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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Day Bake You Up podcast, available every morning on Apples,

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Speaker 1: Spotify or wherever you listen. It's Tuesday, the twenty fourth

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Speaker 1: of December here in London. I'm Caroline Hepke, coming up

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Speaker 1: today looking for success where his predecessor failed. France's new

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Speaker 1: prime minister says he wants a deal that brings the

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Speaker 1: deficit down to almost five percent. Twenty twenty four was

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Speaker 1: dominated by big tech and AI. But can the world's

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Speaker 1: biggest firms repeat their success in the year ahead. Plus,

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Speaker 1: after a year of turmoil, could twenty twenty five deliver

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Speaker 1: more stability for the Middle East. We'll get the thoughts

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Speaker 1: of our regional correspondence. Let's start with the roundup of

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Speaker 1: our top stories. France's Prime minister one to a budget

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Speaker 1: deal that will bring the country's deficit down to almost

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Speaker 1: five percent, a target that was also sought by ousted predecessor,

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Speaker 1: Michelle Barnier. So a Beau says he is pursuing a

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Speaker 1: balanced agreement that doesn't unreasonably target companies that create wealth

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Speaker 1: and jobs.

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Speaker 2: I am not for targeting business, I am for its protection.

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Speaker 2: I want everyone to realize that this is where our

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Speaker 2: riches lie. I think it is necessary to recognize that

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Speaker 2: big groups and small businesses make up a single economy.

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Speaker 1: Frost were Baber speaking. They're doing an interview with the

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Speaker 1: French channel BFM. He was speaking via a translator. His

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Speaker 1: comments come just hours after his cabinet was named. Amongst

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Speaker 1: the appointees experienced finance professional Eric Lombard, who will serve

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Speaker 1: as Finance Minister. But the new government faces a difficult

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Speaker 1: task in finding support for the budget in the National Assembly,

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Speaker 1: where Emmanuel Macon's lawmakers are in the minority and opposition

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Speaker 1: forces have shown little desire for compromise. Now, Keir Starmer

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Speaker 1: has delivered his first Christmas message as UK leader after

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Speaker 1: all six months in office. The Prime Minister struck an

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Speaker 1: optimistic tone despite criticism of his management of the economy.

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Speaker 1: Salma says that he's now looking towards a more positive

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Speaker 1: twenty twenty five.

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Speaker 3: This Christmas, I'll be hoping for peace, particularly in the

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Speaker 3: Middle East, as the birthplace of the Christmas story. I'll

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Speaker 3: be looking towards a better, brighter future for every person

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Speaker 3: and celebrating the joy and wonder that Christmas brings.

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Speaker 1: The labor leader also used the traditional message to thank

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Speaker 1: those who'll be spending Christmas serving others, including the emergency

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Speaker 1: services and armed forces. Meanwhile, the Conservative leader, Kemmy Baidenock

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Speaker 1: says that it's time for reflection and supporting those who

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Speaker 1: need assistance. Now to corporate news, Honda has announced plans

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Speaker 1: for a year's long deal to acquire rival Nissan. The

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Speaker 1: news comes as Japanese automakers struggled to keep up with

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Speaker 1: a competitive global industry. Our Global Automotive editor Craig Trudell

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Speaker 1: says share in the companies may query the move.

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Speaker 4: Real questions about just how happy shareholders across the various

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Speaker 4: companies involved are going to be with this. To put

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Speaker 4: it plainly, I mean, this is really Honda coming to

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Speaker 4: Nissan's rescue. Honda, will you take the lead in forming

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Speaker 4: this holding company that Nissan will be a part of,

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Speaker 4: maybe Mitsubishi Motors will join. And the big question is,

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Speaker 4: you know where does Renault stand in all this as

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Speaker 4: Nissan's biggest shareholder.

