24,760 Speaker 5: than labor. 109 00:06:25,040 --> 00:06:28,200 Speaker 2: Well, that gets us to the CPI print that we're 110 00:06:28,240 --> 00:06:31,520 Speaker 2: expecting on Friday. What are your expectations there when it 111 00:06:31,600 --> 00:06:32,760 Speaker 2: comes to inflation. 112 00:06:33,200 --> 00:06:34,960 Speaker 5: I think that the monthly print is going to be hot. 113 00:06:34,960 --> 00:06:36,440 Speaker 5: I think that we're going to see about a zero 114 00:06:36,480 --> 00:06:40,280 Speaker 5: point three percent month on month pace of both headline 115 00:06:40,320 --> 00:06:43,520 Speaker 5: and core inflation. When we look at PMI data, firms 116 00:06:43,640 --> 00:06:47,719 Speaker 5: were marking up their prices. They were reporting higher input costs. 117 00:06:47,839 --> 00:06:51,559 Speaker 5: I think that inventories were a big story and running 118 00:06:51,600 --> 00:06:54,400 Speaker 5: down inventories during the holiday season. Now firms are feeling 119 00:06:54,400 --> 00:06:57,320 Speaker 5: a little bit higher input costs and they're starting to 120 00:06:57,360 --> 00:07:01,440 Speaker 5: try to pass that through to customers once again. And ultimately, however, 121 00:07:01,480 --> 00:07:06,800 Speaker 5: we think that pricing plans are pointing toward cooling inflation pressures. 122 00:07:07,080 --> 00:07:09,520 Speaker 5: But this January CPI report we think is going to 123 00:07:09,640 --> 00:07:12,640 Speaker 5: end up showing I think quite a bit of inflation 124 00:07:12,680 --> 00:07:13,800 Speaker 5: pressure in January. 125 00:07:14,120 --> 00:07:16,000 Speaker 2: Thanks for the Stuart, good having you with us. It's 126 00:07:16,000 --> 00:07:19,680 Speaker 2: Stuart Paul, us economist with Bloomberg Economics. Let's take a 127 00:07:19,680 --> 00:07:22,239 Speaker 2: look now at some stocks making news in the week ahead. 128 00:07:22,280 --> 00:07:25,800 Speaker 2: I'm Nathan Hager, joined by Bailey Lipschultz, senior equities reporter 129 00:07:25,960 --> 00:07:28,800 Speaker 2: for Bloomberg News. Bailey, it looks like Wednesday is going 130 00:07:28,840 --> 00:07:31,040 Speaker 2: to be a particularly busy day on the earnings for 131 00:07:31,120 --> 00:07:33,400 Speaker 2: we got several big names reporting in the middle of 132 00:07:33,400 --> 00:07:36,840 Speaker 2: the week. So let's start with Cisco. The tech earnings 133 00:07:36,880 --> 00:07:38,200 Speaker 2: aren't quite done with us yet. 134 00:07:38,280 --> 00:07:40,600 Speaker 6: Huh No, not done with us yet, and we're pivoting 135 00:07:40,640 --> 00:07:43,400 Speaker 6: to some of those I don't know, actual companies that 136 00:07:43,520 --> 00:07:46,080 Speaker 6: make real tangible goods that you can hold, and Cisco's 137 00:07:46,120 --> 00:07:48,200 Speaker 6: going to be a big one given the stocks up 138 00:07:48,200 --> 00:07:50,400 Speaker 6: more than thirty percent over the last year and a 139 00:07:50,400 --> 00:07:52,960 Speaker 6: lot of expectations are a big focus on can they 140 00:07:53,000 --> 00:07:56,480 Speaker 6: maintain the momentum that we've been seeing given the jitters 141 00:07:56,600 --> 00:08:00,240 Speaker 6: broadly speaking around software, AI and kind of the broaderself. 142 00:08:00,400 --> 00:08:03,080 Speaker 2: Yeah, we've seen the sub massive sell off, particularly and 143 00:08:03,120 --> 00:08:08,000 Speaker 2: software stocks after the anthropic AI agent was announced. So 144 00:08:08,120 --> 00:08:10,960 Speaker 2: how could that potentially affect the results we see from 145 00:08:11,040 --> 00:08:12,440 Speaker 2: Cisco particularly well. 146 00:08:12,480 --> 00:08:14,400 Speaker 6: I think the big question comes back to what is 147 00:08:14,440 --> 00:08:17,640 Speaker 6: management guide towards for the remainder of twenty twenty six 148 00:08:17,720 --> 00:08:22,160 Speaker 6: And everyone seemingly is marking down their software expectations. But 149 00:08:22,240 --> 00:08:24,600 Speaker 6: is a company like Cisco that makes the hardware and 150 00:08:24,720 --> 00:08:28,239 Speaker 6: is able to at least benefit from a huge push 151 00:08:28,280 --> 00:08:32,360 Speaker 6: of AI investments. The question will be is there actually capacity? 152 00:08:32,880 --> 00:08:35,280 Speaker 6: Is their capacity constraight and are we going to hit 153 00:08:35,320 --> 00:08:37,719 Speaker 6: a point where maybe some of these companies, the likes 154 00:08:37,720 --> 00:08:40,040 Speaker 6: of Meta and Google, who seemingly are not slowing down 155 00:08:40,040 --> 00:08:42,280 Speaker 6: on their investment, are we going to see that potentially 156 00:08:42,360 --> 00:08:45,080 Speaker 6: hidden inflection point or a peak and that'll be critical 157 00:08:45,120 --> 00:08:47,680 Speaker 6: for investors. But again, this is a stock that has 158 00:08:47,720 --> 00:08:51,040 Speaker 6: continued to rally over the last few days and weeks, 159 00:08:51,120 --> 00:08:53,680 Speaker 6: as opposed to, as we mentioned, the big sell off 160 00:08:53,679 --> 00:08:56,760 Speaker 6: that we've seen for anything that could lose out to 161 00:08:56,880 --> 00:08:59,120 Speaker 6: AI making their kind of software relevant. 162 00:08:59,280 --> 00:09:02,480 Speaker 2: Along with Big we're waiting for earnings from Big Max. 163 00:09:02,760 --> 00:09:06,120 Speaker 2: What do we expect from McDonald's this week, Bayley, There's 164 00:09:06,160 --> 00:09:06,679 Speaker 2: a lot. 165 00:09:06,520 --> 00:09:10,960 Speaker 6: Of optimism about this, how McDonald's is positioning benefiting from 166 00:09:11,280 --> 00:09:14,480 Speaker 6: tax rebates for the lower end consumer benefiting potentially from 167 00:09:14,480 --> 00:09:18,080 Speaker 6: your upper and middle class downshifting some of their spending. 168 00:09:18,120 --> 00:09:19,880 Speaker 6: This is a company that, if you look at the 169 00:09:19,960 --> 00:09:21,840 Speaker 6: chart on a twelve month basis, looks a bit like 170 00:09:21,880 --> 00:09:24,280 Speaker 6: an EKG. But right now it's going to close at 171 00:09:24,320 --> 00:09:27,160 Speaker 6: another record high. So this is a lot of excitement 172 00:09:27,200 --> 00:09:29,400 Speaker 6: around their new offerings. It does seem like when you 173 00:09:29,400 --> 00:09:31,280 Speaker 6: talk to analysts or look through some of the notes, 174 00:09:31,400 --> 00:09:33,679 Speaker 6: this is one of the companies that could benefit as 175 00:09:33,679 --> 00:09:36,240 Speaker 6: a fast food operator, not only here in the US, 176 00:09:36,280 --> 00:09:39,280 Speaker 6: but globally speaking. So again, does it turn into to 177 00:09:39,320 --> 00:09:42,160 Speaker 6: your point of price perfection example remains to be seen, 178 00:09:42,200 --> 00:09:43,120 Speaker 6: But a lot of excitement. 179 00:09:43,320 --> 00:09:45,280 Speaker 2: No, there are a lot of questions, aren't there about 180 00:09:45,320 --> 00:09:49,360 Speaker 2: whether the pivot, the return of the extra value meal 181 00:09:49,679 --> 00:09:53,760 Speaker 2: is going to eat into McDonald's margins potentially. 