1
00:00:02,920 --> 00:00:08,280
Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

2
00:00:11,039 --> 00:00:13,560
Speaker 2: This is Bloomberg Daybreak Weekend, our global look at the

3
00:00:13,560 --> 00:00:16,240
Speaker 2: top stories in the coming week from our Daybreak anchors

4
00:00:16,239 --> 00:00:18,480
Speaker 2: all around the world, and straight ahead on the program,

5
00:00:18,520 --> 00:00:21,159
Speaker 2: we'll look ahead to the May jobs report here in

6
00:00:21,200 --> 00:00:24,400
Speaker 2: the US what it means for FED policy moving forward.

7
00:00:24,600 --> 00:00:27,560
Speaker 2: I'm Tom Busby in New York. I'm Stephen Carolyn London.

8
00:00:27,560 --> 00:00:29,680
Speaker 2: When we're looking ahead to an expected rate cut from

9
00:00:29,720 --> 00:00:32,960
Speaker 2: the European Central Bank, what might be unexpected in the

10
00:00:33,000 --> 00:00:34,520
Speaker 2: European Parliament elections.

11
00:00:34,800 --> 00:00:37,160
Speaker 3: And I'm Brian Curtis in Hong Kong. We look ahead

12
00:00:37,200 --> 00:00:41,120
Speaker 3: to China's PMIS and the computext type a event featuring

13
00:00:41,120 --> 00:00:43,240
Speaker 3: a number of AI heavy hitters.

14
00:00:43,960 --> 00:00:47,960
Speaker 4: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg

15
00:00:48,000 --> 00:00:51,800
Speaker 4: Eleve Them Free own New York, Bloomberg ninety nine to one, Washington, DC,

16
00:00:52,120 --> 00:00:56,200
Speaker 4: Bloomberg one O six one, Boston, Bloomberg nine sixty, San Francisco,

17
00:00:56,400 --> 00:01:00,600
Speaker 4: DAB Digital Radio, London, Sirius XM one nineteen and around

18
00:01:00,680 --> 00:01:03,320
Speaker 4: the world on Bloomberg Radio dot com and via the

19
00:01:03,360 --> 00:01:04,520
Speaker 4: Bloomberg Business App.

20
00:01:08,319 --> 00:01:10,520
Speaker 2: Good day to you. I'm Tom Busby. We begin Today's

21
00:01:10,520 --> 00:01:13,559
Speaker 2: program with the May Jobs report. This Friday, we get

22
00:01:13,600 --> 00:01:17,200
Speaker 2: non farm payroll data eight thirty am. Wall Street Time

23
00:01:17,720 --> 00:01:20,160
Speaker 2: the big question, what does this mean for the next

24
00:01:20,200 --> 00:01:21,440
Speaker 2: FED meeting in June?

25
00:01:21,520 --> 00:01:21,959
Speaker 5: And for more.

26
00:01:22,000 --> 00:01:27,640
Speaker 2: We're joined by Michael McKee, Bloomberg International Economics and Policy correspondent, Michael,

27
00:01:28,200 --> 00:01:30,600
Speaker 2: what are you expecting to see in that May report?

28
00:01:30,880 --> 00:01:33,200
Speaker 6: Can I change your question? Does this mean for FED

29
00:01:33,240 --> 00:01:36,240
Speaker 6: meetings down the road? It's not going to mean really

30
00:01:36,319 --> 00:01:39,840
Speaker 6: much of anything for the June meeting because members of

31
00:01:39,880 --> 00:01:42,080
Speaker 6: the Open Market Committee have already said we're not going

32
00:01:42,160 --> 00:01:45,720
Speaker 6: to do anything. We need several more months. But if

33
00:01:45,720 --> 00:01:49,960
Speaker 6: we see stronger than anticipated payroll growth as we have

34
00:01:50,120 --> 00:01:52,880
Speaker 6: been getting, that's going to worry people on the FED

35
00:01:52,960 --> 00:01:56,480
Speaker 6: because they are beginning to wonder if growth is going

36
00:01:56,520 --> 00:01:59,920
Speaker 6: to come in stronger than anticipated and keep inflation pressures on.

37
00:02:00,440 --> 00:02:03,720
Speaker 6: So they'll be watching the payroll numbers. They also have

38
00:02:03,800 --> 00:02:07,120
Speaker 6: to watch it from the standpoint of are we going

39
00:02:07,120 --> 00:02:09,520
Speaker 6: to see a real slow down? And people started to

40
00:02:09,560 --> 00:02:12,079
Speaker 6: lose jobs? So there's a two way risk for them

41
00:02:12,080 --> 00:02:15,840
Speaker 6: as we go into this. Right now, economists are generally

42
00:02:16,240 --> 00:02:19,079
Speaker 6: splitting the baby in half, as it were, by saying

43
00:02:19,160 --> 00:02:22,600
Speaker 6: we're going to have about one hundred eighty thousand or

44
00:02:22,639 --> 00:02:26,160
Speaker 6: so jobs created, which is still stronger than the FED

45
00:02:26,240 --> 00:02:28,639
Speaker 6: wants to see, but it's down from those way over

46
00:02:28,680 --> 00:02:31,240
Speaker 6: two hundred thousand numbers we were getting. And they're not

47
00:02:31,280 --> 00:02:34,359
Speaker 6: seeing any change in the unemployment rate. That's three point

48
00:02:34,400 --> 00:02:37,160
Speaker 6: nine three point nine percent study. But the one seventy

49
00:02:37,160 --> 00:02:40,680
Speaker 6: five that we saw added in April was lower, maybe

50
00:02:40,720 --> 00:02:42,680
Speaker 6: not a lot lower than what we were expecting. So

51
00:02:43,360 --> 00:02:45,040
Speaker 6: there could be a trend. If we see another one

52
00:02:45,080 --> 00:02:48,600
Speaker 6: eighty or so, it would suggest that the Fed's medicine

53
00:02:48,639 --> 00:02:51,760
Speaker 6: is working in that the economy is slowing down, labor

54
00:02:51,800 --> 00:02:54,800
Speaker 6: demand is slowing down. What we haven't seen is any

55
00:02:54,880 --> 00:02:58,960
Speaker 6: sign that companies feel they're overstaffed. At this point, jobless

56
00:02:59,000 --> 00:03:02,880
Speaker 6: claims just continue to stay in roughly the same range.

57
00:03:03,240 --> 00:03:06,160
Speaker 6: So you would think you would start to see more

58
00:03:06,240 --> 00:03:11,520
Speaker 6: layoffs before there was a recession. That's historically what's happened,

59
00:03:11,760 --> 00:03:16,200
Speaker 6: But at this point we're not seeing a huge number

60
00:03:16,560 --> 00:03:22,040
Speaker 6: of signs. The Basebook came out last week basically said

61
00:03:22,080 --> 00:03:26,120
Speaker 6: companies are slowing their hiring and they see less demand

62
00:03:26,160 --> 00:03:28,440
Speaker 6: for labor, but they still see demand for labor as

63
00:03:28,480 --> 00:03:30,000
Speaker 6: opposed to getting rid of people.

64
00:03:30,280 --> 00:03:33,200
Speaker 2: Now are we seeing specific groups of people? We know

65
00:03:33,240 --> 00:03:36,440
Speaker 2: summer is coming, so we know leisure and hospitality is

66
00:03:36,440 --> 00:03:39,680
Speaker 2: going to move up. But if we're seeing growth there,

67
00:03:39,680 --> 00:03:41,560
Speaker 2: we're probably going to see a pull back in some others.

68
00:03:41,600 --> 00:03:43,920
Speaker 2: I mean, are we seeing less construction cranes in the

69
00:03:43,920 --> 00:03:44,760
Speaker 2: city or Well.

70
00:03:44,800 --> 00:03:47,200
Speaker 6: It's interesting because this all gets tied up into a

71
00:03:47,280 --> 00:03:50,840
Speaker 6: number of different things. One is the change in the

72
00:03:50,880 --> 00:03:54,880
Speaker 6: way people work. Is it going to be harder to

73
00:03:54,960 --> 00:03:58,720
Speaker 6: hire summer help or are you looking for summer help

74
00:03:58,760 --> 00:04:03,320
Speaker 6: who sits in a computer. Obviously the lifeguards and the

75
00:04:03,440 --> 00:04:06,640
Speaker 6: kids putting you onto the amusement park rides are going

76
00:04:06,680 --> 00:04:09,040
Speaker 6: to be needed, but they adjust for that and the

77
00:04:09,120 --> 00:04:11,080
Speaker 6: data because they know this is the time of year

78
00:04:11,160 --> 00:04:14,280
Speaker 6: when that happens. One thing we do see often around

79
00:04:14,360 --> 00:04:17,600
Speaker 6: this time of year is some funny numbers with teachers

80
00:04:17,600 --> 00:04:19,680
Speaker 6: and education because school comes to an end, but it

81
00:04:19,680 --> 00:04:22,359
Speaker 6: comes to an end at different times across the country,

82
00:04:22,680 --> 00:04:25,720
Speaker 6: and so those numbers can go up and down. And

83
00:04:25,760 --> 00:04:29,000
Speaker 6: then there's this whole question of immigration. And you've heard

84
00:04:29,040 --> 00:04:33,320
Speaker 6: the arguments that immigration is been supplying a lot of labor,

85
00:04:33,760 --> 00:04:37,039
Speaker 6: whether legal or illegal, and that would weigh on what

86
00:04:37,080 --> 00:04:40,520
Speaker 6: you mentioned about construction workers, because many construction workers are

87
00:04:41,040 --> 00:04:47,400
Speaker 6: undocumented aliens, and so given the need for housing and

88
00:04:47,440 --> 00:04:51,320
Speaker 6: the way housing starts have gone, you would expect a

89
00:04:51,440 --> 00:04:56,360
Speaker 6: continued rise in construction hiring. And we have seen that.

90
00:04:56,560 --> 00:04:58,760
Speaker 6: But everybody's seeing we're going to run out of workers

91
00:04:58,800 --> 00:05:00,960
Speaker 6: at some point, but we haven't. So that may be

92
00:05:01,080 --> 00:05:02,400
Speaker 6: the immigration impact at work.

