Speaker 1: This is Bloomberg day Break Weekend, our globe look at
Speaker 1: the top stories of the coming week from our day
Speaker 1: Break anchors all around the world, and just the him
Speaker 1: of the program. The Battle of the Retailers is on.
Speaker 1: I'm John Tuckery in New York. I'm Stephen carl in London,
Speaker 1: where the stakes are high for Chancellor Jeremy Hunt as
Speaker 1: he unveils a budget that must pluck a massive fiscal
Speaker 1: gap and calm market fears about the UK economy. I'm
Speaker 1: Brian Curtis in Hong Kong. We look at the most
Speaker 1: innovative ideas that the Bloomberg New Economy Forum in Singapore.
Speaker 1: I'm Amy Morris in Washington. How the mid terms could
Speaker 1: shape the presidential election. That's all straight ahead on Bloomberg
Speaker 1: Daybreak Weekend on Bloomberg eleven three on New York, Bloomberg one, Washington,
Speaker 1: d C, Bloomberg one oh six one, Boston, Bloomberg nine sixties,
Speaker 1: San Francisco, d A B, Digital Radio, London, Sirius XM
Speaker 1: one nineteen and around the world on Bloomberg Radio dot
Speaker 1: Com and via the Bloomberg Business App. I did I'm
Speaker 1: John Tucker, and let's start today's program with the retail segment.
Speaker 1: The retailers sitting on massive amounts of inventory. They over
Speaker 1: ordered this year after being traumatized by pandemic supply chain shortages,
Speaker 1: and now, according to industry experts including Dana Kelsey, CEO
Speaker 1: of Telsey Advisory Group, inventory is sky high. It's not
Speaker 1: only up versus last year, it's up versus also most
Speaker 1: companies are looking to reduce inventory levels and tells you
Speaker 1: also tells us this massive blood of inventory comes just
Speaker 1: as the economy appears to be hitting a rough patch.
Speaker 1: Certainly the middle and lower income levels are definitely spending
Speaker 1: more cautiously, and the stock market volatility real estate values
Speaker 1: may also lead to some level of moderation in the
Speaker 1: upper income areas. This could potentially put discount retailers in
Speaker 1: the sweet spot, although we just heard Telsey say their
Speaker 1: shoppers could be constrained. So joining us now to talk
Speaker 1: about this punum coil seeing your retail analysts with Bloomberg Intelligence.
Speaker 1: All right, what we just said, throw that into the blender,
Speaker 1: turn alound high and what do we pour out? What's
Speaker 1: what's what's the outlook here? The outlook is for the
Speaker 1: shoppers they're going to get great deals with holiday UM
Speaker 1: if they can afford it. I don't every money less
Speaker 1: a deal of a deal. People still jump on deals UM,
Speaker 1: but seriously, on a serious no UM. Holiday is going
Speaker 1: to be challenging this year. UM. Retailers have a lot
Speaker 1: to chew on. Clearly, consumers, they're strapped for cash. They
Speaker 1: have a lot of inventory, which means that they'll be
Speaker 1: promotional across the board. They're still dealing with inflation higher costs,
Speaker 1: so that's going to pressure margins. It won't be easy.
Speaker 1: But we do see shoppers returning to stores, which is
Speaker 1: a good thing, and online sales will still rise, but
Speaker 1: you're not going to see the double digit gains that
Speaker 1: you're used to seeing for the past many years. Specifically
Speaker 1: to t J Max, they report quarterly results this coming week,
Speaker 1: So is this their moment in the sun because they're
Speaker 1: a discounter. Yeah, t J asked, you know, the one
Speaker 1: thing inventory is bad for retail, but it's great for
Speaker 1: t j X and the off spicers. When there's a
Speaker 1: lot of inventory in the marketplace, they get to buy
Speaker 1: it cheap and pass on those savings to their customers.
Speaker 1: So it just means they'll be getting better products, they
Speaker 1: save that product, they can put it out next year
Speaker 1: and make better margin on it. So you will find
Speaker 1: good stuff at t j X at a bargain, and
Speaker 1: we're going to see shoppers appreciate that and to their store.
Speaker 1: To keep in mind, their business is largely a store
Speaker 1: based business with less than two or three percent done online. Okay,
Speaker 1: this this just occurs to me now, just sort of tangentially.
Speaker 1: Does the fact that they're high inventories mean that the
Speaker 1: supply chain disruptions all that stuff is solved, it's all
Speaker 1: behind us now, Yeah, I think it's a different hiccup
Speaker 1: in the supply chain. So remember last year at this point,
Speaker 1: we're talking about not getting enough inventory for the holidays.
