WEBVTT - Bloomberg Daybreak Weekend: Jobs, FTSE Reshuffle and Trump 0:00:02.360 --> 0:00:05.440 This is Bloomberg Daybreak Weekend, our global look at the 0:00:05.480 --> 0:00:08.160 top stories in the coming week from our Daybreak anchors 0:00:08.280 --> 0:00:10.920 all around the world. Straight Ahead on the program, we 0:00:10.960 --> 0:00:14.040 look to the US Jobs report as the Fed prepares 0:00:14.120 --> 0:00:16.720 to meet again in September. I'm Nathan Hager. 0:00:16.880 --> 0:00:19.119 I'm Stephen Carol in London, where we're looking ahead to 0:00:19.120 --> 0:00:22.279 a reshuffle in the benchmark Foots one hundred equity index, 0:00:22.480 --> 0:00:25.080 with well known high street retailers set for a promotion. 0:00:25.360 --> 0:00:28.800 I'm deug Prisner looking at whether Japan's economy has made 0:00:28.800 --> 0:00:29.880 a major pivot. 0:00:30.080 --> 0:00:32.879 I'm Kabiglyones in Washington. There is a key hearing in 0:00:32.960 --> 0:00:35.360 former President Trump's twenty twenty election case. 0:00:35.479 --> 0:00:38.720 That's all straight ahead on Bloomberg day Break Weekend on 0:00:38.880 --> 0:00:41.959 Bloomberg Eleve Them three oh New York, Bloomberg ninety nine 0:00:42.000 --> 0:00:45.400 to one, Washington, DC, Bloomberg one O six one, Boston, 0:00:45.440 --> 0:00:50.240 Bloomberg nine sixty, San Francisco, DAB Digital Radio London, Sirius 0:00:50.400 --> 0:00:53.640 XM one nineteen and around the world on Bloomberg Radio 0:00:53.720 --> 0:00:55.960 dot com and via the Bloomberg Business App. 0:00:59.560 --> 0:01:02.680 Good day to you. I'm Nathan Hager. We begin today's 0:01:02.720 --> 0:01:05.120 program with a look at the job market in the 0:01:05.280 --> 0:01:09.280 US and what it could signal about more potential interest 0:01:09.360 --> 0:01:12.240 rate hikes from the Federal Reserve and joining me out 0:01:12.280 --> 0:01:15.440 to talk about this preview the August jobs report we've 0:01:15.440 --> 0:01:19.000 got coming up this Friday. Anna Wong is here with me, 0:01:19.160 --> 0:01:23.399 chief US economist at Bloomberg Economics. Anna, great to speak 0:01:23.400 --> 0:01:25.360 with you, and I want to start things off with 0:01:25.400 --> 0:01:28.039 what we heard from the Chairman of the Federal Reserve, 0:01:28.120 --> 0:01:31.400 Jerome Powell, at the Jackson Hole Symposium this week. Of course, 0:01:31.440 --> 0:01:33.720 there was a lot of attention on the remarks about 0:01:33.880 --> 0:01:36.760 rates and how they could go even higher to bring 0:01:36.800 --> 0:01:39.960 down inflation to the two percent target, but Powell also 0:01:40.200 --> 0:01:43.319 did discuss the labor market and the impact that tighter 0:01:43.360 --> 0:01:46.400 policies having on job growth. Here's just a bit of 0:01:46.400 --> 0:01:47.840 what Chairman Powell had to say. 0:01:47.880 --> 0:01:52.160 We expect this labor market rebouncing to continue. Evidence that 0:01:52.200 --> 0:01:54.520 the tightness in the labor market is no longer easy 0:01:54.800 --> 0:01:57.200 could also call for a monetary policy response. 0:01:57.840 --> 0:02:00.040 All right, So that brings me to you, Anna, what 0:02:00.160 --> 0:02:04.279 kind of tightness could we see in this August jobs report? 0:02:05.200 --> 0:02:09.600 Right? So, our team is still forecasting, is forecasting that 0:02:10.240 --> 0:02:15.080 nonfarm payroll will increase by about one hundred eighty five 0:02:15.160 --> 0:02:20.919 thousand jobs in August, and it's still it's a slightly 0:02:21.120 --> 0:02:26.480 lower than the past month, but it is still very 0:02:26.560 --> 0:02:30.520 high relative to the kind of pace that would be 0:02:30.600 --> 0:02:34.840 consistent with the neutral temperature of the jobs market. So 0:02:34.919 --> 0:02:38.360 I think Powell in the past has cited one hundred 0:02:38.440 --> 0:02:43.079 thousand k per month as the neutral pace of job growth. 