93
00:05:02,400 --> 00:05:06,360
Speaker 2: Maybe skilled workers will run out of but maybe not unskilled. Well,

94
00:05:06,400 --> 00:05:08,680
Speaker 2: you do see, you know, pickup trucks are still selling.

95
00:05:08,760 --> 00:05:12,359
Speaker 2: That's always a good sign of housing, construction, plumbing, drywall,

96
00:05:12,600 --> 00:05:15,479
Speaker 2: those types of jobs. But let's talk about something that

97
00:05:15,520 --> 00:05:18,279
Speaker 2: the Bureau of Labor Statistics came out with just last week,

98
00:05:18,279 --> 00:05:21,159
Speaker 2: and that was about unemployment rates in cities. And I

99
00:05:21,200 --> 00:05:24,360
Speaker 2: found this curious. It's at about three quarters of the

100
00:05:24,400 --> 00:05:29,120
Speaker 2: biggest cities saw a spike in the unemployment rate. What

101
00:05:29,279 --> 00:05:31,920
Speaker 2: is it about the cities that we're seeing that as

102
00:05:31,920 --> 00:05:33,480
Speaker 2: opposed to the rest of the country.

103
00:05:33,760 --> 00:05:37,960
Speaker 6: Well, the most generally accepted explanation for this is that

104
00:05:38,160 --> 00:05:41,320
Speaker 6: work from home is still out there, and so what

105
00:05:41,360 --> 00:05:45,000
Speaker 6: we're not seeing is people coming back to the service

106
00:05:45,040 --> 00:05:48,760
Speaker 6: support jobs in the cities. If people are not of

107
00:05:48,760 --> 00:05:53,560
Speaker 6: the offices, you don't need people selling them lunches, for example,

108
00:05:53,680 --> 00:05:57,400
Speaker 6: and so that has caused a rise in the unemployment

109
00:05:57,480 --> 00:06:01,080
Speaker 6: rate because those people aren't working from home. They're not

110
00:06:01,200 --> 00:06:04,719
Speaker 6: working because people are not in the office to utilize

111
00:06:04,760 --> 00:06:06,200
Speaker 6: the services they provide.

112
00:06:06,560 --> 00:06:09,280
Speaker 2: Well, let's get people back to the office. Maybe that'll

113
00:06:09,440 --> 00:06:12,800
Speaker 2: help jump start things. The Labor departments Non farm Payroll

114
00:06:12,880 --> 00:06:15,520
Speaker 2: report for May out on Friday morning, and our thanks

115
00:06:15,560 --> 00:06:20,000
Speaker 2: to Michael McKee, Bloomberg International Economics and Policy correspondent. All right,

116
00:06:20,040 --> 00:06:23,000
Speaker 2: moving on now, this week, we expect to see earnings

117
00:06:23,000 --> 00:06:26,359
Speaker 2: from GameStop, the world's largest retail gaming and trade in

118
00:06:26,400 --> 00:06:30,600
Speaker 2: destination and recently once again the world's best known memestock.

119
00:06:31,120 --> 00:06:33,200
Speaker 2: Now there's a lot to unpack about what's behind the

120
00:06:33,240 --> 00:06:36,719
Speaker 2: recent rally and game stop shares and its latest equity offering,

121
00:06:36,760 --> 00:06:39,920
Speaker 2: and for more. We're joined by Jess Minton, Bloomberg News

122
00:06:40,000 --> 00:06:45,239
Speaker 2: Deputy team Leader and Senior reporter US Equities. Well, Jess,

123
00:06:45,400 --> 00:06:48,919
Speaker 2: it's been three years since GameStop became the epitome for

124
00:06:49,000 --> 00:06:53,200
Speaker 2: memestocks along with theatore chain AMC take us through what

125
00:06:53,400 --> 00:06:56,760
Speaker 2: jump started investor interest in the company. Shares on a

126
00:06:56,880 --> 00:06:59,119
Speaker 2: roller coaster ride in the last few weeks up twenty

127
00:06:59,120 --> 00:06:59,800
Speaker 2: percent this year.

128
00:07:00,080 --> 00:07:02,680
Speaker 7: What is going on right A head scratcher for a

129
00:07:02,680 --> 00:07:05,360
Speaker 7: lot of traders when you think of the me Madia

130
00:07:05,440 --> 00:07:08,560
Speaker 7: being revived, which really came in full force in the

131
00:07:08,600 --> 00:07:11,080
Speaker 7: middle of May. So that started when we did see

132
00:07:11,080 --> 00:07:14,040
Speaker 7: that pop a few weeks ago in game stock, especially

133
00:07:14,080 --> 00:07:17,280
Speaker 7: when you were echoing what people remember from sort of

134
00:07:17,280 --> 00:07:20,280
Speaker 7: the heydays of when everyone was in lockdown during COVID,

135
00:07:20,280 --> 00:07:23,040
Speaker 7: maybe you got stimulus checks like the Stimmis and the

136
00:07:23,080 --> 00:07:24,960
Speaker 7: ten des. That was kind of all the rage during

137
00:07:24,960 --> 00:07:27,200
Speaker 7: the meme media in early twenty twenty one. I'm sure

138
00:07:27,200 --> 00:07:29,440
Speaker 7: people don't forget about that. Or Diamond Hands was another

139
00:07:29,480 --> 00:07:32,840
Speaker 7: big term. So obviously the HARKing back to when we

140
00:07:32,920 --> 00:07:35,520
Speaker 7: did see a lot of those and also short squeezes

141
00:07:35,560 --> 00:07:36,960
Speaker 7: that were going on with a lot of these names,

142
00:07:36,960 --> 00:07:42,760
Speaker 7: so some of those fan favorites when you think of GameStop, AMC, BlackBerry, Nokia.

143
00:07:42,800 --> 00:07:45,200
Speaker 7: But this was really enforced when it comes to GameStop

144
00:07:45,240 --> 00:07:47,720
Speaker 7: this month, but also even with the pop we saw

145
00:07:47,720 --> 00:07:49,800
Speaker 7: in the middle of the month, that's stock the prior

146
00:07:49,920 --> 00:07:53,040
Speaker 7: three weeks leading into that was almost up close to

147
00:07:53,080 --> 00:07:55,160
Speaker 7: about seventy percent, but was a little bit under the

148
00:07:55,240 --> 00:07:57,840
Speaker 7: radar because other things were happening with other dynamics with

149
00:07:57,920 --> 00:08:00,320
Speaker 7: Carvana and some other meme stocks. But it really came

150
00:08:00,320 --> 00:08:03,400
Speaker 7: into full force because Roar and Kitty, whose name is

151
00:08:03,480 --> 00:08:07,280
Speaker 7: Keith Gill. I'm sure people remember this from three years ago.

152
00:08:07,400 --> 00:08:10,320
Speaker 7: He actually had been off x formerly known as Twitter

153
00:08:10,400 --> 00:08:12,600
Speaker 7: for a while, but then he started posting something. It

154
00:08:12,720 --> 00:08:15,240
Speaker 7: was a Sunday leading into that week in the middle

155
00:08:15,280 --> 00:08:17,640
Speaker 7: of the month, and so that was a bit basically

156
00:08:17,680 --> 00:08:19,520
Speaker 7: a signal and some of the tweets he was putting

157
00:08:19,520 --> 00:08:21,840
Speaker 7: out that he's back, maybe he's starting to trade some

158
00:08:21,880 --> 00:08:25,160
Speaker 7: of these names again. You still basically post on Wall

159
00:08:25,200 --> 00:08:28,360
Speaker 7: Street bets, on Reddit, some other platforms like stock twits

160
00:08:28,360 --> 00:08:30,600
Speaker 7: where retail traders were jumping back in. But the big

161
00:08:30,680 --> 00:08:32,679
Speaker 7: question with this and the way some of the market

162
00:08:32,720 --> 00:08:35,360
Speaker 7: dynamics and some things have changed, was based on like

163
00:08:35,400 --> 00:08:38,560
Speaker 7: a regulatory perspective, because if you think back to with

164
00:08:38,679 --> 00:08:42,120
Speaker 7: Robin Hood and some other brokerages where they couldn't execute

165
00:08:42,120 --> 00:08:44,120
Speaker 7: a lot of the orders in twenty twenty one, and

166
00:08:44,160 --> 00:08:46,680
Speaker 7: then it was at the end of January of that year,

167
00:08:46,720 --> 00:08:49,440
Speaker 7: and it sparked a lot of outcry and Washington about

168
00:08:49,480 --> 00:08:51,800
Speaker 7: regulations and people that weren't able to get out of

169
00:08:51,840 --> 00:08:54,480
Speaker 7: certain trades because a lot of those brokerages were just

170
00:08:54,520 --> 00:08:57,200
Speaker 7: so overwhelmed with the trades that what would happen this

171
00:08:57,280 --> 00:08:59,319
Speaker 7: time around and if it would be different. And one

172
00:08:59,320 --> 00:09:01,559
Speaker 7: thing that's really striking if you look at the percentage

173
00:09:01,559 --> 00:09:04,720
Speaker 7: of float, if you're thinking about short interest on this stock,

174
00:09:05,280 --> 00:09:07,440
Speaker 7: it's only sitting at about a quarter. To put that

175
00:09:07,480 --> 00:09:10,120
Speaker 7: into perspective, for Game stock, at the height of twenty

176
00:09:10,200 --> 00:09:12,440
Speaker 7: twenty one, it was over one hundred and forty percent.

177
00:09:12,800 --> 00:09:14,840
Speaker 7: So that's showing you you're not seeing the type of

178
00:09:15,280 --> 00:09:17,520
Speaker 7: same fervor there. And also a lot of this might

179
00:09:17,559 --> 00:09:21,160
Speaker 7: not necessarily be retail traders this time around, you're having

180
00:09:21,320 --> 00:09:24,040
Speaker 7: a big institutions on Wall Street that also we're getting

181
00:09:24,040 --> 00:09:25,800
Speaker 7: on that. And to point out we have seen a

182
00:09:25,800 --> 00:09:27,800
Speaker 7: lot of that trade fizzle the last couple of weeks,

183
00:09:27,840 --> 00:09:30,280
Speaker 7: even though we did see that pop earlier this month, well.