Speaker 1: So retailers had ordered in advance, they had ordered more
Speaker 1: than they needed, and all that inventory is coming into
Speaker 1: the stores and distribution centers as of spring summer this year.
Speaker 1: So now all of a sudden, they have so much inventory, right,
Speaker 1: it's almost a reverse problem, and um, they don't know
Speaker 1: where to keep it, they don't know how to stock it,
Speaker 1: they don't know how to sell that. Some of it
Speaker 1: is not sellable anymore because it's not seasonal. Because some
Speaker 1: of that inventory from Spring is coming in in the fall.
Speaker 1: What do you do with that? You've got to write
Speaker 1: it down. Okay, Um, let's move on to Amazon. You
Speaker 1: also cover Amazon. What's the story there? Yeah, you know,
Speaker 1: Amazon is a company that we still like very much.
Speaker 1: They clearly are going through some issues right now, especially
Speaker 1: when it comes to rising costs and enterprises cutting back
Speaker 1: on fund So they have multiple businesses online clearly the
Speaker 1: biggest business, but the most profitable, is their cloud business
Speaker 1: a WS. What you saw last quarter was a function
Speaker 1: of what happened at a w S, which is why
Speaker 1: the stock took a beating. Um. But from the online perspective,
Speaker 1: we do things that sales have bounced back from the
Speaker 1: first half, so they're much better than they were in
Speaker 1: one age. And while there will be more discounting in
Speaker 1: the fourth quarter, we do think Amazon for the long
Speaker 1: run still stands to be in the best position to
Speaker 1: take online share, as a shift from brick and mortar
Speaker 1: to online is still very much on the table. Okay.
Speaker 1: We also have Macy's gap Walmart reporting this coming week.
Speaker 1: You said this earlier. The consumer doesn't have money to spend, right,
Speaker 1: they have to find the money to spend. They're worried
Speaker 1: about cost rising, so promotions will be key, and how
Speaker 1: they discount on the inventory that they bring forward will
Speaker 1: really determine their top line in margins at the end
Speaker 1: of the quarter. Walmart of value play, but it does
Speaker 1: target the low end consumer, so the consumers that's probably
Speaker 1: most trapped for cash and inflation will hurt their spending.
Speaker 1: Where Macy's is struggling with being a department store. Right,
Speaker 1: We've talked about department stores in the past, and it's
Speaker 1: it's a place where consumers are going less today than
Speaker 1: they did years ago, so they're still challenged with those
Speaker 1: structural or structural shopping challenges that consumers are shifting away from. Okay,
Speaker 1: before you go, I gotta I asked this question every
Speaker 1: year review what's the what's the to get item this year?
Speaker 1: What's the one item I have to buy for the
Speaker 1: holiday shopping season? The PS five is still on a
Speaker 1: lot of shoppers which lost so I think it's electronics
Speaker 1: and toys. Electronics or toys are still at the top
Speaker 1: of which lift and gift cards. People want gift cards,
Speaker 1: That's what I'll get you then put them always a pleasure.
Speaker 1: I appreciate it. Put them gals, senior retail analysts with
Speaker 1: Bloomberg Intelligence and just to hand. On Bloomberg Daybreak weekend,
Speaker 1: Britain's Finance minister will finally officially on Bailer's bunchet. I'm
Speaker 1: John Tucker, DNCY is Bloomberg. This is Bloomberg Daybreaking weekend.
Speaker 1: Are global looking ahead of the tom stories for investors
Speaker 1: in the coming week. I'm John Tucker in New York.
Speaker 1: Up later in the program busy time in Asia as
Speaker 1: we gear up for the Bloomberg New Economy Forum. But first,
Speaker 1: almost three weeks later than planned, Britain's Finance minister will
Speaker 1: finally unveil he his budget on Thursday. Jeremy Hunt, along
Speaker 1: with the Prime Minister Rishi Sunac, need to balance the
Speaker 1: books and convince markets there won't be a repeat of
Speaker 1: the previous government's mistakes that sent guilt markets into meltdown.
Speaker 1: From Warlet's into London bringing Bloomberg Daybreak Europe anchor Steven
Speaker 1: Carol John Jeremy Hunt might have been spooked by the
Speaker 1: Halloween date his budget was originally set for, but in
Speaker 1: the coming days he might get a chance to scare
Speaker 1: us all anyway. With the gloomy economic outlook that the
Speaker 1: UK is facing. We've been well warned the situation is grim.
