WEBVTT - UK Avoids Recession and Tech Layoffs Continue

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<v Speaker 1>Live from the Bloomberg Interactive Broker Studios. This is Bloomberg

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<v Speaker 1>Daybreak for Friday, February tenth. Coming up today, the UK

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<v Speaker 1>narrowly avoids a recession in the fourth quarter, the end

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<v Speaker 1>strength and Secker surprise picked ahead in the Bank of Japan,

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<v Speaker 1>Shares of Lift plunge on disappointing earnings, and Yahoo becomes

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<v Speaker 1>the latest tech company to slash jobs. I'm Amy Morris.

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<v Speaker 1>Wallmakers are working on a single payer healthcare system in

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<v Speaker 1>New York, and former Vice President Mike Pence has been subpoenaed.

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<v Speaker 1>I'm John stan Shower and sports home wins for the

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<v Speaker 1>Nets and Devils, a loss for the Islanders. Bryan day

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<v Speaker 1>Ball named NFL Coach of the Year. Patrick Mahomes one

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<v Speaker 1>m v P. That's all straight ahead on Bloomberg day Break,

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<v Speaker 1>The business news you need disturb your day, and just

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<v Speaker 1>one fifteen minute podcast each pointing on Apples, Spotify, the

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<v Speaker 1>Bloomberg Business app and everywhere you get your podcasts. Good morning,

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<v Speaker 1>I'm Nathan Hagar and I'm kerin Moscow. Here are the

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<v Speaker 1>stories we're following today. We begin with important economic news

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<v Speaker 1>this morning around the world, starting in Europe, where the

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<v Speaker 1>UK avoided a recession last year by the narrowest of margins.

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<v Speaker 1>We go live to London and get the very latest

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<v Speaker 1>with Bloomberg's You and Parts, Good Morning You, and Good

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<v Speaker 1>Morning Nathan and Karen. The UK economy failed to grow

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<v Speaker 1>in the fourth quarter, but the reading of zero percent

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<v Speaker 1>will come as a relief to achus sing That's government,

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<v Speaker 1>as it means that Britain avoided a recession at the

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<v Speaker 1>end of last year. The more timely data, though, looks worse,

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<v Speaker 1>with economic output falling nor point five percent in the

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<v Speaker 1>month of December alone, worse than forecast. With consumer prices

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<v Speaker 1>ten percent higher than a year ago and widespread industrial action,

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<v Speaker 1>there are plenty of headwinds facing the UK economy. In London,

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<v Speaker 1>I'm you in Parts in Bug Daybreak, Great You and

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<v Speaker 1>thank You, and Asia the yen strengthening sharply. That's following

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<v Speaker 1>news dec Zoo Waiter will be nominated to take the

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<v Speaker 1>helm of the Bank of Japan in April. Begin more

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<v Speaker 1>from Bloomberg's cousin Nori Takata into You. He served as

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<v Speaker 1>one of the board members on the Bank of Japan

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<v Speaker 1>from thousand and five. That was when the b O

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<v Speaker 1>j for the first time embarked on negative rights and

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<v Speaker 1>quantitative easy. He's also known for voting against lifting of

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<v Speaker 1>negative rights, and Bloomberg'ssinri Takata and Tokyo says investors are

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<v Speaker 1>interpreting the decision as a hawkish choice for the b

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<v Speaker 1>o J. Staying in Asia, Karen, we have economic data

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<v Speaker 1>out of China this morning. The country's consumer inflation accelerated

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<v Speaker 1>last month as the Lunar New Year holiday stimulated demand.

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<v Speaker 1>Bloomberg Daybreak Asia anchor Brian Curtis has more from Hong Kong.

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<v Speaker 1>The CPI rose two point one percent from a year earlier.