182 00:09:54,200 --> 00:09:56,520 Speaker 6: Well, that's the question when you look at a company 183 00:09:57,080 --> 00:09:59,400 Speaker 6: like McDonald's, or you kind of look broadly speaking at 184 00:09:59,600 --> 00:10:02,400 Speaker 6: some of these companies who are needing to rethink their playbook, 185 00:10:02,600 --> 00:10:05,800 Speaker 6: does that impact margins? And are investors willing to underwrite 186 00:10:05,800 --> 00:10:08,720 Speaker 6: maybe more narrow margins for actually a return to growth 187 00:10:08,840 --> 00:10:12,120 Speaker 6: or seemingly bigger kind of beat on the top line. 188 00:10:12,160 --> 00:10:14,240 Speaker 6: But the questions do come back to your point. If 189 00:10:14,240 --> 00:10:16,240 Speaker 6: you're using better deals or trying to get people in 190 00:10:16,240 --> 00:10:19,199 Speaker 6: the door, and you're competing with other peers who are 191 00:10:19,200 --> 00:10:21,280 Speaker 6: catering towards people who don't want to spend up to 192 00:10:21,320 --> 00:10:24,079 Speaker 6: eat out or eat fast food, how does that ultimately 193 00:10:24,080 --> 00:10:26,800 Speaker 6: impact the bottom line. But it does seem like again, 194 00:10:27,360 --> 00:10:29,680 Speaker 6: at least the cell side is very optimistic, and I 195 00:10:29,720 --> 00:10:32,160 Speaker 6: do want to call out the fact that if investors 196 00:10:32,160 --> 00:10:35,760 Speaker 6: are rotating away from fast growing tech stocks, McDonald's is 197 00:10:35,800 --> 00:10:37,680 Speaker 6: not a bad place to park your money. And we've 198 00:10:37,679 --> 00:10:39,520 Speaker 6: been seeing that play out over the last few weeks. 199 00:10:39,920 --> 00:10:43,679 Speaker 2: And along with McDonald's and Cisco Systems, we're going to 200 00:10:43,720 --> 00:10:46,480 Speaker 2: get earnings as well from Tea Mobile on Wednesday, I 201 00:10:46,480 --> 00:10:49,320 Speaker 2: think we had some recent beats, didn't we from Verizon 202 00:10:49,400 --> 00:10:51,680 Speaker 2: and AT and T. Where does that leave the country's 203 00:10:51,679 --> 00:10:53,400 Speaker 2: most valuable cell phone provider. 204 00:10:53,720 --> 00:10:55,839 Speaker 6: It's kind of stuck in a rut. If you look 205 00:10:55,880 --> 00:10:58,920 Speaker 6: at the stock price right now on Team Mobile really 206 00:10:58,920 --> 00:11:02,360 Speaker 6: move in sideways. Did rally from a low at the 207 00:11:02,480 --> 00:11:04,679 Speaker 6: end towards the end of January of one hundred and 208 00:11:04,720 --> 00:11:07,080 Speaker 6: eighty three dollars. But when you compare or overlay their 209 00:11:07,160 --> 00:11:10,360 Speaker 6: charts against AT and T to your point or Verizon, 210 00:11:10,600 --> 00:11:14,160 Speaker 6: those stocks look like rocket ships. Verizon over the last 211 00:11:14,160 --> 00:11:16,440 Speaker 6: week went from thirty about forty dollars a share to 212 00:11:16,480 --> 00:11:18,960 Speaker 6: forty seven dollars a share. On the flip side, AT 213 00:11:19,080 --> 00:11:22,520 Speaker 6: and T is up pretty sharply after rallying after its results, 214 00:11:22,600 --> 00:11:25,520 Speaker 6: So it does seem like investors maybe are baking in 215 00:11:25,600 --> 00:11:27,880 Speaker 6: some optimism. There was a bit of a lift which 216 00:11:27,920 --> 00:11:31,320 Speaker 6: we typically do see with mobile or spectrum providers. We 217 00:11:31,360 --> 00:11:34,040 Speaker 6: do see with airlines when one company beats, people get 218 00:11:34,080 --> 00:11:36,280 Speaker 6: a bit more optimistic. But if we're looking at a 219 00:11:36,280 --> 00:11:38,640 Speaker 6: T Mobile stock that on the last twelve months is down, 220 00:11:38,880 --> 00:11:41,080 Speaker 6: it doesn't seem like investors are maybe giving them the 221 00:11:41,120 --> 00:11:45,280 Speaker 6: credit to benefit again from the optimism and from what 222 00:11:45,559 --> 00:11:48,040 Speaker 6: all intents and purposes, kind of looks like a little 223 00:11:48,080 --> 00:11:49,480 Speaker 6: bit like a rocket ship as much as it could 224 00:11:49,520 --> 00:11:52,480 Speaker 6: for a communications company. What we saw for Verizon again 225 00:11:52,559 --> 00:11:55,040 Speaker 6: rallying twelve percent last week after their results. 226 00:11:55,440 --> 00:11:58,160 Speaker 2: So what are the potential big growth drivers for T 227 00:11:58,320 --> 00:11:59,280 Speaker 2: Mobile in this quarter? 228 00:12:00,360 --> 00:12:03,000 Speaker 6: Focus is going to be on how are they competing 229 00:12:03,960 --> 00:12:06,440 Speaker 6: with AT and T? With Verizon, can they continue to 230 00:12:06,760 --> 00:12:09,680 Speaker 6: compete on price? We all see the Verizon ads about 231 00:12:09,720 --> 00:12:12,480 Speaker 6: how if you can swap and they can beat your 232 00:12:12,480 --> 00:12:15,080 Speaker 6: price for a mobile provider. The big other question is 233 00:12:15,240 --> 00:12:18,760 Speaker 6: are they going to benefit potentially from what we've seen 234 00:12:18,960 --> 00:12:24,800 Speaker 6: play out with SpaceX's starlink direct to consumer potentially from Starlink. 235 00:12:25,440 --> 00:12:27,680 Speaker 6: The big question also is when you look at these 236 00:12:27,679 --> 00:12:31,000 Speaker 6: companies in their propensity to return capital, whether that's buybacks, 237 00:12:31,040 --> 00:12:34,079 Speaker 6: whether that's through dividends. Management's commentary around that I think 238 00:12:34,120 --> 00:12:35,840 Speaker 6: also will be closely watched. 239 00:12:35,840 --> 00:12:39,400 Speaker 2: A lot to watch just on Wednesday for earnings. Thank 240 00:12:39,400 --> 00:12:42,280 Speaker 2: you for this, Bailey Lipschultz, see your equities reporter for 241 00:12:42,360 --> 00:12:45,400 Speaker 2: Bloomberg News. And coming up on Bloomberg day Break weekend, 242 00:12:45,400 --> 00:12:48,720 Speaker 2: we'll look ahead as global energy leaders convene in London 243 00:12:48,840 --> 00:12:53,640 Speaker 2: for International Energy Week. I'm Nathan Hager, and this is Bloomberg. 244 00:13:05,120 --> 00:13:07,920 Speaker 2: This is Bloomberg Daybreak weekend, our global look ahead at 245 00:13:07,960 --> 00:13:10,280 Speaker 2: the top stories for investors in the coming week. I'm 246 00:13:10,360 --> 00:13:13,520 Speaker 2: Nathan Hager in Washington. Up later in our program, we'll 247 00:13:13,559 --> 00:13:16,960 Speaker 2: look ahead to earnings from the Japanese holding company soft Bank. 248 00:13:17,200 --> 00:13:20,280 Speaker 2: But first in the coming days, global energy leaders convene 249 00:13:20,320 --> 00:13:25,400 Speaker 2: in London for International Energy Week. Policymakers chief executives, academics, 250 00:13:25,400 --> 00:13:29,080 Speaker 2: and even influencers will gather united by a shared focus 251 00:13:29,120 --> 00:13:33,559 Speaker 2: on growth and security during an increasingly disordered energy transition. 252 00:13:33,960 --> 00:13:36,600 Speaker 2: For more, let's go to London and bring in Bloomberg Daybreak. 253 00:13:36,600 --> 00:13:38,840 Speaker 2: You're a banker, Caroline hebger Nathan. 254 00:13:38,920 --> 00:13:42,360 Speaker 3: In recent weeks, the conversation around global energy has been 255 00:13:42,400 --> 00:13:44,760 Speaker 3: focused on the Middle East to oil markets have been 256 00:13:44,800 --> 00:13:48,120 Speaker 3: calibrating the prospect of a conflict between the US and Iran. 257 00:13:48,559 --> 00:13:51,640 Speaker 3: The tension is built up as President Donald Trump has 258 00:13:51,679 --> 00:13:55,080 Speaker 3: dispatched an armada to the region and a US jets 259 00:13:55,120 --> 00:13:58,400 Speaker 3: shut down an Iranian drone. Trump said recently that the 260 00:13:58,400 --> 00:14:02,239 Speaker 3: two sides are now talking, Deran's foreign ministry has expressed 261 00:14:02,280 --> 00:14:06,080 Speaker 3: hopes that the process could bear fruit. There's also a 262 00:14:06,120 --> 00:14:09,640 Speaker 3: growing standoff, though, between the White House and Iraqi politicians 263 00:14:10,000 --> 00:14:13,200 Speaker 3: over who should be Iraq's next prime minister, which could 264 00:14:13,400 --> 00:14:19,200 Speaker 3: destabilize another OPEC nation. So geopolitics and hard power will 265 00:14:19,320 --> 00:14:22,359 Speaker 3: likely be high on the agenda at the upcoming International 266 00:14:22,480 --> 00:14:27,240 Speaker 3: Energy Week, where participants are expected to discuss issues including 267 00:14:27,480 --> 00:14:33,040 Speaker 3: energy sovereignty and industrial competitiveness, but there are many other 268 00:14:33,160 --> 00:14:37,400 Speaker 3: aspects touching on global energy needs that will also feature 269 00:14:37,520 --> 00:14:43,480 Speaker 3: including the need for energy in supporting evolving technology. China's 270 00:14:43,560 --> 00:14:47,840 Speaker 3: ramping up its energy installations. Elon Musk has worn that 271 00:14:48,040 --> 00:14:54,040 Speaker 3: energy is a limiting factor for AI deployment. Microsoft's vice 272 00:14:54,080 --> 00:14:57,240 Speaker 3: president of Energy Bobby Hollis says that energy will play 273 00:14:57,280 --> 00:15:00,280 Speaker 3: a central role in the future of Microsoft. 