Speaker 1: The Bank of England's forecasting eighteen months of recession and
Speaker 1: the fiscal gap that needs to be plugged in this
Speaker 1: budget has estimated at more than thirty billion pounds. To
Speaker 1: look ahead to Watson Store, I'm joined by our UK
Speaker 1: correspondent Lizzie Burden. Lizzie set the scene for us. It's
Speaker 1: it's been called an artem statement, but it's a pretty
Speaker 1: wintry backdrop. Our colleague Katherine Griffiths has reported that the
Speaker 1: Chancellor told a group of senior business people that this
Speaker 1: would be really interesting bleep if he wasn't in the
Speaker 1: middle of it. You've got double digit inflation strikes across
Speaker 1: sectors and the Bank of England forecasting a recession, though
Speaker 1: how deep it's going to be is going to depend
Speaker 1: on how high interest rates will rise. Now the Chancellor,
Speaker 1: Jeremy Hunt and the Prime Minister Richie Snack have made
Speaker 1: very clear there are eyewatering ly difficult decisions ahead if
Speaker 1: they want to plug this hole in the public finances.
Speaker 1: Some would say that hole isn't real, it doesn't have
Speaker 1: to be plugged, but you'll remember the market turmoil that
Speaker 1: followed Liz trust Is mini budget in September, in large
Speaker 1: part due to the raft of unfunded tax cuts that
Speaker 1: she and her chancellor, then Quasi Quarsteng proposed. But the
Speaker 1: bottom line is they need to boost growth, help the
Speaker 1: most vulnerable people through the cost of living crisis without
Speaker 1: adding to inflation. I want to tackle this idea of
Speaker 1: how much information we're getting in advance of the budget
Speaker 1: as well and the run up to Thursday's announcement, there
Speaker 1: has been a plethora of reports in the media about
Speaker 1: what sorts of measures we might be getting. This is
Speaker 1: something they see that you and I discussed what pamer.
Speaker 1: Gordon's chief economists Simon French, He's very against the way
Speaker 1: these leaks are happening and says that it has a
Speaker 1: visible chilling effect on UK economic activity. There are areas
Speaker 1: that are sensitive to changing tax rates, changing funding for
Speaker 1: infrastructure projects. This run up to every fiscal event does
Speaker 1: move activity to the right. Now, you could say that
Speaker 1: only for a couple of weeks, but this stuff is
Speaker 1: I feel like symptomatic of a broader malaise that has
Speaker 1: overtaken UK politics in my view, which is this rotating
Speaker 1: door between the special advisor community and the journalist community,
Speaker 1: and they're all trying to keep each other happy by
Speaker 1: leaking stories. This leak culture up at a hair up
Speaker 1: ahead of a fiscal event has real world implications that
Speaker 1: I do think if you're in the Westminster bubble, it's
Speaker 1: you sometimes lose sight of Okay. So that's the view
Speaker 1: of Simon French from Pioneer Gordon when he spoke to
Speaker 1: us a couple of days ago, Lizzie, that's Simon's point
Speaker 1: of view on that issue. Of course, we're very keen
Speaker 1: to see what sort of things are being floated, what
Speaker 1: are the controversial ideas that are being battered around at
Speaker 1: the moment. Well, first off, Simon's not wrong. Business leaders
Speaker 1: are frustrated by all the leaks, especially about potential tax
Speaker 1: rises on dividends and capital gains, because they do have
Speaker 1: real world consequences for investment in cash hungry startups. The
Speaker 1: way the former Pizza Express boss put it, Hugh Osmond,
Speaker 1: was it's as if every day they set a new
Speaker 1: hair running. He said, it's lazy, it's laden with unintended consequences.
Speaker 1: So that's the comms in terms of the meat of
Speaker 1: the budget some measures that you could see would be
Speaker 1: an increased windfall tax on energy profits, which would be
Speaker 1: extended in terms of time from and expanded to include
Speaker 1: energy generators. That would expect upset Tories who think that
Speaker 1: the state shouldn't punish business for success. You could also
Speaker 1: see a freeze on the foreign aid budget. That's going
Speaker 1: to invite criticism that the UK is abandoning its ambitions
Speaker 1: as a world leader. And then there's the thorny issue
Speaker 1: of whether to raise pensions and benefits in line with inflation.
Speaker 1: But if you look at who Rishi Sonacs appointed as
Speaker 1: Work and Pension Secretary male Stride, he's expressed that he
Speaker 1: thinks they should rise in line with inflation and he's
Speaker 1: a key sooner and lots of difficult decisions being made
Speaker 1: as well. That this statement will also be a chance
Speaker 1: for Issy Snacs government to set out some of its
Speaker 1: priorities for the economy. Plenty of industry is very interested
Speaker 1: in what's going to be said. One that will be
Speaker 1: listening closely is the financial sector, very key to the
Speaker 1: City of London. We've been talking to Miles Selleck about this.