0:02:43.160 --> 0:02:46.240 So at one hundred over one hundred thousand, it is 0:02:46.280 --> 0:02:50.440 still greatly exceeding that number. But that said, I think 0:02:50.480 --> 0:02:54.720 what we heard in Powell's Jackson Hole speech is that 0:02:55.000 --> 0:02:57.560 it sounded like he does think the labor market is 0:02:57.600 --> 0:03:02.320 softening rather quickly. He mentioned that wage growth has eased, 0:03:02.440 --> 0:03:05.679 and he said it in a pretty unambiguous right way, right. 0:03:06.040 --> 0:03:09.640 And so next week's jobs report will come along with 0:03:09.680 --> 0:03:13.600 it the average hourly earnings. We're expecting it to show 0:03:13.720 --> 0:03:18.720 also pretty fast deceleration. I mean, despite all these news 0:03:18.760 --> 0:03:23.440 headline recently talking about the wage negotiations from labor strikes 0:03:23.480 --> 0:03:28.440 getting these ups, drivers could be earning one hundred seventy thousands, 0:03:28.480 --> 0:03:31.200 ten dollars in five years time. The fact of the 0:03:31.240 --> 0:03:34.880 matter is the labor market has softened in the sense 0:03:34.920 --> 0:03:38.280 that people are more hesitant to quit their jobs. And 0:03:38.360 --> 0:03:41.680 also job openings have come down, but it's a an 0:03:41.720 --> 0:03:46.360 oftentimes job opening stayed online even though it's no longer 0:03:46.440 --> 0:03:50.920 being recruited. So the true degree of decline and jobpenings 0:03:50.960 --> 0:03:54.720 could actually even be larger than what the jolt's number 0:03:54.760 --> 0:03:57.160 that we also will get next week will show. So 0:03:57.560 --> 0:04:00.720 I think, all in all a pretty positive case for 0:04:01.280 --> 0:04:04.120 why the Fed doesn't need to hike anymore, you know. 0:04:04.200 --> 0:04:07.240 And I'm glad you brought up the strikes because this 0:04:07.440 --> 0:04:10.240 has been the summer of strikes with a lot of 0:04:10.440 --> 0:04:14.000 you know, not just Hollywood, but some big name companies, 0:04:14.080 --> 0:04:19.560 really large companies like UPS getting these really big concessions 0:04:19.839 --> 0:04:22.440 when it comes to wages. Why do you think that's 0:04:22.560 --> 0:04:26.680 not having a read through into the broader wage pressure story, 0:04:26.680 --> 0:04:31.520 that we're not necessarily seeing wages as a major component 0:04:31.600 --> 0:04:32.920 for inflation going forward. 0:04:32.920 --> 0:04:35.920 Here in our forecast of one hundred and eighty five 0:04:35.960 --> 0:04:39.400 thousand jobs outed for next week's report, we already baked 0:04:39.400 --> 0:04:43.080 in that the layoffs from the bankruptcy of Yellow, which 0:04:43.120 --> 0:04:47.240 is the trucking company. The bankruptcy was the catalyst of 0:04:47.279 --> 0:04:51.920 that bankruptcy was the strike by teamster, and in fact, 0:04:52.800 --> 0:04:56.839 strikes happened in a kind of like almost it's like 0:04:56.880 --> 0:04:59.960 a virus when people you left and right, oh you succeed, 0:05:00.279 --> 0:05:05.560 then let's do it, you know. But in terms of 0:05:05.600 --> 0:05:13.160 how strikes and higher wages would translate to job, you know, 0:05:13.360 --> 0:05:18.240 hiring and layoff, it's actually a pretty subtle and unclear thing. 0:05:18.320 --> 0:05:22.920 So higher wages raises the input cost of companies, raises 0:05:22.960 --> 0:05:28.320 the operating costs, and decreases the profits, and so companies 0:05:28.440 --> 0:05:32.160 could feel more pressure to lay off workers as a 0:05:32.200 --> 0:05:36.320 result of higher wages. So and in fact, if you 0:05:36.640 --> 0:05:39.520 look at the transcripts of earning calls in this quarter, 0:05:39.880 --> 0:05:43.960 you're already seeing that many of the reasons cited by 0:05:44.000 --> 0:05:48.920 companies as laying off workers is to reduce overhead costs. Right, 0:05:49.240 --> 0:05:53.159 So I think the increase in the frequency of labor 0:05:53.200 --> 0:05:57.799 strikes it doesn't really tell you whether workers in general 0:05:57.880 --> 0:06:00.640 are gaining. In fact, if you produce is a group 0:06:00.680 --> 0:06:04.359 of winners, the ones who engage in the strikes, but 0:06:04.440 --> 0:06:07.120 it also produces a whole bunch of losers, the ones 0:06:07.160 --> 0:06:09.839 who would be ultimately laid off because firms have to 0:06:09.880 --> 0:06:11.000 cut overhead costs. 