274 00:15:01,120 --> 00:15:03,200 Speaker 7: I think we have a lot of history to support 275 00:15:03,360 --> 00:15:06,200 Speaker 7: how energy is needed and how it can actually be 276 00:15:06,320 --> 00:15:10,640 Speaker 7: used efficiently to support infrastructure for data centers, including AI. 277 00:15:11,200 --> 00:15:14,080 Speaker 7: So the opportunity really is to take advantage of what 278 00:15:14,120 --> 00:15:16,760 Speaker 7: we saw when cloud developed, and we found lots of 279 00:15:16,800 --> 00:15:21,840 Speaker 7: opportunities for efficiency. So there's a wide range of expectations 280 00:15:22,080 --> 00:15:24,160 Speaker 7: and planning numbers out there, and you do have to 281 00:15:24,200 --> 00:15:27,040 Speaker 7: plan for a larger number so that you can make 282 00:15:27,080 --> 00:15:29,760 Speaker 7: sure that the energy is there to serve you. But 283 00:15:29,880 --> 00:15:32,440 Speaker 7: we do believe that there's going to be significant efficiency 284 00:15:32,480 --> 00:15:35,240 Speaker 7: that's going to come from deploying AI and figuring out 285 00:15:35,440 --> 00:15:38,440 Speaker 7: how we can actually make sure that we're using every 286 00:15:38,480 --> 00:15:41,320 Speaker 7: single mega megawat hour in the most efficient way possible. 287 00:15:42,400 --> 00:15:46,440 Speaker 3: That was Bobby Hollis from Microsoft speaking that to Bloomberg Television. 288 00:15:46,960 --> 00:15:51,200 Speaker 3: So how will the energy sector fuel the next technological 289 00:15:51,280 --> 00:15:56,880 Speaker 3: era and will geopolitical uncertainty overshadow its progress. Joining me 290 00:15:56,960 --> 00:16:01,520 Speaker 3: now Bloomberg's climate opinion columnist Laura will and our energy 291 00:16:01,560 --> 00:16:04,640 Speaker 3: reporter Aim and Farhat. Welcome to both of you, and 292 00:16:04,680 --> 00:16:05,680 Speaker 3: thanks for your time. 293 00:16:06,400 --> 00:16:06,720 Speaker 7: Aiman. 294 00:16:06,800 --> 00:16:10,800 Speaker 3: Can I start with you just specifically? I suppose on 295 00:16:10,960 --> 00:16:14,280 Speaker 3: the conference and its aims, it is going to gather 296 00:16:14,440 --> 00:16:17,800 Speaker 3: a lot of people together at a very pivotal moment. 297 00:16:18,320 --> 00:16:18,480 Speaker 8: Yeah. 298 00:16:18,520 --> 00:16:20,880 Speaker 9: I mean, it's an energy conference, but really energy across 299 00:16:20,920 --> 00:16:24,040 Speaker 9: all types of oil, gas, but also power electricity. You know, 300 00:16:24,080 --> 00:16:26,440 Speaker 9: we're talking about AI and data centers and trying to 301 00:16:27,160 --> 00:16:29,360 Speaker 9: power them. ePower economies. A lot of that is how 302 00:16:29,360 --> 00:16:33,120 Speaker 9: do we build more generation, whether that's gas plant, solar farms, 303 00:16:33,280 --> 00:16:34,960 Speaker 9: you know, all this stuff, and how we bring together 304 00:16:35,000 --> 00:16:38,200 Speaker 9: different stakeholders like government officials, companies and some of the 305 00:16:38,200 --> 00:16:40,200 Speaker 9: people who are funding this to make that happen. I 306 00:16:40,240 --> 00:16:41,960 Speaker 9: think this kind of conference really does that. 307 00:16:42,280 --> 00:16:46,880 Speaker 3: Yeah, Lara. A lot of the discussion surrounding energy is 308 00:16:46,920 --> 00:16:52,000 Speaker 3: still about fossil fuels, though. How motivated our policy makers 309 00:16:52,120 --> 00:16:55,800 Speaker 3: our businesses to shift the conversation towards renewables? 310 00:16:57,400 --> 00:16:59,680 Speaker 10: Yeah, well, you know, when it comes to policymakers, I 311 00:16:59,680 --> 00:17:02,800 Speaker 10: think it depends on the policy maker, you've got someone 312 00:17:02,880 --> 00:17:06,240 Speaker 10: like Ed miller Bandon, that's his big mission. He's fully 313 00:17:06,240 --> 00:17:09,159 Speaker 10: committed to the energy transition. He wants to rally support 314 00:17:09,240 --> 00:17:14,040 Speaker 10: for you know, him investing the UK's money in renewables, 315 00:17:15,000 --> 00:17:17,000 Speaker 10: for a lot of other policy makers. I think now 316 00:17:17,119 --> 00:17:20,960 Speaker 10: zero has become a politically charged thing and I think 317 00:17:20,960 --> 00:17:24,000 Speaker 10: that makes it slightly harder to communicate. So you know, 318 00:17:24,080 --> 00:17:27,159 Speaker 10: for example, with offshore wind, we had the results of 319 00:17:27,200 --> 00:17:30,159 Speaker 10: the latest subsidute auction in the UK in January and 320 00:17:30,200 --> 00:17:32,399 Speaker 10: it was a record auction in terms of capacity. It 321 00:17:32,440 --> 00:17:35,440 Speaker 10: was really positive, but it was also more expensive than 322 00:17:35,840 --> 00:17:38,920 Speaker 10: the last auction and more expensive than wholesale power prices, 323 00:17:39,280 --> 00:17:43,720 Speaker 10: and it kind of does against the overall story that 324 00:17:43,840 --> 00:17:46,400 Speaker 10: has been in recent years that renewable prices are coming 325 00:17:46,520 --> 00:17:50,200 Speaker 10: right down. And to be clear that you know, this 326 00:17:50,440 --> 00:17:53,400 Speaker 10: capacity that the UK secured will still help bring down 327 00:17:53,440 --> 00:17:56,440 Speaker 10: power prices in the future by reducing the amount of 328 00:17:56,480 --> 00:17:58,400 Speaker 10: gas that has to be bought, but it's a more 329 00:17:58,440 --> 00:18:01,800 Speaker 10: complicated story to tell voters who are concerned about their 330 00:18:01,880 --> 00:18:05,359 Speaker 10: energy bills today, and I think potentially there is you know, 331 00:18:05,480 --> 00:18:09,359 Speaker 10: policy makers are nervous about rocking the boat, especially with 332 00:18:09,840 --> 00:18:13,240 Speaker 10: far right parties like Reform on the rise. You know 333 00:18:13,320 --> 00:18:16,000 Speaker 10: that leaves a void then, which is filled by people 334 00:18:16,040 --> 00:18:18,560 Speaker 10: who have an interest in talking about fossil fuels. 335 00:18:19,240 --> 00:18:22,480 Speaker 3: Yeah, and the distinctly sort of pro oil and gas 336 00:18:22,480 --> 00:18:26,440 Speaker 3: stance of the current White House surely factors into that too. 337 00:18:27,160 --> 00:18:32,000 Speaker 3: In terms of the energy transition though. Aimon last year 338 00:18:32,000 --> 00:18:35,440 Speaker 3: I was speaking to core Weaves UK and Global Heads 339 00:18:35,840 --> 00:18:40,040 Speaker 3: about their rapid data center expansion plans for the UK, 340 00:18:40,880 --> 00:18:43,960 Speaker 3: and it really is all about the need for energy. 