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<v Speaker 1>That was in line with estimates. Core inflation, stripping out

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<v Speaker 1>food and energy, gained just one percent. In the meantime,

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<v Speaker 1>the pp I fill zero point eight percent as commodity

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<v Speaker 1>prices lagged. The estimate was for a drop of zero

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<v Speaker 1>point five percent. Bloomberg Economic says the pickup in cp

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<v Speaker 1>I was down to higher food prices, not services. As such,

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<v Speaker 1>the signal is underwhelming in Hong Kong. Bryan Curtis, Bloomberg Daybreak,

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<v Speaker 1>All right, Brian, thank you. Well. Back here in the US,

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<v Speaker 1>we get a reading on consumer confidence today. The University

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<v Speaker 1>of Michigan issues. It's a national consumer sentiment index for

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<v Speaker 1>early February, and economists anticipate further improvement to Bloombergy Sviny

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<v Speaker 1>dewl Judais has more. January's consumer sentiment index rose stor

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<v Speaker 1>nine month high sixty four point nine as the outlook improved,

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<v Speaker 1>somewhat encouraging news following historic clothes. Even so, Bloomberg Economics

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<v Speaker 1>he is considerable downside risks. Two thirds of consumers are

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<v Speaker 1>bracing for an economic downturn. Also on today's economic agenda,

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<v Speaker 1>the Treasuries monthly budget statement for January Finny del Judais

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<v Speaker 1>Bloomberg Daybreak Fanny Thanks. Turning to earnings this morning, shares

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<v Speaker 1>of Lift are plunging by more than thirty three percent.

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<v Speaker 1>The right hailing company says it will prioritize lower prices

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<v Speaker 1>to attract more customers. We get more from Bloomberg Intelligence

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<v Speaker 1>see or analyst man Deep Singh. Lift, being the smaller player,

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<v Speaker 1>has a little choice but to keep its prices low

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<v Speaker 1>because Uber definitely has the advantage when it comes to

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<v Speaker 1>scale of you know, writers, it has the number of

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<v Speaker 1>trips as well as the driver's supply, and and that's

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<v Speaker 1>what you're seeing in the results Bloomberg Intelligence Senior analyst

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<v Speaker 1>man Deep Singh says lifts revenue projection for the current

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<v Speaker 1>period also fell below expectations. Well in Europe, Nathan shares

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<v Speaker 1>of Adidas are down almost eleven percent. The German apparel

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<v Speaker 1>company warrants it could post in operating losses higher seven

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<v Speaker 1>hundred fifty million dollars this year. That's after terminating a

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<v Speaker 1>lucrative branding agreement with the rapper Ya Karen. More job

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<v Speaker 1>cuts are coming to the tech industry. Yahoo is eliminating

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<v Speaker 1>about a thousand jobs beginning this week. That's roughly twelve

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<v Speaker 1>percent of its workforce. We get the story from Bloomberg's

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<v Speaker 1>Charlie Pellett. It is the first round of cuts and

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<v Speaker 1>a larger plan to restructure its advertising tech division amiddle

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<v Speaker 1>way eve of layoffs in the industry, The company, now

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<v Speaker 1>owned by Apollo Global Management, plans to reduce headcount. Had

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<v Speaker 1>its Yahoo for Business at Tech unit by almost fifty

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<v Speaker 1>percent by the end of this year, or more than

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<v Speaker 1>twenty percent of the workforce at Yahoo. Digital advertising providers

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<v Speaker 1>have had to grapple with skittish customers who are concerned

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<v Speaker 1>about the uncertain economic climate in New York Charlie Pellette,

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<v Speaker 1>Bloomberg Daybreak. All right, Charlie, thank you. Now let's turn

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<v Speaker 1>to the latest on the earthquake aftermath in Turkey and Syria.

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<v Speaker 1>The death toll has now crossed twenty two thousand. Thousands

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<v Speaker 1>more remained missing, but just this morning six people were

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<v Speaker 1>pulled alive from the rubble and Turkey dedemed American as

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<v Speaker 1>deputy executive director for Oxfam and Turkey, and she says

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<v Speaker 1>the disaster area is huge. It had ten provinces, so

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<v Speaker 1>it's a big geography and thirteen million people were impacted,

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<v Speaker 1>so you know, it's a big population. So first of all,

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<v Speaker 1>the neath are too much and ox FAM's deedom Americans

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<v Speaker 1>as many survivors who are afraid to go back to

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<v Speaker 1>their homes due to aftershocks. Turkey's government is facing growing

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<v Speaker 1>criticism over the earthquake response and the country's poor construction record.