Speaker 1: He's from the industry Group the City UK. Reflecting the
Speaker 1: conversations that we've had with international counterparts and other potential
Speaker 1: investors in the UK. What people are looking for is stability,
Speaker 1: They're looking for predictability. I think the UK has been
Speaker 1: seen from a political perspective is just a little bit
Speaker 1: too exciting, certainly since six and the Brexit vote and
Speaker 1: the sort of consequences that have flowed from that, and
Speaker 1: arguably from fourteen and the Scottish independence referendum. So I
Speaker 1: think there would be there will be a strong sense
Speaker 1: of welcome for being able to know the direction of travel.
Speaker 1: On regulation, what that looks like now that the UK
Speaker 1: is out of the European Union. What's the vision for
Speaker 1: financial and related professional services? Something Richie Sunac set out
Speaker 1: quite compellingly in his mention how speech last year? How
Speaker 1: will that be built on and what are we going
Speaker 1: to see as we move forward? Also in terms of
Speaker 1: potential new deals with other markets. Okay, so that's males
Speaker 1: select from the city UK. That's one form of perhaps
Speaker 1: pressure that the government will be feeling. It hasn't been
Speaker 1: a very easy start to Richie Suonac's premiership either, in
Speaker 1: this could potentially be an important moment politically as well.
Speaker 1: Talk to us about the politics. Could this be a
Speaker 1: reset moment perhaps for the new government. I'm sure Richie
Speaker 1: Sunac would hope to draw a line between himself and
Speaker 1: Liz Trust given that he spent the whole summer warning
Speaker 1: what would happen if tax cuts were launched too soon
Speaker 1: without dealing with the immediate problem of inflation. He too
Speaker 1: is going to need to boost growth in the medium
Speaker 1: to long term if he wants to be re elected,
Speaker 1: but he needs to do that without adding to inflation.
Speaker 1: In fact, the Chancellor, Jeremy Hunt, has said that he
Speaker 1: wants to help bring down inflation so that the Bank
Speaker 1: of England can raise rates as little as possible to
Speaker 1: minimize the recession the UK faces. Now Hunt and Sunac
Speaker 1: are being accused of managing Britain's decline, being too pessimistic
Speaker 1: about UK growth, and you could say that the Bank
Speaker 1: of England's messaging has been in too excessively gloomy. The
Speaker 1: banks forecast this long recession if rates follow market expectations,
Speaker 1: but that nuance was seemingly lost on most of the
Speaker 1: national newspapers. So you have to ask whether the man
Speaker 1: in the street is going to be too gloomy as
Speaker 1: a result. Of the messaging outside the Bank of England. Likewise,
Speaker 1: with the Treasury, economists are asking whether the Treasury is
Speaker 1: going to raise taxes and cut spending too much in
Speaker 1: order to leave itself headroom in case growth underwhelms so
Speaker 1: that it has enough left in the kitty for pre
Speaker 1: election giveaways. And the question really is is the Treasury
Speaker 1: creating unnecessary pain? One of the many many questions will
Speaker 1: be hoping to get answers to on Thursday when the Chancellor,
Speaker 1: Jeremy Hunter takes to his feet to deliver the autumn statements.
Speaker 1: Thanks for our correspondent and Lizzie Burden forward those insights.
Speaker 1: I'm Stephen Carroll in London. You can catch us every
Speaker 1: weekday morning here for Bloomberg Daybreak Europe, beginning at six
Speaker 1: am in London and one am on Wall Street. John Stephen,
Speaker 1: Thanks live just ahead on Bloomberg day Break weekend Global
Speaker 1: leaders gathering in Asia for the Bloomberg New Economy Forum.
Speaker 1: I'm John Tucker. This is Bloomberg broadcasting live from the
Speaker 1: Bloomberg Interactive Broker Studio in New York. Bloomberg eleven three
Speaker 1: oh to Washington, d C. Bloomberg to Boston, Bloomberg one
Speaker 1: O six one to San Francisco, Bloomberg nine sixty to
Speaker 1: the country, Sirius XM Channel one nineteen to London, d
Speaker 1: A B Digital Radio, and around the globe the Bloomberg
Speaker 1: Business Act and Bloomberg Radio dot Com. This is Bloomberg
Speaker 1: day Break Weekend. I'm John Tucker in New York with
Speaker 1: your global look ahead of the top stories for investors
Speaker 1: in the coming week. Movers and shakers gathering in Asia.
Speaker 1: We have the Guy Getting taking place in the coming
Speaker 1: days in Bali, Indonesia, and US China relations also in
Speaker 1: focus there. We also have another big gathering in Asia
Speaker 1: just about underway, and for more on that, let's go
Speaker 1: to Hong Kong and Bloomberg Daybreak Asia host Brian Curtis
Speaker 1: and his colleague Doug Prisner. John. The fifth annual Bloomberg
Speaker 1: New Economy Forum gets underway in the coming week in Singapore.