184
00:09:30,080 --> 00:09:32,439
Speaker 2: Things are different. And also Game stop, I mean they

185
00:09:32,520 --> 00:09:35,600
Speaker 2: just sold about forty five million Roman shares. That is

186
00:09:35,600 --> 00:09:38,600
Speaker 2: not a fluke. Now, that's real money you're talking.

187
00:09:38,720 --> 00:09:41,160
Speaker 7: It's exactly so as the calendar flips to June and

188
00:09:41,280 --> 00:09:44,840
Speaker 7: we get the earnings results from Game stop soon, that's

189
00:09:44,920 --> 00:09:48,079
Speaker 7: the question because the shelf offering, and the big thing

190
00:09:48,080 --> 00:09:50,080
Speaker 7: about this is if a company is trying to file

191
00:09:50,480 --> 00:09:54,200
Speaker 7: to end up selling more shares, that would essentially dilute

192
00:09:54,200 --> 00:09:56,959
Speaker 7: the value of the stock. So typically investors don't like

193
00:09:57,000 --> 00:10:00,000
Speaker 7: to see something like that. So in the preliminary result

194
00:10:00,360 --> 00:10:03,120
Speaker 7: that Game Stock put out on May seventeenth, a part

195
00:10:03,120 --> 00:10:06,120
Speaker 7: of a separate filing was that shelf offering. So now

196
00:10:06,160 --> 00:10:08,480
Speaker 7: investors want to know are we going to get more

197
00:10:08,520 --> 00:10:11,600
Speaker 7: information and when exactly would they be putting out and

198
00:10:11,600 --> 00:10:14,200
Speaker 7: trying to sell more stock. And then also part of

199
00:10:14,240 --> 00:10:17,200
Speaker 7: that too, they had a profit warning about a loss

200
00:10:17,240 --> 00:10:19,040
Speaker 7: that they could have and last year, because this is

201
00:10:19,040 --> 00:10:22,640
Speaker 7: a company again that as people were transitioning to hard

202
00:10:22,640 --> 00:10:25,640
Speaker 7: disks for playing video games to something digital, they really

203
00:10:25,640 --> 00:10:28,040
Speaker 7: struggled in recent years, but last year they were able

204
00:10:28,040 --> 00:10:31,319
Speaker 7: to have more, especially turning a profit for that year.

205
00:10:31,360 --> 00:10:33,160
Speaker 7: But then it looks like they're still struggling in the

206
00:10:33,160 --> 00:10:34,920
Speaker 7: first three months of this year. So they did have

207
00:10:34,920 --> 00:10:37,520
Speaker 7: that profit warning, and then you have the shelf registration,

208
00:10:37,679 --> 00:10:39,720
Speaker 7: So that's something that investors are going to be really

209
00:10:39,760 --> 00:10:42,600
Speaker 7: focused on once we hear their earnings results. And obviously

210
00:10:42,640 --> 00:10:44,360
Speaker 7: the company's conference call, Well, have.

211
00:10:44,360 --> 00:10:46,360
Speaker 2: They said what they're going to do with that? It

212
00:10:46,400 --> 00:10:49,199
Speaker 2: was nine hundred and thirty three million bucks, Yes, they got.

213
00:10:49,080 --> 00:10:51,320
Speaker 7: From that, so part of it, and it's very kind

214
00:10:51,320 --> 00:10:54,720
Speaker 7: of vague in the regulatory filing to the SEC. So

215
00:10:54,760 --> 00:10:57,280
Speaker 7: a lot of it is in terms of general purposes.

216
00:10:57,280 --> 00:11:00,319
Speaker 7: Some of it could be used for potential acquisitions, whether

217
00:11:00,360 --> 00:11:03,000
Speaker 7: that happens or not. When a company's already struggling like that,

218
00:11:03,400 --> 00:11:05,760
Speaker 7: most likely that's probably not where the money is going

219
00:11:05,800 --> 00:11:07,800
Speaker 7: to be ended up. So it's something that when you

220
00:11:07,920 --> 00:11:10,640
Speaker 7: had such a huge pop in that stock, so we

221
00:11:10,760 --> 00:11:13,880
Speaker 7: have injured day trading on May fourteenth, it got as

222
00:11:13,960 --> 00:11:17,600
Speaker 7: high as close to sixty five dollars. Also, if you

223
00:11:17,679 --> 00:11:20,560
Speaker 7: think back to where it was in twenty twenty one,

224
00:11:21,000 --> 00:11:24,000
Speaker 7: way off the highs of that, and it's now trading

225
00:11:24,120 --> 00:11:27,360
Speaker 7: close to roughly around twenty dollars. So it came into

226
00:11:27,400 --> 00:11:29,800
Speaker 7: May being close to around eleven dollars. So it's doubled

227
00:11:29,840 --> 00:11:32,640
Speaker 7: in value this month so far. But it kind of

228
00:11:32,679 --> 00:11:35,120
Speaker 7: remains to be seen how long that could really last.

229
00:11:35,240 --> 00:11:37,840
Speaker 2: Yeah, who knows how long? Right, right, but you know,

230
00:11:38,360 --> 00:11:41,800
Speaker 2: May twelfth, May thirteenth, it just skyrocketed up out of nowhere,

231
00:11:41,840 --> 00:11:45,400
Speaker 2: so anything could happen. So we expect to see earnings.

232
00:11:45,440 --> 00:11:49,559
Speaker 2: And do you think all these new investors, whether it's

233
00:11:49,600 --> 00:11:53,000
Speaker 2: institutional investors or anyone, do you think they're gonna stay

234
00:11:53,000 --> 00:11:55,400
Speaker 2: with the stock? Do you think does it have legs?

235
00:11:55,480 --> 00:11:58,160
Speaker 2: That's the question I think. And is the meme rally

236
00:11:58,200 --> 00:11:59,320
Speaker 2: over right?

237
00:11:59,400 --> 00:12:03,160
Speaker 7: Because we have seen that fizzled out And also something else.

238
00:12:03,240 --> 00:12:06,280
Speaker 7: Goldman Sachs has a basket of most shorted stocks and

239
00:12:06,320 --> 00:12:09,000
Speaker 7: so typically a lot of the meme names are housed

240
00:12:09,040 --> 00:12:12,560
Speaker 7: into that, and we've seen that quite underperformed the broader

241
00:12:12,679 --> 00:12:15,520
Speaker 7: SMP five hundred over the last couple of weeks since

242
00:12:15,520 --> 00:12:18,840
Speaker 7: we initially saw that pop, So you aren't seeing it.

243
00:12:18,880 --> 00:12:20,920
Speaker 7: Almost seems as if when you're thinking about names like

244
00:12:20,920 --> 00:12:25,840
Speaker 7: this and even beyond that, AMC, Nokia, BlackBerry, Carvana, some

245
00:12:25,920 --> 00:12:28,040
Speaker 7: of these have seen pops too, but it's fizzled out

246
00:12:28,160 --> 00:12:30,679
Speaker 7: more so, so it's hard to tell if this would

247
00:12:30,679 --> 00:12:32,559
Speaker 7: really have legs. But it seems as if right now

248
00:12:33,240 --> 00:12:34,720
Speaker 7: we're not going to see what we would have seen

249
00:12:34,840 --> 00:12:35,560
Speaker 7: three years ago.

250
00:12:35,960 --> 00:12:36,480
Speaker 8: Well, there's a.

251
00:12:36,480 --> 00:12:38,679
Speaker 2: Lot to look forward to. Our thanks to Jess Menton,

252
00:12:38,760 --> 00:12:42,920
Speaker 2: Bloomberg News deputy team leader and senior reporter US Equities.

253
00:12:43,320 --> 00:12:45,520
Speaker 2: Coming up on Bloomberg Daybreak weekend, I look ahead to

254
00:12:45,559 --> 00:12:49,240
Speaker 2: elections for the European Parliament and a monetary policy decision

255
00:12:49,440 --> 00:12:52,840
Speaker 2: from the European Central Bank. I'm Tom Busby, and this

256
00:12:53,080 --> 00:13:06,600
Speaker 2: is Bloomberg. This is Bloomberg day Break weekend, our global

257
00:13:06,640 --> 00:13:08,680
Speaker 2: look ahead at the top stories for investors in the

258
00:13:08,679 --> 00:13:12,160
Speaker 2: coming week. I'm Tom Busby in New York. Up later

259
00:13:12,200 --> 00:13:15,240
Speaker 2: in our program, we look ahead to China's PMIS and

260
00:13:15,320 --> 00:13:18,720
Speaker 2: the computext High Pay event featuring a number of AI

261
00:13:18,760 --> 00:13:22,080
Speaker 2: heavy hitters. But first to Europe, where inflation is down

262
00:13:22,120 --> 00:13:24,520
Speaker 2: and interest rate cuts are on the agenda. When the

263
00:13:24,559 --> 00:13:28,520
Speaker 2: European Central Bank meets this Thursday. Meantime, voters head to

264
00:13:28,559 --> 00:13:31,280
Speaker 2: the polls and elections for the European Parliament. For more,

265
00:13:31,400 --> 00:13:33,920
Speaker 2: Let's go to London and bring in Bloomberg Daybreak europe

266
00:13:33,960 --> 00:13:35,320
Speaker 2: Banker Steven Carrol.

267
00:13:36,040 --> 00:13:38,280
Speaker 9: Tom, let me take you back to October of twenty

268
00:13:38,360 --> 00:13:40,920
Speaker 9: twenty two, when inflation hit a peak of ten point

269
00:13:41,040 --> 00:13:44,600
Speaker 9: six percent across the countries that use the Euro. Since then,

270
00:13:44,640 --> 00:13:47,120
Speaker 9: the ECB raised rates to four and a half percent,

271
00:13:47,280 --> 00:13:50,640
Speaker 9: where they've stayed since last September. Now in the coming days.

272
00:13:50,679 --> 00:13:54,600
Speaker 9: As widely telegraphed by policymakers, we're expecting the first interest

273
00:13:54,679 --> 00:13:58,080
Speaker 9: rate cut of twenty five basis points, and that's because

274
00:13:58,400 --> 00:14:02,600
Speaker 9: inflation has come down. It also puts the ECB ahead

275
00:14:02,720 --> 00:14:05,920
Speaker 9: of the FED, a move that's drawn much attention. What's

276
00:14:06,000 --> 00:14:09,800
Speaker 9: less clear, though, is what happens after the June ECB meeting.