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<v Speaker 1>It is fifty eight degrees in New York going to

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<v Speaker 1>be partly sunny, breezy and mild today. High's pretty much

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<v Speaker 1>where they are right now, and we'll get down to

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<v Speaker 1>the mid thirties tonight. Time now to take a look

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<v Speaker 1>at some of the other stories making news in New

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<v Speaker 1>York and around the world with Bloomberg's Amy Morris, Good Morning, Amy,

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<v Speaker 1>Good Morning Nathan. Former Vice President Mike Ben's, and former

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<v Speaker 1>National security advisor Robert O'Brien have been subpoenaed in the

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<v Speaker 1>Special Council investigations of Donald Trump and his allies. Special

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<v Speaker 1>counsel Jack Smith is investigating efforts by Trump and others

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<v Speaker 1>to overturn the presidential election and the discovery of classified

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<v Speaker 1>documents that were found at the former president's Mara Logo

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<v Speaker 1>resort in Florida. Lawmakers and labor unions are working to

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<v Speaker 1>amend a long time bill that would establish a single

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<v Speaker 1>payer healthcare system in New York as budget talks are underway.

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<v Speaker 1>The so called New York Health Act would create a

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<v Speaker 1>universal health care system and cover all primary, preventive, and

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<v Speaker 1>specialized medical care for all New Yorkers, regardless of immigration status.

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<v Speaker 1>It would be funded through an income based graduated tax

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<v Speaker 1>based on a person's ability to pay. New York One

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<v Speaker 1>reports the plan is different from the Affordable Care Act.

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<v Speaker 1>It eliminates insurance companies as the core of the system.

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<v Speaker 1>Talks are ongoing. Governor Huckle's office did not respond to

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<v Speaker 1>questions about the governor's position on the bill. A handful

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<v Speaker 1>of Senate lawmakers were briefed behind closed doors yesterday by

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<v Speaker 1>Defense Department officials and attorneys on the Chinese balloon that

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<v Speaker 1>was shut down off the coast of South Carolina last week.

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<v Speaker 1>Democratic Senator Chris Murphy of Connecticut says intelligence gathering was critical.

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<v Speaker 1>Maybe some people don't think it's valuable to collect the intelligence,

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<v Speaker 1>um I do. I think it made sense for us

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<v Speaker 1>to learn something about this balloon, given that it really

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<v Speaker 1>posed no threat to the United States. Senegun officials say

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<v Speaker 1>the balloon was first detected over Alaska, but they waited

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<v Speaker 1>to shoot it down so they could gather intelligence about it.

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<v Speaker 1>In Battled New York Congressman George Santos would have been

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<v Speaker 1>one of those briefed on the balloon. He was not,

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<v Speaker 1>as he is facing a new measure to get him

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<v Speaker 1>removed from the House. California Representative Robert Garcia is joining

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<v Speaker 1>New York Congressman Richie Torres and Dan Goldman. They're sponsoring

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<v Speaker 1>a bill to get Santos removed. They say the measure

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<v Speaker 1>will be referred to the Ethics Committee. Global News twenty

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<v Speaker 1>four hours a day, powered by more than twenty seven

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<v Speaker 1>hundred journalists and analysts in over one d twenty countries.

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<v Speaker 1>I'm Amy Morris. This is Bloomberg Nathan. All right, Amy,

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<v Speaker 1>thank you time now for our Bloomberg Sports Ubday, brought

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<v Speaker 1>to you by try stayed Outie. Good morning, John Stash,

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<v Speaker 1>Our morning, Nathan. Super Bowl fifty seven Sunday in Phoenix,

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<v Speaker 1>Chiefs and Eagles. And obviously a big storyline is that

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<v Speaker 1>Andy Reid is coaching against his former team fourteen grade

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<v Speaker 1>years there. I loved every minute of it. Um. It's

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<v Speaker 1>a great organization. UM, and I still I'm close with

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<v Speaker 1>the people there. It was great to see the kids

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<v Speaker 1>that we had drafted, uh that are now these veteran players,

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<v Speaker 1>all pro. Chiefs and Eagles have together won only three

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<v Speaker 1>of the fifties six Super Bowls read in the Chiefs

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<v Speaker 1>one three years ago, the Eagles two years before that.

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<v Speaker 1>This first super Bowl in forty years between two teams.