Speaker 1: It comes at a delicate time for the global economy.
Speaker 1: Inflation is at a forty year high in many countries.
Speaker 1: We know that war continues to rage in Ukraine and
Speaker 1: food security is very much in question. It's in question
Speaker 1: because food supplies are dwindling and costs are skyrocketing. Supply
Speaker 1: chains have been broken and output has been crippled by
Speaker 1: labor shortages. Policymakers and investors are looking for innovative ideas
Speaker 1: to break the chain, and as such the forum comes
Speaker 1: at a very opportune time. Joining us now Bloomberg's Eric Shatzker,
Speaker 1: who is in Singapore for the forum. Eric, always a pleasure,
Speaker 1: Thanks so much for helping us set the stage for
Speaker 1: this year's any f Let's begin with a view from
Speaker 1: thirty thousand feet, so to speak. New economy, big picture,
Speaker 1: no doubt, and I imagine that a lot of this
Speaker 1: is going to focus on the intersection between government and
Speaker 1: the private sector. Can you touch upon some of the
Speaker 1: key themes up for discussion? I would say that one
Speaker 1: theme we will be tackling in earnest and absolutely cannot ignore,
Speaker 1: is the rising tension level between the United States and China.
Speaker 1: And of course this isn't a new story. The tension
Speaker 1: level has been rising for some time. But with President
Speaker 1: she having cemented control over the Chinese Communist Party at
Speaker 1: the recent Congress and the Biden administration having imposed new
Speaker 1: controls on the export of advanced technology to China, UH,
Speaker 1: this situation has been thrown into perhaps sharper relief. Then
Speaker 1: we've seen it in maybe since the early nineteen seventies,
Speaker 1: because it casts a shadow over everything in this part
Speaker 1: of the world, and it's just something impossible to ignore.
Speaker 1: You're right. And it's interesting that you mentioned that has
Speaker 1: been with us because you remember even the first one.
Speaker 1: We were supposed to do the first an F in
Speaker 1: Beijing and it had to get switched to Singapore, and
Speaker 1: we went to Singapore for that first one. So US
Speaker 1: China relations has tended to intervene really even back in
Speaker 1: that time where when Donald Trump was was waging his
Speaker 1: uh sort of trade war with China. But there's some
Speaker 1: other big issues that weigh in as well. Inflation. I'm
Speaker 1: thinking that inflation could be having a big impact as
Speaker 1: well on companies trying to deal with, say setting targets
Speaker 1: for carbon reduction and for spending and green technologies and
Speaker 1: such uh and and this is this makes it a
Speaker 1: very difficult time to outlay a lot of capital. Oh,
Speaker 1: it certainly does. It's a very delicate time. It's one
Speaker 1: of the themes that we will be exploring at the
Speaker 1: New Economy Forum with some of the world's largest and
Speaker 1: most powerful investors I would name among them cal doon
Speaker 1: A Lebark from Mubatla, which is of course the Emirati
Speaker 1: Sovereign Wealth Fund. We also have Neil Sheen who who
Speaker 1: is the founder and CEO effectively of Sequoia, the man
Speaker 1: managing partner excuse me of Sequoia China, one of the
Speaker 1: world's foremost venture capital investors. We have Limb chow Kat
Speaker 1: who is the CEO of g I C which is
Speaker 1: the Singaporean one of the two Singaporean sovereign wealth funds.
Speaker 1: John Graham from the Canada Pension Plan Investment Board, Raphael
Speaker 1: Aren't from the Future Fund of Australia, yet another sovereign
Speaker 1: wealth fund. These are the capital pools that have to
Speaker 1: make decisions right now about how much they're willing to
Speaker 1: plow into renewable energy and sustainability, and the pressures uh
Speaker 1: that inflation is creating for the rest of the world
Speaker 1: is having a real consequences for those investment decisions. What
Speaker 1: we're hoping to find out at the New Economy Form
Speaker 1: is that some of these sovereign wealth pools remain committed
Speaker 1: to making investments in carbon reduction, for example, and renewable
Speaker 1: energy because if they falter, then there's there's there's a
Speaker 1: good chants that we could throw net zero by out
Speaker 1: the window. Well, the timing of the n e F
Speaker 1: is such that it's so closely follows Cop seven. And
Speaker 1: I'm curious to hear about the momentum that may be
Speaker 1: building in the community that you just described here. Is
Speaker 1: there greater appetite in the investment community for opportunities in
Speaker 1: the green space now? Is there some enthusiasm building? You know?
