1 00:00:00,280 --> 00:00:07,720 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:10,039 --> 00:00:12,400 Speaker 2: This is Bloomberg day Break Weekend, our global look at 3 00:00:12,440 --> 00:00:15,040 Speaker 2: the top stories in the coming week from our Daybreak 4 00:00:15,080 --> 00:00:17,520 Speaker 2: anchors all around the world. Straight ahead on the program, 5 00:00:17,520 --> 00:00:19,439 Speaker 2: and look ahead to some key inflation data in the 6 00:00:19,600 --> 00:00:22,800 Speaker 2: US how that may impact FED policy, Plus a look 7 00:00:22,800 --> 00:00:26,079 Speaker 2: at the impact of tariffs on housing. I'm Tom Busby 8 00:00:26,200 --> 00:00:26,799 Speaker 2: in New York. 9 00:00:27,080 --> 00:00:29,600 Speaker 3: I'm Carolyn Hepke here in London, where we're weighing up 10 00:00:29,640 --> 00:00:32,920 Speaker 3: the Chancellor's options ahead of the spring statements. 11 00:00:33,120 --> 00:00:36,000 Speaker 4: I'm Derek Prisner, looking ahead to the earnings from Chinese 12 00:00:36,080 --> 00:00:38,159 Speaker 4: ev Giant byd. 13 00:00:38,400 --> 00:00:42,400 Speaker 1: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 14 00:00:42,440 --> 00:00:46,160 Speaker 1: eleven to three, Yeero, New York, Bloomberg ninety nine to one, Washington, DC, 15 00:00:46,640 --> 00:00:50,920 Speaker 1: Bloomberg ninety two to nine, Boston, DAB Digital Radio, London, 16 00:00:51,320 --> 00:00:54,520 Speaker 1: Sirius XM one twenty one, and around the world on 17 00:00:54,600 --> 00:00:57,720 Speaker 1: Bloomberg Radio, dot Com and the Bloomberg Business App. 18 00:01:02,480 --> 00:01:04,280 Speaker 2: Good day to you. I'm Tom Busby, and we begin 19 00:01:04,319 --> 00:01:07,720 Speaker 2: today's program with fresh reads on US economic growth that's 20 00:01:07,720 --> 00:01:10,559 Speaker 2: for the final quarter of last year, and the Fed's 21 00:01:10,640 --> 00:01:14,520 Speaker 2: preferred measure of consumer inflation for last month. For more 22 00:01:14,680 --> 00:01:17,440 Speaker 2: on what it all means, we're joined by Stuart Paul 23 00:01:17,560 --> 00:01:21,520 Speaker 2: Us economists with Bloomberg Economics. Well, Stuart, thank you for 24 00:01:21,600 --> 00:01:24,440 Speaker 2: joining us. Did the economy continue to grow in the 25 00:01:24,440 --> 00:01:26,560 Speaker 2: fourth quarter and what's behind that growth? 26 00:01:26,920 --> 00:01:29,120 Speaker 5: Well, we knew that the economy grew in the fourth quarter. 27 00:01:29,240 --> 00:01:31,600 Speaker 5: Our previous estimates that we got from the Bureau of 28 00:01:31,640 --> 00:01:35,280 Speaker 5: Economic Analysis showed two point three percent annualized pace of 29 00:01:35,319 --> 00:01:39,160 Speaker 5: growth in the fourth quarter, mostly supported by consumer spending, 30 00:01:39,160 --> 00:01:43,679 Speaker 5: which was pretty robust, strong, healthy spending through the holidays. 31 00:01:44,280 --> 00:01:46,360 Speaker 5: We're likely to see the same two point three percent 32 00:01:46,720 --> 00:01:50,840 Speaker 5: estimate in the final reading of that fourth quarter GDP number. 33 00:01:51,720 --> 00:01:54,240 Speaker 5: If anything, risk might be skewed a little bit to 34 00:01:54,320 --> 00:01:58,720 Speaker 5: the upside. We do know that there was some adjustments 35 00:01:58,760 --> 00:02:01,600 Speaker 5: that firms were making into imports. We know that some 36 00:02:01,680 --> 00:02:05,320 Speaker 5: foreign countries were trying to get ahead of any sort 37 00:02:05,320 --> 00:02:09,280 Speaker 5: of escalating trade tensions as the Trump administration was gearing 38 00:02:09,400 --> 00:02:12,360 Speaker 5: up to come into office in the first quarter. So, 39 00:02:12,680 --> 00:02:15,200 Speaker 5: if anything, maybe there's a little bit of risk that 40 00:02:15,320 --> 00:02:18,920 Speaker 5: GDP will be revised up just to touch. But we 41 00:02:19,000 --> 00:02:21,600 Speaker 5: do know that there was a healthy, robust pace of 42 00:02:21,600 --> 00:02:24,120 Speaker 5: growth in the fourth quarter. Probably not going to see 43 00:02:24,160 --> 00:02:26,840 Speaker 5: the same degree of growth this year. We know that 44 00:02:27,000 --> 00:02:30,480 Speaker 5: amid policy uncertainty, but I think that we did end 45 00:02:30,840 --> 00:02:32,880 Speaker 5: twenty twenty four in a relatively strong place. 46 00:02:33,320 --> 00:02:36,920 Speaker 2: Well. To your point, consumer spending the big driver of 47 00:02:36,960 --> 00:02:40,280 Speaker 2: all that, and there are indications though in this current 48 00:02:40,320 --> 00:02:43,520 Speaker 2: first quarter, which is about to end, there has been 49 00:02:43,520 --> 00:02:46,440 Speaker 2: a significant pullback though in consumer spending, unlike what we 50 00:02:46,480 --> 00:02:47,720 Speaker 2: saw leading up to the holidays. 51 00:02:47,800 --> 00:02:50,239 Speaker 5: That's right, the first quarter is going to be especially choppy. 52 00:02:50,600 --> 00:02:55,519 Speaker 5: In January sales, we're just dismal. Spending in January decline 53 00:02:55,639 --> 00:02:58,360 Speaker 5: zero point two percent. A big part of that was 54 00:02:58,360 --> 00:03:00,480 Speaker 5: a pullback in autos, and a big part of that 55 00:03:00,720 --> 00:03:03,280 Speaker 5: was that there was a polar vortex in the lower 56 00:03:03,280 --> 00:03:07,080 Speaker 5: forty eight states. When it's snowing in Houston, folks aren't 57 00:03:07,080 --> 00:03:10,480 Speaker 5: going to be wanting to walk around an auto dealer's lot. 58 00:03:11,000 --> 00:03:15,000 Speaker 5: We do expect to see quite a rebound in February. Again, 59 00:03:15,040 --> 00:03:17,480 Speaker 5: a big part of that is a rebound in auto sales. 60 00:03:17,840 --> 00:03:22,080 Speaker 5: We're estimating that February personal spending growth will register zero 61 00:03:22,120 --> 00:03:24,760 Speaker 5: point six percent. That's pretty strong, and that is the 62 00:03:24,800 --> 00:03:27,800 Speaker 5: type of number that's going to justify the Fed's decision 63 00:03:27,880 --> 00:03:30,440 Speaker 5: to hold rate steady when it met just last week. 64 00:03:31,400 --> 00:03:34,960 Speaker 5: But I think that when we decompose what's driving the spending, 65 00:03:35,360 --> 00:03:39,400 Speaker 5: it's not all sunshine and rainbows. After January's polar vortex, 66 00:03:39,560 --> 00:03:41,960 Speaker 5: the February data we're going to be so we think 67 00:03:41,960 --> 00:03:45,480 Speaker 5: we're supported by spending on autos again, just a rebound 68 00:03:45,840 --> 00:03:49,160 Speaker 5: on healthcare because of the rise in the number of 69 00:03:49,160 --> 00:03:52,960 Speaker 5: flu cases, and a little bit of an increase in 70 00:03:53,080 --> 00:03:57,120 Speaker 5: discretionary goods. But we also do know that people pulled 71 00:03:57,160 --> 00:04:01,120 Speaker 5: back on their spending at foods services, in drinking places. 72 00:04:01,120 --> 00:04:02,880 Speaker 5: They were dining out, which is one of the key 73 00:04:03,000 --> 00:04:05,120 Speaker 5: measures of discretionary spending. 74 00:04:05,320 --> 00:04:08,240 Speaker 2: That was the biggest decrease right in bars and restaurant. 75 00:04:07,920 --> 00:04:09,920 Speaker 5: That's right in the retail sales report. So when we 76 00:04:10,000 --> 00:04:12,520 Speaker 5: think about what we should expect from the personal spending 77 00:04:12,520 --> 00:04:16,000 Speaker 5: report coming out this Friday, I think that the headline 78 00:04:16,080 --> 00:04:18,520 Speaker 5: number for spending is going to look pretty solid zero 79 00:04:18,560 --> 00:04:21,080 Speaker 5: point six percent growth, But some of the details, some 80 00:04:21,120 --> 00:04:23,520 Speaker 5: of the composition under the surface is just going to 81 00:04:23,600 --> 00:04:26,159 Speaker 5: illustrate this choppiness in the first quarter. 82 00:04:26,960 --> 00:04:29,839 Speaker 2: Well, let's talk about an even stickier subject related to that, 83 00:04:29,880 --> 00:04:34,800 Speaker 2: and that's inflation. We have the PCE for February that's 84 00:04:34,800 --> 00:04:36,920 Speaker 2: out this week. What are you expecting to see there. 85 00:04:37,000 --> 00:04:40,240 Speaker 5: We're expecting to see a very hot core number, core 86 00:04:40,279 --> 00:04:43,360 Speaker 5: inflation of thirty five basis points during the month. That's 87 00:04:43,400 --> 00:04:45,840 Speaker 5: going to push the year on year measure of core 88 00:04:45,880 --> 00:04:48,919 Speaker 5: inflation up to nearly two point eight percent from a 89 00:04:49,040 --> 00:04:52,360 Speaker 5: touch under two point seven. And what's a little bit 90 00:04:52,360 --> 00:04:57,400 Speaker 5: troubling is that we did see a nice cool CPI measure. 