341 00:18:44,119 --> 00:18:46,440 Speaker 3: How are people thinking about that now? 342 00:18:46,840 --> 00:18:47,040 Speaker 7: Yeah? 343 00:18:47,040 --> 00:18:48,679 Speaker 9: When I talk to some of these people trying to 344 00:18:48,720 --> 00:18:50,840 Speaker 9: build and develop better centers, which is really in line 345 00:18:50,880 --> 00:18:53,439 Speaker 9: with what the government wants. You know, it's just about 346 00:18:53,480 --> 00:18:55,479 Speaker 9: how quickly can they get powered. They don't really care 347 00:18:55,560 --> 00:18:57,800 Speaker 9: much about price, it's about can they connect to the grid. 348 00:18:58,240 --> 00:19:00,480 Speaker 9: And as you've seen before, I mean, you know we're 349 00:19:00,520 --> 00:19:03,439 Speaker 9: talking about gas still being important. I mean, right now, 350 00:19:03,640 --> 00:19:05,720 Speaker 9: you know, gas generation. Building a gas power plant could 351 00:19:05,760 --> 00:19:07,320 Speaker 9: be the fastest way to do that in the US. 352 00:19:07,359 --> 00:19:09,679 Speaker 9: That's what you know Trump has been talking about. You know, 353 00:19:09,840 --> 00:19:11,360 Speaker 9: if we're trying to do it with renewables, it will 354 00:19:11,400 --> 00:19:13,600 Speaker 9: take a lot longer. And some of the companies trying 355 00:19:13,600 --> 00:19:16,120 Speaker 9: to develop these data centers don't want to wait that long, 356 00:19:16,160 --> 00:19:17,880 Speaker 9: so then it you know, we risk maybe losing out 357 00:19:18,040 --> 00:19:20,240 Speaker 9: on some of this momentum the data centers have right now. 358 00:19:20,400 --> 00:19:21,960 Speaker 9: So it really it is all about getting that power 359 00:19:22,000 --> 00:19:24,600 Speaker 9: as quickly as possible and trying to see how government 360 00:19:24,640 --> 00:19:25,760 Speaker 9: can facilitate that. 361 00:19:25,800 --> 00:19:29,320 Speaker 3: For companies, Laura, how much broad support is there still 362 00:19:29,359 --> 00:19:31,520 Speaker 3: for the energy transition. 363 00:19:33,359 --> 00:19:38,399 Speaker 10: Among corporates. I think I think there is broad support. Really, 364 00:19:39,119 --> 00:19:41,400 Speaker 10: I think from what from people I've spoken to, there's 365 00:19:41,440 --> 00:19:44,879 Speaker 10: been a lot of green hushing going on. So the 366 00:19:45,640 --> 00:19:48,560 Speaker 10: toxicstal atmosphere makes it hard to kind of shout about 367 00:19:48,560 --> 00:19:51,359 Speaker 10: climate change unless you want to draw the wrath of 368 00:19:51,920 --> 00:19:55,200 Speaker 10: the US President. But you know, the investments are still 369 00:19:55,320 --> 00:19:58,879 Speaker 10: being made in renewables, and that's partly because you know, 370 00:19:59,280 --> 00:20:02,200 Speaker 10: it is just cheaper and being energy efficient is really 371 00:20:02,200 --> 00:20:05,160 Speaker 10: good for business, and reducing operating costs has always been 372 00:20:05,160 --> 00:20:08,000 Speaker 10: a motivator for to operates, and you know, really it's 373 00:20:08,040 --> 00:20:10,880 Speaker 10: a much more powerful one than doing the right thing. 374 00:20:11,119 --> 00:20:13,639 Speaker 10: So while you might not hear businesses going on about 375 00:20:13,920 --> 00:20:18,080 Speaker 10: climate changing carbon emissions, the investments are still being made, 376 00:20:18,119 --> 00:20:20,160 Speaker 10: and I think there is still broad support for the transition. 377 00:20:21,000 --> 00:20:24,320 Speaker 3: I am in how are businesses dealing with the uncertainty 378 00:20:24,800 --> 00:20:27,520 Speaker 3: around the kind of energy backdrop. I mean, obviously we're 379 00:20:27,560 --> 00:20:31,199 Speaker 3: not in a period of such volatility of prices as 380 00:20:31,240 --> 00:20:34,440 Speaker 3: we saw after Russia's invasion of Ukraine, but it's still 381 00:20:34,520 --> 00:20:35,960 Speaker 3: a highly uncertain environment. 382 00:20:36,080 --> 00:20:38,760 Speaker 9: Yeah, I mean wholesale power prices which feeds into household 383 00:20:38,800 --> 00:20:41,680 Speaker 9: bills but also businesses bills. They are still elevated and 384 00:20:41,720 --> 00:20:43,720 Speaker 9: people are still worry about what the future could bring 385 00:20:43,880 --> 00:20:45,600 Speaker 9: because you know, when it comes to all these government 386 00:20:45,640 --> 00:20:47,480 Speaker 9: plans and all these things we talk about clean power 387 00:20:47,520 --> 00:20:50,200 Speaker 9: twenty thirty, breaking down bills, these are all just forecasts 388 00:20:50,200 --> 00:20:52,280 Speaker 9: and a lot can change between now and then, whether 389 00:20:52,320 --> 00:20:53,800 Speaker 9: that's you know, how much it cost to build an 390 00:20:53,800 --> 00:20:57,040 Speaker 9: official wind farm, how much the price of gases soment. 391 00:20:57,119 --> 00:20:59,280 Speaker 9: Companies who are making plans to maybe build a factory 392 00:20:59,400 --> 00:21:01,160 Speaker 9: and do all this, they have to really be sure 393 00:21:01,200 --> 00:21:03,960 Speaker 9: that will really putting their model some uncertainty around the 394 00:21:04,080 --> 00:21:06,760 Speaker 9: energy prices, and right now there isn't much certainty around that. 395 00:21:06,760 --> 00:21:09,000 Speaker 9: We can try to model things, but things can keep changing. 396 00:21:09,320 --> 00:21:12,679 Speaker 3: And in terms of policy here in the UK, how 397 00:21:12,760 --> 00:21:16,679 Speaker 3: much do you think is changing in terms of capacity 398 00:21:16,920 --> 00:21:21,000 Speaker 3: and sovereignty and all those sorts of discussions for you know, 399 00:21:21,080 --> 00:21:23,280 Speaker 3: the UK's policy makers. 400 00:21:23,520 --> 00:21:26,600 Speaker 9: Yeah, I mean after what happened with the Russian invasion 401 00:21:26,640 --> 00:21:28,560 Speaker 9: of Ukraine, there was definitely a reckoning of we have 402 00:21:28,640 --> 00:21:31,600 Speaker 9: to have some more energy sovereignty and clean Pawer Tway 403 00:21:31,600 --> 00:21:34,200 Speaker 9: and thirty. It does bring down bills, It's that's important 404 00:21:34,200 --> 00:21:36,359 Speaker 9: because renewables is achieved, but also it means that our power 405 00:21:36,359 --> 00:21:38,200 Speaker 9: will be generated in the UK and that's a big 406 00:21:38,240 --> 00:21:40,919 Speaker 9: push for the government. You know, they've set up gb Energy, 407 00:21:40,960 --> 00:21:42,879 Speaker 9: a kind of state owned utility that will help to 408 00:21:42,920 --> 00:21:44,840 Speaker 9: develop some of this. And it's a lot about trying 409 00:21:44,880 --> 00:21:47,159 Speaker 9: to be in control of our own energy because that 410 00:21:47,200 --> 00:21:49,359 Speaker 9: also means you can control your economy, your growth, and 411 00:21:49,359 --> 00:21:51,680 Speaker 9: not be reliant on outside partners as much. 412 00:21:52,200 --> 00:21:55,720 Speaker 3: That's interesting, Lara. Also a topic on the agenda at 413 00:21:55,720 --> 00:21:59,399 Speaker 3: this event that's taking place in London is Africa's energy transition. 414 00:22:00,040 --> 00:22:03,440 Speaker 3: How much of a focus is there on clean energy 415 00:22:03,720 --> 00:22:05,320 Speaker 3: for emerging markets. 