Speaker 1: I would say, Doug that yes, Uh, it's it's It's
Speaker 1: as much of an imperative as ever before, but it's
Speaker 1: a much more complicated and challenging picture because of the
Speaker 1: macroeconomic headwinds And it's not just inflation. That's the consequences
Speaker 1: of inflation, not just rising prices, but higher the hurdle.
Speaker 1: The hurdle is so much higher now. A lot of
Speaker 1: fodder for interesting conversation, no doubt. Eric, thank you so
Speaker 1: much for being with us and helping us set the
Speaker 1: stage for the fifth annual Bloomberg New Economy Forum. Bloomberg's
Speaker 1: Eric Shatzker joining us from Singapore. I'm Doug Krisner along
Speaker 1: with Brian Curtis in Hong Kong. You can catch us
Speaker 1: weekdays here for Bloomberg Daybreak Aisia, beginning at seven am
Speaker 1: in Hong Kong, six pm on Wall Street, John Brian
Speaker 1: and Doc thanks a lot. Just ahead on Bloomberg Daybreak weekend.
Speaker 1: What to watch for in the coming week and weeks
Speaker 1: as we moved closer to the presidential campaigns. I'm John Tucker.
Speaker 1: This is Bloomberg. This is Bloomberg Daybreak Weekend. Are global
Speaker 1: look ahead at the top stories for investors in the
Speaker 1: coming week. I'm John Tucker in New York. Lots of
Speaker 1: surprises in the mid terms and some rancor between former
Speaker 1: President Trump and Florida Governor Ron De Santis to Trump
Speaker 1: last week lashing out and his potential competitors in the
Speaker 1: presidential race. Trump at seventy one, Rond sanctimonious at Mike
Speaker 1: Pence at seven. Mike's doing better than I thought. That's
Speaker 1: sort of the stage center movedwise when it comes to
Speaker 1: Republicans in the post mid term world. For more about
Speaker 1: all of it, including how things are stacking up for
Speaker 1: Democrats in four as well, let'stend to our Bloomberg newsroom
Speaker 1: in Washington and Amy Morris, Amy all right, thank you, John,
Speaker 1: and joining me now Bloomberg Government Senior Elections reporter Greg Jero. Greg,
Speaker 1: You've been following this very closely with momentum for President Biden,
Speaker 1: and he's talking now a little more about there's also
Speaker 1: been some disarray among Republicans. They say they'll be able
Speaker 1: to work some of it out. Let's start from the
Speaker 1: very beginning, Rondo Santis claiming this huge victory in the
Speaker 1: gubernatorial race down in Florida. Let's hear what he had
Speaker 1: to say, and we'll talk about it. On the other side,
Speaker 1: we offer a ray of hope that better days still
Speaker 1: lie ahead. All right, So Rondo Santa's talking about some
Speaker 1: of the traction that he's got. How much does he
Speaker 1: really have to play with here? Well, he was a
Speaker 1: big winner from Tuesday and was otherwise a good overperformance
Speaker 1: by Democrats and underperformance by Republicans around the country. To
Speaker 1: Santis was re elected by nineteen percentage points in Florida,
Speaker 1: which is a very stunning margin in a state that
Speaker 1: not too long ago was seen as the quintessential swing state.
Speaker 1: Was the biggest win by a Florida gubernatorial candidate since
Speaker 1: Santis was winning areas like Miami Dade County in South Florida,
Speaker 1: heavily Hispanic area. He was winning Palm Beach County, a
Speaker 1: very Democratic leaning county. So this is a big win
Speaker 1: for De Santis. And given that he's a Republican governor
Speaker 1: in a state that will have thirty electoral votes in
Speaker 1: the election, if he can help lockdown Florida for Republicans,
Speaker 1: he'll be at the top, if not near the top
Speaker 1: of Republican Republican preference voters for the election if one
Speaker 1: Donald J. Trump does not run well. That was what
Speaker 1: I was going to ask about, because it almost sounds
Speaker 1: as though De Santis could be dethroning Donald Trump, at
Speaker 1: least when it comes to who is the kingmaker in
Speaker 1: the GOP, because there were plenty of Trump backed candidates
Speaker 1: on Tuesday who did not win. That's right. Trump did
Speaker 1: not have a good election night on Tuesday. Uh mem
Speaker 1: and Oz in Pennsylvania lost a key Senate race to
Speaker 1: John Fetterman, and in some key house races, some Trump
Speaker 1: alligned candidates lost districts that maybe other Republican candidates would
Speaker 1: have held. So Trump does not look good coming out
Speaker 1: of this election, although he is it seems clear he's
Speaker 1: likely to run for a third time for president. The
Speaker 1: big question will be does Rhonda Santis run against him
Speaker 1: in the Republican primary. If you look at Republican preference polls,
Speaker 1: it's Trump and to Santis, and then there's a big
Speaker 1: fall off with everyone else. We didn't see a one
Speaker 1: on one race against Trump in twenty sixteen. He benefited
Speaker 1: somewhat by the divided Republican opposition. But will we see
Speaker 1: a one on one race between Trump and de Santis.