91 00:04:57,640 --> 00:05:00,159 Speaker 5: What could it be that's driving core PC the E 92 00:05:00,320 --> 00:05:03,640 Speaker 5: inflation higher. Well, if you track all the components that 93 00:05:03,680 --> 00:05:07,360 Speaker 5: come from CPI and that come from producer prices the 94 00:05:07,360 --> 00:05:12,080 Speaker 5: PPI and combine those to create the PCE measure, which 95 00:05:12,120 --> 00:05:15,800 Speaker 5: is what the FED is really good at estimating before 96 00:05:15,800 --> 00:05:19,720 Speaker 5: it even meets, we see that the composition of all 97 00:05:19,720 --> 00:05:22,279 Speaker 5: the different spending categories are going to boost the Fed's 98 00:05:22,320 --> 00:05:27,240 Speaker 5: preferred measure. You had hot financial services inflation, you had 99 00:05:27,240 --> 00:05:32,039 Speaker 5: hot food services inflation despite the pullback in spending. You 100 00:05:32,120 --> 00:05:36,760 Speaker 5: had rising healthcare costs, possibly just a continuation of the 101 00:05:36,800 --> 00:05:40,479 Speaker 5: annual resets that typically take place in January. And we 102 00:05:40,560 --> 00:05:44,479 Speaker 5: saw a lot of goods inflation, typically core goods, particularly 103 00:05:44,600 --> 00:05:49,200 Speaker 5: durable goods. Way on headline inflation over the past couple months. 104 00:05:49,240 --> 00:05:52,640 Speaker 5: In February in particular, goods were boosting inflation, which is 105 00:05:52,640 --> 00:05:56,000 Speaker 5: something that's troubling, especially as tarot's start to hit. We 106 00:05:56,040 --> 00:05:58,919 Speaker 5: only saw just the first little wave of tariff's in 107 00:05:58,960 --> 00:06:03,240 Speaker 5: February taking effect. As we get reciprocal tariffs in April 108 00:06:03,360 --> 00:06:06,719 Speaker 5: April second, as we've been told to expect. 109 00:06:06,720 --> 00:06:09,240 Speaker 2: We could expect right now anyway, at least for. 110 00:06:09,240 --> 00:06:12,080 Speaker 5: Now, that's right. As we get those reciprocal tariffs, we 111 00:06:12,120 --> 00:06:15,720 Speaker 5: should expect a little bit more goods inflation. So it 112 00:06:15,800 --> 00:06:17,360 Speaker 5: is the sort of thing that should be troubling for 113 00:06:17,400 --> 00:06:19,920 Speaker 5: the Fed. And again we'll justify that decision to hold 114 00:06:20,000 --> 00:06:21,719 Speaker 5: RAID steady just last week Q. 115 00:06:21,640 --> 00:06:24,840 Speaker 2: Four GDP a third and final reading on GDP. That's 116 00:06:24,839 --> 00:06:28,520 Speaker 2: how this Thursday, February's PCE out on Friday our thanks 117 00:06:28,560 --> 00:06:32,599 Speaker 2: to Stuart Paul, us economists with Bloomberg Economics. Well, we 118 00:06:32,720 --> 00:06:35,919 Speaker 2: turn now to housing, and spring has sprung, the busiest 119 00:06:35,920 --> 00:06:37,840 Speaker 2: time of the year for the US housing market. Bud 120 00:06:37,880 --> 00:06:42,360 Speaker 2: boy has it struggled. Skyrocketing home prices, elevated mortgage rates, 121 00:06:42,360 --> 00:06:45,359 Speaker 2: a dearth of homes on the market despite pent up demand, 122 00:06:45,480 --> 00:06:50,360 Speaker 2: and now a new worry President Trump's tariffs against Canada, Mexico, 123 00:06:50,480 --> 00:06:53,320 Speaker 2: and China, and for more on how those policies could 124 00:06:53,320 --> 00:06:56,640 Speaker 2: impact housing and home building. We welcome Drew reading Bloomberg 125 00:06:56,640 --> 00:07:01,440 Speaker 2: Intelligence US home building analysts. Drew, thank you for being here. 126 00:07:01,520 --> 00:07:05,760 Speaker 2: I tell you, the timing could not be worse for builders, contractors, buyers, 127 00:07:05,920 --> 00:07:08,200 Speaker 2: people that want to replace their back deck or renovate 128 00:07:08,240 --> 00:07:10,720 Speaker 2: their kitchen. I mean, could it be even worse for 129 00:07:10,760 --> 00:07:11,400 Speaker 2: them right now? 130 00:07:12,240 --> 00:07:15,360 Speaker 6: Yeah, you're right. There's a lot of factors conspiring against 131 00:07:15,400 --> 00:07:18,240 Speaker 6: the home building industry. You know, whether it's high home 132 00:07:18,280 --> 00:07:24,720 Speaker 6: prices as you mentioned, elevated rates, declining consumer confidence, potential tariffs, 133 00:07:25,480 --> 00:07:28,840 Speaker 6: immigration policy. So there's a lot of things that builders 134 00:07:28,880 --> 00:07:31,480 Speaker 6: and investors in the space are having to digest right now. 135 00:07:31,520 --> 00:07:33,040 Speaker 6: So definitely a difficult period. 136 00:07:33,640 --> 00:07:36,400 Speaker 2: And these tariffs, these numbers are staggering. Twenty five percent 137 00:07:36,480 --> 00:07:39,240 Speaker 2: on certain imports from Mexico and Canada that went into 138 00:07:39,280 --> 00:07:42,440 Speaker 2: effect early March, and that includes softwood lumber and the 139 00:07:42,520 --> 00:07:45,600 Speaker 2: US gets what like forty percent of its lumber from Canada. 140 00:07:45,720 --> 00:07:48,720 Speaker 2: Also the appliances in Mexico and China that come in 141 00:07:48,760 --> 00:07:51,800 Speaker 2: twenty percent tariffs there drywall out of you know, the 142 00:07:51,840 --> 00:07:55,840 Speaker 2: gypsum and drywall out of Mexico, and we're expecting even 143 00:07:55,920 --> 00:07:59,400 Speaker 2: more tariffs on April second. As of today anyway. 144 00:08:00,200 --> 00:08:02,040 Speaker 6: Right, So for just for a little bit of context, 145 00:08:02,040 --> 00:08:04,680 Speaker 6: the US imports about thirteen billion dollars worth of goods 146 00:08:04,760 --> 00:08:08,120 Speaker 6: used in residential construction. So that's about seven percent of 147 00:08:08,160 --> 00:08:10,680 Speaker 6: all goods used in the industry coming from other countries. 148 00:08:11,240 --> 00:08:14,800 Speaker 6: Within that, you have about forty five percent coming from China, Mexico, 149 00:08:14,840 --> 00:08:16,680 Speaker 6: and Canada, which is you know, have kind of been 150 00:08:17,280 --> 00:08:19,520 Speaker 6: at the forefront of all this tariff talk. China is 151 00:08:19,520 --> 00:08:22,679 Speaker 6: about thirty percent of imports, Mexico about ten in Canada 152 00:08:22,720 --> 00:08:25,440 Speaker 6: almost ten percent. And you're right, it's it's there's products 153 00:08:25,480 --> 00:08:27,880 Speaker 6: you mentioned, it's you know, appliance isn't lighting from China, 154 00:08:27,920 --> 00:08:31,440 Speaker 6: it's drywall from Mexico. And I think you know, the 155 00:08:31,480 --> 00:08:34,880 Speaker 6: real biggie, as you mentioned, is lumber from Canada. That 156 00:08:34,920 --> 00:08:38,720 Speaker 6: accounts for about seventy percent of all US lumber imports, 157 00:08:38,760 --> 00:08:42,400 Speaker 6: and it's about thirty percent of the lumber used in 158 00:08:42,559 --> 00:08:46,320 Speaker 6: US construction. So certainly an important thing to watch. Now, 159 00:08:46,800 --> 00:08:49,280 Speaker 6: keep in mind we're already paying a fourteen and a 160 00:08:49,320 --> 00:08:53,720 Speaker 6: half percent tariff on imports of Canadian lumber, so you know, 161 00:08:53,720 --> 00:08:55,959 Speaker 6: when these go into effect in April will be at 162 00:08:56,000 --> 00:08:59,480 Speaker 6: forty percent, So certainly a real threat to the builders. 163 00:08:59,120 --> 00:09:02,640 Speaker 2: Wow, big builders of Last week, the National Association of 164 00:09:02,640 --> 00:09:06,600 Speaker 2: Home Builders said tariffs on lumber, appliances, steel aluminum piping 165 00:09:06,640 --> 00:09:09,520 Speaker 2: could add as much as ten thousand dollars. That's just 166 00:09:09,520 --> 00:09:11,800 Speaker 2: to the cost of building a home. I mean, what 167 00:09:11,800 --> 00:09:12,880 Speaker 2: does that mean to a buyer? 168 00:09:13,400 --> 00:09:16,240 Speaker 6: Yeah, it's a great question. So typically builders are able 169 00:09:16,280 --> 00:09:18,679 Speaker 6: to pass their costs onto the consumers. 170 00:09:19,440 --> 00:09:19,640 Speaker 7: You know. 171 00:09:19,880 --> 00:09:22,400 Speaker 6: The concern I guess from an investor perspective would be, 172 00:09:22,880 --> 00:09:25,920 Speaker 6: you know, home shoppers have become increasingly sensitive to costs, 173 00:09:25,920 --> 00:09:28,520 Speaker 6: whether it's financing costs or you know, the actual cost 174 00:09:28,520 --> 00:09:30,480 Speaker 6: of a home. So you know, I'm not sure in 175 00:09:30,480 --> 00:09:33,840 Speaker 6: this environment how much they're going to be able to absorb. 