0:06:11.120 --> 0:06:14.080 Are you seeing a lot of those laid off workers 0:06:14.839 --> 0:06:19.280 finding difficulties getting into new jobs. Where is the labor 0:06:19.279 --> 0:06:22.000 force participation picture right now. 0:06:21.960 --> 0:06:24.880 In terms of what happens in August, which is what 0:06:24.920 --> 0:06:29.440 we'll see next month, the laidoff workers from Yellow will 0:06:29.480 --> 0:06:33.599 have trouble finding a new job because in that particular industry, 0:06:33.640 --> 0:06:38.640 the trucking industry, the freight industry, that industry has undergone 0:06:38.680 --> 0:06:42.200 a pretty serious recession in the past year. And that's 0:06:42.279 --> 0:06:46.600 one reason why the company Yellow went under, because it 0:06:47.000 --> 0:06:50.680 just has very people are just not buying as much goods. 0:06:51.040 --> 0:06:55.720 So at a time when FedEx ups all these companies, 0:06:55.800 --> 0:06:58.560 car box shipments are coming down. I mean you can 0:06:58.600 --> 0:07:02.680 see the car box shipment indicator, which is actually one 0:07:02.720 --> 0:07:07.200 of former fed Chairman Alan Greenspan's favorite barometer of the 0:07:07.240 --> 0:07:11.280 temperature of the economy. That indicator has been plunging since March. 0:07:11.680 --> 0:07:14.880 So there will be less need for workers to deliver boxes. 0:07:15.160 --> 0:07:20.600 And so I'm not optimistic about the rehiring prospect of 0:07:20.640 --> 0:07:23.440 the laid off Yellow workers. And then on top of 0:07:23.480 --> 0:07:28.000 that you have the ups books getting this wage bump. 0:07:28.480 --> 0:07:33.720 It means that these company ups, as I said that, 0:07:34.120 --> 0:07:37.320 at a time where their revenues are plunging. Their profits 0:07:37.360 --> 0:07:40.520 are coming down, the operating cost is surging because of 0:07:40.560 --> 0:07:43.640 these labor strikes. They will have to cut the cost somewhere, 0:07:43.680 --> 0:07:45.720 and there will be losers as a result of that. 0:07:46.440 --> 0:07:49.080 Well, I've got you here, Anna, I've got to touch 0:07:49.240 --> 0:07:52.880 on your analysis this week that got so much attention 0:07:53.000 --> 0:07:58.320 about the overall US economy and about Barbenheimer and blockbuster 0:07:58.520 --> 0:08:04.119 concert tours giving a pretty significant bump to US economic growth. 0:08:04.160 --> 0:08:07.880 Who knew that Taylor, Swift and Beyonce had this kind. 0:08:07.680 --> 0:08:13.880 Of power, Yeah, I did, neither. But what prompted that 0:08:13.960 --> 0:08:20.200 analysis was this Atlanta Fed GDP now cast reading, which 0:08:20.960 --> 0:08:23.200 a lot of people on Wall Street pay attention to 0:08:23.240 --> 0:08:26.360 this now cast reading, and it was showing a five 0:08:26.400 --> 0:08:30.040 point nine percent for third quarter GDP growth, which is 0:08:30.400 --> 0:08:35.400 out of the world high, right, And we noticed that 0:08:36.120 --> 0:08:39.840 out of that three percentage point was due to consumption 0:08:40.120 --> 0:08:44.880 due to the really high July retail's reading. And indeed 0:08:44.880 --> 0:08:47.600 it was true. The retail reading for July was like 0:08:47.720 --> 0:08:52.120 shockingly high at a time when you're seeing delinquencies on 0:08:52.200 --> 0:08:56.800 consumer loan surging, and you know, at a time when 0:08:56.840 --> 0:09:00.319 a lot of firms during the earning season this year 0:09:00.400 --> 0:09:03.800 talk about how volumes are down. So it was all 0:09:03.920 --> 0:09:08.840 very odd until you look at the individual economic impact 0:09:08.880 --> 0:09:14.640 of these four cultural phenomena. Right So AMC, the largest 0:09:14.720 --> 0:09:18.839 movie theater chain in the country, said that the Barbenheimer 0:09:19.000 --> 0:09:23.480 July was the best box office in their one hundred 0:09:23.520 --> 0:09:27.160 and five years of operation. It's a once in a 0:09:27.240 --> 0:09:31.760 blue moon thing. And also Taylor Swift by itself is 0:09:31.800 --> 0:09:34.800 already a seismic event. On top of that, you get 0:09:34.840 --> 0:09:39.000 Beyonce happening at