277
00:14:10,040 --> 00:14:12,800
Speaker 9: I've been discussing this with our senior Euro Area economist,

278
00:14:12,880 --> 00:14:15,760
Speaker 9: David Powell, and started by asking him about the data

279
00:14:16,000 --> 00:14:17,840
Speaker 9: that's in the backdrop to this rate decision.

280
00:14:18,280 --> 00:14:22,000
Speaker 1: If we remember, going back to last year, after the

281
00:14:22,240 --> 00:14:26,240
Speaker 1: huge rise and energy prices, inflation in the EU Area

282
00:14:26,760 --> 00:14:31,680
Speaker 1: was reaching unprecedented levels and that has come down considerably.

283
00:14:31,760 --> 00:14:35,120
Speaker 1: We're no longer that far from the target anymore on

284
00:14:35,200 --> 00:14:38,080
Speaker 1: either the headline or the core. So basically what's happened

285
00:14:38,160 --> 00:14:41,520
Speaker 1: is the ECB put interest rates into very restrictive territory

286
00:14:41,600 --> 00:14:44,840
Speaker 1: result of high inflation, and that has come down. Now

287
00:14:45,000 --> 00:14:48,760
Speaker 1: we've seen inflation, while still above target, come much closer

288
00:14:48,760 --> 00:14:52,080
Speaker 1: to it, and basically the lower levels of inflation are

289
00:14:52,120 --> 00:14:56,120
Speaker 1: allowing the ECB to remove some of the monetary tightening.

290
00:14:56,440 --> 00:14:58,680
Speaker 9: Talk to us about the bumps we've seen in the

291
00:14:58,760 --> 00:15:01,680
Speaker 9: data though, because it hasn't been a completely smooth downward

292
00:15:01,760 --> 00:15:04,880
Speaker 9: trajectory for inflation. I mentioned the surprise in the German

293
00:15:05,240 --> 00:15:08,760
Speaker 9: and the Spanish data as well. Are those causes for concern?

294
00:15:09,160 --> 00:15:12,880
Speaker 1: Well, in the most recent releases that we've seen, those

295
00:15:13,280 --> 00:15:16,160
Speaker 1: movements are small relative to what we were seeing kind

296
00:15:16,200 --> 00:15:18,400
Speaker 1: of a year ago or something. So when you take

297
00:15:18,440 --> 00:15:20,800
Speaker 1: a step back and you look at the big picture

298
00:15:20,840 --> 00:15:24,480
Speaker 1: and you remember that back in October twenty twenty two,

299
00:15:24,680 --> 00:15:29,440
Speaker 1: inflation the eye was nearly eleven percent and the reading

300
00:15:29,440 --> 00:15:32,000
Speaker 1: which was for April was at two point four percent.

301
00:15:32,240 --> 00:15:35,840
Speaker 1: So the big picture is a huge process of disinvation

302
00:15:35,960 --> 00:15:39,160
Speaker 1: has gone on, even if right now we're seeing some

303
00:15:39,440 --> 00:15:42,760
Speaker 1: kind of upward surprises to the upside, and we do

304
00:15:42,840 --> 00:15:45,720
Speaker 1: expect even before the upside surprises that we had, we

305
00:15:45,760 --> 00:15:49,160
Speaker 1: were already expecting your area inflation to tick up a

306
00:15:49,240 --> 00:15:52,520
Speaker 1: little bit in May, largely due to a base effect

307
00:15:52,560 --> 00:15:54,800
Speaker 1: from transportation prices in Germany.

308
00:15:55,080 --> 00:15:59,560
Speaker 9: Let's talk about what happens after the upcoming meeting for

309
00:16:00,040 --> 00:16:02,920
Speaker 9: the European Central Bank though, because the rat cut has

310
00:16:02,960 --> 00:16:07,400
Speaker 9: been largely telegraphed by you know, so many policymakers, including

311
00:16:07,480 --> 00:16:10,840
Speaker 9: Christine Legard, but there's a bit of difference of opinion

312
00:16:11,120 --> 00:16:14,080
Speaker 9: about what the ECB does after the June meeting.

313
00:16:14,400 --> 00:16:14,800
Speaker 10: That's right.

314
00:16:14,840 --> 00:16:17,160
Speaker 1: The rat cut in June is basically a done deal.

315
00:16:17,280 --> 00:16:21,040
Speaker 1: In fact, the governor of the French Central Bank used

316
00:16:21,080 --> 00:16:23,840
Speaker 1: that exact phrase. He said it's a done deal recently

317
00:16:24,360 --> 00:16:27,560
Speaker 1: in an interview while barring any surprises is what he said.

318
00:16:28,200 --> 00:16:30,800
Speaker 1: And we've had that same message from La guard and

319
00:16:30,840 --> 00:16:33,920
Speaker 1: even the most hawkish members of the governing Council, Bundesbank

320
00:16:33,960 --> 00:16:38,400
Speaker 1: president Johakim Nagle and others. So that does seem to

321
00:16:38,400 --> 00:16:40,840
Speaker 1: be a done deal. And the debates really moved on,

322
00:16:41,040 --> 00:16:43,360
Speaker 1: and here the hawks are already coming out with their opposition.

323
00:16:43,400 --> 00:16:46,200
Speaker 1: They're being very firm. We had Isabelle Schnabler, member the

324
00:16:46,240 --> 00:16:50,080
Speaker 1: executive board is from Germany, say she was opposed to

325
00:16:50,120 --> 00:16:53,600
Speaker 1: a July move. We've had the Bundesbank president Yoakim Nagle

326
00:16:53,640 --> 00:16:57,280
Speaker 1: say the same thing, and others on that hawker's side

327
00:16:57,280 --> 00:16:59,640
Speaker 1: of the spectrum. They basically want to quash any thought

328
00:16:59,640 --> 00:17:02,040
Speaker 1: of a July move, and they're saying that we need

329
00:17:02,080 --> 00:17:05,120
Speaker 1: to wait for this important quarterly data that we're getting

330
00:17:05,160 --> 00:17:07,800
Speaker 1: in June, but we'll not get again until September, and

331
00:17:07,960 --> 00:17:12,439
Speaker 1: that quarterly data is the most comprehensive measure of wage growth,

332
00:17:12,600 --> 00:17:15,679
Speaker 1: which comes out in the national accounts, the GDP report,

333
00:17:16,280 --> 00:17:20,280
Speaker 1: and that's available once every three months. Also, the ECB's

334
00:17:20,600 --> 00:17:23,919
Speaker 1: staff economists on the update their forecast once every three months.

335
00:17:24,000 --> 00:17:26,160
Speaker 1: So we'll have all that data in June, then they'll

336
00:17:26,160 --> 00:17:28,520
Speaker 1: have all that data again in September. It is what

337
00:17:28,520 --> 00:17:30,760
Speaker 1: the hawks are saying is July is just too early

338
00:17:30,920 --> 00:17:33,440
Speaker 1: because we won't have enough information to make that decision

339
00:17:33,680 --> 00:17:34,560
Speaker 1: for another move.

340
00:17:35,080 --> 00:17:38,320
Speaker 9: Is there any risk for the ECB in cutting now

341
00:17:38,480 --> 00:17:40,640
Speaker 9: ahead of the FAT.

342
00:17:40,640 --> 00:17:44,720
Speaker 1: The risk that sometimes policymakers worry about is a sharp

343
00:17:45,520 --> 00:17:49,320
Speaker 1: movement in the exchange rate as an interest differentials change,

344
00:17:49,480 --> 00:17:51,800
Speaker 1: But we've not really seen that. We're not seeing any

345
00:17:51,800 --> 00:17:55,600
Speaker 1: movements in the FX markets that are particularly worrisome to

346
00:17:56,359 --> 00:17:59,639
Speaker 1: policy makers. You know, we look at euro dollar, the

347
00:17:59,640 --> 00:18:03,120
Speaker 1: exchange in trade, it's not anywhere that's that's very far

348
00:18:03,160 --> 00:18:06,680
Speaker 1: from it it's been in recent years, and the FED

349
00:18:06,760 --> 00:18:09,000
Speaker 1: is probably not going to be too far behind. We

350
00:18:09,080 --> 00:18:12,040
Speaker 1: have Bloomberg Economics expect the FED to start cutting in July,

351
00:18:12,160 --> 00:18:15,920
Speaker 1: and that's not very far after the ECB.

352
00:18:16,240 --> 00:18:19,480
Speaker 9: In June, when we think about the I suppose the

353
00:18:20,119 --> 00:18:22,919
Speaker 9: rest of the year, or when we look beyond a

354
00:18:23,000 --> 00:18:27,639
Speaker 9: second rate cut, how much could we expect central banks

355
00:18:27,640 --> 00:18:29,600
Speaker 9: to start converging at that point? I suppose. What I'm

356
00:18:29,600 --> 00:18:32,560
Speaker 9: really asking is is how long could divergence last? Looking

357
00:18:32,560 --> 00:18:34,600
Speaker 9: at the data that we have available to us now.

358
00:18:34,520 --> 00:18:38,280
Speaker 1: Well, the your area is very different, The state of

359
00:18:38,320 --> 00:18:40,159
Speaker 1: the your economy is very different the state of the

360
00:18:40,240 --> 00:18:44,640
Speaker 1: US economy. The US economy going into this inflationary surch

361
00:18:44,720 --> 00:18:47,440
Speaker 1: has this huge amount of physical stimulus. It was really

362
00:18:47,520 --> 00:18:50,080
Speaker 1: absent in Europe. We had some physical stimilus, but nothing

363
00:18:50,119 --> 00:18:52,720
Speaker 1: on that scale, and that really pushed the US economy

364
00:18:52,720 --> 00:18:56,440
Speaker 1: into overdrive. Unemployment was very low, and the economy has

365
00:18:56,480 --> 00:19:01,520
Speaker 1: stayed very strong throughout this period of monetary tightening. The

366
00:19:01,560 --> 00:19:05,160
Speaker 1: same cannot be said about the EU Area. So, for example,

367
00:19:05,880 --> 00:19:10,200
Speaker 1: last year, I think the EUR area economy basically flat line,

368
00:19:10,200 --> 00:19:13,360
Speaker 1: there was no expansion GDP, and in contrast to that,

369
00:19:13,560 --> 00:19:16,760
Speaker 1: the US economy expanded by about three percent or so.