416 00:22:06,760 --> 00:22:09,280 Speaker 10: Yeah, well, you know, the African continent is like one 417 00:22:09,280 --> 00:22:11,480 Speaker 10: of the settings for one of the most like positive 418 00:22:11,560 --> 00:22:14,720 Speaker 10: renewable stories out there right now is and absolutely huge 419 00:22:14,720 --> 00:22:19,359 Speaker 10: booming solar installations. I think they jumped fifty four percent, 420 00:22:20,520 --> 00:22:23,560 Speaker 10: and that's you know, both utility scale and ones you know, 421 00:22:23,680 --> 00:22:28,560 Speaker 10: on on people's roofs, and so it is, you know, 422 00:22:28,720 --> 00:22:31,840 Speaker 10: it is there is a big focus on that in 423 00:22:31,920 --> 00:22:35,520 Speaker 10: emerging markets. More broadly, I think they're you know, there's 424 00:22:35,520 --> 00:22:39,280 Speaker 10: a huge opportunity. People that often talk about them, you know, 425 00:22:39,440 --> 00:22:42,440 Speaker 10: leap frauding fossil fuels because you know, part of the 426 00:22:42,480 --> 00:22:46,399 Speaker 10: motivation for these tentries is simply expanding access to energy 427 00:22:46,400 --> 00:22:49,600 Speaker 10: full stop and clean. You know, renewables are cheap, so 428 00:22:49,640 --> 00:22:51,960 Speaker 10: it's a good way that they can you know, expands 429 00:22:52,040 --> 00:22:55,840 Speaker 10: energy access. But they receive so little of the kind 430 00:22:55,840 --> 00:22:59,320 Speaker 10: of global investment and so that's the main thing that's 431 00:22:59,320 --> 00:23:01,000 Speaker 10: holding them back. So I'm sure there'll be lots of 432 00:23:01,040 --> 00:23:06,280 Speaker 10: conversations about how to increase the funds going to these markets. 433 00:23:06,800 --> 00:23:09,960 Speaker 3: Laura, what do you think the biggest challenges to the 434 00:23:10,080 --> 00:23:12,800 Speaker 3: energy transition then are going to be in the years 435 00:23:12,840 --> 00:23:14,920 Speaker 3: to come? If you say, you know, as you mentioned 436 00:23:14,960 --> 00:23:19,600 Speaker 3: for emerging markets, is actually just getting access to electricity 437 00:23:19,680 --> 00:23:22,600 Speaker 3: and to power, what are going to be the big challenges? 438 00:23:22,640 --> 00:23:25,200 Speaker 3: Do you think that maybe the participants of this event 439 00:23:25,560 --> 00:23:28,399 Speaker 3: are going to be well versed in I. 440 00:23:28,440 --> 00:23:32,040 Speaker 10: Think I think partly is you know, improving grid infrastructure. 441 00:23:33,080 --> 00:23:35,800 Speaker 10: We used to a kind of on demand model and 442 00:23:35,840 --> 00:23:39,719 Speaker 10: so now we've got to have much more capacity and 443 00:23:39,840 --> 00:23:45,639 Speaker 10: also work in energy storage because renewables are intermittent. I 444 00:23:45,680 --> 00:23:48,879 Speaker 10: think so I think, you know, just improving grid infrastructure 445 00:23:48,920 --> 00:23:50,880 Speaker 10: all around the world is going to be a big challenge, 446 00:23:51,800 --> 00:23:53,560 Speaker 10: and I think, you know, the kind of rise of 447 00:23:53,560 --> 00:23:57,240 Speaker 10: AI will also be a big challenge. There's there's places 448 00:23:57,560 --> 00:24:01,960 Speaker 10: where you know, coal power plan have been kept going 449 00:24:02,280 --> 00:24:05,880 Speaker 10: just because of the energy demand from new data centers, 450 00:24:06,040 --> 00:24:09,919 Speaker 10: and so AI has a potential to help us, you know, 451 00:24:10,040 --> 00:24:13,920 Speaker 10: improve energy efficiency, but it could also be a drawd 452 00:24:13,960 --> 00:24:17,040 Speaker 10: and it really just depends on which way that trend goes. 453 00:24:18,160 --> 00:24:20,160 Speaker 3: I mean, what are you thinking about then, in terms 454 00:24:20,200 --> 00:24:23,040 Speaker 3: of what people are going to get out of this event, 455 00:24:23,640 --> 00:24:26,800 Speaker 3: in terms of what corporates are hoping to gain from it, 456 00:24:27,240 --> 00:24:29,280 Speaker 3: What do you think might emerge in the days ahead? 457 00:24:29,359 --> 00:24:30,800 Speaker 9: Yeah, I mean, I think when you look at what 458 00:24:30,840 --> 00:24:33,360 Speaker 9: the topics are, who the speakers are, it's very clear 459 00:24:33,400 --> 00:24:35,199 Speaker 9: that now we're at the stage in the UK and 460 00:24:35,240 --> 00:24:37,320 Speaker 9: Europe and even elsewhere that it's less about kind of 461 00:24:37,359 --> 00:24:39,879 Speaker 9: proving the case for the transition, but more understanding how 462 00:24:39,920 --> 00:24:41,680 Speaker 9: we're going to deliver it and what the impacts will 463 00:24:41,720 --> 00:24:44,520 Speaker 9: be on consumers and the challenges ahead. I mean, I 464 00:24:44,560 --> 00:24:46,880 Speaker 9: think it's understand now that I mean, as Laura said, 465 00:24:46,880 --> 00:24:49,800 Speaker 9: you know, the economic case in lots of cases, is there. 466 00:24:49,800 --> 00:24:51,359 Speaker 9: I mean, it's a cheapest form of power. It's more 467 00:24:51,359 --> 00:24:54,080 Speaker 9: about how do you actually now build these things, make 468 00:24:54,119 --> 00:24:56,439 Speaker 9: this happen, and how the governments play their part in that. 469 00:24:56,760 --> 00:24:58,960 Speaker 3: Yeah, and make it a priority. Thank you so much 470 00:24:59,040 --> 00:25:00,800 Speaker 3: to both of you for your I'm really great to 471 00:25:00,800 --> 00:25:03,960 Speaker 3: speak to you. That is our energy reporter Aimin Farhat 472 00:25:03,960 --> 00:25:08,040 Speaker 3: and Bloomberg's climate opinion columnist Lara Williams. My thanks to 473 00:25:08,280 --> 00:25:11,119 Speaker 3: both of you. I'm Caroline Hepge here in London and 474 00:25:11,200 --> 00:25:14,320 Speaker 3: you can catch us every weekday morning for Bloomberg Daybreak. 475 00:25:14,359 --> 00:25:17,000 Speaker 3: Youre at beginning at six am in London. That's one 476 00:25:17,040 --> 00:25:18,200 Speaker 3: am on Wall Street. 477 00:25:18,400 --> 00:25:22,240 Speaker 2: Nathan, Thanks Caroline, and coming up on Bloomberg day Break weekend, 478 00:25:22,240 --> 00:25:26,080 Speaker 2: we'll look ahead to earnings from the Japanese holding company SoftBank. 479 00:25:26,280 --> 00:25:41,000 Speaker 2: I'm Nathan Hager, and this is Bloomberg. This is Bloomberg 480 00:25:41,040 --> 00:25:43,879 Speaker 2: Daybreak Weekend, our global look ahead at the top stories 481 00:25:43,920 --> 00:25:47,719 Speaker 2: for investors in the coming week. I'm Nathan Hager in Washington. 482 00:25:47,880 --> 00:25:50,479 Speaker 2: This week we get the latest results from Japanese holding 483 00:25:50,560 --> 00:25:54,159 Speaker 2: company SoftBank. Let's get to Bloomberg's Doug Chrisner for that. 484 00:25:54,320 --> 00:25:56,800 Speaker 2: He's host of the Daybreak Asia podcast. 485 00:25:57,280 --> 00:26:00,800 Speaker 4: Nathan SoftBank founder Masayoshi's son has met the farm on 486 00:26:00,960 --> 00:26:04,240 Speaker 4: artificial intelligence. The company is one of the largest backers 487 00:26:04,280 --> 00:26:05,080 Speaker 4: of open Ai. 488 00:26:05,520 --> 00:26:05,680 Speaker 1: Now. 489 00:26:05,680 --> 00:26:07,480 Speaker 4: Some of the funding has come from the sale of 490 00:26:07,520 --> 00:26:10,760 Speaker 4: soft Bank's earlier investments. As one example, in the fourth 491 00:26:10,800 --> 00:26:13,199 Speaker 4: quarter of last year, soft Bank sold at steak in 492 00:26:13,359 --> 00:26:16,879 Speaker 4: Nvidia for about five point eight billion dollars. It also 493 00:26:17,080 --> 00:26:19,480 Speaker 4: sold part of its steak in t Mobile for nearly 494 00:26:19,560 --> 00:26:22,520 Speaker 4: nine point two billion. For a look at SoftBank, I'm 495 00:26:22,560 --> 00:26:26,440 Speaker 4: joined by Bloomberg's Alice French. She covers the Japanese equity market, 496 00:26:26,520 --> 00:26:29,240 Speaker 4: and she joins us from our studios in Tokyo. Thank 497 00:26:29,240 --> 00:26:31,960 Speaker 4: you for being here. What are we expecting to learn 498 00:26:32,040 --> 00:26:33,480 Speaker 4: from soft banks results? 