176 00:09:34,880 --> 00:09:36,920 Speaker 6: So I think you're going to see builders take some 177 00:09:37,000 --> 00:09:38,600 Speaker 6: of that on the margin side. So I think it's 178 00:09:38,600 --> 00:09:41,320 Speaker 6: going to be a little bit on the builder side 179 00:09:41,360 --> 00:09:43,600 Speaker 6: as well as consumers having to pay a higher price 180 00:09:43,640 --> 00:09:45,000 Speaker 6: for a new product. 181 00:09:45,280 --> 00:09:47,360 Speaker 2: And it's not just the builders. Of course, you want 182 00:09:47,360 --> 00:09:50,160 Speaker 2: to replace your deck or your kitchen cabinets, I mean 183 00:09:50,200 --> 00:09:51,560 Speaker 2: you are going to pay more aren't you. 184 00:09:53,080 --> 00:09:54,920 Speaker 6: Yeah, we're going to see it across the industry. So 185 00:09:54,960 --> 00:09:57,400 Speaker 6: you're going to see it in the repair and remodeling space, 186 00:09:57,440 --> 00:10:01,319 Speaker 6: which is dealing with its own issues with As consumers 187 00:10:01,360 --> 00:10:04,559 Speaker 6: continue to battle with the cumutive impact of inflation over 188 00:10:04,559 --> 00:10:07,840 Speaker 6: the last couple of years, you know, people not wanting 189 00:10:07,880 --> 00:10:10,199 Speaker 6: to go out and make big purchasing decisions. So we're 190 00:10:10,200 --> 00:10:14,160 Speaker 6: seeing pullback indiscretionary categories, and of course, you know, lumbers 191 00:10:14,200 --> 00:10:17,440 Speaker 6: a big component of that. You know, the appliance market 192 00:10:17,559 --> 00:10:19,920 Speaker 6: has also struggled over the last couple of years, so 193 00:10:20,400 --> 00:10:23,960 Speaker 6: you know, on appliances that are imported from China and 194 00:10:24,000 --> 00:10:26,320 Speaker 6: other countries, you're starting going to see higher prices there. 195 00:10:27,280 --> 00:10:30,920 Speaker 2: Now, we did get some encouraging data last week on housing. 196 00:10:30,960 --> 00:10:34,640 Speaker 2: New home construction sharply higher in February. But is that 197 00:10:34,720 --> 00:10:37,440 Speaker 2: more because of the all that wicked winter weather in January? 198 00:10:37,600 --> 00:10:39,760 Speaker 2: I mean, what's behind that push on construction? 199 00:10:40,840 --> 00:10:42,520 Speaker 6: Yeah, I think you're right there. I think a lot 200 00:10:42,559 --> 00:10:45,080 Speaker 6: of is some payback from some of the weather disruption 201 00:10:45,200 --> 00:10:48,720 Speaker 6: we've seen. Within that same report, our preferred measure of 202 00:10:49,080 --> 00:10:53,160 Speaker 6: activity is really building permits. It's a much less volatile indicator, 203 00:10:53,160 --> 00:10:55,200 Speaker 6: and it's a better leading indicator of production, and they 204 00:10:55,200 --> 00:10:57,720 Speaker 6: were actually down eleven percent compared to last year, and 205 00:10:57,720 --> 00:11:00,520 Speaker 6: that jives with the data we saw in builders sentiment. 206 00:11:01,080 --> 00:11:03,920 Speaker 6: You're definitely seeing a more cautious approach to the market. 207 00:11:03,960 --> 00:11:06,720 Speaker 6: What they're doing is matching starts with demand, and with 208 00:11:06,760 --> 00:11:10,760 Speaker 6: the market slowing, you're seeing a corresponding pullback in new production. 209 00:11:10,880 --> 00:11:13,640 Speaker 6: The other important piece is the fact that the industry 210 00:11:13,760 --> 00:11:16,760 Speaker 6: was so aggressive in ramping up speccom production to fill 211 00:11:16,800 --> 00:11:19,240 Speaker 6: the void left by resales that you know, there's a 212 00:11:19,240 --> 00:11:21,760 Speaker 6: lot of inventory out there that's already under construction, so 213 00:11:21,840 --> 00:11:24,600 Speaker 6: there's a lot less incentive for builders to be aggressive 214 00:11:24,679 --> 00:11:27,560 Speaker 6: until they start to work through that inventory. And to 215 00:11:27,559 --> 00:11:29,080 Speaker 6: do that, we think they're going to have to continue 216 00:11:29,080 --> 00:11:32,839 Speaker 6: to lean on incentives, particularly given the increase as you 217 00:11:32,840 --> 00:11:35,960 Speaker 6: allude to before, with the increased competition that we're seeing 218 00:11:36,000 --> 00:11:38,880 Speaker 6: in the resale market in key markets in Florida and Texas. 219 00:11:39,600 --> 00:11:42,280 Speaker 2: Yeah, does that mean maybe there's too many houses out there, 220 00:11:42,320 --> 00:11:45,480 Speaker 2: too many new houses, or maybe not the right kinds 221 00:11:45,520 --> 00:11:49,120 Speaker 2: of houses. People are looking for more affordable houses instead 222 00:11:49,120 --> 00:11:51,559 Speaker 2: of you know, five bedrooms four bats. 223 00:11:52,400 --> 00:11:54,680 Speaker 6: Yeah. I certainly think when you talk about a lack 224 00:11:54,720 --> 00:11:57,280 Speaker 6: of for sale inventory over the last couple of years, 225 00:11:57,280 --> 00:12:00,720 Speaker 6: it's really for more affordably priced products. Now it's an 226 00:12:00,720 --> 00:12:03,400 Speaker 6: area where the builders have been shifting to over the 227 00:12:03,440 --> 00:12:06,679 Speaker 6: last couple of years. They've done that through smaller square 228 00:12:06,679 --> 00:12:10,480 Speaker 6: footage floor plans, are less amenotized home so they realized 229 00:12:10,520 --> 00:12:13,880 Speaker 6: that's where the gap in the market is. But now, 230 00:12:13,960 --> 00:12:16,240 Speaker 6: you know, when you start to pile on additional calls, 231 00:12:16,240 --> 00:12:18,280 Speaker 6: it gets harder and harder for them, you know, to 232 00:12:18,360 --> 00:12:21,680 Speaker 6: make that product work. But by and large, if you 233 00:12:21,720 --> 00:12:24,160 Speaker 6: look at the inventory picture, I mean, over the last 234 00:12:24,240 --> 00:12:27,040 Speaker 6: couple of years, the lack of resale supply has really 235 00:12:27,080 --> 00:12:29,880 Speaker 6: been what's driven demand into the new home market. It's 236 00:12:29,880 --> 00:12:31,240 Speaker 6: been certainly been a key factor. 237 00:12:31,679 --> 00:12:34,120 Speaker 2: Well, we get more housing data out this week, new 238 00:12:34,160 --> 00:12:37,400 Speaker 2: home sales for February coming out on Tuesday. Our thanks 239 00:12:37,400 --> 00:12:41,280 Speaker 2: to Drew Redding Bloomberg Intelligence US home building analysts. Coming 240 00:12:41,360 --> 00:12:43,320 Speaker 2: up on Bloomberg day Break weekend to look ahead to 241 00:12:43,400 --> 00:12:48,480 Speaker 2: UK Chancellor Rachel reeves hotly anticipated spring statement. I'm Tom 242 00:12:48,480 --> 00:13:02,600 Speaker 2: Busby and this is Bloomberg. This is Bloomberg Day Break weekend, 243 00:13:02,600 --> 00:13:04,880 Speaker 2: our global look ahead at the top stories for investors 244 00:13:04,880 --> 00:13:07,360 Speaker 2: in the coming week. I'm Tom Busby in New York. 245 00:13:07,960 --> 00:13:10,360 Speaker 2: Up later, our program will look ahead to earnings from 246 00:13:10,440 --> 00:13:15,240 Speaker 2: Chinese ev maker byd But first UK Chancellor Rachel Reeves 247 00:13:15,320 --> 00:13:19,559 Speaker 2: presenting her hotly anticipated spring statement this week. She faces 248 00:13:19,600 --> 00:13:24,319 Speaker 2: contentious a contentious environment, including recently slash growth figures and 249 00:13:24,440 --> 00:13:27,760 Speaker 2: expensive promises on defense. Now there's also a question of 250 00:13:27,800 --> 00:13:30,720 Speaker 2: silencing critics, some of whom may be from within her 251 00:13:30,760 --> 00:13:33,160 Speaker 2: own party. For more, let's go to London and bring 252 00:13:33,160 --> 00:13:36,079 Speaker 2: in Bloomberg Daybreak Europe anchor Caroline hepgar. 253 00:13:36,240 --> 00:13:39,320 Speaker 3: Tom On Wednesday, the twenty sixth of March, the Chancellor 254 00:13:39,360 --> 00:13:42,440 Speaker 3: is expected to announce billions of pounds of spending cuts 255 00:13:42,760 --> 00:13:46,320 Speaker 3: to ensure that she meets her key fiscal rule, which 256 00:13:46,360 --> 00:13:49,520 Speaker 3: requires day to day government spending to be covered by 257 00:13:49,640 --> 00:13:53,360 Speaker 3: tax receipts. Her task is not an easy one. Rachel 258 00:13:53,400 --> 00:13:57,880 Speaker 3: Reeves left herself an historically slim nine point nine billion 259 00:13:58,000 --> 00:14:02,040 Speaker 3: pound margin against that time target at her budget in October, 260 00:14:02,320 --> 00:14:05,600 Speaker 3: a buffer that has since been eroded by higher government 261 00:14:05,640 --> 00:14:10,320 Speaker 3: borrowing costs and lower growth forecasts. Net debt for Britain 262 00:14:10,400 --> 00:14:14,400 Speaker 3: stood at ninety five point three percent of GDP in January. 