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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Bloomberg Day baq At podcast. Good morning,

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Speaker 2: It's Monday, the tenth of November. I'm Caroline Hetkut in London.

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Speaker 1: And I'm Stephen Caroline Brussels. Coming up today, Democrats and

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Speaker 1: the US Senate break with their party to support a

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Speaker 1: deal to reopen the government.

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Speaker 2: BBC bosses resign over allegations that broadcasts and misled viewers

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Speaker 2: by editing remarks by US President Donald Trump.

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Speaker 1: Plus, we take a look inside Peel Hunt's fight to

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Speaker 1: stay independent amid a wave of city consolidation.

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Speaker 2: Let's start with the roundup of our top stories.

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Speaker 1: The record breaking US government shutdown appears to be nearing

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Speaker 1: an end after moderate Democrats and the Senate broke with

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Speaker 1: party leaders to back a deal with Republicans. The agreement

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Speaker 1: would fully fund some government departments for the next year,

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Speaker 1: with funding for others set to lapse at the end

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Speaker 1: of January. It also restores pay for furloughed workers, zooms

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Speaker 1: withheld payments, andrew calls laid off federal employees. The shutdown

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Speaker 1: is costing the US economy and estimated fifteen billion dollars

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Speaker 1: a week, while grounding flights and halting the release of

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Speaker 1: key government economic data. Democratic Senator Katherine Cortez explains why

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Speaker 1: she broke with the party to support the motion.

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Speaker 3: The vote tonight was crucial to open the government because

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Speaker 3: too many Americans, hardworking individuals, seniors' children were suffering.

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Speaker 1: Catherine Cortez speaking there. With the bill still requiring approval

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Speaker 1: from the House before it can be sent to President

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Speaker 1: Trump for his signature. Over passages not guaranteed, Democratic leaders

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Speaker 1: have voiced opposition to any deal that does not include

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Speaker 1: an extension of expiring Obamacare subsidies, which this bill does

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Speaker 1: not do.

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Speaker 2: Now, the Director General of the BBC Tim Davey and

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Speaker 2: News chief Deborah Turness are resigning of allegations the broadcast

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Speaker 2: and misled viewers by editing by US President Donald Trump

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Speaker 2: in a Panorama documentary last year. The two senior executives

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Speaker 2: announced their departures ahead of an expected apology from the organization. Today,

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Speaker 2: the Shadow Culture Secretary Nigel Huddleston says big changes need

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Speaker 2: to be made.

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Speaker 4: They've offended the US President, They've reprimanded a journalist for

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Speaker 4: correcting on biology. You know, there's just so many examples

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Speaker 4: of there being biased, but also there's clear political bias here.

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Speaker 2: As well, Nigel Hudderson speaking there. The controversy comes ahead

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Speaker 2: of critical funding talks with the government and follows a

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Speaker 2: turbulent year for the BBC, which has been criticized for

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Speaker 2: its coverage and neutrality. In a post on his Truth

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Speaker 2: social platform, Trump called the individuals resigning quote dishonest people

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Speaker 2: and accused them of trying to influence a US presidential election.

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Speaker 2: In his resignation letter, Davey said he hoped there could

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Speaker 2: be a quote sensible, calm and rational public conversation about

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Speaker 2: the next chapter for the BBC.

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Speaker 1: More than a quarter of large UK businesses expect to

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Speaker 1: cut jobs within the next year due to the impact

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Speaker 1: of artificial intelligence. That's according to a CIPD survey of

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Speaker 1: more than two thousand employers showing sixty two percent of

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Speaker 1: them believe junior, managerial or administrative roles are likely to

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Speaker 1: be last due to AI.

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Speaker 5: Blouebrooks.

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Speaker 1: Freddie Folston has.

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Speaker 6: More hiring freezes, weaker employer confidence and uncertainty ahead of

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Speaker 6: this month's budget, and now a labor market survey to

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Speaker 6: add to the Chancellor's workforce woes. Data from the CIPD

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Speaker 6: shows the risk of AI to young people and white

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Speaker 6: collar workers is particularly acute. Twenty six percent of large

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Speaker 6: private sector firms expect to shrink their workforce in the

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Speaker 6: next twelve months. That's compared to twenty percent in the

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Speaker 6: public sector. One of the cipd's senior economists said that

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Speaker 6: while AI held great potential for improving productivity, it also

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Speaker 6: risks leaving many people behind. In London, freddie Fulston Bloomberg Radio.