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<v Speaker 1>We've both won championships within the previous five seasons. Postseason

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<v Speaker 1>honors handed out last night in Phoenix. Patrick Mahomes a

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<v Speaker 1>runaway choice for m v P, only the tenth to

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<v Speaker 1>win it twice. Brian Dabo rewarded for getting the Giants

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<v Speaker 1>to the playoffs. He beat out Kyle Shanahan for Coach

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<v Speaker 1>of the Year and two Jets one Rookie awards. Garrett

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<v Speaker 1>Wilson on offense, Sauce Gardner on defense. Former Jet and

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<v Speaker 1>Giant quarterback Geno Smith, now with Seattle, named the Comeback

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<v Speaker 1>Player of the Year. To former Jets name for induction

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<v Speaker 1>to the Hall of Fame. The Great cornerback dar l

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<v Speaker 1>Reeb has made it in his first year of eligibility.

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<v Speaker 1>Played eight seasons, two different stints with the Jets, and

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<v Speaker 1>Joe Cleco had twenty sacks back in one. He was

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<v Speaker 1>named by the vet of in his committee. Another home

0:10:01.559 --> 0:10:03.360
<v Speaker 1>game for the Nets their third and four nights, and

0:10:03.400 --> 0:10:06.000
<v Speaker 1>they gotta win one sixteen one oh five over Chicago.

0:10:06.080 --> 0:10:09.559
<v Speaker 1>Spencer Dinwoodie, just acquired in the Kyrie Irving trade, scored

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<v Speaker 1>twenty five points. Zach Levine had thirty eight for the Voles.

0:10:12.480 --> 0:10:14.120
<v Speaker 1>There was a hot rumor yesterday that he was going

0:10:14.160 --> 0:10:16.400
<v Speaker 1>to be traded to the Knicks. That didn't happen. On

0:10:16.480 --> 0:10:19.240
<v Speaker 1>the ice, Devils beat Seattle three to one. Islanders lost

0:10:19.280 --> 0:10:22.120
<v Speaker 1>to Vancouver six to five. On the Rangers have acquired

0:10:22.200 --> 0:10:25.400
<v Speaker 1>veteran Vladimir Terra Senko from St. Louis. He's had six

0:10:25.880 --> 0:10:32.560
<v Speaker 1>thirty goal seasons. John Statutward Bloomberg Sports Live from coast

0:10:32.559 --> 0:10:36.240
<v Speaker 1>to coast, from New York to San Francisco, Boston to Washington,

0:10:36.320 --> 0:10:40.120
<v Speaker 1>d C. Nationwide on Sirius x AM, the Bloomberg Business app,

0:10:40.160 --> 0:10:45.200
<v Speaker 1>and Bloomberg dot Com. This is Bloomberg Daybreak. Good morning,

0:10:45.240 --> 0:10:47.880
<v Speaker 1>I'm Nathan Hager. We're taking a closer look now at

0:10:47.920 --> 0:10:50.240
<v Speaker 1>a bit of a surprise coming out of the UK

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<v Speaker 1>in terms of the economic data. Britain just barely avoided

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<v Speaker 1>a recession last year. That's despite the cost of living

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<v Speaker 1>crisis and the strikes we keep hearing about in the

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<v Speaker 1>UK that have been going on for months now. And

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<v Speaker 1>Andreta is an economist who covers your Forest and Bloomberg Economics,

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<v Speaker 1>and Anna is here with us now. Good morning, Anna,

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<v Speaker 1>thanks for being with us. So the gross national product

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<v Speaker 1>we're told was flat in the fourth quarter, so technically

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<v Speaker 1>not a recession, but I'm sure that does not change

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<v Speaker 1>how the economy feels to the average citizen in the UK.

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<v Speaker 1>Good morning. So yeah, I would say that's that's exactly

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<v Speaker 1>it's um so essentially growth platons in the last quarter

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<v Speaker 1>of the year, and there were a couple of reasons

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<v Speaker 1>for that. So one was that, you know, the vaccines

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<v Speaker 1>were rolled out, the vaccine campaign in the autumn was

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<v Speaker 1>rolled out and that drove up health output. And also

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<v Speaker 1>there was something related to the timing of an extra

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<v Speaker 1>national holiday, and so those are the kind of reasons

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<v Speaker 1>that you know, helped the UK avoid contraction in the

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<v Speaker 1>last quarter of the year. But I would say that,

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<v Speaker 1>you know, the broader picture is that momentum is weak.