263 00:14:14,480 --> 00:14:17,440 Speaker 3: That is close to levels last scene in the early 264 00:14:17,559 --> 00:14:21,360 Speaker 3: nineteen sixties. The deficit in the first ten months of 265 00:14:21,400 --> 00:14:25,160 Speaker 3: the year was one hundred and eighteen billion pounds, and 266 00:14:25,240 --> 00:14:28,040 Speaker 3: that is nearly thirteen billion more than the Office for 267 00:14:28,080 --> 00:14:33,520 Speaker 3: Budget Responsibility forecasts only in October. But Reeves is standing strong. 268 00:14:33,840 --> 00:14:36,720 Speaker 3: She told Bloomberg that she is committed to bringing down 269 00:14:36,840 --> 00:14:39,560 Speaker 3: government borrowing despite the obstacles. 270 00:14:39,880 --> 00:14:44,840 Speaker 8: We've already made some substantial changes on regulation. Last week 271 00:14:44,880 --> 00:14:47,640 Speaker 8: the Prime Minister announced that we're going to be getting 272 00:14:47,720 --> 00:14:51,000 Speaker 8: rid of NHS England, the biggest quango in the world. 273 00:14:51,360 --> 00:14:55,320 Speaker 8: We announced last week getting rid of the Payment Systems 274 00:14:55,400 --> 00:15:00,560 Speaker 8: Regulator and just today the merger of the Community Interest 275 00:15:00,600 --> 00:15:04,400 Speaker 8: Companies Regulator into Company's House. So you can see that 276 00:15:04,440 --> 00:15:08,479 Speaker 8: this government are determined to make it easier for businesses 277 00:15:08,560 --> 00:15:11,680 Speaker 8: to do business in the UK, to get building and 278 00:15:11,760 --> 00:15:17,360 Speaker 8: to get on with things. Over Burdensome regulation, overlapping regulation 279 00:15:17,560 --> 00:15:20,360 Speaker 8: has held back Britain for too long and we're determined 280 00:15:20,400 --> 00:15:21,160 Speaker 8: to turn that around. 281 00:15:21,280 --> 00:15:23,760 Speaker 9: Well, what's the metric for success here, how soon and 282 00:15:23,800 --> 00:15:25,840 Speaker 9: how much do you expect this to boost GDP? 283 00:15:26,200 --> 00:15:29,400 Speaker 8: Well, we've made a commitment to reduce the regulatory burden, 284 00:15:29,480 --> 00:15:33,000 Speaker 8: the administrative burden by twenty five percent during the course 285 00:15:33,040 --> 00:15:36,240 Speaker 8: of this parliament. That's across all regulators, whether it is 286 00:15:36,280 --> 00:15:40,760 Speaker 8: in the environment or financial services, right across the economy, 287 00:15:41,080 --> 00:15:43,920 Speaker 8: and that is to meet our ambition to grow the economy, 288 00:15:44,000 --> 00:15:46,840 Speaker 8: to make working people better off, and to make our 289 00:15:46,920 --> 00:15:51,440 Speaker 8: country and our economy more competitive. So next week the 290 00:15:51,480 --> 00:15:54,960 Speaker 8: new growth forecast will be published by the Office of 291 00:15:55,000 --> 00:15:58,680 Speaker 8: Budget Responsibility. But this is just one of a range 292 00:15:58,680 --> 00:16:01,560 Speaker 8: of measures, along with the Planning an Infrastructure Bill that 293 00:16:01,640 --> 00:16:04,680 Speaker 8: was published last week, the Pensions Bill which is coming 294 00:16:04,760 --> 00:16:08,680 Speaker 8: soon to turn around the lackluster growth performance that has 295 00:16:08,800 --> 00:16:10,600 Speaker 8: affected the UK for far too long. 296 00:16:10,720 --> 00:16:14,040 Speaker 9: Well, the OCD published its forecast today has cut its 297 00:16:14,080 --> 00:16:16,960 Speaker 9: growth forecast for this year and next. Do you accept 298 00:16:17,040 --> 00:16:19,800 Speaker 9: responsibility for that or is it all the fault of 299 00:16:19,840 --> 00:16:21,640 Speaker 9: Donald Trump and the Conservatives. 300 00:16:22,240 --> 00:16:25,200 Speaker 8: Well, if you look at what the OECD have done today, 301 00:16:25,480 --> 00:16:31,200 Speaker 8: they have downgraded most major economies growth forecasts. The UK 302 00:16:31,400 --> 00:16:34,640 Speaker 8: is not immune from those global headwinds. But if you 303 00:16:34,680 --> 00:16:37,000 Speaker 8: look at the forecast for next year for the UK, 304 00:16:37,400 --> 00:16:40,840 Speaker 8: with forecast to be the second fastest growing economy in 305 00:16:40,880 --> 00:16:43,600 Speaker 8: the G seven, that is up from the third fast 306 00:16:43,680 --> 00:16:46,440 Speaker 8: is the last time they published their forecasts. But if 307 00:16:46,440 --> 00:16:49,880 Speaker 8: you're asking am I happy with those numbers, of course not. 308 00:16:50,440 --> 00:16:53,480 Speaker 8: I want to see the UK economy create more jobs, 309 00:16:53,560 --> 00:16:57,040 Speaker 8: create more prosperity, to lift the living standards of working people, 310 00:16:57,240 --> 00:17:02,240 Speaker 8: and that's what this regulatory drive is all about, unlocking growth, 311 00:17:02,400 --> 00:17:04,479 Speaker 8: making it easier to do business in Britain. 312 00:17:04,600 --> 00:17:07,280 Speaker 9: What I'm asking is, do you accept any responsibility for 313 00:17:07,280 --> 00:17:10,640 Speaker 9: the downgrade? Is it anything to do with your gloomy 314 00:17:10,640 --> 00:17:13,280 Speaker 9: messaging or your tax risers in the October budget. 315 00:17:13,840 --> 00:17:18,679 Speaker 8: Well, of course there are costs from any measures on tax, 316 00:17:18,720 --> 00:17:22,000 Speaker 8: but there are also costs of irresponsibility. And if in 317 00:17:22,040 --> 00:17:24,760 Speaker 8: the budget last year I hadn't have dealt with a 318 00:17:24,800 --> 00:17:27,840 Speaker 8: twenty two billion pound black hole that I'd inherited from 319 00:17:27,880 --> 00:17:31,159 Speaker 8: the Conservatives, if I hadn't put our public finances on 320 00:17:31,240 --> 00:17:33,879 Speaker 8: a firm footing, then we wouldn't have been able to 321 00:17:34,119 --> 00:17:37,080 Speaker 8: increase defense spending in the way that we did just 322 00:17:37,160 --> 00:17:40,240 Speaker 8: a couple of weeks ago, and we wouldn't be able 323 00:17:40,280 --> 00:17:44,240 Speaker 8: to weather the global economic headwinds. So we made the 324 00:17:44,320 --> 00:17:48,280 Speaker 8: right decisions in that budget to return stability to the economy. 325 00:17:48,440 --> 00:17:50,560 Speaker 8: And since the general election, of course, there's been three 326 00:17:50,600 --> 00:17:54,639 Speaker 8: cuts in interest rates, only possible because we've returned stability 327 00:17:54,680 --> 00:17:55,400 Speaker 8: to the economy. 328 00:17:55,440 --> 00:17:58,119 Speaker 9: But do you regret not giving yourself more breathing space 329 00:17:58,200 --> 00:18:01,080 Speaker 9: against your fiscal rules at the time of the October prodject. 330 00:18:01,320 --> 00:18:04,800 Speaker 8: Well, in October we set the fiscal rules for this 331 00:18:04,880 --> 00:18:07,320 Speaker 8: Parliament that we would balance day to day spending with 332 00:18:07,400 --> 00:18:09,879 Speaker 8: tax receipts and we would get decked down as a 333 00:18:09,920 --> 00:18:13,280 Speaker 8: share of GDP. But significantly we changed the way that 334 00:18:13,400 --> 00:18:16,480 Speaker 8: we measured investments. So for the first time ever we 335 00:18:16,560 --> 00:18:19,399 Speaker 8: count the benefits of investment, not just the costs. And 336 00:18:19,480 --> 00:18:22,320 Speaker 8: because of that we were able to invest in an additional 337 00:18:22,280 --> 00:18:25,120 Speaker 8: one hundred billion pounds during the course of this parliament 338 00:18:25,359 --> 00:18:30,440 Speaker 8: in capital projects, transport, digital energy and of course a 339 00:18:30,600 --> 00:18:33,240 Speaker 8: housing that's pro business, that's pro growth and it's pro 340 00:18:33,280 --> 00:18:33,960 Speaker 8: working people. 341 00:18:34,720 --> 00:18:38,200 Speaker 3: That was Chancellor Rachel Reeves speaking two Bluebags Lizzie Burden 342 00:18:38,280 --> 00:18:41,040 Speaker 3: ahead of her big day in the Commons. This is 343 00:18:41,080 --> 00:18:43,760 Speaker 3: an event the government, though, has tried to play down, 344 00:18:44,160 --> 00:18:47,800 Speaker 3: even as Work and Pension Secretary Liz Kendall announced the 345 00:18:47,880 --> 00:18:50,879 Speaker 3: plan to save five billion pounds a year by twenty 346 00:18:51,000 --> 00:18:54,919 Speaker 3: thirty with cuts to welfare benefits. So what will we 347 00:18:55,000 --> 00:18:58,560 Speaker 3: learn from the Chancellor's spring statement? Can Rachel Reeves keep 348 00:18:58,640 --> 00:19:03,000 Speaker 3: markets on side and also fend off her political opponents. 