370
00:19:16,760 --> 00:19:20,439
Speaker 1: So the Ewer area is weak and it's going to

371
00:19:20,520 --> 00:19:24,000
Speaker 1: need monetary easing, whether the FED cuts or not.

372
00:19:24,640 --> 00:19:28,199
Speaker 9: We're also looking ahead to the European parliamentary elections that

373
00:19:28,280 --> 00:19:31,320
Speaker 9: are taking place in the coming days as well. Of course,

374
00:19:31,400 --> 00:19:33,400
Speaker 9: economics is going to be a key issue there as

375
00:19:33,400 --> 00:19:36,240
Speaker 9: well as it is in pretty much every election. Talk

376
00:19:36,320 --> 00:19:41,040
Speaker 9: us through the economic situation that European consumers, European households

377
00:19:41,440 --> 00:19:44,920
Speaker 9: are facing, because of course, the right cut, as expected,

378
00:19:45,119 --> 00:19:47,080
Speaker 9: should come just as many are going to the polls.

379
00:19:47,240 --> 00:19:52,439
Speaker 1: Yeah, many consumers around the globe still feel that their

380
00:19:52,480 --> 00:19:56,880
Speaker 1: budgets are being pinched by this surgeon inflation because say

381
00:19:57,200 --> 00:20:00,639
Speaker 1: a basket of groceries that used to cost undred euros

382
00:20:00,640 --> 00:20:03,719
Speaker 1: now cost one hundred and twenty euros, and we're not

383
00:20:03,760 --> 00:20:06,240
Speaker 1: seeing prices go down, so that's going to remain the same.

384
00:20:06,280 --> 00:20:09,359
Speaker 1: It still feels expensive to several years ago. What's happening

385
00:20:09,440 --> 00:20:11,800
Speaker 1: is inflation comes out and prices are just no longer

386
00:20:11,920 --> 00:20:15,639
Speaker 1: rising as quickly as they previously were, so people still

387
00:20:15,640 --> 00:20:18,879
Speaker 1: feel that pinch. Real incomes in the EUR area have

388
00:20:19,080 --> 00:20:23,160
Speaker 1: not caught up to pre pandemic levels, meaning the inflation

389
00:20:23,320 --> 00:20:27,800
Speaker 1: has outpaced income growth. We're seeing high wage growth in

390
00:20:27,800 --> 00:20:30,639
Speaker 1: the EU area now and probably over the course of

391
00:20:30,680 --> 00:20:33,119
Speaker 1: the next couple of years, there will be a catchup

392
00:20:33,160 --> 00:20:35,879
Speaker 1: in real incomes to pre pandemic levels, meaning that the

393
00:20:36,000 --> 00:20:39,840
Speaker 1: growth and wages will make up for the purchasing power

394
00:20:39,920 --> 00:20:42,960
Speaker 1: loss to inflation. Consumers will feel better about it at

395
00:20:42,960 --> 00:20:46,840
Speaker 1: that stage. But around the Western World, where we have

396
00:20:46,920 --> 00:20:50,560
Speaker 1: seen this inflationary surge, and other places in the world

397
00:20:50,600 --> 00:20:54,080
Speaker 1: as well, consumers still feel that things are not great.

398
00:20:54,440 --> 00:20:58,560
Speaker 9: That was Bloomberg's senior Euro Area economist David Powell. So

399
00:20:58,640 --> 00:21:01,000
Speaker 9: let's talk more than about the poly. Some four hundred

400
00:21:01,040 --> 00:21:03,439
Speaker 9: million voters across the European Union will be able to

401
00:21:03,480 --> 00:21:05,960
Speaker 9: cast their ballots in the coming days to elect seven

402
00:21:06,040 --> 00:21:09,640
Speaker 9: hundred and twenty members of the European Parliament. These elections

403
00:21:09,680 --> 00:21:12,080
Speaker 9: will influence the policymaking course of the EU for the

404
00:21:12,119 --> 00:21:15,119
Speaker 9: next five years and help determine who gets the top

405
00:21:15,240 --> 00:21:18,959
Speaker 9: jobs of Presidents of the European Commission, European Council, and

406
00:21:19,080 --> 00:21:22,720
Speaker 9: High Representative for Foreign Affairs. This at a time when

407
00:21:22,760 --> 00:21:26,520
Speaker 9: the EU is facing economic and geopolitical challenges, with the

408
00:21:26,560 --> 00:21:30,600
Speaker 9: ongoing war in Ukraine, trade tensions with China, and concerns

409
00:21:30,640 --> 00:21:35,000
Speaker 9: over the bloc's competitiveness versus the United States. We've been

410
00:21:35,040 --> 00:21:37,520
Speaker 9: speaking to many of the leading political figures in the

411
00:21:37,520 --> 00:21:40,719
Speaker 9: European elections on Bloomberg Radio and television, and asking them

412
00:21:40,760 --> 00:21:43,359
Speaker 9: about the key issues in this vote. Let's start by

413
00:21:43,440 --> 00:21:46,280
Speaker 9: hearing from Nicola Schmidt, lead candidate for the Party of

414
00:21:46,320 --> 00:21:50,160
Speaker 9: European Socialists, currently the second biggest grouping in the European Parliament.

415
00:21:50,720 --> 00:21:53,600
Speaker 11: Well, the biggest issue in this election is the future

416
00:21:53,600 --> 00:21:59,040
Speaker 11: of Europe. It's the decision about the future direction Europe

417
00:21:59,040 --> 00:22:01,560
Speaker 11: will take. I think we are living now in a

418
00:22:01,680 --> 00:22:08,760
Speaker 11: very different geopolitical, economic, global economic context, and this means

419
00:22:08,800 --> 00:22:12,159
Speaker 11: that Europe has to be up to this new challenges.

420
00:22:12,720 --> 00:22:15,880
Speaker 11: And this means also that we have to strengthen Europe

421
00:22:16,480 --> 00:22:20,960
Speaker 11: in different areas, the economic, the technological, the green transformation,

422
00:22:21,160 --> 00:22:25,240
Speaker 11: but also our defense. If this does not happen, really

423
00:22:25,400 --> 00:22:27,639
Speaker 11: Europe could be on the loser's edge.

424
00:22:28,200 --> 00:22:30,960
Speaker 9: The Liberal renew Europe group is the third largest and

425
00:22:31,000 --> 00:22:35,000
Speaker 9: the outgoing parliament Hungarian MEP Kathleen che told us she's

426
00:22:35,040 --> 00:22:38,440
Speaker 9: worried about the threat posed by disinformation in this election.

427
00:22:38,880 --> 00:22:40,639
Speaker 12: I have to say, as a Hungarian we have been

428
00:22:40,680 --> 00:22:43,800
Speaker 12: seeing signs of Russian disinformation every day ever since the

429
00:22:43,800 --> 00:22:46,119
Speaker 12: war broke out. If I turn on the television, the

430
00:22:46,160 --> 00:22:49,520
Speaker 12: state television in Hungary, all I hear is Russian propaganda.

431
00:22:49,640 --> 00:22:54,159
Speaker 12: The Russian hackers were infiltrating or foreign ministry for years,

432
00:22:54,240 --> 00:22:56,560
Speaker 12: the government knew about it and they did nothing. So

433
00:22:56,640 --> 00:22:59,840
Speaker 12: Russian influences here in the heart of Europe alive, and

434
00:23:00,720 --> 00:23:03,399
Speaker 12: we have to protect our democratic systems. We have to

435
00:23:03,440 --> 00:23:10,440
Speaker 12: protect our citizens through establishing a strong anti distintformation framework

436
00:23:10,560 --> 00:23:12,080
Speaker 12: and to protect our security.

437
00:23:12,359 --> 00:23:15,120
Speaker 9: Her fear is about interference are shared by the Greens

438
00:23:15,200 --> 00:23:18,840
Speaker 9: co lead candidate Terry Rinker from Germany. She's also concerned

439
00:23:18,880 --> 00:23:21,960
Speaker 9: about a rise and support for far right parties, which

440
00:23:22,119 --> 00:23:26,480
Speaker 9: she suggests could jeopardize some of her parties climate initiatives.

441
00:23:26,560 --> 00:23:29,080
Speaker 13: What we are facing right now if there is, for example,

442
00:23:29,119 --> 00:23:31,840
Speaker 13: as search of the far right, that the whole European

443
00:23:31,880 --> 00:23:34,280
Speaker 13: project is basically going to be put in question. So

444
00:23:34,720 --> 00:23:38,080
Speaker 13: that would have horrible consequences but for Europeans, but I

445
00:23:38,119 --> 00:23:41,520
Speaker 13: think also across the world. And one of the key

446
00:23:41,560 --> 00:23:44,200
Speaker 13: issues that we will be discussing is how we continue

447
00:23:44,200 --> 00:23:46,760
Speaker 13: with the Green Deal. So will we go down the

448
00:23:46,800 --> 00:23:49,719
Speaker 13: path of climate neutrality that Europe has taken cause on

449
00:23:50,200 --> 00:23:52,480
Speaker 13: or will we have a back and forth and basically

450
00:23:52,520 --> 00:23:54,480
Speaker 13: go back and with that not only not meet the

451
00:23:54,480 --> 00:23:57,719
Speaker 13: climate targets, but also create a lot of economic and security.

452
00:23:58,040 --> 00:23:59,720
Speaker 9: Now we haven't managed to speak yet to the center

453
00:23:59,760 --> 00:24:02,760
Speaker 9: right European People's Party. That's the group that commissioned president

454
00:24:02,880 --> 00:24:05,920
Speaker 9: erslavanderline belongs to. They were the biggest group in the

455
00:24:05,960 --> 00:24:09,760
Speaker 9: last parliament. Their manifesto promises to focus on competitiveness, supporting

456
00:24:09,880 --> 00:24:13,399
Speaker 9: Ukraine and what they're calling smart trade agreements with like

457
00:24:13,560 --> 00:24:17,080
Speaker 9: minded partners. Now the EPP allied with the Socialists and

458
00:24:17,160 --> 00:24:19,600
Speaker 9: renew in the last parliament to build their governing coalition.