Speaker 1: We'll probably find out not too long from now. I'm
Speaker 1: wondering if this also helps to embolden other Republican candidates
Speaker 1: who might be looking at the White House. I'm thinking
Speaker 1: of Maryland Governor Larry Hogan. He is, of course the
Speaker 1: outgoing governor of Maryland, but he is also indicated, Hey,
Speaker 1: look at how these terms turned out. It seems as
Speaker 1: though there might be some room for me in the
Speaker 1: Republican Party. Yes, it will be interesting to see which
Speaker 1: Republicans who have wanted to be president or considered becoming president,
Speaker 1: or at least running for that office, will uh decide
Speaker 1: to at least do the early spadework that candidates often do,
Speaker 1: like traveling to Ohio and New Hampshire and contributing to candidates.
Speaker 1: One critic of Trump who has run for president before
Speaker 1: and who's been who donated to Republican candidates late in
Speaker 1: the campaign I noticed was former New Jersey Governor Chris Christie.
Speaker 1: He was very critical of Trump after Tuesday's election results.
Speaker 1: So if Trump doesn't run, I think all bets are
Speaker 1: off about who gets in. I think it'd be a
Speaker 1: free for all. But I think I am also wondering
Speaker 1: who other Republicans besides Rhoda Santis, who's mentioned frequently the
Speaker 1: presidential sweepstakes, what other Republicans would decide to run against Trump?
Speaker 1: Should the the ex president make that third bid for president,
Speaker 1: as he seems likely to do. Yeah, I'm wondering about
Speaker 1: that too. If this indicates that perhaps he would not
Speaker 1: be the choice for the GOP to run for the
Speaker 1: White House. At the same time, would this be an
Speaker 1: opportunity for people to sort of hang onto those coattails,
Speaker 1: maybe a vice presidential bid because he has also indicated
Speaker 1: that Pence won't be his running mate. Pence certainly won't
Speaker 1: be his running mate, and you want to look for
Speaker 1: maybe the next generation of Republican leaders so we'll see
Speaker 1: who that when when the when the smoke clears um
Speaker 1: After that, we got final results from the election, who
Speaker 1: might be in the running for president and vice president,
Speaker 1: and we are talking about how the midterms may have
Speaker 1: shaped the general election. We are talking with Bloomberg Government
Speaker 1: senior elections reporter Greg Jarol. Want to shift over Greg
Speaker 1: to the Democratic side, turning our attention now to California
Speaker 1: Governor Gavin Newsom. After the polls closed on election night,
Speaker 1: he spoke at a watch party at the Citizen Hotel
Speaker 1: in Sacramento. We have a responsibility as California's to do
Speaker 1: more about what we did tonight, to continue to assert
Speaker 1: our values, which we hold dear We believe their Americans
Speaker 1: is certainly California values. Now, does he Greg have a
Speaker 1: clearer path to the Democratic presidential nomination than maybe de
Speaker 1: Santist does on the Republican side? Like, how does that breakdown?
Speaker 1: I don't think he has a clearer path than the Santists,
Speaker 1: if only because I think Joe Biden is clearly going
Speaker 1: to run for re election again and maybe the overperformance
Speaker 1: by Democrats in the midterm election may tamp down whatever
Speaker 1: chatter that may be out there floating out there about
Speaker 1: would Biden run again or not, or he would be
Speaker 1: challenged in the primary. I don't expect Gavin Newsom to
Speaker 1: challenge Joe Biden the Democratic primaries in UM. But you know,
Speaker 1: Gavin Newsom is the governor of what would be the
Speaker 1: fourth largest economy in the world, about the size of Germany,
Speaker 1: and so just like the governor of Florida, you think
Speaker 1: the governor of a large state like California, just being
Speaker 1: the chief executive of a huge state, but the huge
Speaker 1: economy would be automatically mentioned in presidential sweepstakes. It's been
Speaker 1: a while since we've had the California governor mentioned as
Speaker 1: a possible presidential candidate. UM. You know, Jerry Brown had
Speaker 1: already run what three times when he was governor for
Speaker 1: the second time, Arnold Schwarzenegger was ineligible to run, Gray
Speaker 1: Davis was too unpopular, Pete Wilson probably too moderate to
Speaker 1: win the Republican presidential nomination. And you know, not too
Speaker 1: long before that, you had Ronald Reagan who used the
Speaker 1: governor California governorship to launch himself to the presidency. So
Speaker 1: Gavin Newsom, I think, is going to be mentioned as
Speaker 1: a potential presidential candidate, if not four maybe, if only
Speaker 1: because he is the chief executive of what would be
Speaker 1: the fourth or fifth largest economy in the world, a
Speaker 1: three point five trillion dollar economy. Is that, though, Gregg,
Speaker 1: one of the issues that faces the Democratic Party right now.