349 00:19:03,320 --> 00:19:06,320 Speaker 3: I ask putting bogs UK government reporter Joe mays, how 350 00:19:06,359 --> 00:19:10,360 Speaker 3: difficult the backdrop is for Reeves given the UK economy 351 00:19:10,440 --> 00:19:14,879 Speaker 3: shrank in January and Britain has many long standing and 352 00:19:14,960 --> 00:19:16,920 Speaker 3: now some new expenses. 353 00:19:17,440 --> 00:19:21,520 Speaker 10: Yes, the backdob is a stagnating economy. It's barely grown 354 00:19:21,600 --> 00:19:25,680 Speaker 10: since Labor took power last year. And indeed the budget 355 00:19:25,720 --> 00:19:28,040 Speaker 10: that rich Reeves had in October is seen to have 356 00:19:28,280 --> 00:19:30,960 Speaker 10: not made things much better. Indeed, the increase in the 357 00:19:31,040 --> 00:19:34,119 Speaker 10: Nation Insurance payroll tax has led to a decrease in 358 00:19:34,200 --> 00:19:37,160 Speaker 10: business confidence. It's been a hit to hiring as well. 359 00:19:37,359 --> 00:19:39,840 Speaker 10: And rich Reeves has tried to get growth going with 360 00:19:39,920 --> 00:19:43,960 Speaker 10: these initiatives announced such as Heather expansion, developing the Oxford 361 00:19:43,960 --> 00:19:45,920 Speaker 10: Cambridge art but these will take time. So in the 362 00:19:45,960 --> 00:19:48,040 Speaker 10: immediate term there's that there have been headwinds to growth 363 00:19:48,359 --> 00:19:51,199 Speaker 10: and so yeah, the backdrop is difficult for her, and 364 00:19:51,240 --> 00:19:54,760 Speaker 10: it's within that very tight space of low growth that 365 00:19:54,800 --> 00:19:58,199 Speaker 10: she's having to manage these public finances. And now, as 366 00:19:58,200 --> 00:20:00,280 Speaker 10: we'll talk about, she has to find spending cuts, make 367 00:20:00,320 --> 00:20:02,320 Speaker 10: sure she keeps hitting her main fiscal rule and that 368 00:20:02,359 --> 00:20:04,520 Speaker 10: will be a big political difficulty for her. 369 00:20:05,000 --> 00:20:08,560 Speaker 3: Yeah, spending cuts rather than tax increases. Where do we 370 00:20:08,560 --> 00:20:10,000 Speaker 3: think the cuts are going to come from? 371 00:20:10,359 --> 00:20:13,280 Speaker 10: Well, what we expect Richarl Reeves to announce on March 372 00:20:13,320 --> 00:20:17,359 Speaker 10: twenty sixth is a reduction in the overall spending envelope, 373 00:20:17,400 --> 00:20:19,399 Speaker 10: so the overall amount the government's going to spend on 374 00:20:19,440 --> 00:20:22,240 Speaker 10: public services through the end of the parliament. It's currently 375 00:20:22,280 --> 00:20:24,000 Speaker 10: it's set to grow at one point three percent on 376 00:20:24,040 --> 00:20:26,800 Speaker 10: average until twenty thirty and economists thinks she could hit 377 00:20:26,840 --> 00:20:29,560 Speaker 10: it down to one one percent, but she won't crucially 378 00:20:29,560 --> 00:20:31,720 Speaker 10: have to spell out where those cuts will fall. That's 379 00:20:31,760 --> 00:20:34,680 Speaker 10: something that will be revealed at the Spending Review in June, 380 00:20:34,720 --> 00:20:37,560 Speaker 10: which is where each government department is allocated its budget. 381 00:20:37,840 --> 00:20:40,159 Speaker 10: So yeah, that can be that'll come later. But we 382 00:20:40,200 --> 00:20:43,000 Speaker 10: do know that welfare is already earmarked for five billion 383 00:20:43,040 --> 00:20:45,200 Speaker 10: pounds in savings. Governments already announced that. Well off, the 384 00:20:45,200 --> 00:20:46,800 Speaker 10: waiting scene has a where the rest of the cuts 385 00:20:46,840 --> 00:20:47,040 Speaker 10: do for? 386 00:20:47,800 --> 00:20:50,119 Speaker 3: Okay, will we get more details on that then? Do 387 00:20:50,160 --> 00:20:53,600 Speaker 3: you think potentially on Wednesday, given the pressure that Rachel 388 00:20:53,640 --> 00:20:57,760 Speaker 3: Reeves will be under, how much does Reeves need to 389 00:20:57,800 --> 00:21:00,879 Speaker 3: gain in terms of savings in order also to keep 390 00:21:00,960 --> 00:21:04,600 Speaker 3: to her pledge of sticking to her fiscal rules. 391 00:21:04,960 --> 00:21:07,440 Speaker 10: So we think that she might announce up to ten 392 00:21:07,560 --> 00:21:11,480 Speaker 10: billion pounds of production in public spending in addition to 393 00:21:11,480 --> 00:21:14,200 Speaker 10: the welfare savings that have been announced, and that would 394 00:21:14,359 --> 00:21:17,720 Speaker 10: help her get back to a fiscal buffer of about 395 00:21:17,760 --> 00:21:20,440 Speaker 10: ten to fifteen billion pounds against her fiscal rule. Because 396 00:21:20,440 --> 00:21:22,720 Speaker 10: that's another question here, you know, what headroom does she 397 00:21:22,840 --> 00:21:25,879 Speaker 10: build back against that rule. I mean, we saw that 398 00:21:25,920 --> 00:21:29,359 Speaker 10: headroom eroded in recent months because of the weaker growth 399 00:21:29,359 --> 00:21:32,200 Speaker 10: forecasts because of higher borrowing costs. I think Rachel reads 400 00:21:32,240 --> 00:21:35,879 Speaker 10: it alive to the problems that can happen when you 401 00:21:35,920 --> 00:21:39,119 Speaker 10: don't have much headroom to absorb these kind of fiscal shocks. 402 00:21:39,119 --> 00:21:41,080 Speaker 10: So you expect to go back to ten fifteen billion 403 00:21:41,359 --> 00:21:44,040 Speaker 10: funded through that ten billion pound production in public spending. 404 00:21:44,320 --> 00:21:45,760 Speaker 10: I think that's where the explanitions are. 405 00:21:46,720 --> 00:21:49,920 Speaker 3: In terms of that cut to welfare. That has been 406 00:21:50,280 --> 00:21:55,000 Speaker 3: a hugely significant that announcement, and a lot of backlash 407 00:21:55,119 --> 00:21:58,520 Speaker 3: around that sort of cut to welfare is especially from 408 00:21:58,560 --> 00:22:02,680 Speaker 3: within the Chances Own party. That's a very difficult issue. 409 00:22:02,880 --> 00:22:05,520 Speaker 10: Yes, we've already seen signs of what could be quite 410 00:22:05,520 --> 00:22:08,440 Speaker 10: a PUNCHI rebellion here on the labor backbenches. I think 411 00:22:08,440 --> 00:22:10,919 Speaker 10: that the concern is that the welfare cuts that were 412 00:22:10,920 --> 00:22:14,520 Speaker 10: anounced might not necessarily achieve what the government says they 413 00:22:14,560 --> 00:22:16,800 Speaker 10: want them to achieve. The government says that too many 414 00:22:16,840 --> 00:22:20,359 Speaker 10: people are claiming benefits and it creates a disincentive to work. 415 00:22:20,480 --> 00:22:24,000 Speaker 10: But the particular benefit they are targeting and reducing the 416 00:22:24,000 --> 00:22:27,399 Speaker 10: accessibility of is really unclear. Why reducing the availability of 417 00:22:27,400 --> 00:22:30,760 Speaker 10: that benefit, which is prominally taken by people who are 418 00:22:30,920 --> 00:22:34,560 Speaker 10: disabled and have to meet various quite strict criteria to 419 00:22:35,520 --> 00:22:39,040 Speaker 10: receive the benefit, Why reducing access to that would necessarily 420 00:22:39,200 --> 00:22:41,600 Speaker 10: lead to a particular increase in access to work. And 421 00:22:41,640 --> 00:22:44,800 Speaker 10: at the same time, the government is increasing above inflation 422 00:22:44,960 --> 00:22:48,680 Speaker 10: the Universal Credit benefit for everyone else, so that's increasing 423 00:22:48,680 --> 00:22:51,359 Speaker 10: an incentive to stay on that benefit, which would perhaps 424 00:22:51,520 --> 00:22:53,840 Speaker 10: reduce the likely that people go into work. So yeah, 425 00:22:53,920 --> 00:22:56,720 Speaker 10: it's a confused package in that sense. I think lots 426 00:22:56,720 --> 00:22:58,159 Speaker 10: of labor and PE's are worried about it. 427 00:22:58,240 --> 00:23:00,800 Speaker 3: I say that the problems with the UK economy and 428 00:23:00,840 --> 00:23:04,240 Speaker 3: for the government's violences are familiar, but actually the defense 429 00:23:04,280 --> 00:23:07,160 Speaker 3: spending is something quite new. This idea that we must 430 00:23:07,240 --> 00:23:09,800 Speaker 3: ramp up a defense spending. How do you think that 431 00:23:10,000 --> 00:23:13,920 Speaker 3: labor is addressing that issue now and thinking about it fiscally, 432 00:23:13,960 --> 00:23:17,760 Speaker 3: I mean it's something of a massively long term need 433 00:23:17,920 --> 00:23:18,560 Speaker 3: and desire. 