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Speaker 2: Now on the markets as investors grapple with concerns about

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Speaker 2: an AI bubble. Many are increasingly chasing the rally but

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Speaker 2: ensuring against the drop options. Volatility looks to be headed

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Speaker 2: high regardless of the direction of the S and P

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Speaker 2: five hundred index. Last week, AI related US textocks lost

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Speaker 2: more than a trillion dollars in market value as tradeos

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Speaker 2: were seen taking bets off the VIX index falling. It

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Speaker 2: came as hedge fund boss Michael Barry disclosed bearish put

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Speaker 2: options on Nvidia and Polante after warning of market exuberance.

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Speaker 1: The UK is providing staff and equipment to help Belgium

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Speaker 1: counter drone incursions near airports and military bases. Britain's Chief

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Speaker 1: of the Defense Staff Richard Knighton tell the BBC that

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Speaker 1: equipment and personnel are now now on the way.

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Speaker 7: I spect to why Belgian opposite number in the week,

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Speaker 7: and he asked if we would be prepared to support them,

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Speaker 7: and the Defense Section I agreed at the end of

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Speaker 7: last week that we would deploy our people and our

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Speaker 7: equipment to Belgium to help them. It is important to

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Speaker 7: be clear though that we don't know and the Belgians

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Speaker 7: don't yet know the source of that those drones, and

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Speaker 7: but we will help them by providing our kit and capability,

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Speaker 7: which has already started to deploy to help to Belgium.

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Speaker 1: Britain the Chief of the Defense Staff, Richard Niden, speaking

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Speaker 1: to the BBC after airports in Belgium were forced to

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Speaker 1: suspend flights last week when unidentified drones were spotted in

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Speaker 1: its airspace. It follows a series of suspected Russian droll

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Speaker 1: incursions over several EU countries that have disrupted our travel.

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Speaker 2: Now, the odds of extreme cold this winter in the US,

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Speaker 2: Asia and parts of Europe are climbing. That's raising concerns

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Speaker 2: about energy costs and economic strain across the region. Kegsbyhol

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Speaker 2: Kubala has more on what this means for Europe.

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Speaker 8: Europe's mild winter could be interrupted by frequent cold pells

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Speaker 8: in the coming months. For casters say the polar vortex,

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Speaker 8: the belt of winds around the Arctic, could weaken and

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Speaker 8: let frigid air spill south across the continent at deep

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Speaker 8: freeze would likely push up gas prices and pose a

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Speaker 8: risk to winter wheat crops. Experts say northern and central

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Speaker 8: Europe are most at risk, but climate warming may compete

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Speaker 8: with the worst of the chill in Brussels.

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Speaker 5: Michel Kubala Bloomberg Radio.

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Speaker 1: Those are your top stories on the markets. The Mscirish

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Speaker 1: Pacific Index up one percent. Wall Street futures have jumped

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Speaker 1: on the news of progress in the US government shutdown.

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Speaker 1: NAZAC features now one point three percent higher, SMP minez

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Speaker 1: are up by eight tens. Eurostocks fifty features also getting

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Speaker 1: a boost, up by one point five percent. For two

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Speaker 1: one hundred features are nine tents higher this morning. The

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Speaker 1: ten year treasury yield four basis points higher at four

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Speaker 1: point one four percent.

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Speaker 2: Now those are the markets in a moment, will bring

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Speaker 2: you more on the US government down, plus why London's

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Speaker 2: last big independent broker may be becoming a takeover target itself.

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Speaker 2: But before we get to that, another story has got

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Speaker 2: our attention this morning.

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Speaker 5: Supercars.

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Speaker 2: Bloomberg's Hannah Elliott has been writing about how exotic cars

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Speaker 2: are sort of very popular, and especially amongst an unusual cohort.

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Speaker 2: You might not think it, young supercar collectors are driving

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Speaker 2: their expensive vehicles rather than just keeping them stalled.

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Speaker 1: Yeah, indeed, Look, these are obviously major pieces of investment,

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Speaker 1: and the maintenance because of the nature of them, can

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Speaker 1: be pretty hefty as well. But I did find it

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Speaker 1: interesting that a lot of these younger owners as well

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Speaker 1: are much more keen to drive the cars and get

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Speaker 1: them out in the road. They're not as worried about,

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Speaker 1: you know, whatever might happen if you actually take the

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Speaker 1: car out and use it.

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Speaker 2: Well, I mean if you can see out of the window.

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Speaker 2: I have seen supercars around London, you know, literally outside

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Speaker 2: of Tesco, which I think is very funny given how

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Speaker 2: fast they can drive. But no, I thought this story

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Speaker 2: about the gathering in Las Vegas on the first of

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Speaker 2: November with all of these car owners. Apparently there was

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Speaker 2: one point one billion dollars worth of vehicles outside of

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Speaker 2: the win Las Vegas only a few days ago. So yeah,

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Speaker 2: Supercars has got.