499 00:26:33,880 --> 00:26:36,159 Speaker 11: So soft Bank is interesting, right because it's kind of 500 00:26:36,240 --> 00:26:39,320 Speaker 11: more so become almost a proxy for open AI or 501 00:26:39,359 --> 00:26:41,879 Speaker 11: for sort of AI sentiment in general in Tokyo, and 502 00:26:41,920 --> 00:26:44,800 Speaker 11: I think investors are looking much more toward you know, 503 00:26:44,840 --> 00:26:49,480 Speaker 11: any comments from some around future investment plans current returns 504 00:26:49,480 --> 00:26:53,679 Speaker 11: on investment rather than the actual kind of earnings numbers themselves. Now, 505 00:26:53,720 --> 00:26:56,160 Speaker 11: obviously the open Ai investment is sort of the big 506 00:26:56,280 --> 00:26:58,680 Speaker 11: top line issue here, and we know that soft Bank 507 00:26:58,800 --> 00:27:00,879 Speaker 11: is kind of betting on who it's the whole house 508 00:27:00,960 --> 00:27:05,120 Speaker 11: on open Ai right recently this additional thirty billion dollar investment, 509 00:27:05,640 --> 00:27:08,040 Speaker 11: and whilst that you know, has allowed the stock to 510 00:27:08,119 --> 00:27:11,200 Speaker 11: kind of ride on the coattails of the AI boom 511 00:27:11,240 --> 00:27:13,199 Speaker 11: over the past year and it did really well in 512 00:27:13,280 --> 00:27:16,800 Speaker 11: twenty twenty five, I think caution is really starting to 513 00:27:16,880 --> 00:27:18,600 Speaker 11: kind of come to the fall now, right. I mean 514 00:27:18,600 --> 00:27:21,880 Speaker 11: we saw this with Microsoft results recently in the States, 515 00:27:22,520 --> 00:27:25,000 Speaker 11: these kind of worries that all these companies are just 516 00:27:25,480 --> 00:27:27,760 Speaker 11: pumping so much money into AI and when are we 517 00:27:27,800 --> 00:27:30,080 Speaker 11: actually going to see the returns and what does it 518 00:27:30,160 --> 00:27:32,399 Speaker 11: mean for their credit risks and things like that, And 519 00:27:32,480 --> 00:27:35,879 Speaker 11: I think if it starts to look kind of irresponsible 520 00:27:36,040 --> 00:27:38,800 Speaker 11: this investment, then that's something that's really going to weigh 521 00:27:38,960 --> 00:27:42,639 Speaker 11: on sentiment, right, So any kind of language around that, 522 00:27:42,680 --> 00:27:45,399 Speaker 11: I think is something that investors will really be looking for. 523 00:27:45,480 --> 00:27:48,560 Speaker 4: Away from the story on open Ai, help me understand 524 00:27:48,920 --> 00:27:52,320 Speaker 4: what SoftBank is doing in the hardware space as it 525 00:27:52,400 --> 00:27:54,920 Speaker 4: relates to AI. I think. In the last week the 526 00:27:54,960 --> 00:27:59,240 Speaker 4: company announced a collaboration with Intel on developing cutting edge 527 00:27:59,280 --> 00:28:00,160 Speaker 4: memory technol. 528 00:28:00,520 --> 00:28:02,359 Speaker 11: Soft Bank wants to make sure that they are kind 529 00:28:02,400 --> 00:28:04,960 Speaker 11: of jumping on all of these tech bandwagons, right, and 530 00:28:05,000 --> 00:28:07,000 Speaker 11: so the Intel story is, yeah, I mean, we know 531 00:28:07,080 --> 00:28:10,399 Speaker 11: that memory prices are set to saw they're already up 532 00:28:10,400 --> 00:28:13,440 Speaker 11: a lot because of all of this demand for AI products, 533 00:28:13,960 --> 00:28:15,600 Speaker 11: and so soft Bank trying to kind of hitch a 534 00:28:15,680 --> 00:28:18,800 Speaker 11: ride on that too. Something else they've also spoken about 535 00:28:18,800 --> 00:28:21,679 Speaker 11: in recent months is robotics, right, so this idea of 536 00:28:21,960 --> 00:28:26,040 Speaker 11: physical AI. We saw this acquisition of ABB's robotics arm 537 00:28:26,119 --> 00:28:28,920 Speaker 11: back late last year, and so they're kind of trying 538 00:28:28,960 --> 00:28:31,480 Speaker 11: to get their fingers in all of the AI pies, 539 00:28:31,560 --> 00:28:33,480 Speaker 11: I think, and it seems like memory is going to 540 00:28:33,520 --> 00:28:36,000 Speaker 11: be the biggest one in the coming months. 541 00:28:36,320 --> 00:28:39,120 Speaker 4: What do we know about soft banks commitments to invest 542 00:28:39,200 --> 00:28:41,680 Speaker 4: money in the United States? How is that process going? 543 00:28:42,200 --> 00:28:44,520 Speaker 11: This is the big ongoing question, right. So we know 544 00:28:44,600 --> 00:28:47,440 Speaker 11: that there is this five hundred and fifty billion supposed 545 00:28:47,560 --> 00:28:50,360 Speaker 11: packed between the US and Japan as part of this 546 00:28:50,520 --> 00:28:53,160 Speaker 11: kind of tariff deal. Now all of it's still sort 547 00:28:53,160 --> 00:28:54,680 Speaker 11: of quite up in the air. 548 00:28:54,760 --> 00:28:54,920 Speaker 7: Now. 549 00:28:54,920 --> 00:28:56,760 Speaker 11: We kind of get the sense that we might start 550 00:28:56,760 --> 00:28:58,840 Speaker 11: to get some of these deals getting announced in the 551 00:28:58,880 --> 00:29:01,560 Speaker 11: next kind of few weeks or months, but it's all 552 00:29:01,600 --> 00:29:04,040 Speaker 11: been quite hush hush. We know that soft Bank is 553 00:29:04,080 --> 00:29:06,320 Speaker 11: going to be playing a big role in it. Of course, 554 00:29:06,360 --> 00:29:08,800 Speaker 11: it's already a big part of the Stargate project with 555 00:29:09,400 --> 00:29:11,880 Speaker 11: those US firms, and we know that Son has had 556 00:29:11,920 --> 00:29:14,560 Speaker 11: meetings in the US and and with Trump, so they 557 00:29:14,600 --> 00:29:16,960 Speaker 11: will be playing a big role there. But again that's 558 00:29:17,000 --> 00:29:19,560 Speaker 11: another potential risk, right. This is all money that they 559 00:29:19,600 --> 00:29:23,920 Speaker 11: are throwing at an area where competition is rising, and 560 00:29:23,960 --> 00:29:27,240 Speaker 11: there's already so much caution and worries about overvaluation in 561 00:29:27,280 --> 00:29:29,280 Speaker 11: the stock market. So I think it really could go 562 00:29:29,640 --> 00:29:32,200 Speaker 11: either way in terms of soft banks performance. 563 00:29:32,320 --> 00:29:34,640 Speaker 4: Do you have a sense of how soft Bank shareholders 564 00:29:34,640 --> 00:29:38,200 Speaker 4: are feeling about what Masayoshi sun is up to these days? 565 00:29:38,440 --> 00:29:40,760 Speaker 11: People are really split, right, I mean, if we just 566 00:29:40,840 --> 00:29:43,480 Speaker 11: look at what's happened so far this year, soft Bank 567 00:29:43,560 --> 00:29:46,960 Speaker 11: is actually down around two percent, and that's compared to 568 00:29:47,000 --> 00:29:49,640 Speaker 11: a seven percent rise for the topics. I mean, Japanese 569 00:29:49,640 --> 00:29:52,600 Speaker 11: stocks overall have been doing pretty well, partly on this 570 00:29:52,720 --> 00:29:55,680 Speaker 11: kind of takaichi trade ahead of ahead of the election. 571 00:29:56,800 --> 00:29:59,680 Speaker 11: But I think in the last few weeks, I would say, 572 00:29:59,680 --> 00:30:02,560 Speaker 11: I think things have been shifting from kind of excitement 573 00:30:02,720 --> 00:30:05,840 Speaker 11: more towards caution, right, And I think it's partly because 574 00:30:05,880 --> 00:30:09,120 Speaker 11: son is going in so hard on open Ai at 575 00:30:09,120 --> 00:30:11,600 Speaker 11: a time when open i is coming up against you know, 576 00:30:11,720 --> 00:30:15,560 Speaker 11: competition with Google's Gemini and just worries really about how 577 00:30:15,600 --> 00:30:17,520 Speaker 11: much money they are throwing at this, and you know 578 00:30:17,920 --> 00:30:21,160 Speaker 11: they they're not really that diversified, right, They're going so 579 00:30:21,600 --> 00:30:24,040 Speaker 11: hard on open ai and AI in general at a 580 00:30:24,040 --> 00:30:26,880 Speaker 11: time when market sentiment is really kind of looking a 581 00:30:26,880 --> 00:30:30,040 Speaker 11: bit jittery, and I think, you know, investors are going 582 00:30:30,120 --> 00:30:32,360 Speaker 11: to have to start seeing some real, kind of solid, 583 00:30:32,400 --> 00:30:35,840 Speaker 11: tangible returns and get some more confidence that you know, 584 00:30:35,920 --> 00:30:37,880 Speaker 11: this is actually going to be all worth it, or 585 00:30:37,960 --> 00:30:40,040 Speaker 11: I think, you know, the shares are going to suffer. 