the same time at each stadium. The 0:09:39.080 --> 0:09:43.280 average stadium capacity for a Taylor Swift concert is fifty 0:09:43.280 --> 0:09:46.720 four thousand people and each of them, on average spent 0:09:47.120 --> 0:09:52.160 fifteen hundred dollars in attending the concert, which included the tickets, 0:09:52.200 --> 0:09:57.320 the hotel, buy food. As Memorilia and Beyonce. Is even 0:09:57.480 --> 0:10:00.440 an i estimate that Beyonce would produce an even bigger 0:10:01.320 --> 0:10:06.720 impact because Taylor Swift's concert tours dialing down in North 0:10:06.760 --> 0:10:11.360 America in August and September, where is Beyonce is just 0:10:11.400 --> 0:10:16.040 starting up. She has over thirty concerts in the next 0:10:16.040 --> 0:10:19.640 two months. Each of the concert has an average capacity 0:10:19.640 --> 0:10:22.600 of seventy thousand, even larger than Taylor Swift, and people 0:10:22.640 --> 0:10:26.360 who attend Beyonce are slightly wealthier than Taylor Swift, probably 0:10:26.360 --> 0:10:31.120 because they're older. So altogether you produce this Olympic size 0:10:31.200 --> 0:10:35.400 kind of event. The economy is actually quite tremendous. 0:10:35.600 --> 0:10:37.600 Well, wouldn't it be something if Taylor Swift or the 0:10:37.679 --> 0:10:41.559 kind of data that the Fed depends on in data dependency. 0:10:42.000 --> 0:10:44.200 Thanks for this, Anna, great having you on with us. 0:10:44.520 --> 0:10:45.320 Happy to be here. 0:10:45.640 --> 0:10:49.600 Anna Wong is chief US economist for Bloomberg Economics and 0:10:49.720 --> 0:10:52.720 coming up here on Bloomberg Daybreak weekend, we take you 0:10:52.800 --> 0:10:56.240 to London where the foot Sea reshuffle is about to 0:10:56.280 --> 0:11:06.800 take place. I'm Nathan Hager, and this is Bloomberg. This 0:11:06.960 --> 0:11:10.320 is Bloomberg Daybreak Weekend, our global look ahead at the 0:11:10.360 --> 0:11:14.040 top stories for investors in the coming week. I'm Nathan Hager. 0:11:14.280 --> 0:11:16.480 Up later in our program, we'll take a look at 0:11:16.520 --> 0:11:20.840 the allegations of election interference against former President Donald Trump. 0:11:21.280 --> 0:11:24.400 But first we go to London, where the cutoff arrives 0:11:24.440 --> 0:11:28.600 for inclusion in the Footsie one hundred. The benchmark UK 0:11:28.760 --> 0:11:31.920 index is due for a shakeup as the miners and 0:11:32.000 --> 0:11:35.600 oil majors that have dominated its ranks sink on fears 0:11:35.600 --> 0:11:39.160 of weakness in the Chinese economy. One bright spot, though 0:11:39.240 --> 0:11:41.880 from Britain's high Street, may be set to make a 0:11:41.920 --> 0:11:44.960 return this quarter. And for more we go to London 0:11:45.240 --> 0:11:48.200 and bring in Bloomberg Daybreak Europe banker Stephen Carroll. 0:11:48.320 --> 0:11:51.280 At the close of trading on Tuesday, Britain's one hundred 0:11:51.320 --> 0:11:53.960 biggest public companies will be selected to make up the 0:11:53.960 --> 0:11:56.360 foot see one hundred. A bit like sports leagues, some 0:11:56.520 --> 0:12:00.760 face relegation, others promotion company it looks set to re 0:12:00.920 --> 0:12:03.520 enter the Benchmark index this week is a staple of 0:12:03.640 --> 0:12:07.040 the British high street. The grocery and clothing chain Marks 0:12:07.040 --> 0:12:10.040 and Spencer has seen their share price stage to comeback 0:12:10.120 --> 0:12:13.000 this year, but that's at the expense of others, including 0:12:13.040 --> 0:12:15.640 the home builder per Simon, which has been a victim 0:12:15.760 --> 0:12:18.880 of higher interest rates in the downturn in the housing market. 0:12:19.520 --> 0:12:22.720 I've been discussing this with Bloomberg's UK retail reporter Katie 0:12:22.800 --> 0:12:27.079 Linsel and equities reporter Lisa fam I started by asking Katie, 0:12:27.200 --> 0:12:30.600 what's driven the upturn in Marks and Spencer's fortunes. 