434 00:23:19,240 --> 00:23:22,520 Speaker 10: Yes. So the increase in spending from two point three 435 00:23:22,520 --> 00:23:25,200 Speaker 10: percent of GDP to two point five percent of GDP 436 00:23:25,320 --> 00:23:28,560 Speaker 10: by twenty twenty seven is funded by moving money across 437 00:23:28,560 --> 00:23:30,879 Speaker 10: from the foreign aid budget, and that obviously has caused 438 00:23:30,880 --> 00:23:33,200 Speaker 10: some upset in the labor ranks, but it does give 439 00:23:33,240 --> 00:23:35,680 Speaker 10: the government a kind of very credible and definite way 440 00:23:35,720 --> 00:23:38,440 Speaker 10: of funding that uptick. And then they have the line 441 00:23:38,440 --> 00:23:40,480 Speaker 10: that will increase a three percent over the course of 442 00:23:40,480 --> 00:23:43,399 Speaker 10: the next decade. But that line quite conveniently parks the 443 00:23:43,480 --> 00:23:46,840 Speaker 10: question in the next parliament, so the government can say 444 00:23:46,880 --> 00:23:49,120 Speaker 10: I'll get to thirty percent, but won't actually have to 445 00:23:49,200 --> 00:23:52,040 Speaker 10: say how really until after the next election, which is 446 00:23:52,119 --> 00:23:55,359 Speaker 10: kind of in political terms, a very long way away. 447 00:23:55,480 --> 00:24:00,119 Speaker 10: So yes, they have a pretty immediate, plausible uplift. But 448 00:24:00,119 --> 00:24:02,960 Speaker 10: then Rachel Reeves does know that funding pressure is going 449 00:24:03,000 --> 00:24:08,320 Speaker 10: to be significant, sustained and high, so yeah, it does 450 00:24:08,359 --> 00:24:10,280 Speaker 10: add pressure to the public finances. 451 00:24:09,920 --> 00:24:13,159 Speaker 3: In terms of the other sort of part of this story, 452 00:24:13,200 --> 00:24:15,920 Speaker 3: which is the sluggish economic growth that Britain has seen 453 00:24:15,960 --> 00:24:19,159 Speaker 3: and the fact that the economy contracted in January, the 454 00:24:19,280 --> 00:24:23,160 Speaker 3: chance has talked about global uncertainty. We know that there 455 00:24:23,200 --> 00:24:25,399 Speaker 3: has been an increase in global uncertainty in terms of 456 00:24:25,440 --> 00:24:29,639 Speaker 3: the tariff risks and so much more. When we heard 457 00:24:29,680 --> 00:24:33,679 Speaker 3: from the Chancellor, she pointed to worldwide volatility as a 458 00:24:33,720 --> 00:24:39,040 Speaker 3: contributing factor to the country's recent obl growth downgrade. Is 459 00:24:39,080 --> 00:24:42,760 Speaker 3: that a fair assessment? How much is global uncertainty a 460 00:24:42,840 --> 00:24:43,840 Speaker 3: factor for Britain? 461 00:24:44,680 --> 00:24:47,200 Speaker 10: I think that it is true that across the peace. 462 00:24:47,320 --> 00:24:50,720 Speaker 10: You know, governments around the world have seeing boring costs increase. 463 00:24:50,840 --> 00:24:55,440 Speaker 10: We have seen global growth forecasts hit by the trade engiins, 464 00:24:55,560 --> 00:24:58,720 Speaker 10: tariff wars being instigated by the United States and stad 465 00:24:58,760 --> 00:25:00,920 Speaker 10: Trump was lected. So all of that it is true 466 00:25:00,960 --> 00:25:03,439 Speaker 10: and fair. I think they're just a UK element in 467 00:25:03,480 --> 00:25:06,359 Speaker 10: that there's a vulnerability that we have given the significant 468 00:25:06,680 --> 00:25:09,200 Speaker 10: debt stock that we have, and that makes us even 469 00:25:09,280 --> 00:25:11,840 Speaker 10: more kind of susceptible and at risk when it comes 470 00:25:11,840 --> 00:25:14,919 Speaker 10: to boring costs increasing. And then and there is that 471 00:25:14,920 --> 00:25:17,080 Speaker 10: also domestic element of the impact of the budget did 472 00:25:17,160 --> 00:25:22,600 Speaker 10: have in hitting business confidence and making conditions to operate 473 00:25:22,640 --> 00:25:24,720 Speaker 10: in the UK at hard. So you have to combine 474 00:25:24,720 --> 00:25:25,280 Speaker 10: the two things. 475 00:25:25,600 --> 00:25:28,919 Speaker 3: That was Bloomberg's UK government reported Joe Mays My thanks 476 00:25:28,920 --> 00:25:31,680 Speaker 3: to him for joining me. So all the country's first 477 00:25:31,680 --> 00:25:36,119 Speaker 3: female chancellor managed to balance the books amidst stormy Global 478 00:25:36,200 --> 00:25:39,880 Speaker 3: Seas will have full coverage of the spring statement. Here 479 00:25:39,920 --> 00:25:42,880 Speaker 3: for you on Bloomberg. I'm Caroline Hepek. You can catch 480 00:25:42,960 --> 00:25:45,680 Speaker 3: us every weekday morning for bluemberg Daybreak you at beginning 481 00:25:45,760 --> 00:25:49,119 Speaker 3: at six am in London. That's one am or Wall Street. Tom. 482 00:25:49,640 --> 00:25:52,440 Speaker 2: Thank you Caroline, And coming up on Bloomberg day Break weekend, 483 00:25:52,480 --> 00:25:56,480 Speaker 2: we'll look ahead to earnings from Chinese ev giant BYD. 484 00:25:57,119 --> 00:26:11,000 Speaker 2: I'm Tom Buzzbeak and this is Bloomberg. This is Bloomberg 485 00:26:11,040 --> 00:26:13,080 Speaker 2: day Break Weekend, our global look ahead of the top 486 00:26:13,119 --> 00:26:16,080 Speaker 2: stories for investors in the coming week. I'm Tom Busby 487 00:26:16,119 --> 00:26:19,399 Speaker 2: in New York. Earnings this week from BYD. That's the 488 00:26:19,480 --> 00:26:22,920 Speaker 2: Chinese evy giant that's battling Tesla to be that nation's 489 00:26:22,960 --> 00:26:27,000 Speaker 2: top selling automaker. Let's get to Daybreak Asia podcast host 490 00:26:27,040 --> 00:26:29,480 Speaker 2: Doug Prisner for a preview Tom. 491 00:26:29,600 --> 00:26:33,240 Speaker 4: Last year, BYD nearly took over Tesla as the world's 492 00:26:33,359 --> 00:26:36,640 Speaker 4: largest maker of electric vehicles and so far this year, 493 00:26:37,240 --> 00:26:40,199 Speaker 4: shears and BYD are up more than fifty five percent. 494 00:26:40,840 --> 00:26:43,120 Speaker 4: For a closer look at the story on BYD, I'm 495 00:26:43,200 --> 00:26:46,600 Speaker 4: joined by Danny Lee. He is Bloomberg Asia Transport reporter. 496 00:26:47,240 --> 00:26:49,800 Speaker 4: Danny joins us from our studios in Hong Kong. Danny, 497 00:26:49,800 --> 00:26:52,120 Speaker 4: it's always a pleasure. Thanks for taking time to chat 498 00:26:52,160 --> 00:26:55,040 Speaker 4: with us about this story. What is your sense of 499 00:26:55,040 --> 00:26:57,920 Speaker 4: what we may hear from BYD in the coming week? 500 00:26:59,200 --> 00:27:02,680 Speaker 7: Well, he from b YD over the past twelve months 501 00:27:02,720 --> 00:27:06,280 Speaker 7: and twenty twenty four, the record number of sales it 502 00:27:06,359 --> 00:27:10,439 Speaker 7: has delivered in terms of passenger electric vehicles and hybrid 503 00:27:10,520 --> 00:27:13,639 Speaker 7: vehicles four point two five million of them in the 504 00:27:13,680 --> 00:27:17,480 Speaker 7: past year. That will feed into record amount of earnings, 505 00:27:17,520 --> 00:27:21,280 Speaker 7: and in particular it's going to be quite a landmark 506 00:27:21,320 --> 00:27:23,119 Speaker 7: the fact that for the first time it will be 507 00:27:23,160 --> 00:27:27,880 Speaker 7: able to deliver we expect one hundred billion US dollars 508 00:27:27,880 --> 00:27:30,840 Speaker 7: worth of sales and that's for the first time ever. 509 00:27:31,320 --> 00:27:35,600 Speaker 7: And also it's a contrast to one of its near rivals, Tesla, 510 00:27:35,840 --> 00:27:40,280 Speaker 7: which it will overtake if they can deliver on expectations 511 00:27:40,320 --> 00:27:43,400 Speaker 7: that investors and the market is looking for, and by 512 00:27:43,720 --> 00:27:47,919 Speaker 7: quite some margin. So it's yet another metric that we 513 00:27:48,080 --> 00:27:52,240 Speaker 7: see potentially BYD overtaking Tesla on in a growing list 514 00:27:52,320 --> 00:27:54,720 Speaker 7: of numbers that we are closely watching for. 515 00:27:54,880 --> 00:27:57,240 Speaker 4: So I have to ask you about this new charging 516 00:27:57,320 --> 00:28:01,159 Speaker 4: system that BYD recently. Do you think it's going to 517 00:28:01,200 --> 00:28:04,240 Speaker 4: show up in the outlook? Will be WYD say that 518 00:28:04,560 --> 00:28:08,359 Speaker 4: essentially this new technology really will pave the way for 519 00:28:08,400 --> 00:28:09,679 Speaker 4: a jump in earnings growth. 