459
00:24:19,840 --> 00:24:22,080
Speaker 9: But ahead of this vote, there's been much focus about

460
00:24:22,080 --> 00:24:24,880
Speaker 9: where else the EPP might look for support if they

461
00:24:24,920 --> 00:24:28,400
Speaker 9: don't have enough seats after the election. One option would

462
00:24:28,440 --> 00:24:31,760
Speaker 9: be the right wing European Conservatives and Reformists. They include

463
00:24:31,760 --> 00:24:35,600
Speaker 9: the party of Italy's Prime Minister Georgia Maloney. Belgian MEP

464
00:24:35,800 --> 00:24:38,600
Speaker 9: Johann van Overertfeldt is a member. We asked him whether

465
00:24:38,640 --> 00:24:41,480
Speaker 9: he do business whether our slavanderline after the elections.

466
00:24:42,080 --> 00:24:43,960
Speaker 14: Well, that will depend on what she comes up with

467
00:24:44,080 --> 00:24:47,480
Speaker 14: in terms of her policy priorities, and we really want

468
00:24:47,480 --> 00:24:49,399
Speaker 14: her to be a little bit more specific on that

469
00:24:49,760 --> 00:24:52,480
Speaker 14: than what she has been telling us now. But as

470
00:24:52,520 --> 00:24:55,800
Speaker 14: of course a distinct possibility that we might support her. Yes,

471
00:24:56,480 --> 00:24:59,040
Speaker 14: it's not a done deal. Far from it, but it's

472
00:24:59,040 --> 00:24:59,880
Speaker 14: a possibility.

473
00:25:00,240 --> 00:25:01,920
Speaker 9: What would you expect in return.

474
00:25:01,800 --> 00:25:05,240
Speaker 14: Good policies, that's the major thing, and especially with respect

475
00:25:05,240 --> 00:25:08,760
Speaker 14: to Ukraine defense and a few other things like, for example,

476
00:25:08,880 --> 00:25:12,000
Speaker 14: further adjustments in the Green Deal to better take into

477
00:25:12,000 --> 00:25:16,280
Speaker 14: accounts for example, Europeans sorely lacking competitiveness.

478
00:25:16,680 --> 00:25:19,800
Speaker 9: That was the MEP Johann van Overtfeld from Belgium. Now

479
00:25:19,800 --> 00:25:21,639
Speaker 9: you'll find a full list of candidates in the European

480
00:25:21,640 --> 00:25:24,640
Speaker 9: elections on the europe Elect's website. And we'll have full

481
00:25:24,680 --> 00:25:27,720
Speaker 9: coverage of the ECB decision and the European Parliament elections

482
00:25:27,720 --> 00:25:30,920
Speaker 9: on Bloomberg Daybreak Europe in the coming days, including special

483
00:25:30,960 --> 00:25:34,320
Speaker 9: programming from Brussels. I'm Stephen, Carol and London. You can

484
00:25:34,359 --> 00:25:37,119
Speaker 9: catch us every weekday morning here for Bloomberg Daybreak Europe,

485
00:25:37,119 --> 00:25:39,959
Speaker 9: beginning at six am in London and one am on

486
00:25:40,040 --> 00:25:40,560
Speaker 9: Wall Street.

487
00:25:40,760 --> 00:25:43,479
Speaker 2: Tom, thank you, Steven, and coming up on Bloomberg day

488
00:25:43,480 --> 00:25:45,800
Speaker 2: Break weekend and look ahead to the compu text type

489
00:25:45,800 --> 00:25:49,960
Speaker 2: pay event featuring a number of AI heavy hitters. I'm

490
00:25:50,000 --> 00:26:04,639
Speaker 2: Tom Busby and this is Bloomberg. I'm Tom Busby in

491
00:26:04,680 --> 00:26:06,440
Speaker 2: New York with your global look ahead at the top

492
00:26:06,480 --> 00:26:09,240
Speaker 2: stories for investors in the coming week. This week, we'll

493
00:26:09,240 --> 00:26:12,640
Speaker 2: be getting a slew of trade data out of China,

494
00:26:12,680 --> 00:26:16,240
Speaker 2: also the COMPUTECHS tech show in Taipei, which coincides with

495
00:26:16,320 --> 00:26:20,400
Speaker 2: TSMC's May sales and revenue release. Let's get to Bloomberg

496
00:26:20,480 --> 00:26:23,800
Speaker 2: Daybreak Asia host Brian Curtis to walk us through all

497
00:26:23,840 --> 00:26:24,880
Speaker 2: these upcoming events.

498
00:26:25,160 --> 00:26:28,480
Speaker 3: Tom we look ahead to more economic data in China,

499
00:26:28,520 --> 00:26:32,360
Speaker 3: including the trade numbers from May. The PMI figures came

500
00:26:32,359 --> 00:26:34,919
Speaker 3: in a little disappointing, and we'll have more on that

501
00:26:35,000 --> 00:26:38,520
Speaker 3: in just a moment. Meantime, the IMF recently raised its

502
00:26:38,560 --> 00:26:42,080
Speaker 3: forecast for overall growth in China in twenty twenty four

503
00:26:42,440 --> 00:26:45,399
Speaker 3: to five percent. That's up from a previous prediction of

504
00:26:45,440 --> 00:26:48,520
Speaker 3: four point six percent. The IMF said that that reflects

505
00:26:48,600 --> 00:26:51,439
Speaker 3: a strong expansion at the start of this year and

506
00:26:51,520 --> 00:26:55,320
Speaker 3: additional support from the government. In an exclusive interview with

507
00:26:55,320 --> 00:27:00,200
Speaker 3: Bloomberg's Haslinda Ahman, first Deputy Managing director Gita Gobinov talked

508
00:27:00,200 --> 00:27:02,560
Speaker 3: about the macro policy measures from Beijing.

509
00:27:02,880 --> 00:27:07,840
Speaker 15: We've upgraded China's growth by zero point four percentage points

510
00:27:07,880 --> 00:27:10,080
Speaker 15: for this year and for next, so we have growth

511
00:27:10,119 --> 00:27:12,640
Speaker 15: now projected at five percent for this year and four

512
00:27:12,640 --> 00:27:15,800
Speaker 15: point six percent for next year. There are two main

513
00:27:15,880 --> 00:27:19,320
Speaker 15: drivers for that. The first is the better than expected

514
00:27:19,400 --> 00:27:23,520
Speaker 15: first quarter GDP numbers that came out for twenty twenty four.

515
00:27:23,640 --> 00:27:27,240
Speaker 15: That is lifting up our growth projection. And the second

516
00:27:27,400 --> 00:27:30,679
Speaker 15: is we have incorporated some of the newer announcements that

517
00:27:30,720 --> 00:27:33,119
Speaker 15: have been made on the policy front. So those are

518
00:27:33,119 --> 00:27:34,560
Speaker 15: the two main reasons for the upgrade.

519
00:27:34,600 --> 00:27:37,680
Speaker 5: But some say five percent is actually out of reach

520
00:27:37,720 --> 00:27:41,040
Speaker 5: for China. They say private sector sentiment is still weak.

521
00:27:41,320 --> 00:27:45,080
Speaker 5: The property sector is also in the Doldrum sixteen million

522
00:27:45,119 --> 00:27:48,959
Speaker 5: home still unsold, and some point to Chinavanka under a

523
00:27:48,960 --> 00:27:52,159
Speaker 5: lot of financial stress at some point, Gita, that is

524
00:27:52,359 --> 00:27:55,240
Speaker 5: likely to weigh on confidence, way on sentiment, way on.

525
00:27:55,119 --> 00:27:56,880
Speaker 9: Growth as well. What's your take on that.

526
00:27:57,440 --> 00:28:01,679
Speaker 15: So China's economy is continuing to recover, so we certainly

527
00:28:02,080 --> 00:28:05,520
Speaker 15: are seeing that consumption is recovering, but still it has

528
00:28:05,720 --> 00:28:08,439
Speaker 15: some ways to go. The strength we're seeing in public

529
00:28:08,480 --> 00:28:13,600
Speaker 15: investment remains. Private investments is still weak, mainly because of

530
00:28:13,720 --> 00:28:16,919
Speaker 15: the weakness and the property sector. So we are seeing

531
00:28:18,000 --> 00:28:20,280
Speaker 15: signs of recovery, but yes, we need to see more

532
00:28:20,320 --> 00:28:23,560
Speaker 15: evidence of that. But despite that, we do expect that

533
00:28:23,720 --> 00:28:26,359
Speaker 15: growth will be around five percent this year.

534
00:28:26,640 --> 00:28:27,760
Speaker 5: What more needs to be done?

535
00:28:27,800 --> 00:28:31,200
Speaker 15: So, firstly, I would like to recognize the policy steps

536
00:28:31,200 --> 00:28:34,800
Speaker 15: that have been taken. I mean the recent announcement which

537
00:28:34,920 --> 00:28:41,000
Speaker 15: involves upgrading equipment of firms but also consumer goods of households.

538
00:28:41,200 --> 00:28:45,120
Speaker 15: That can help. But yes, in our view more will

539
00:28:45,120 --> 00:28:48,400
Speaker 15: be needed, and so specifically on the property sector front,

540
00:28:48,440 --> 00:28:50,680
Speaker 15: I think what would be very helpful is to deal

541
00:28:50,760 --> 00:28:54,000
Speaker 15: with the problem of pre sold housing. So there are

542
00:28:54,080 --> 00:28:57,120
Speaker 15: large number of houses that have been presold but have

543
00:28:57,240 --> 00:29:00,280
Speaker 15: not been completed. Here we see a bigger role for

544
00:29:00,320 --> 00:29:02,600
Speaker 15: the central government to come in to deal with that,

545
00:29:02,720 --> 00:29:06,600
Speaker 15: to be able to complete those pre sold houses because

546
00:29:06,600 --> 00:29:08,840
Speaker 15: when that happens, that's going to help house or confidence

547
00:29:08,960 --> 00:29:11,720
Speaker 15: which is really essential at this time and also will

548
00:29:11,760 --> 00:29:15,960
Speaker 15: help with the exit of non viable developers. Secondly, in

549
00:29:16,080 --> 00:29:20,120
Speaker 15: terms of providing support, while overall we think that there

550
00:29:20,120 --> 00:29:22,520
Speaker 15: should be a fiscal neutral stance, I think it's is

551
00:29:22,560 --> 00:29:25,560
Speaker 15: important that the spending goes in the direction of helping

552
00:29:25,720 --> 00:29:28,360
Speaker 15: low income households because they are the ones who are

553
00:29:28,400 --> 00:29:30,840
Speaker 15: able to consume more of that additional income and that

554
00:29:30,880 --> 00:29:33,280
Speaker 15: will also provide a boost to the economy.