0:12:31.120 --> 0:12:33.520 Really, what we're seeing is an improvement on both sides 0:12:33.520 --> 0:12:36.520 of the business, so both in food and in home 0:12:36.600 --> 0:12:39.360 and it's quite a long time coming for MINS, because 0:12:39.760 --> 0:12:42.400 really we've been looking at years, even decades of the 0:12:42.440 --> 0:12:45.599 turnaround trying to take hold here at this retailer. And 0:12:46.160 --> 0:12:49.160 if we look at food, firstly, m Ands has really 0:12:49.200 --> 0:12:52.240 made a lot of effort to show that you can 0:12:52.440 --> 0:12:55.520 actually shop a full basket of food m Ands, and 0:12:55.520 --> 0:12:57.480 they've been trying to keep prices down as much as 0:12:57.520 --> 0:13:00.920 possible to really encourage shoppers to buy their basics with 0:13:01.000 --> 0:13:03.920 them and not just their sort of premium items. And 0:13:03.960 --> 0:13:06.760 then if we look at clothing, they've been making a 0:13:06.760 --> 0:13:08.880 lot of effort to try and fight the image of 0:13:08.880 --> 0:13:13.360 sort of dowdy, ill fitting, unfashionable clothing and working on 0:13:13.400 --> 0:13:16.720 their own brands as well as attracting third party brands. 0:13:17.240 --> 0:13:21.200 Lisa, let's go to you next. What will rejoining the 0:13:21.240 --> 0:13:24.840 Footy one hundred mean for m and S and for 0:13:24.880 --> 0:13:25.520 its shares? 0:13:26.160 --> 0:13:28.600 Yeah, So, as Katie was saying, like m Ands has 0:13:28.640 --> 0:13:31.280 done really well this year, and it's been reflected in 0:13:31.320 --> 0:13:33.520 the share prices as well. The stocks has risen more 0:13:33.520 --> 0:13:36.120 than seventy percent this year and so it's taken as 0:13:36.200 --> 0:13:39.280 market cap to more than four billion pounds. So the 0:13:39.360 --> 0:13:41.840 advantage for stocks like Maxi and Spencer to be in 0:13:41.880 --> 0:13:44.600 the Footy one hundred index is the fact that there 0:13:44.640 --> 0:13:47.760 are a lot of tracker fans, which, as the name suggests, 0:13:48.000 --> 0:13:51.480 track the underlying index. So this means that these fans 0:13:51.559 --> 0:13:54.240 would have to buy the shares in order to replicate 0:13:54.280 --> 0:13:57.920 the performance of the index. There are also some actively 0:13:58.040 --> 0:14:01.440 managed fans and so with these funds, they may have 0:14:01.520 --> 0:14:04.480 a mandate to only invest in foot See one hundred 0:14:04.559 --> 0:14:06.959 companies in the universe of stocks that they look at 0:14:07.000 --> 0:14:12.479 alongside other benchmark indexes in other countries and other markets. 0:14:12.679 --> 0:14:14.960 So that would be another advantage to be part of 0:14:15.000 --> 0:14:17.040 this blue chip foot See one hundred index. 0:14:17.480 --> 0:14:21.720 What other changes might we see at the upcoming review. 0:14:21.800 --> 0:14:27.000 So we could potentially see Detra Pharmaceuticals, Hikma Pharmaceuticals and 0:14:27.080 --> 0:14:30.680 Diploma going in alongside the m ands. And in terms 0:14:30.720 --> 0:14:33.720 of who might go out, it might be Aberdeen, Johnson, 0:14:33.800 --> 0:14:38.720 Matthe Persimon and RS Group. But the final changes will 0:14:38.760 --> 0:14:42.080 be based on Tuesday's prices. So if we look at 0:14:42.280 --> 0:14:45.760 RS Group as an example, as of Thursday morning, its 0:14:45.800 --> 0:14:48.960 market cap is slightly higher than his Scoss, which is 0:14:49.000 --> 0:14:51.280 also in the foot See one hundred, So there's a 0:14:51.400 --> 0:14:54.480 chance that RS Group might actually stay in despite the 0:14:54.520 --> 0:14:57.280 indicative results saying that it might go out. So the 0:14:57.320 --> 0:15:01.200 market caps between RS Group and his Scots are very close. 0:15:01.520 --> 0:15:03.640 What then should we be watching for in the run 0:15:03.720 --> 0:15:05.040 up to that deadline on Tuesday? 