520 00:28:09,960 --> 00:28:10,120 Speaker 6: Well. 521 00:28:10,160 --> 00:28:13,800 Speaker 7: BYD has already flagged it expects to sell five to 522 00:28:13,880 --> 00:28:18,240 Speaker 7: six million units this year of evs and hybrids, and 523 00:28:18,600 --> 00:28:21,040 Speaker 7: I think when you think about the numbers that it 524 00:28:21,080 --> 00:28:24,520 Speaker 7: has already guided towards, it already knows over a very 525 00:28:24,560 --> 00:28:28,320 Speaker 7: long lead time what products and innovations and developments will 526 00:28:28,359 --> 00:28:31,280 Speaker 7: be coming out over twenty twenty five, and we've already 527 00:28:31,280 --> 00:28:34,680 Speaker 7: had some of those developments emerge already. For example, we've 528 00:28:34,720 --> 00:28:40,440 Speaker 7: had big details on its autonomous driving strategy, driver assist vehicles, 529 00:28:40,560 --> 00:28:43,719 Speaker 7: things that putting in much more tech into its vehicle 530 00:28:43,840 --> 00:28:47,440 Speaker 7: at no extra cost, which will really grab the attention 531 00:28:47,520 --> 00:28:52,120 Speaker 7: of drivers who are weighing up how to, particularly in China, 532 00:28:52,160 --> 00:28:55,320 Speaker 7: how to find more value for the cars that they 533 00:28:55,360 --> 00:28:57,920 Speaker 7: are going to buy, particularly in electric vehicles. And so 534 00:28:58,520 --> 00:29:02,680 Speaker 7: with the announcement last week that they will install or 535 00:29:02,840 --> 00:29:06,280 Speaker 7: have and create fast charging ultra fast charging vehicles that 536 00:29:06,360 --> 00:29:11,200 Speaker 7: can charge four hundred kilometers in five minutes. That in 537 00:29:11,240 --> 00:29:17,160 Speaker 7: itself is way better than what other competitors Tesla, for example, 538 00:29:17,800 --> 00:29:21,400 Speaker 7: Mercedes Benz is putting out, and so it has set 539 00:29:21,400 --> 00:29:26,560 Speaker 7: a high benchmark for other competitors to try and chase down, 540 00:29:27,040 --> 00:29:30,200 Speaker 7: not just outside of China, but even in China where 541 00:29:30,240 --> 00:29:33,280 Speaker 7: there is a much more narrow sense of competition given 542 00:29:33,320 --> 00:29:36,840 Speaker 7: the advancements in in the EV space that there has been, 543 00:29:36,880 --> 00:29:41,160 Speaker 7: and so therefore the kinds of developments that bid has 544 00:29:41,320 --> 00:29:46,360 Speaker 7: already got in train, This will already feed into the 545 00:29:46,400 --> 00:29:50,640 Speaker 7: expectations and also the pressure for them to deliver five 546 00:29:50,680 --> 00:29:54,040 Speaker 7: to six million units this year, which is going to 547 00:29:54,040 --> 00:29:57,920 Speaker 7: be around one potentially two million more. So every year 548 00:29:57,960 --> 00:30:01,360 Speaker 7: they're having to pull out for my act trick. So 549 00:30:01,920 --> 00:30:03,720 Speaker 7: this is always going to be a challenge for them, 550 00:30:03,760 --> 00:30:06,240 Speaker 7: and for now this is them delivering on that promise. 551 00:30:06,360 --> 00:30:09,200 Speaker 4: So in terms of this new charging system Danny, is 552 00:30:09,240 --> 00:30:12,440 Speaker 4: this something that BYD developed on its own. Is it 553 00:30:12,480 --> 00:30:17,040 Speaker 4: proprietary or has the company partnered with a battery manufacturer 554 00:30:17,080 --> 00:30:20,560 Speaker 4: to arrive at this level of speed and sophistication. 555 00:30:21,320 --> 00:30:24,560 Speaker 7: Now, this is very much BYD pursuing its own in 556 00:30:24,720 --> 00:30:31,719 Speaker 7: house development with its frankly army of R and D technicians, developers, researchers, 557 00:30:31,880 --> 00:30:36,000 Speaker 7: over one hundred thousand of them, very much in China 558 00:30:36,240 --> 00:30:40,480 Speaker 7: working on these kind of innovations and breakthroughs day and night. 559 00:30:40,520 --> 00:30:43,960 Speaker 7: And so they know they have the resources, they have 560 00:30:44,080 --> 00:30:47,040 Speaker 7: the firepower to do all of this, and so it's 561 00:30:47,120 --> 00:30:51,200 Speaker 7: important to understand for a global audience just how many 562 00:30:51,240 --> 00:30:55,479 Speaker 7: people BYD employees. We are getting close, if not already 563 00:30:55,480 --> 00:30:59,640 Speaker 7: at a million employees, predominantly in China. And they have 564 00:30:59,720 --> 00:31:04,239 Speaker 7: been so aggressive in their push to higher not just 565 00:31:04,480 --> 00:31:06,360 Speaker 7: on the R and D side, but clearly on their 566 00:31:06,360 --> 00:31:09,720 Speaker 7: manufacturing side, and so you know, they have really rapidly 567 00:31:09,720 --> 00:31:13,960 Speaker 7: expanded its workerforce BACE, and so this all feeds into 568 00:31:14,400 --> 00:31:19,480 Speaker 7: them trying to push out very quickly new innovations, new developments, 569 00:31:19,520 --> 00:31:23,520 Speaker 7: and so this latest push with ultra fast charging is 570 00:31:24,240 --> 00:31:27,400 Speaker 7: a big step forward to them. However, one of the 571 00:31:27,440 --> 00:31:31,000 Speaker 7: fascinating things about last week's announcement was, you know, we 572 00:31:31,000 --> 00:31:35,040 Speaker 7: were anticipating and expecting developments in this space like ultra 573 00:31:35,080 --> 00:31:39,480 Speaker 7: fast charging, more durable batteries, but the one kind of 574 00:31:39,520 --> 00:31:43,000 Speaker 7: phrase that was not mentioned in last week's announcement. In 575 00:31:43,080 --> 00:31:47,200 Speaker 7: last week's event was Blade two refers to type of 576 00:31:47,440 --> 00:31:51,360 Speaker 7: battery product that BID initially produced in twenty twenty called Blade, 577 00:31:51,520 --> 00:31:53,520 Speaker 7: which changed the game for them in many ways to 578 00:31:53,960 --> 00:31:55,960 Speaker 7: really get them to where they are today in terms 579 00:31:56,000 --> 00:31:59,760 Speaker 7: of selling millions of vehicles, and that Blade, which is 580 00:32:00,400 --> 00:32:05,360 Speaker 7: lithium ion phosphate battery, really durable, very low cost to make. 581 00:32:06,000 --> 00:32:09,240 Speaker 7: We were expecting an upgrade on that product this year 582 00:32:09,360 --> 00:32:13,320 Speaker 7: and it hasn't been announced yet. And so whilst we 583 00:32:13,400 --> 00:32:15,720 Speaker 7: all thought that this fast charging was related to that, 584 00:32:16,000 --> 00:32:19,640 Speaker 7: technically yes and no, but it does appear that this 585 00:32:19,760 --> 00:32:23,360 Speaker 7: Blade too battery upgrade is still yet to come. So 586 00:32:23,840 --> 00:32:26,480 Speaker 7: in terms of other innovations in twenty twenty five, this 587 00:32:26,560 --> 00:32:27,840 Speaker 7: is another one to watch. 588 00:32:27,960 --> 00:32:31,320 Speaker 4: So away from the kind of the technological advancements, I'm 589 00:32:31,360 --> 00:32:34,960 Speaker 4: wondering about the extent to which BYD has kind of 590 00:32:35,000 --> 00:32:38,960 Speaker 4: benefited from maybe missteps on the part of Tesla. There 591 00:32:38,960 --> 00:32:43,560 Speaker 4: really hasn't been anything in terms of a material redesign 592 00:32:43,920 --> 00:32:47,280 Speaker 4: that any of the Tesla vehicles have had recently. But 593 00:32:47,360 --> 00:32:51,280 Speaker 4: at the same time BYD has been constantly refining and 594 00:32:51,360 --> 00:32:55,200 Speaker 4: redesigning its cars is that one of the other things 595 00:32:55,200 --> 00:32:59,440 Speaker 4: that has kind of contributed to the enthusiasm around BYD. 596 00:33:00,080 --> 00:33:03,280 Speaker 7: There is always a criticism of Tesla that its lineup 597 00:33:03,360 --> 00:33:06,440 Speaker 7: is very thin, it's very stale, the fact that there's 598 00:33:06,480 --> 00:33:10,560 Speaker 7: no wholesale upgrades of its mass market product. And when 599 00:33:10,600 --> 00:33:14,320 Speaker 7: you look at Tesla as it's rolled out more narrowly 600 00:33:14,480 --> 00:33:16,840 Speaker 7: produced products such as a cyber truck, which is not 601 00:33:16,880 --> 00:33:20,920 Speaker 7: being sold around the world either, and now it's pushing 602 00:33:20,920 --> 00:33:25,880 Speaker 7: its focus into robotaxis autonomous style driving, which is yes, 603 00:33:26,000 --> 00:33:29,120 Speaker 7: very similar to what the Chinese EV producers such as 604 00:33:29,200 --> 00:33:33,800 Speaker 7: BID are focusing on, but they're not necessarily pushing into 605 00:33:33,840 --> 00:33:36,320 Speaker 7: a severe where they are really going to be over 606 00:33:36,400 --> 00:33:41,160 Speaker 7: aligned on effectively