555
00:29:32,880 --> 00:29:37,120
Speaker 3: Geter gopinatt there from the IMF. Meantime, China's factory activity

556
00:29:37,240 --> 00:29:41,880
Speaker 3: contracted in May, missing estimates for expansion. The official PMI

557
00:29:41,960 --> 00:29:45,440
Speaker 3: fel to forty nine point five compared to fifty point

558
00:29:45,520 --> 00:29:49,160
Speaker 3: four last month and the forecast of fifty point five.

559
00:29:49,440 --> 00:29:52,440
Speaker 3: It's a warning sign that GDP may struggle to reach

560
00:29:52,480 --> 00:29:56,120
Speaker 3: the government's target of growth of around five percent this year.

561
00:29:56,480 --> 00:29:58,880
Speaker 3: Wendy Chan at GAM Investments.

562
00:29:58,480 --> 00:30:01,320
Speaker 10: Its definitely come as a the slight disappointment for the

563
00:30:01,360 --> 00:30:04,160
Speaker 10: market as what people are expecting to see another month

564
00:30:04,280 --> 00:30:07,480
Speaker 10: of expansion just to keep the seam of the past

565
00:30:07,480 --> 00:30:10,040
Speaker 10: two months and supported by a kind of healthy order

566
00:30:10,080 --> 00:30:13,320
Speaker 10: book on the manufacturing side. But however, we probably need

567
00:30:13,360 --> 00:30:17,160
Speaker 10: to focus on what does it mean for the regulator

568
00:30:17,240 --> 00:30:20,640
Speaker 10: to counter react on that, because the PMI is definitely

569
00:30:20,680 --> 00:30:24,320
Speaker 10: impact on the pace of physical and the monetary policy

570
00:30:24,320 --> 00:30:27,600
Speaker 10: to follow, such as the intensity of the monitor easing

571
00:30:27,640 --> 00:30:30,120
Speaker 10: as well as the government bound issuers, which to be

572
00:30:30,160 --> 00:30:32,640
Speaker 10: FRED has been behind the schedule a little bit.

573
00:30:32,480 --> 00:30:35,160
Speaker 3: And China is hoping that tech investment can help it

574
00:30:35,560 --> 00:30:38,520
Speaker 3: with growth in the general economy. It's doubling down on

575
00:30:38,560 --> 00:30:42,280
Speaker 3: its efforts to stimulate the domestic chip industry. The Big

576
00:30:42,320 --> 00:30:45,880
Speaker 3: Fund three was just formulated at forty seven point five

577
00:30:45,960 --> 00:30:50,320
Speaker 3: billion dollars of funding since time. Co founder Being Shoe says,

578
00:30:50,680 --> 00:30:53,520
Speaker 3: the Chinese chip makers are catching up fast on AI.

579
00:30:54,000 --> 00:30:56,560
Speaker 3: He spoke with Bloomberg's David and Glaze at the UBS

580
00:30:56,600 --> 00:30:57,600
Speaker 3: conference in Hong Kong.

581
00:30:57,720 --> 00:31:01,520
Speaker 8: The one that having a leadership in Yeah technology will

582
00:31:01,640 --> 00:31:05,000
Speaker 8: be attracting a lot of customers to work with them.

583
00:31:05,200 --> 00:31:08,320
Speaker 8: So I see that already in the US a lot

584
00:31:08,320 --> 00:31:12,520
Speaker 8: of customers working closely with leaders like open Ai, like Anthropic,

585
00:31:12,680 --> 00:31:15,920
Speaker 8: and I believe that in the Asian markets there will

586
00:31:15,960 --> 00:31:18,360
Speaker 8: also be leaders as well, So we try to be

587
00:31:18,480 --> 00:31:22,320
Speaker 8: that leader. But of course there are shortage of resources

588
00:31:22,400 --> 00:31:25,640
Speaker 8: here in Asia. I think in general it's like the

589
00:31:25,680 --> 00:31:28,680
Speaker 8: ten times of gap of the compute resources that we

590
00:31:28,800 --> 00:31:32,600
Speaker 8: have here compared to the US leaders. But I think

591
00:31:32,960 --> 00:31:36,200
Speaker 8: Asian market is never lack of talents and never lack

592
00:31:36,240 --> 00:31:38,600
Speaker 8: of data. So in terms of talents and data, I

593
00:31:38,640 --> 00:31:42,240
Speaker 8: think eventually we will be able to, you know, make

594
00:31:42,280 --> 00:31:45,360
Speaker 8: sure that we squeeze the last bit of the compute

595
00:31:45,360 --> 00:31:47,600
Speaker 8: out then right, Yeah, try to be there.

596
00:31:47,720 --> 00:31:50,560
Speaker 16: That brings up the topic of and you mentioned you

597
00:31:50,600 --> 00:31:52,720
Speaker 16: work with in Nvidia. You invested a lot, of course

598
00:31:52,760 --> 00:31:55,160
Speaker 16: in buying in Vidia inventory. You know, of course, of

599
00:31:55,240 --> 00:31:58,400
Speaker 16: these restrictions that the US has placed on China's access

600
00:31:58,400 --> 00:32:00,880
Speaker 16: to some of these technologies. The problem for the secretory

601
00:32:00,920 --> 00:32:03,000
Speaker 16: is that the problem for you, how are you working

602
00:32:03,000 --> 00:32:05,600
Speaker 16: around that, for example? And you think that in any

603
00:32:05,640 --> 00:32:09,520
Speaker 16: way constraints China's ability to meet it on aim chet.

604
00:32:10,000 --> 00:32:14,040
Speaker 8: That does impose a challenge to everybody, not just the

605
00:32:14,080 --> 00:32:17,560
Speaker 8: companies in China, but also companies in the US. In China,

606
00:32:17,640 --> 00:32:20,720
Speaker 8: we also do a lot of fundamental innovation. We also

607
00:32:20,760 --> 00:32:22,600
Speaker 8: publish a lot of papers. We do a lot of

608
00:32:22,680 --> 00:32:25,400
Speaker 8: open source. See the open source models that we released

609
00:32:25,440 --> 00:32:32,400
Speaker 8: recently our open source version of multimodality model called the INTENVL.

610
00:32:32,960 --> 00:32:36,760
Speaker 8: Actually it beats activity for a week, and we recently

611
00:32:36,840 --> 00:32:39,720
Speaker 8: re open source another one, a large Luguay model that

612
00:32:39,760 --> 00:32:45,040
Speaker 8: does really good maths and it beats almost all the models.

613
00:32:45,640 --> 00:32:48,440
Speaker 8: We try to share what we discover in the JAI

614
00:32:49,040 --> 00:32:52,720
Speaker 8: in the EGI in general. There are also domestic chips

615
00:32:52,880 --> 00:32:56,320
Speaker 8: coming up that's catching up with the international leader the

616
00:32:56,400 --> 00:32:59,440
Speaker 8: chip leaders really quickly. And we're also working with this

617
00:32:59,600 --> 00:33:02,960
Speaker 8: do net domestic chips to expanding the compue that we have.

618
00:33:03,440 --> 00:33:07,600
Speaker 16: How far behind do you think the domestic chip sector

619
00:33:07,720 --> 00:33:09,200
Speaker 16: is compared.

620
00:33:08,840 --> 00:33:09,200
Speaker 2: To the West.

621
00:33:09,240 --> 00:33:12,040
Speaker 8: All it's hot to sell because I believe that in

622
00:33:12,120 --> 00:33:15,480
Speaker 8: the lauralm there will be a smaller gap. Okay, short

623
00:33:15,560 --> 00:33:19,240
Speaker 8: term right now, I think somebody says one year, sometimes

624
00:33:19,280 --> 00:33:20,840
Speaker 8: somebody says three years.

625
00:33:20,920 --> 00:33:24,240
Speaker 3: Since time co founder Bing Shu, and a lot of

626
00:33:24,240 --> 00:33:27,880
Speaker 3: this will play out across the Taiwan straight At Computex Taipei,

627
00:33:28,160 --> 00:33:31,400
Speaker 3: it gets underway with advanced semiconductors very much at the

628
00:33:31,440 --> 00:33:34,000
Speaker 3: heart of the event. We'll have a number of top

629
00:33:34,040 --> 00:33:38,960
Speaker 3: executives there and CEOs and companies like TSMC and Qualcomm

630
00:33:38,960 --> 00:33:42,920
Speaker 3: and AMD among others, all in attendance. Joining us now

631
00:33:42,920 --> 00:33:46,520
Speaker 3: for some discussion about the invisible threads that run through

632
00:33:46,760 --> 00:33:51,200
Speaker 3: all of this is Lad Savov, Bloomberg Tech expert, San Francisco,

633
00:33:51,320 --> 00:33:55,800
Speaker 3: forty nine ers fanboy, and my favorite Bulgarian on the planet. Lad,

634
00:33:55,840 --> 00:33:59,040
Speaker 3: thanks very much for being with us here for this discussion. First,

635
00:33:59,320 --> 00:34:01,960
Speaker 3: to some of the point it's made thereby being a hue,

636
00:34:02,600 --> 00:34:06,240
Speaker 3: is China catching up on advanced chip making and AI.