0:15:05.440 --> 0:15:08.560 Yeah exactly. I do know some people who are constantly 0:15:08.600 --> 0:15:10.880 refreshing to see what the market caps of these two 0:15:10.920 --> 0:15:13.800 are going to be like. So it's quite an interesting 0:15:13.840 --> 0:15:16.800 one to watch. And just as a reminder, Akada had 0:15:16.800 --> 0:15:20.960 been set to exit the Footy one hundred index last quarter, 0:15:21.040 --> 0:15:23.160 but in the end it kept its spot and British 0:15:23.200 --> 0:15:26.280 Land was removed instead, so it's still very much up 0:15:26.320 --> 0:15:26.760 in the air. 0:15:26.920 --> 0:15:29.480 It's interesting on that point about Accado being of course 0:15:29.640 --> 0:15:32.480 a big online retailer. To go back to Katie Linsel 0:15:32.680 --> 0:15:35.720 for more on how the sector in general is facing 0:15:35.800 --> 0:15:38.680 as well. I mean, cost of living pressures has driven 0:15:38.760 --> 0:15:42.120 up revenues for many, but retailers, particularly supermarkets, coming under 0:15:42.200 --> 0:15:46.600 huge pressure about passing on price increases to consumers. How 0:15:46.680 --> 0:15:51.400 much have these businesses been able to benefit, as it were, 0:15:51.480 --> 0:15:52.200 from inflation. 0:15:52.560 --> 0:15:55.640 We did have the traditional Big four UK supermarkets pulled 0:15:55.680 --> 0:16:00.000 in front of MPs to answer questions on this topic. Recently, 0:15:59.240 --> 0:16:02.120 and if we look at profits last year for the 0:16:02.160 --> 0:16:07.160 traditional Big four, they actually fell, margins were tighter. It's 0:16:07.200 --> 0:16:10.080 clear that supermarkets are under pressure from higher energy bills 0:16:10.120 --> 0:16:13.000 and also higher labor costs, and so you know, they 0:16:13.000 --> 0:16:15.800 weren't making more money off the back of this. But still, 0:16:15.840 --> 0:16:19.960 you know, we're expecting quite big profits this year. I 0:16:20.040 --> 0:16:22.240 think the supermarkets are really at pains to try and 0:16:22.280 --> 0:16:25.600 tell the consumer, you know, we are cutting prices wherever possible. 0:16:26.320 --> 0:16:28.600 We're seeing almost sort of weekly press releases from the 0:16:28.600 --> 0:16:31.920 supermarkets showing that they are cutting the prices of basics, 0:16:32.400 --> 0:16:34.360 and the latest one is butter and M and S 0:16:34.480 --> 0:16:37.080 is no different there. You know, they are really been 0:16:38.320 --> 0:16:40.800 almost at the forefront and trying to tell consumers, you know, 0:16:40.880 --> 0:16:44.320 we are keeping prices affordable, especially on basic you know, 0:16:44.440 --> 0:16:47.120 jacket potatoes, bate beams, trying to paint the image for 0:16:47.160 --> 0:16:49.320 the consumer be you can buy those items with us, 0:16:49.360 --> 0:16:51.920 it's not just the sort of premium ready meals. 0:16:52.080 --> 0:16:54.960 It's interesting to think about this because the question around 0:16:55.000 --> 0:16:58.880 pricing power for companies that are making consumer goods has 0:16:58.960 --> 0:17:01.440 very much been in focused because of the rate of inflation. 0:17:02.080 --> 0:17:06.160 The power that supermarkets have to increase prices is quite 0:17:06.240 --> 0:17:08.600 limited because these are very thin margin businesses. 0:17:08.840 --> 0:17:10.640 That's a big debate, you know, looking at the sort 0:17:10.640 --> 0:17:13.320 of unilevers of this world that have much higher margins 0:17:13.400 --> 0:17:18.680 versus supermarkets, and it's quite a fiercely fault debate between 0:17:18.760 --> 0:17:21.399 the supermarkets and their suppliers. You know, who's to blame 0:17:22.160 --> 0:17:25.400 when it comes to higher prices to the consumers. Supermarkets 0:17:25.440 --> 0:17:28.720 do have their own brand items as well, and we've 0:17:28.760 --> 0:17:31.159 seen through the cost living crisis consumers buying more and 0:17:31.200 --> 0:17:33.399 more of these own brand goods because they are cheaper. 0:17:34.080 --> 0:17:37.280 And so that's where the supermarkets are really taking control 0:17:37.320 --> 0:17:39.840 of the narrative and showing this is where we are 0:17:39.880 --> 0:17:43.800 cutting prices. We are seeing prices costs come through lower 0:17:44.040 --> 0:17:46.800 in certain commodities and so we are able to cut 0:17:46.880 --> 0:17:49.520 prices there. So yeah, I think I think it's going 0:17:49.560 --> 0:17:51.560 to be a sort of ongoing fist debate between the 0:17:51.880 --> 0:17:53.640 big suppliers and the supermarkets. 