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Speaker 1: A bit of a far away to go, I think

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Speaker 1: before you're going to get it. You know, a billion

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Speaker 1: gord dollars worth of cars outside the Tasco on Candish Town.

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Speaker 2: Absolutely, So that's one of the stories that we've been

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Speaker 2: thinking about. Yes, Supercars in Focus. We'll put a link

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Speaker 2: to that story in our show notes.

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Speaker 1: Let's bring it the latest though on what's happening with

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Speaker 1: the US government shut down. The Senate taking a step

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Speaker 1: towards reopening the government after a group of Democrats broke

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Speaker 1: with their leadership and voted for a deal put forward

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Speaker 1: by the Republicans. Our chief Aga carspondent Roslyn Maths and

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Speaker 1: has been following the story for us, and she joins

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Speaker 1: us now was good to talk to you. How much

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Speaker 1: closer does an end to the shutdown look than this morning?

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Speaker 9: Well, it does seem we are actually getting closer. You

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Speaker 9: can see that expectation reflected in the financial markets today.

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Speaker 9: A group of moderate Democrats who have now decided to

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Speaker 9: break ranks and back the deal to end the shutdown,

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Speaker 9: and the Senate in fact has voted sixty forty on

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Speaker 9: a procedural measure to advance the bill and has now

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Speaker 9: adjourned until Monday, so we don't know exactly when there

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Speaker 9: would be a vote in.

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Speaker 5: The Senate for final passage.

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Speaker 9: We also don't know when it might go to the House,

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Speaker 9: and that's obviously much less certain. But this deal would

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Speaker 9: essentially pass full year funding for some departments, including Congress

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Speaker 9: itself and others through January thirteen. It would pay those

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Speaker 9: furloughed workers. It would resume federal payments to states, and

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Speaker 9: that's a key one there for aid. So you know,

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Speaker 9: there are some steps to be walked here, but we

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Speaker 9: do seem to be getting into the billpart.

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Speaker 5: The question is how quickly might we see this come through?

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Speaker 5: I mean, any one senator can.

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Speaker 9: Force days of procedural delays in the Senate alone, let

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Speaker 9: alone getting to the House. And there are some questions

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Speaker 9: around the Democratic level of support. Excuse me, but you

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Speaker 9: know this does seem to be at least a major

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Speaker 9: step forward.

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Speaker 2: Yeah, absolutely, I mean, what are the chances of the

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Speaker 2: deal actually being passed in the House.

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Speaker 9: Well, Speaker Mike Johnson has given House law makers thirty

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Speaker 9: six hours notice to get back to Washington, but it's

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Speaker 9: certainly not guaranteed even when they're there. The big issue

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Speaker 9: in the House is over the extension or the desire

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Speaker 9: by the Democrats to extend Obamacare subsidies. They've spoken about

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Speaker 9: this being an important part, but it's not in this

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Speaker 9: current bill, and it falls short really of their goals

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Speaker 9: on their front, that extension of these expiring Obamacare premium subsidies.

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Speaker 5: And so are all.

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Speaker 9: Democrats going to be on board highly unlikely in both

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Speaker 9: the Senate but also most importantly in the House. Do

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Speaker 9: we see those signs of discord within Democratic ranks and

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Speaker 9: do enough Republicans remain uneasy about where Obamacare stands to

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Speaker 9: also be concerned about the bill. So certainly it's going

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Speaker 9: to have less of a secure passage to the House.

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Speaker 1: If this is the end of the shutdown, as you say,

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Speaker 1: there's quite a few hurdles to get over before then

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Speaker 1: as well. I mean, does it mean that the Democrats

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Speaker 1: capitulated to the Republicans. How does it play out from

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Speaker 1: party a party line point of view?

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Speaker 9: Well, certainly it shows yes, Republicans can peel Democrats away.

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Speaker 9: And you know, really one of the key things, of

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Speaker 9: course is that you know, the Democrats came into this thing,

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Speaker 9: saying that their line in the sand, in a way

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Speaker 9: was Obamacare and these subsidies. I wanted to show a

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Speaker 9: strong line on that. They wanted to show a firm

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Speaker 9: line on negotiating in general with Republicans in Washington, and

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Speaker 9: you know, they've not necessarily been as successful on that front.

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Speaker 9: There is the promise of a future vote on those

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Speaker 9: healthcare tax credits. That's part of the deal, the promise

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Speaker 9: of it, but it's not in the deal itself, and

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Speaker 9: obviously that's a win potentially for Republicans. However, the question

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Speaker 9: is who gets the blame coming out the other side,

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Speaker 9: and polling shows that it's more Republicans so far than Democrats.

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Speaker 5: And we are not that.