637
00:34:06,760 --> 00:34:09,239
Speaker 17: Well, that's trigger to say. I would put it that

638
00:34:09,280 --> 00:34:12,680
Speaker 17: he is being very optimistic about the situation, One of

639
00:34:12,760 --> 00:34:15,040
Speaker 17: the things that you have to look at is Nvidia

640
00:34:15,160 --> 00:34:19,520
Speaker 17: and its leadership in AI accelerators is largely uncontested whe

641
00:34:19,520 --> 00:34:22,280
Speaker 17: are you looking at the US globally or within China,

642
00:34:22,360 --> 00:34:26,160
Speaker 17: and those key AI accelerators are the exact thing that

643
00:34:26,239 --> 00:34:29,280
Speaker 17: the US sanctions have kept out of China. Its nearest competitor,

644
00:34:29,320 --> 00:34:32,160
Speaker 17: AMD also has its own offerings and they have also

645
00:34:32,200 --> 00:34:34,480
Speaker 17: been captured by those sanctions. So when you talk about

646
00:34:34,520 --> 00:34:37,799
Speaker 17: the companies that develop the AI models, the ones that

647
00:34:37,880 --> 00:34:40,440
Speaker 17: need these data centers full of the fastest and the

648
00:34:40,440 --> 00:34:43,880
Speaker 17: best possble accelerators in China, they don't have them because

649
00:34:43,960 --> 00:34:46,920
Speaker 17: those are made by US companies. There are a couple

650
00:34:46,960 --> 00:34:49,920
Speaker 17: of players, such as Burn Technology, who are developing their

651
00:34:49,960 --> 00:34:54,560
Speaker 17: own alternatives. Domestically, Huawei has been made effectively China's chip

652
00:34:54,600 --> 00:34:57,440
Speaker 17: making development champion, and it did have that big breakthrough

653
00:34:57,480 --> 00:35:00,080
Speaker 17: with a smartphone processor. But both of them still have

654
00:35:00,120 --> 00:35:01,320
Speaker 17: a lot to prove on this front.

655
00:35:01,600 --> 00:35:03,759
Speaker 3: So we heard from being Shue there from since time.

656
00:35:03,800 --> 00:35:07,319
Speaker 3: I'm curious because he referenced this, who will be the

657
00:35:07,400 --> 00:35:10,360
Speaker 3: leaders of AI in Asia? In China?

658
00:35:10,520 --> 00:35:12,359
Speaker 17: Well, this is a fun thing, and this is what

659
00:35:12,400 --> 00:35:13,959
Speaker 17: makes computext such a compelling show.

660
00:35:14,080 --> 00:35:14,640
Speaker 1: We don't know.

661
00:35:14,800 --> 00:35:17,520
Speaker 17: It's still very very early on now. When you look

662
00:35:17,520 --> 00:35:19,640
Speaker 17: at nvideo share price, you can say there's been a

663
00:35:19,680 --> 00:35:22,680
Speaker 17: lot of impact because there's been a lot of buying already,

664
00:35:23,120 --> 00:35:26,160
Speaker 17: but it is still very early. The likes of AMD

665
00:35:26,360 --> 00:35:28,719
Speaker 17: can take the lead. Quot coom another one of these

666
00:35:28,719 --> 00:35:31,400
Speaker 17: players is CEO will have one of the highlight keynotes

667
00:35:31,440 --> 00:35:35,080
Speaker 17: of computext. It's making a big push into AI chips

668
00:35:35,080 --> 00:35:38,040
Speaker 17: on devices not in the data centers. So there's all

669
00:35:38,040 --> 00:35:40,200
Speaker 17: of this opportunity and it's still very early days.

670
00:35:40,320 --> 00:35:42,480
Speaker 3: We just had this announcement of the Big Fund three

671
00:35:42,760 --> 00:35:48,000
Speaker 3: and I'm curious exactly how that funding gets deployed in China.

672
00:35:47,920 --> 00:35:50,759
Speaker 17: So am I Brian. We're going to find out it's

673
00:35:50,800 --> 00:35:52,719
Speaker 17: forty eight billion dollars. It's not going to be just

674
00:35:52,760 --> 00:35:56,160
Speaker 17: handed out overnight. It's going to require a bit of focus,

675
00:35:56,239 --> 00:35:59,319
Speaker 17: I would argue, because one of the interesting things is

676
00:35:59,360 --> 00:36:01,440
Speaker 17: when you look at the likes of TSMC, one of

677
00:36:01,480 --> 00:36:04,560
Speaker 17: the big chip makers in Taiwan, Samsung likewise, they spent

678
00:36:04,719 --> 00:36:07,920
Speaker 17: upwards of thirty billion dollars per year in capital expenditure.

679
00:36:08,239 --> 00:36:11,040
Speaker 17: If China wants to have its own competitors, to those companies.

680
00:36:11,080 --> 00:36:14,400
Speaker 17: It can't really just spend the money all across. It

681
00:36:14,440 --> 00:36:16,840
Speaker 17: needs to focus. Maybe Huawei will be the focus of

682
00:36:16,880 --> 00:36:19,680
Speaker 17: that investment, but it also needs to build out a

683
00:36:19,800 --> 00:36:22,239
Speaker 17: wide ecosystem. One of the things that you hear from

684
00:36:22,360 --> 00:36:25,479
Speaker 17: Taiwanese ministers and even the likes of a Vidia CEO

685
00:36:25,600 --> 00:36:30,360
Speaker 17: Jensen Huang, is that there is a massive ecosystem around TSMC.

686
00:36:30,400 --> 00:36:32,920
Speaker 17: It's not just TSMC as a single company. There are

687
00:36:33,120 --> 00:36:36,920
Speaker 17: countless companies that create components, that put together servers and

688
00:36:36,960 --> 00:36:39,399
Speaker 17: do older work that's required around the chip making.

689
00:36:39,800 --> 00:36:42,000
Speaker 3: So when you look at TSMC, you can tell the

690
00:36:42,080 --> 00:36:45,080
Speaker 3: huge impact it has had on the taiwan economy. And

691
00:36:45,120 --> 00:36:47,560
Speaker 3: we talked about Nvidia and AMD, and when you look

692
00:36:47,560 --> 00:36:52,440
Speaker 3: at how AI is impacting investment in the United States

693
00:36:52,480 --> 00:36:55,640
Speaker 3: and even growth in the United States, you can understand

694
00:36:55,920 --> 00:36:58,280
Speaker 3: that point that we made earlier that China is looking

695
00:36:58,400 --> 00:37:02,719
Speaker 3: for high investment and per perhaps AI and semiconductors to

696
00:37:02,800 --> 00:37:06,520
Speaker 3: help fuel the Chinese economy. Is that possible sometime in

697
00:37:06,560 --> 00:37:07,279
Speaker 3: the next year or two.

698
00:37:07,520 --> 00:37:09,800
Speaker 17: Well, as I mentioned, it's stay early days. I think

699
00:37:09,960 --> 00:37:13,719
Speaker 17: the payoff on AI likewise early days. When you look

700
00:37:13,760 --> 00:37:16,560
Speaker 17: at some of the polling Lenobo, for example, did a

701
00:37:16,600 --> 00:37:19,719
Speaker 17: polling of CIOs around the world and many of them

702
00:37:20,000 --> 00:37:22,719
Speaker 17: expect a year at least, maybe even two before they

703
00:37:22,800 --> 00:37:26,480
Speaker 17: start monetizing their investments in AI. And ask globally, when

704
00:37:26,520 --> 00:37:28,880
Speaker 17: you look at China with its economic challenges, with the

705
00:37:28,960 --> 00:37:31,759
Speaker 17: US anction and everything else, I think the length of

706
00:37:31,800 --> 00:37:34,080
Speaker 17: time that is going to take to monetize these AA

707
00:37:34,160 --> 00:37:35,720
Speaker 17: services might be even longer.

708
00:37:35,760 --> 00:37:38,200
Speaker 3: You're going to be at computex right, yes, sir. What

709
00:37:38,360 --> 00:37:40,640
Speaker 3: will be most interesting to you? What will you really

710
00:37:40,640 --> 00:37:41,399
Speaker 3: be looking for?

711
00:37:41,640 --> 00:37:44,440
Speaker 17: Well, the big announcement at computext is the thing that

712
00:37:44,480 --> 00:37:47,320
Speaker 17: Microsoft and quot coom have already given us in advance.

713
00:37:47,360 --> 00:37:50,960
Speaker 17: It's these co pilot plus PCs, the quote unquote aipcs.

714
00:37:51,040 --> 00:37:53,120
Speaker 17: The thing I really want to find out is how

715
00:37:53,160 --> 00:37:56,280
Speaker 17: they justify that label. I still see it as marketing

716
00:37:56,280 --> 00:37:59,560
Speaker 17: and branding more than actual end user changes. But if

717
00:37:59,560 --> 00:38:02,440
Speaker 17: there is a tangible advantage to ODIs AI that Microsoft

718
00:38:02,480 --> 00:38:05,480
Speaker 17: is stuffing into PCs, we can see a real optick

719
00:38:05,600 --> 00:38:07,960
Speaker 17: in the PC industry. The pandemic and a lack of

720
00:38:08,040 --> 00:38:11,239
Speaker 17: innovation have really kind of plateaued the PC industry for

721
00:38:11,320 --> 00:38:14,359
Speaker 17: many years now, and Microsoft, Quocom and a whole bunch

722
00:38:14,360 --> 00:38:16,680
Speaker 17: of other companies are betting on Ai being the driver

723
00:38:16,880 --> 00:38:18,800
Speaker 17: to get people to buy new devices.

724
00:38:18,960 --> 00:38:21,800
Speaker 3: Lad, thanks so much for joining us. Flat Salvov, Bloomberg

725
00:38:21,880 --> 00:38:25,480
Speaker 3: tech expert with us on the program. I'm Brian Curtis

726
00:38:25,480 --> 00:38:28,080
Speaker 3: along with Doug Chrisner. You can catch us every weekday

727
00:38:28,120 --> 00:38:31,240
Speaker 3: here for Bloomberg day Break Asia, beginning at eight am

728
00:38:31,239 --> 00:38:34,040
Speaker 3: in Hong Kong and eight pm on Wall Street.

729
00:38:34,360 --> 00:38:37,160
Speaker 2: Tom, thank you, Brian, and that does it for this

730
00:38:37,320 --> 00:38:40,200
Speaker 2: edition of Bloomberg day Break Weekend. Join us again Monday

731
00:38:40,200 --> 00:38:42,360
Speaker 2: morning at five am Wall Street time for the latest

732
00:38:42,360 --> 00:38:44,959
Speaker 2: on markets overseas and the news you need to start

733
00:38:45,000 --> 00:38:48,360
Speaker 2: your day. I'm Tom Busby. Stay with us. Top stories

734
00:38:48,360 --> 00:38:51,920
Speaker 2: and global business headlines are coming up right now