0:17:54.000 --> 0:17:56.879 Katie, what about the competition between SuperM or other among 0:17:56.960 --> 0:18:00.320 supermarkets over this issue as well? Our customers move moving 0:18:00.440 --> 0:18:02.760 to the cheaper end of the scale when it comes 0:18:02.760 --> 0:18:03.800 to where they're shopping. 0:18:04.680 --> 0:18:07.400 Absolutely, we've seen all through this period of really high inflation, 0:18:07.560 --> 0:18:10.399 that Alba and Little are really lucking out if you like, 0:18:10.480 --> 0:18:15.560 they are gaining market share, and Aldi in September last year, 0:18:15.680 --> 0:18:18.560 so almost a year ago, took the spot of the 0:18:18.600 --> 0:18:21.720 fourth largest grosser in the UK. They knocked Morrisons off 0:18:21.720 --> 0:18:25.399 that spot. Morrisons have been much slower to be able 0:18:25.440 --> 0:18:27.760 to pass on that message to consumers that the prices 0:18:27.760 --> 0:18:30.399 are coming down, partly because Morrisons produce a lot of 0:18:30.440 --> 0:18:33.880 their own food, so they feel that impact of inflation 0:18:34.040 --> 0:18:37.080 much faster. If we look at the sort of premium 0:18:37.160 --> 0:18:40.920 end at Waitros for example, and Marx expenses, I mean, 0:18:41.119 --> 0:18:44.639 Weightros have been much slower to flag to consumers that 0:18:44.680 --> 0:18:48.320 the prices are that they are cutting prices, whereas Marcus 0:18:48.320 --> 0:18:50.480 Spenser's a really sort of run away with the competition 0:18:50.560 --> 0:18:51.760 there at that premium end. 0:18:52.200 --> 0:18:55.760 Lisa fam thinking more broadly about the prospects for UK 0:18:55.880 --> 0:18:59.320 equities in the next year, what should we be considering 0:18:59.359 --> 0:19:01.800 when we can say where the new members of the 0:19:01.800 --> 0:19:03.119 FOOTSI one hundred will go. 0:19:03.400 --> 0:19:06.439 Inflation seems to be quite sticky. We're dealing with a 0:19:06.440 --> 0:19:09.639 lot of high interest rates and so it does seem 0:19:09.680 --> 0:19:12.600 like the outlook is still quite gloomy for UK stocks. 0:19:12.640 --> 0:19:15.199 At the same time, we did have black Rock Strategists 0:19:15.240 --> 0:19:18.760 last week they upgraded their view on UK stocks too neutral, 0:19:19.320 --> 0:19:21.919 so I guess it could be just a case of 0:19:22.200 --> 0:19:24.399 wait and see in terms of like what happens with 0:19:24.600 --> 0:19:25.320 UK stocks. 0:19:25.600 --> 0:19:29.879 Thanks to Bloomberg's UK retail reporter Katie Linsel and equities 0:19:30.000 --> 0:19:32.920 reporter Lisa fam we will bring you coverage of the 0:19:32.960 --> 0:19:36.040 FOTZI one hundred reshuffle here on Bloomberg Radio. And another 0:19:36.080 --> 0:19:38.439 piece of related data we'll be watching for in the 0:19:38.440 --> 0:19:41.119 coming days is the Shop Price Index in the British 0:19:41.160 --> 0:19:43.639 Retail Consortium. We'll be looking out to see what it 0:19:43.720 --> 0:19:47.199 might tell us about the trajectory for the UK's stubbornly 0:19:47.359 --> 0:19:51.000 high inflation rate. I'm Stephen Carroll in London. You can 0:19:51.040 --> 0:19:53.800 catch us every weekday morning here for Bloomberg Daybreak Europe, 0:19:53.800 --> 0:19:56.760 beginning at six am in London and one am on 0:19:56.800 --> 0:19:57.320 Wall Street. 0:19:57.440 --> 0:20:00.000 All right, thank you, Stephen. Then coming up on Bloomberg 0:20:00.080 --> 0:20:03.480 day Break weekend, a wave of developments related to the 0:20:03.520 --> 0:20:07.720 allegations of election interference against former President Donald Trump. I'm 0:20:07.760 --> 0:20:09.840 Nathan Hager, and this is. 0:20:09.760 --> 0:20:19.520 Bloomberg broadcasting live from the Bloomberg It a active brokers 0:20:19.520 --> 0:20:22.960 studio in New York, Bloomberg elemon three oh to Washington, 0:20:23.040 --> 0:20:26.360 d C, Bloomberg ninety nine one to Boston, Bloomberg one 0:20:26.400 --> 0:20:29.639 oh six one to San Francisco, Bloomberg nine sixty to 0:20:29.720 --> 0:20:33.440 the country, Syrius XM Channel one nineteen to London DAB 0:20:33.720 --> 0:20:37.040 Digital Radio, and around the globe the Bloomberg Business app 0:20:37.119 --> 0:20:41.400 in Bloomberg Radio dot Com. This is Bloomberg Daybreak Weekend. 