Speaker 1: You have someone like Joe Biden, that all, not all
Speaker 1: Democrats are a percent in love with having Joe Biden
Speaker 1: run again. And at the same time, the next guy
Speaker 1: who maybe in line, the next sort of air apparent
Speaker 1: and I'm using air quotes here, would be Gavin Newsom,
Speaker 1: who doesn't really have a shot against somebody like Joe Biden.
Speaker 1: Is that is that the issue that they're looking for
Speaker 1: the leadership that they haven't quite found yet. They don't
Speaker 1: have a Bill Clinton, they don't have a Barack Obama, right.
Speaker 1: I think in the Democratic circles and the Democratic Party
Speaker 1: certainly with when it comes to the presidency and also
Speaker 1: for congressional leadership, you have, you know, Joe Biden, you
Speaker 1: have Nancy Pelosi, Stenny Hoyer, James Kleiburne who have been
Speaker 1: around for some time, and there's clearly a lot of
Speaker 1: pent up ambition in Democratic circles about who is going
Speaker 1: to be in that next vanguard of Democratic Party leadership,
Speaker 1: so not just for Congress, but the presidency as well. Um. Yes,
Speaker 1: I mean, we can't escape the fact that Joe Biden
Speaker 1: will be almost eighty two years old by the time
Speaker 1: of the election, but I think Democrats would welcome a
Speaker 1: rematch between Biden and Donald Trump. If Trump decides to
Speaker 1: run again, as it looks like he will, then I
Speaker 1: think you know who's going to be in the next
Speaker 1: um uh next kind of a group of future Democratic
Speaker 1: leaders who would run for president. I think maybe you
Speaker 1: look at the two midterm elections, you look at which
Speaker 1: governors were elected for the Democrats. Gretchen Whitmer was re
Speaker 1: elected in Michigan, a key swing state, so I think
Speaker 1: you probably look there at who who won key governorships
Speaker 1: and maybe even key U. S. Senate races. Ino, let
Speaker 1: me ask you about some of the strategy. I want
Speaker 1: to pick your brain if if you were a political strategist, Greg,
Speaker 1: would you recommend to former President Trump to not make
Speaker 1: that announcement that he will be running again. You know,
Speaker 1: he's been teasing for a while now that he's going
Speaker 1: to make this big announcement on November fifte but that
Speaker 1: was before there was going to be this runoff for
Speaker 1: the Senate in Georgia, and there may be some concern
Speaker 1: about sort of sucking all the air out of the
Speaker 1: room if he makes that announcement while that's going on.
Speaker 1: What would you recommend, here's a political strategist. If I
Speaker 1: were aligned with Trump, I might recommend the ex president
Speaker 1: to hold off. Before I let you go, I want
Speaker 1: to talk to you a little bit about the historical
Speaker 1: implications and what we saw over this past week with
Speaker 1: the mid terms. To me, just somebody who's here this
Speaker 1: sort of on a superficial level for decades, this seems
Speaker 1: like a really unusually intense and um raucous mid term.
Speaker 1: I want to know what you think about it and
Speaker 1: why is it in this place in history. Well, this
Speaker 1: mid term was really extraordinary. It was actually a pretty
Speaker 1: good over performance by the White Houses Party. In mid
Speaker 1: term elections, you have more of the energy and enthusiasm
Speaker 1: tends to lie with the opposition party, And in mid
Speaker 1: term elections since the end of World War Two, the
Speaker 1: average result has been the White Houses Party losing an
Speaker 1: average of twenty six seats in the House. It's going
Speaker 1: to be one of the close most closely divided US
Speaker 1: houses in in history, in American history. Yes, alright, Greg,
Speaker 1: thank you so much for bringing us up to speed
Speaker 1: on this. We appreciate it. Thank you. Bloomberg Government Senior
Speaker 1: Elections Reporter Greg Darau. That's what's going on in the
Speaker 1: nation's capital. For more of our political news coverage, tune
Speaker 1: into Balance of Power with David Weston weekdays at noon
Speaker 1: Wall Street Time, and Sound On with Joe Matthew weekdays
Speaker 1: at five pm Wall Street Time. Right here on Bloomberg Radio,
Speaker 1: I'm Amy Morris and this is Bloomberg John. Amy Morris
Speaker 1: reporting from our bloombergs room in Washington. Amy, thanks a lot,
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