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Speaker 9: Far away from the midterms, where you can imagine the

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Speaker 9: Democrats are going to make everything about healthcare. The midterms

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Speaker 9: very much a healthcare vote, and Obamacare health coverage is popular,

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Speaker 9: and so for the Republicans there'll be some questions there

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Speaker 9: also if they get blamed if health premiums go up.

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Speaker 9: In terms of this particular fight in Washington, it does

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Speaker 9: seem the Republicans have gotten the upper hand and questions

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Speaker 9: for the Democrats, and in all of it but what

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Speaker 9: will really matter, of course, is what voters think come midterms.

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Speaker 2: Yeah, indeed, and how much pressure may be. Also the

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Speaker 2: flight cancelations around Thanksgiving that still a couple of weeks

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Speaker 2: away would have had ross. Thanks for being with us,

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Speaker 2: our chief Asia correspondent was there, Matheson. Stay with us.

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Speaker 2: More from Bloomberg daybaqube coming up after this.

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Speaker 1: Now to a shake up that's been happening in the

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Speaker 1: city of London and the shrinking number of corporate brokerages.

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Speaker 1: Most of London's brokers have been taken out, making Peel

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Speaker 1: Hunt the last big independent name and a potential takeover target.

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Speaker 1: Our asset management reporter Leo Knscherper joins us now for more. Leo,

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Speaker 1: first of all, remind us of the role that brokers

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Speaker 1: play in deals and tell us what's been happening in

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Speaker 1: the sector over the past few years.

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Speaker 10: Thank you, Good morning, Stephen. So, first of all, let

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Speaker 10: me say that this is a very British thing. Corporate

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Speaker 10: broking is nothing quite like it in other major financial markets.

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Speaker 10: Corporate brokers act as day to day advisors to listed companies,

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Speaker 10: and they also talk to a lot of the company's

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Speaker 10: current and potential investors. And pretty much all of the

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Speaker 10: major Wall Street banks have a corporate broking business here

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Speaker 10: here in the UK, and there have also been many

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Speaker 10: smaller firms that cater to the mid and smaller end

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Speaker 10: of the market. And it's really important to point out

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Speaker 10: every company listed on the London Stock Exchange has to

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Speaker 10: appoint a corporate broker and they typically you know, these

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Speaker 10: companies typically only pay corporate brokers a relatively small amount

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Speaker 10: as a retainer. But there's of course a big incentive

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Speaker 10: for the investment banks to act as corporate brokers because

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Speaker 10: when their client makes a big acquisition or you know,

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Speaker 10: spins out a unit, they are typically the go to

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Speaker 10: advisors and collect pretty handsome fees and another big revenue stream,

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Speaker 10: coming to the second part of your question, another big

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Speaker 10: revenue stream for corporate brokers are of course I pos

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Speaker 10: and as we all know, there haven't been very many

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Speaker 10: of these lately in the UK, so times have been

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Speaker 10: pretty tough for the past four years, almost no bonuses,

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Speaker 10: job cuts, but still a lot of work on pitches

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Speaker 10: of course.

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Speaker 2: So then how has peel Hunt fared and why is

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Speaker 2: it being considered as a potential take of a target now?

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Speaker 10: Yes, so Peel Hunt has suffered three years of back

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Speaker 10: to back losses and you know, they don't stand out

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Speaker 10: in that regard. Many other players have had similar results.

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Speaker 10: But they still made pretty some decent revenue from MNA activity,

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Speaker 10: which has been pretty rampant in the UK MidCap space.

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Speaker 10: The only problem with that is that Peel Hunt's clients

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Speaker 10: are on the receiving end of most takeover approaches, so

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Speaker 10: you know, they collect fees from advising on successful transactions,

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Speaker 10: but they're also losing clients. And this, you know, this

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Speaker 10: broader downturn in UK equity markets has triggered a wave

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Speaker 10: of consolidation of takeovers in the sector. Deutsche Bank has

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Speaker 10: acquired Numis in twenty twenty three. Numis used to be

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Speaker 10: the go to advisor to MidCap UK PLC basically, and

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Speaker 10: another prominent example is the merger of Pama Gordon, the

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Speaker 10: old city firm. I think David Cameron's father and grandfather

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Speaker 10: both worked for it, and Liberum, which is another MidCap

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Speaker 10: corporate broker. So the landscape has been redrawn and in

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Speaker 10: our story today, we've got a chart that shows that

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Speaker 10: only major Wall Street banks think JP Morgan, cousin of

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Speaker 10: Wargan Stanley these guys have either more or larger clients

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Speaker 10: than Peel Hunt. So it's fair to say that peel

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Speaker 10: Hunt are the last big standalone player in UK corporate broking,

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Speaker 10: and many compare its position to numerous before was taken

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Speaker 10: over by Deutsche Bank.

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Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 5: I'm Caroline Hepka and.

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