0:20:47.520 --> 0:20:50.199 I'm Nathan Hager with your global look ahead at the 0:20:50.240 --> 0:20:53.280 top stories for investors in the coming week. It could 0:20:53.320 --> 0:20:56.520 be a week chuck full of developments for former President 0:20:56.680 --> 0:20:59.760 Donald Trump in the case where he's accused of election 0:21:00.080 --> 0:21:03.320 interference in twenty twenty. For more, let's head to our 0:21:03.320 --> 0:21:06.879 Bloomberg ninety nine one newsroom in Washington and check in 0:21:06.920 --> 0:21:09.880 with Bloomberg Sound On co host Kaylee Lyines. 0:21:10.160 --> 0:21:13.280 That's right, Nathan. This coming Monday here in Washington, Judge 0:21:13.320 --> 0:21:15.920 Tanya Chutkin will hold her first hearing in the twenty 0:21:15.960 --> 0:21:19.320 twenty election case against former President Donald Trump, a hearing 0:21:19.359 --> 0:21:22.720 in which she is expected to announce a trial date. 0:21:23.119 --> 0:21:25.679 And of course, this will come just days after Trump 0:21:25.720 --> 0:21:28.680 was booked in Fulton County, Georgia, in a separate state case, 0:21:28.760 --> 0:21:31.600 though still related to efforts to overturn the result of 0:21:31.640 --> 0:21:34.520 the last presidential election. It's a lot to go through 0:21:34.520 --> 0:21:37.480 from both a legal and political perspective. So I've assembled 0:21:37.480 --> 0:21:41.280 a power team Elizabeth Wasserman, DC based Bloomberg Legal editor 0:21:41.480 --> 0:21:45.800 and Ryan teeg Beck with Bloomberg National Politics reporter. So, Elizabeth, 0:21:46.040 --> 0:21:47.960 just to begin, As I said, we're coming off a 0:21:48.000 --> 0:21:51.040 week in which it was the Georgia twenty twenty election 0:21:51.160 --> 0:21:54.200 case that was in focus. This one this coming week 0:21:54.280 --> 0:21:57.480 is a federal case in question. Can you just remind 0:21:57.560 --> 0:21:58.800 us how they are different. 0:22:00.560 --> 0:22:04.920 Yes, the federal case was brought by Special Council Jack 0:22:05.000 --> 0:22:08.840 Smith and his team prosecutors on behalf of the Justice Department, 0:22:09.320 --> 0:22:12.919 and it's it's looking at it's one part of the 0:22:12.920 --> 0:22:16.440 Special Council two part investigation. You know, there's the one 0:22:16.720 --> 0:22:20.440 about the documents down in Florida. This one in Washington 0:22:20.960 --> 0:22:27.119 is about the twenty twenty election and efforts to overturn 0:22:27.280 --> 0:22:34.400 the results and by Trump and along with some co conspirators, 0:22:34.440 --> 0:22:37.760 you know, to keep him in office. So the case 0:22:37.800 --> 0:22:41.960 in Georgia is a state case and it's a racketeering case. 0:22:42.080 --> 0:22:46.480 It alleges that there's a conspiracy involving you know, nineteen defendants, 0:22:46.560 --> 0:22:52.479 including the former president, and that they conspired to you know, 0:22:52.560 --> 0:22:58.440 deprive you know, the citizens of their their their rightful votes. 0:22:59.480 --> 0:23:02.280 Yeah, it's a good point that there's actually eighteen other 0:23:02.320 --> 0:23:05.560 co defendants in the Georgia case, where in Jack Smith's case, 0:23:05.880 --> 0:23:09.359 while there are other co conspirators, it's just the former 0:23:09.400 --> 0:23:11.600 president that was charged. And of course in Georgia, we 0:23:11.720 --> 0:23:14.119 learned this past week that Fannie Willis is really trying 0:23:14.119 --> 0:23:16.320 She's of course the district attorney, really trying to make 0:23:16.359 --> 0:23:19.680 this thing speedy. She asked for an October twenty third, 0:23:20.000 --> 0:23:22.680 of twenty twenty three trial date. When it comes to 0:23:22.760 --> 0:23:25.080 the trial date in the Washington case though, which we 0:23:25.119 --> 0:23:27.360 expect to be decided this coming week, I believe Jack 0:23:27.400 --> 0:23:30.040 Smith's off as Elizabeth had asked for a start date 0:23:30.119 --> 0:23:33.359 of January second, so also going for speed here. I 0:23:33.400 --> 0:23:35.679