what we call so called autonomous driving 607 00:33:41,400 --> 00:33:44,760 Speaker 7: to the ultimate extremes that someone like Tesla is pushing to. 608 00:33:45,440 --> 00:33:48,120 Speaker 7: But then the same criticism could be leveled at other 609 00:33:48,240 --> 00:33:51,040 Speaker 7: foreign automakers when we look at someone like a Ford 610 00:33:51,160 --> 00:33:54,960 Speaker 7: or a GM who have lagged behind significantly on such 611 00:33:55,000 --> 00:33:59,120 Speaker 7: a strategy as they have this huge gasoline lineup of cars, 612 00:33:59,160 --> 00:34:01,760 Speaker 7: and you know, it's really hard for those legacy automakers 613 00:34:01,800 --> 00:34:04,480 Speaker 7: to try and transition as we have seen, as we've 614 00:34:04,480 --> 00:34:08,040 Speaker 7: seen with targets on for twenty thirty twenty thirty five 615 00:34:08,120 --> 00:34:11,560 Speaker 7: being pushed back in terms of investing in a strategy 616 00:34:11,600 --> 00:34:15,320 Speaker 7: of evs which is very costly, and where the Chinese 617 00:34:15,360 --> 00:34:18,480 Speaker 7: EV brands and automakers have had bigger bets and more 618 00:34:18,520 --> 00:34:21,120 Speaker 7: bold bets and so far at least in the world's 619 00:34:21,120 --> 00:34:24,160 Speaker 7: biggest auto market of China is paying off handsomely, And 620 00:34:24,360 --> 00:34:27,680 Speaker 7: which is why we're seeing this leadership, this makeup of 621 00:34:27,719 --> 00:34:31,319 Speaker 7: the auto domination kind of shift a little bit when 622 00:34:31,320 --> 00:34:33,080 Speaker 7: you look at the numbers and the way in which 623 00:34:33,160 --> 00:34:37,239 Speaker 7: foreign automakers are seeing sales get pinched, and the likes 624 00:34:37,239 --> 00:34:40,360 Speaker 7: of BYD, who are very much high up there. You know, 625 00:34:40,440 --> 00:34:43,520 Speaker 7: the BDY was so close to overtaking Ford Motors in 626 00:34:43,640 --> 00:34:46,960 Speaker 7: terms of annual sales in the past year, just fell short. 627 00:34:46,960 --> 00:34:49,280 Speaker 7: And when you look at the twenty twenty five targets, 628 00:34:49,360 --> 00:34:52,160 Speaker 7: if they can even reach the top end, that will 629 00:34:52,200 --> 00:34:55,040 Speaker 7: take them beyond potentially General motors. 630 00:34:55,120 --> 00:34:58,480 Speaker 4: So what is BYD doing to expand markets outside of 631 00:34:58,560 --> 00:35:00,440 Speaker 4: China right now? And I think I think we have 632 00:35:00,480 --> 00:35:02,760 Speaker 4: to talk a little bit about the tariff story because 633 00:35:02,800 --> 00:35:06,640 Speaker 4: that seems to be a threat to further expansion, does 634 00:35:06,680 --> 00:35:06,920 Speaker 4: it not? 635 00:35:07,960 --> 00:35:08,200 Speaker 6: Well? 636 00:35:08,280 --> 00:35:11,359 Speaker 7: The tariffs is a fascinating component, and let me answer 637 00:35:11,400 --> 00:35:14,160 Speaker 7: it in two ways. So tariffs obviously being put on 638 00:35:14,200 --> 00:35:17,000 Speaker 7: in markets such as Europe where BYD is really being 639 00:35:17,040 --> 00:35:21,560 Speaker 7: aggressive in that's part of a hindrance. And one of 640 00:35:21,600 --> 00:35:27,480 Speaker 7: the fascinating conversations with automakers generally in China is how 641 00:35:27,520 --> 00:35:30,839 Speaker 7: do they approach such an imposition of tariffs. They are 642 00:35:30,880 --> 00:35:34,920 Speaker 7: actually generally swallowing the cost of these extra tariffs on 643 00:35:35,000 --> 00:35:38,080 Speaker 7: behalf of the consumer because they know what it means 644 00:35:38,080 --> 00:35:43,000 Speaker 7: to try and gain entry into a market and build 645 00:35:43,120 --> 00:35:46,600 Speaker 7: a reputation and build sales, you know, And for someone 646 00:35:46,600 --> 00:35:49,320 Speaker 7: like be D, they have found it tough in Europe 647 00:35:49,360 --> 00:35:53,320 Speaker 7: because they're starting on basically zero to a low base, 648 00:35:53,600 --> 00:35:56,120 Speaker 7: but they are making gains in their steadily increasing sales, 649 00:35:56,560 --> 00:35:59,799 Speaker 7: clearly nowhere near enough for the investment they have put 650 00:35:59,880 --> 00:36:03,280 Speaker 7: in across Europe. But then outside of Europe a mature 651 00:36:03,880 --> 00:36:08,040 Speaker 7: auto market in the emerging market space, BYD in particular 652 00:36:08,120 --> 00:36:11,919 Speaker 7: and generally like most Chinese automakers have been aggressive where 653 00:36:11,920 --> 00:36:14,120 Speaker 7: there are no tariffs, where they have been warmly welcomed, 654 00:36:14,520 --> 00:36:18,879 Speaker 7: and they are selling thousands and thousands of cars every month, 655 00:36:18,960 --> 00:36:21,600 Speaker 7: and that is to a testament to see how well 656 00:36:21,640 --> 00:36:24,279 Speaker 7: they have gone up in the rankings. But BYD, who 657 00:36:24,320 --> 00:36:27,320 Speaker 7: are leading in electric vehicle sales and the number of countries, 658 00:36:27,360 --> 00:36:30,640 Speaker 7: whether it be a Thailand or Brazil, they are delivering 659 00:36:30,760 --> 00:36:35,040 Speaker 7: and squeezing on the existing competitors, not just in the 660 00:36:35,080 --> 00:36:39,279 Speaker 7: EV space, but particularly in the traditional gasoline and the 661 00:36:39,320 --> 00:36:42,000 Speaker 7: overall sales space. So there are lots of games to 662 00:36:42,040 --> 00:36:45,600 Speaker 7: be made. And BYD, who has got bigger targets to 663 00:36:45,640 --> 00:36:49,520 Speaker 7: sell overseas, has been able to deliver so far this year, 664 00:36:49,800 --> 00:36:52,959 Speaker 7: doubling the number of sales overseas a month or month, 665 00:36:53,080 --> 00:36:55,799 Speaker 7: and so that is a sign of just how well 666 00:36:55,800 --> 00:36:58,640 Speaker 7: they're doing and they're not going to be slowing down. 667 00:36:59,080 --> 00:37:02,200 Speaker 7: We talk about or we see ships that BYD has 668 00:37:02,239 --> 00:37:05,319 Speaker 7: bought several of them. We had one or two come 669 00:37:05,360 --> 00:37:07,640 Speaker 7: online last year and now we are coming up to 670 00:37:07,680 --> 00:37:11,520 Speaker 7: at least five ships now, so they will have their 671 00:37:11,560 --> 00:37:15,920 Speaker 7: own dedicated fleet of ships to export, particularly more and 672 00:37:15,960 --> 00:37:19,600 Speaker 7: more cars around the world, on top of localizing production, 673 00:37:19,840 --> 00:37:22,600 Speaker 7: which will see the benefits of not just in Thailand 674 00:37:22,680 --> 00:37:25,080 Speaker 7: where they have localized productions, soon in Brazil in the 675 00:37:25,120 --> 00:37:29,520 Speaker 7: coming year or so, and also in Hungary in Europe, 676 00:37:29,800 --> 00:37:33,319 Speaker 7: so there's lots of excitement to come. But when we 677 00:37:33,360 --> 00:37:36,520 Speaker 7: look at the developments, as you said, of targets of 678 00:37:36,600 --> 00:37:40,319 Speaker 7: pushing into markets, clearly when they localize production, the risk 679 00:37:40,400 --> 00:37:42,920 Speaker 7: of tariff's lessons, even if they're not in the one 680 00:37:42,920 --> 00:37:45,839 Speaker 7: of the world's because the auto markets such as such 681 00:37:45,840 --> 00:37:46,800 Speaker 7: as the United States. 682 00:37:46,960 --> 00:37:49,440 Speaker 4: Danny, thank you so much for joining us and helping 683 00:37:49,520 --> 00:37:53,080 Speaker 4: us understand more about what's happening with BYD these days 684 00:37:53,520 --> 00:37:56,200 Speaker 4: as we look ahead to the company's earnings report in 685 00:37:56,239 --> 00:37:58,960 Speaker 4: the week ahead. Danny Lee. There, he is Bloomberg Asia 686 00:37:59,000 --> 00:38:02,719 Speaker 4: Transport reporter, joining from our studios in Hong Kong. I'm 687 00:38:02,760 --> 00:38:05,160 Speaker 4: deug Christner. You can catch us weekdays here for the 688 00:38:05,239 --> 00:38:10,240 Speaker 4: Daybreak Asia podcast. It's available wherever you get your podcast. Tom. 689 00:38:10,680 --> 00:38:13,080 Speaker 2: Thank you, Doug. And that does it for this edition 690 00:38:13,080 --> 00:38:15,719 Speaker 2: of Bloomberg day Break Weekend. Join us again Monday morning 691 00:38:15,760 --> 00:38:17,560 Speaker 2: at five am Wall Street Time for the latest on 692 00:38:17,680 --> 00:38:20,359 Speaker 2: markets overseas and the news you need to start your day. 693 00:38:20,719 --> 00:38:23,760 Speaker 2: I'm Tom Buzzby. Stay with us. Top stories and global 694 00:38:23,760 --> 00:38:25,880 Speaker 2: business headlines are coming up right now.