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<v Speaker 1>You can see in the data that consumers are already

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<v Speaker 1>feeling the pain from high um, high inflation, humor facing

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<v Speaker 1>servant since for instance, up fallen by one percent since

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<v Speaker 1>y cole Um. So I would say that the recession

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<v Speaker 1>was avoided on paper only, and the outpoot isn't also

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<v Speaker 1>looking very good. Yeah, and I would imagine that it

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<v Speaker 1>doesn't just feel like it on paper, but it feels

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<v Speaker 1>like it in the average citizens feelings about the economy

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<v Speaker 1>as well. What is it behind the data that you're

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<v Speaker 1>seeing that points to the possibility that we could see

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<v Speaker 1>even further economic downturns in the UK and the months

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<v Speaker 1>to come. Yeah. So so so there's a couple of things.

0:12:32.800 --> 0:12:34.959
<v Speaker 1>So I mean, first of all, um, we had the

0:12:35.000 --> 0:12:37.000
<v Speaker 1>p m I pro January and that came in pretty

0:12:37.000 --> 0:12:39.880
<v Speaker 1>weak to that pointed to another monthly contraction at the

0:12:39.920 --> 0:12:43.239
<v Speaker 1>start of the year. But then you have just underlying

0:12:43.280 --> 0:12:47.319
<v Speaker 1>weakness that it's driven by, you know, interest rates are increasing. UM.

0:12:47.480 --> 0:12:50.960
<v Speaker 1>Delivery market has been very hot over you know, the

0:12:51.000 --> 0:12:54.840
<v Speaker 1>over twenty two, but now you see in the data

0:12:54.920 --> 0:12:57.040
<v Speaker 1>that there are signs of cooling and that it's likely

0:12:57.120 --> 0:13:02.280
<v Speaker 1>to kind of you know, translate into redundancies this this year. UM.

0:13:02.360 --> 0:13:05.760
<v Speaker 1>And so that's together with you know, wrising interest rates. UM,

0:13:06.080 --> 0:13:08.720
<v Speaker 1>it will drive some witness in the economy and we

0:13:08.760 --> 0:13:13.560
<v Speaker 1>actually expect the GDP to call over the next two quarters. UM.

0:13:13.600 --> 0:13:16.959
<v Speaker 1>Now I would say that, you know, like for historically

0:13:17.080 --> 0:13:20.760
<v Speaker 1>this kind of downturn won't be as severe as in

0:13:20.800 --> 0:13:23.679
<v Speaker 1>the past. So we see since the third quarter of

0:13:23.720 --> 0:13:27.000
<v Speaker 1>twenty two, we actually see the falling GDP of just

0:13:27.120 --> 0:13:29.840
<v Speaker 1>about point seven percent. And just to give you like

0:13:30.240 --> 0:13:34.080
<v Speaker 1>a comparison, output fell by six percent during the downturn

0:13:34.320 --> 0:13:36.559
<v Speaker 1>in the financial crisis and by three percent in the

0:13:37.440 --> 0:13:40.800
<v Speaker 1>so you know, prospects aren't great, but also this recession

0:13:40.880 --> 0:13:44.160
<v Speaker 1>won't be as bad as as as previous one. If

0:13:44.160 --> 0:13:46.480
<v Speaker 1>that forecast holds, and what could that mean for the

0:13:46.520 --> 0:13:48.679
<v Speaker 1>Bank of England the last time around. I think they

0:13:48.800 --> 0:13:51.160
<v Speaker 1>hiked by fifty basis points have been a little bit

0:13:51.200 --> 0:13:53.800
<v Speaker 1>more aggressive than the Fed is looking like it's going

0:13:53.840 --> 0:13:55.640
<v Speaker 1>to be up to this point. What does that mean

0:13:55.720 --> 0:13:57.920
<v Speaker 1>in terms of where the right hike path could go

0:13:58.000 --> 0:14:01.440
<v Speaker 1>for the Bank of England going forward. Yeah, so the

0:14:01.480 --> 0:14:04.640
<v Speaker 1>economy was was a little weaker than the VOE had expected,

0:14:04.800 --> 0:14:07.760
<v Speaker 1>so it had in its forecast. We've had point one