586 00:30:40,080 --> 00:30:42,120 Speaker 11: And I think the sentiment is really kind of at 587 00:30:42,120 --> 00:30:43,400 Speaker 11: a crossroads right now. 588 00:30:43,520 --> 00:30:45,920 Speaker 4: When you look at the firm soft Bank is investing in, 589 00:30:46,000 --> 00:30:49,560 Speaker 4: how are they distributed geographically? Are most Japan based? 590 00:30:49,960 --> 00:30:50,160 Speaker 8: No? 591 00:30:50,280 --> 00:30:53,160 Speaker 11: I mean they've been working with a lot of foreign firms, right, 592 00:30:53,200 --> 00:30:55,320 Speaker 11: of course, we know that they're heavily involved with with 593 00:30:55,640 --> 00:30:58,160 Speaker 11: ARM the chip gear makers that's based in the UK. 594 00:30:58,760 --> 00:31:02,120 Speaker 11: I mentioned ABB there of course open AI in the state, 595 00:31:02,240 --> 00:31:05,040 Speaker 11: So they're very kind of outward looking, and I think 596 00:31:05,040 --> 00:31:08,800 Speaker 11: that's partly because you know Japan's market in general, you 597 00:31:08,880 --> 00:31:12,400 Speaker 11: know they have there's pockets here of sort of companies 598 00:31:12,400 --> 00:31:15,360 Speaker 11: that can jump on the AI trend. For example, we 599 00:31:15,480 --> 00:31:18,520 Speaker 11: saw just recently the toilet and maker Toto, for example, 600 00:31:18,560 --> 00:31:20,920 Speaker 11: that makes these kind of very niche ceramic products that 601 00:31:20,920 --> 00:31:23,360 Speaker 11: can be used in chips for AI. There are companies 602 00:31:23,400 --> 00:31:25,960 Speaker 11: that sort of have small pockets of AI exposure, but 603 00:31:26,000 --> 00:31:29,160 Speaker 11: we don't really have those kind of big AI leaders 604 00:31:29,240 --> 00:31:32,960 Speaker 11: here in the Japanese space, and that's why SoftBank essentially 605 00:31:33,000 --> 00:31:36,200 Speaker 11: has become the proxy for that in the domestic market. 606 00:31:36,280 --> 00:31:38,200 Speaker 11: And that means there's a lot riding on it, right 607 00:31:38,240 --> 00:31:40,360 Speaker 11: and it's a good stock to sort of monitor if 608 00:31:40,360 --> 00:31:42,480 Speaker 11: you want to see what the sentiment is around AI 609 00:31:42,560 --> 00:31:43,680 Speaker 11: domestically in. 610 00:31:43,720 --> 00:31:45,920 Speaker 4: Japan, Alice, if we take a step back for a 611 00:31:45,960 --> 00:31:49,200 Speaker 4: moment and look more broadly at what's happening in Japan 612 00:31:49,360 --> 00:31:52,960 Speaker 4: as it relates to AI, is it primarily showing up 613 00:31:53,120 --> 00:31:57,160 Speaker 4: in the semiconductor space and perhaps to a lesser degree robotics. 614 00:31:57,720 --> 00:32:00,479 Speaker 11: I mean, the traditional names that investors would be looking for, 615 00:32:00,560 --> 00:32:03,080 Speaker 11: right are these chip gear makers. So the big names 616 00:32:03,080 --> 00:32:07,280 Speaker 11: we've got here ad Van Test, Tokyo, Electron Shift Screen, etc. 617 00:32:07,960 --> 00:32:10,080 Speaker 11: And you know, we're well into earning season now and 618 00:32:10,120 --> 00:32:13,680 Speaker 11: it's been quite a mixed kind of quite a mixed 619 00:32:13,840 --> 00:32:17,240 Speaker 11: showing for the earnings so far. Advan tested really well, 620 00:32:17,600 --> 00:32:21,400 Speaker 11: it's really been rallying so far this year, outperforming the benchmark. 621 00:32:21,720 --> 00:32:24,680 Speaker 11: You know, it's forecast kind of blue investors away. On 622 00:32:24,760 --> 00:32:27,960 Speaker 11: the other end, laser Tech, another chip gear maker, kind 623 00:32:28,000 --> 00:32:31,200 Speaker 11: of disappointed. So I think it's kind of becoming it's 624 00:32:31,240 --> 00:32:33,800 Speaker 11: becoming quite a stock pickers market in that sense, right, 625 00:32:33,840 --> 00:32:36,320 Speaker 11: you've got to be backing the right one. But of course, 626 00:32:36,320 --> 00:32:38,800 Speaker 11: on the memory theme, right, which again as we were saying, 627 00:32:38,880 --> 00:32:41,680 Speaker 11: is is a huge theme for AI this year. We 628 00:32:41,800 --> 00:32:44,640 Speaker 11: have Kyoxia, which is a memory chip maker. It was 629 00:32:44,920 --> 00:32:48,280 Speaker 11: actually the world's best performing stock in twenty twenty five, 630 00:32:48,400 --> 00:32:51,040 Speaker 11: only just iPod at the end of twenty twenty four, 631 00:32:51,360 --> 00:32:54,880 Speaker 11: and that's still been continuing. It's rallied so far. And 632 00:32:54,880 --> 00:32:57,160 Speaker 11: then what a lot of investors say Japan might kind 633 00:32:57,160 --> 00:33:01,240 Speaker 11: of have have an edge over other markets is robotics, okay, 634 00:33:01,320 --> 00:33:04,920 Speaker 11: physical AI. So we have companies like yaskaver Electric and 635 00:33:05,040 --> 00:33:07,520 Speaker 11: phanok that have been working in this robotic sphere for 636 00:33:07,560 --> 00:33:11,240 Speaker 11: a long time. Some of them have been announcing collaborations 637 00:33:11,240 --> 00:33:14,959 Speaker 11: with big US AI names in recent months two and 638 00:33:15,000 --> 00:33:17,360 Speaker 11: I think we might see that physical AI, that kind 639 00:33:17,360 --> 00:33:20,800 Speaker 11: of robotics theme really gaining ground throughout this year, and 640 00:33:20,840 --> 00:33:22,360 Speaker 11: that's a benefit for Japan. 641 00:33:22,600 --> 00:33:25,720 Speaker 4: During the last week in the US, many software stocks 642 00:33:25,760 --> 00:33:28,920 Speaker 4: were very hard hit on concern over how AI will 643 00:33:28,960 --> 00:33:32,520 Speaker 4: impact their core businesses. The catalyst for the pullback was 644 00:33:32,560 --> 00:33:35,840 Speaker 4: the release of a new AI tool from Anthropic. Can 645 00:33:35,880 --> 00:33:38,360 Speaker 4: you give me a sense of how Japanese software companies 646 00:33:38,360 --> 00:33:40,720 Speaker 4: are holding up in the face of the many new 647 00:33:40,760 --> 00:33:41,840 Speaker 4: advancements in AI. 648 00:33:42,360 --> 00:33:44,400 Speaker 11: I mean, we've seen a similar theme here in the 649 00:33:44,440 --> 00:33:47,240 Speaker 11: past week, you know, after that Anthropic news, some of 650 00:33:47,240 --> 00:33:50,720 Speaker 11: those software names really dropping. Oracle Japan is a big 651 00:33:50,760 --> 00:33:53,280 Speaker 11: one that was hit, and those worries are definitely there, 652 00:33:53,320 --> 00:33:55,240 Speaker 11: I think as well. A big theme for Japan, of 653 00:33:55,280 --> 00:33:58,920 Speaker 11: course is gaming and video games, right, and we did 654 00:33:58,960 --> 00:34:00,720 Speaker 11: have news in the past we of kind of these 655 00:34:00,800 --> 00:34:03,480 Speaker 11: new tools, these new AI tools where you can sort 656 00:34:03,480 --> 00:34:05,920 Speaker 11: of make your own gaming world using AI. And I 657 00:34:05,920 --> 00:34:08,200 Speaker 11: think there were some worries that that could start threatening 658 00:34:08,520 --> 00:34:11,320 Speaker 11: video game developers, right, And of course we've got Nintendo 659 00:34:11,360 --> 00:34:14,240 Speaker 11: and Sony here, but we have the slightly smaller names 660 00:34:14,280 --> 00:34:16,960 Speaker 11: like Capcom and Konami as well that sort of really 661 00:34:17,040 --> 00:34:20,160 Speaker 11: felt some headwinds from that news. So I think investors 662 00:34:20,200 --> 00:34:22,400 Speaker 11: are still trying to figure out kind of weighing up 663 00:34:22,480 --> 00:34:26,000 Speaker 11: the pluses and minuses of these new AI tools, right, 664 00:34:26,040 --> 00:34:28,799 Speaker 11: And it does seem like software makers, whether they are 665 00:34:28,880 --> 00:34:32,640 Speaker 11: sort of the more kind of corporate office software or 666 00:34:32,640 --> 00:34:36,240 Speaker 11: whether it's gaming software, it's entertainment, you know, there's definitely 667 00:34:36,320 --> 00:34:39,520 Speaker 11: a risk there, and I think it's whether these companies 668 00:34:39,560 --> 00:34:41,879 Speaker 11: can kind of counter that with here's how we're going 669 00:34:41,880 --> 00:34:44,120 Speaker 11: to use it to kind of boost our productivity and 670 00:34:44,160 --> 00:34:47,280 Speaker 11: actually boost earnings. And I don't think investors are quite 671 00:34:47,280 --> 00:34:49,319 Speaker 11: seeing enough of that potential upside yet. 672 00:34:49,640 --> 00:34:51,640 Speaker 4: Alice will leave it there. Thank you so very much 673 00:34:51,719 --> 00:34:53,560 Speaker 4: for helping us set up the earnings in the week 674 00:34:53,600 --> 00:34:58,680 Speaker 4: ahead from SoftBank Bloomberg's Alice French. She covers Japanese equities 675 00:34:58,719 --> 00:35:00,920 Speaker 4: and she joined us from our store videos in Tokyo. 676 00:35:01,560 --> 00:35:04,320 Speaker 4: We move next to trade. In the last week, President 677 00:35:04,320 --> 00:35:07,319 Speaker 4: Trump said he would roll back tariffs on India. That 678 00:35:07,480 --> 00:35:11,000 Speaker 4: was after Prime Minister Narendramodi agreed to stop buying Russian 679 00:35:11,040 --> 00:35:14,279 Speaker 4: crude oil. Trump said he would lower his twenty five 680 00:35:14,320 --> 00:35:18,520 Speaker 4: percent tariff on Indian goods to eighteen percent. That sparked 681 00:35:18,520 --> 00:35:21,240 Speaker 4: a rally in Indian markets. And that's where we begin 682 00:35:21,320 --> 00:35:25,480 Speaker 4: our conversation with then Anantha Nagaswaren then is the chief 683 00:35:25,480 --> 00:35:28,640 Speaker 4: Economic advisor to the Government of India and he spoke 684 00:35:28,680 --> 00:35:30,560 Speaker 4: with Bloomberg's hustlind Amen. 685 00:35:30,560 --> 00:35:35,319 Speaker 12: Your thoughts on this long much anticipated trade deal. 686 00:35:35,680 --> 00:35:38,000 Speaker 8: This was something that was one big stumbling block to 687 00:35:38,080 --> 00:35:41,720 Speaker 8: sentiment in the capital market also for the Indian to BESO, 688 00:35:41,719 --> 00:35:44,560 Speaker 8: I'm not surprised that the reaction is very positive in 689 00:35:44,600 --> 00:35:47,400 Speaker 8: both these markets. And I mean, at the end of 690 00:35:47,440 --> 00:35:50,680 Speaker 8: the day, it is the worst biggest consumption market twenty 691 00:35:50,719 --> 00:35:53,520 Speaker 8: one zillion dollars of GDP and therefore to be able 692 00:35:53,560 --> 00:35:56,680 Speaker 8: to have access to it is important and for all 693 00:35:56,760 --> 00:36:01,640 Speaker 8: labor intensive products. And two, I think the China plus 694 00:36:01,640 --> 00:36:06,320 Speaker 8: one strategy that many Western companies and multinationals are looking 695 00:36:06,320 --> 00:36:10,520 Speaker 8: at India as the next locate dation for the global 696 00:36:10,600 --> 00:36:14,160 Speaker 8: value change. That thought process was getting a bit disrupted 697 00:36:14,239 --> 00:36:18,520 Speaker 8: due to these tariff related uncertainties. Now that would once 698 00:36:18,560 --> 00:36:22,239 Speaker 8: again sort of be back in contention, and therefore it 699 00:36:22,719 --> 00:36:28,160 Speaker 8: lends a huge dose of upside to our growth estimate 700 00:36:28,360 --> 00:36:29,480 Speaker 8: in the economic survey. 701 00:36:29,920 --> 00:36:33,560 Speaker 12: In terms of how it's playing out in the market. 702 00:36:33,640 --> 00:36:36,920 Speaker 12: Are you satisfied that this will provide a boost for 703 00:36:37,040 --> 00:36:39,839 Speaker 12: the Indian group ye, which has been among the worst 704 00:36:39,880 --> 00:36:42,240 Speaker 12: performers in Asia for a while now? 705 00:36:42,560 --> 00:36:44,200 Speaker 8: Yeah, I mean, of course, to put the Indian drop 706 00:36:44,360 --> 00:36:47,959 Speaker 8: performance in context. Over the last five years or since 707 00:36:48,000 --> 00:36:51,719 Speaker 8: the dawn up the millennium, Indian roop hasn't performed any 708 00:36:51,800 --> 00:36:54,680 Speaker 8: worse than most emerging currencies which have a Karada context. 709 00:36:54,760 --> 00:36:57,719 Speaker 8: Is just to put it in context. Nonetheless, obviously in 710 00:36:57,719 --> 00:37:01,200 Speaker 8: the last year or so, due to be drying up 711 00:37:01,200 --> 00:37:04,680 Speaker 8: of capital flows, especially on the portfolio side, which has 712 00:37:04,760 --> 00:37:08,120 Speaker 8: not been made up as much on the FTI side, 713 00:37:08,120 --> 00:37:11,040 Speaker 8: although it was doing better than the previous financial year, 714 00:37:11,600 --> 00:37:14,000 Speaker 8: we have had this impact on the Indian coupe and 715 00:37:14,040 --> 00:37:16,880 Speaker 8: that was to be expected, and this was proving to 716 00:37:16,920 --> 00:37:21,880 Speaker 8: be a big mind block the on the part of 717 00:37:21,960 --> 00:37:27,040 Speaker 8: investors because they were thinking about India being restricted from 718 00:37:27,120 --> 00:37:29,960 Speaker 8: accessing one of the world's because consumption markets and what 719 00:37:30,200 --> 00:37:34,040 Speaker 8: it and therefore what it meant for Indian value chain 720 00:37:35,200 --> 00:37:37,840 Speaker 8: attracted was in India for global value chains, et cetera. 721 00:37:37,920 --> 00:37:41,400 Speaker 8: So they were extrapolating from this TARI funds ability onto 722 00:37:41,680 --> 00:37:45,040 Speaker 8: much bigger and broader questions. And to the extent that 723 00:37:45,840 --> 00:37:50,719 Speaker 8: this UH framework allies those concerns, it is it has 724 00:37:50,760 --> 00:37:53,920 Speaker 8: going to be a very big boost to capital flows, 725 00:37:54,000 --> 00:37:56,760 Speaker 8: which are very critical. Even though India's Cann't account deficit 726 00:37:56,880 --> 00:37:59,960 Speaker 8: is extremely on the lower side compared to historical trends, 727 00:38:00,360 --> 00:38:04,560 Speaker 8: this matters for capital flows and therefore it couldn't have 728 00:38:04,640 --> 00:38:06,920 Speaker 8: come at a better time from that perspective. 729 00:38:07,200 --> 00:38:10,840 Speaker 4: That was then Anantha Nagaswaren, the Chief Economic Advisor to 730 00:38:10,880 --> 00:38:15,200 Speaker 4: the Indian government, speaking with Bloomberg's hustlind Ahman. I'm Doug Krisner. 731 00:38:15,239 --> 00:38:18,080 Speaker 4: You can catch us weekdays for the Daybreak Asia podcast. 732 00:38:18,640 --> 00:38:20,799 Speaker 4: It's available wherever you get your podcast. 733 00:38:21,120 --> 00:38:24,279 Speaker 2: Nathan, Thanks Doug, and that does it for this edition 734 00:38:24,400 --> 00:38:27,719 Speaker 2: of Bloomberg Daybreak Weekend. Join us again Monday morning at 735 00:38:27,719 --> 00:38:30,360 Speaker 2: five am Wall Street Time for the latest DOUN markets 736 00:38:30,360 --> 00:38:33,000 Speaker 2: overseas and the news you need to start your day. 737 00:38:33,400 --> 00:38:36,520 Speaker 2: I'm Nathan Hager. Stay with us top stories and global 738 00:38:36,560 --> 00:38:40,120 Speaker 2: business headlines are coming up right now.