0:14:08.600 --> 0:14:11.400
<v Speaker 1>percent gain for the last quarter of the year. But

0:14:11.520 --> 0:14:14.000
<v Speaker 1>I mean that's that's not going to move the needle

0:14:14.320 --> 0:14:17.400
<v Speaker 1>on the committee. First, the BOE knows that the economy

0:14:17.440 --> 0:14:20.280
<v Speaker 1>is we is weak and it's weakening. It's forecasting a

0:14:20.320 --> 0:14:23.280
<v Speaker 1>recession over this current year and all the way until

0:14:23.320 --> 0:14:27.200
<v Speaker 1>the first quarter of twenty four UM. But secondly and

0:14:27.240 --> 0:14:30.040
<v Speaker 1>most important is that what they're really concerned about is

0:14:30.560 --> 0:14:35.000
<v Speaker 1>underlying pressures in the economy. UM. So they were clear.

0:14:35.160 --> 0:14:38.000
<v Speaker 1>So they did signal at their last meeting that they

0:14:38.000 --> 0:14:40.440
<v Speaker 1>were reaching the end of their hiking cycle, but they

0:14:40.480 --> 0:14:43.640
<v Speaker 1>still kept the door open for further hikes. And what

0:14:43.680 --> 0:14:46.840
<v Speaker 1>they will be looking at is the risk of inflation persistence,

0:14:46.840 --> 0:14:49.120
<v Speaker 1>so they will really be looking at how fast the

0:14:49.400 --> 0:14:54.600
<v Speaker 1>labor deliver market cools down and how services inflation fairs

0:14:54.600 --> 0:14:57.280
<v Speaker 1>over the coming months. And we just don't think that

0:14:57.320 --> 0:15:00.600
<v Speaker 1>those two things will turn around meaningfully by the next

0:15:00.640 --> 0:15:03.840
<v Speaker 1>meeting um to you know, to persuade the committee to

0:15:03.880 --> 0:15:07.160
<v Speaker 1>stop just yet. So we still see rates going up.

0:15:07.320 --> 0:15:09.400
<v Speaker 1>I mean, there will be a downshift. We expect an

0:15:09.440 --> 0:15:12.440
<v Speaker 1>increase of twenty five basis points in March from the

0:15:12.440 --> 0:15:15.600
<v Speaker 1>fifty you mentioned, but but we just don't see them

0:15:15.600 --> 0:15:18.560
<v Speaker 1>pausing just yet. Only about thirty seconds left here. And

0:15:18.600 --> 0:15:21.240
<v Speaker 1>I understand the government can't say what the impact of

0:15:21.280 --> 0:15:25.480
<v Speaker 1>strikes has been on GDP, but can you is there

0:15:25.520 --> 0:15:29.200
<v Speaker 1>any impact on the strikes it is so it's been,

0:15:29.440 --> 0:15:32.520
<v Speaker 1>it's it's it's hard to measure, but the ons in

0:15:32.600 --> 0:15:35.360
<v Speaker 1>its the Certificate Office and it's a GDP release did

0:15:35.440 --> 0:15:39.440
<v Speaker 1>point to some weakness attributed to the strikes. UM We

0:15:39.640 --> 0:15:43.520
<v Speaker 1>think that you know, strikes um since over the last

0:15:43.560 --> 0:15:47.080
<v Speaker 1>quarter of the year had kind of left GDP point

0:15:47.200 --> 0:15:50.760
<v Speaker 1>two percent lower than it would have been. But you know,

0:15:50.880 --> 0:15:53.800
<v Speaker 1>any kind of hit to the GDP due to the

0:15:53.840 --> 0:15:56.840
<v Speaker 1>strikes will will then kind of be you know, gained

0:15:56.880 --> 0:15:58.520
<v Speaker 1>after so or there will be a rebound. So this

0:15:58.640 --> 0:16:01.160
<v Speaker 1>is just a temporary weaknes. It's not really a permanent

0:16:01.200 --> 0:16:05.080
<v Speaker 1>heap um to GDP, but it's definitely amplifying the weakness

0:16:05.160 --> 0:16:08.680
<v Speaker 1>we're seeing at this moment in the economy. This is

0:16:08.680 --> 0:16:12.160
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