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Speaker 1: Bloomberg's Craig Trudell speaking there, the agreement will create one

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Speaker 1: of the world's largest car makers, helping the firms to

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Speaker 1: compete with Chinese manufacturers and Japanese heavyweight Toyota. Nissan's shares

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Speaker 1: fell seven point three percent after the announcement, Honda's rose

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Speaker 1: fourteen point four percent, with analysts calling the dealer takeover

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Speaker 1: that will take time to yield benefits.

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Speaker 5: Now.

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Speaker 1: A key drive of equity market action over the last

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Speaker 1: year was artificial intelligence, with the Magnificent seven powering the

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Speaker 1: S and P five hundred to new record highs. So

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Speaker 1: how big of a role will AI play in the

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Speaker 1: year ahead. We've been asking Thomas Raymond, he is investment

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Speaker 1: management partner at Callen Family Office.

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Speaker 6: It's evolving. So it started with AI producers and then

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Speaker 6: AI consumers and now AI proof of concept. So what

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Speaker 6: you know we're seeing over the past year and a

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Speaker 6: half with this AI overstory is you're seeing it more

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Speaker 6: and more mentioned more and more in earnings calls. So

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Speaker 6: it's not just the mag seven that is embracing this

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Speaker 6: and they've got they've got you know, they've got a lead, right,

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Speaker 6: they've got they've had their valuations balloon. But you're seeing

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Speaker 6: it across you know, this this concept of AI and

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Speaker 6: embracing it going across the entire corporate landscape.

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Speaker 1: Thomas Raymond is investment management partner Callen Family Office speaking there.

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Speaker 1: Analysis by Bloomberg estimates at least a trillion dollars of

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Speaker 1: spending is needed for data centers, electricity supplies and communications

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Speaker 1: networks will power the attempt to deliver on AI's promise

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Speaker 1: to transform everything from medicine to customer service.

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Speaker 5: Now.

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Speaker 1: Germany's president has called for unity after a fatal attack

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Speaker 1: in the city of Magdeburg. Frank water Steinmeier acknowledged citizens'

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Speaker 1: concerns during his Christmas address after an assailant drove a

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Speaker 1: car into a busy Christmas market, killing five people. A

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Speaker 1: fifty year old doctor of Saudi Arabian origin has been

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Speaker 1: detained on suspicion of multiple counts of murder, attempted murder

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Speaker 1: and assault. The incident has sparked debate about immigration in

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Speaker 1: the country, and Luigi Mangioni, the suspect in the killing

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Speaker 1: of the US healthcare boss Brand Thompson, has pleaded not

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Speaker 1: guilty to eleven murder and terror charges. The insurance company

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Speaker 1: chief executive was shot dead earlier this month. Walking into

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Speaker 1: a conference at a New York hotel, Mangioni appeared handcuffed

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Speaker 1: and shackled in the Manhattan court as he responded to

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Speaker 1: charges including first and second degree murder, criminal possession of

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Speaker 1: a weapon, and possessing a forged driver's license. Those are

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Speaker 1: our top stories for you this morning. Thinking about the

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Speaker 1: markets right now, So fifty one hundred futures this morning

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Speaker 1: are powering heart up by six cents of one percent.

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Speaker 1: The S and P five hundred EMII futures they are

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Speaker 1: treading water, although we did see the Magnificent seven stocks

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Speaker 1: jump almost one and a half percent on Monday, only

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Speaker 1: briefly hit by the downturn in US consumer confidence. MSCI

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Speaker 1: Asia Pacific Index this morning up three tenths of one percent.

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Speaker 1: The Bloomberg Dollar Spot Index is stronger, oil prices climbing

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Speaker 1: in thin trading, and Bitcoin hovering just UNDERD ninety four

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Speaker 1: thousand dollars. Those are the markets in a moment. We

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Speaker 1: are going to be looking ahead to the year when

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Speaker 1: it comes to the Middle East, of course, dramatic changes

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Speaker 1: that we have seen in so many countries there. So

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Speaker 1: we're going to be bringing in Honor out in Istanbul

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Speaker 1: for a discussion about the Middle East in just a moment,

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Speaker 1: and be thinking about the year end in markets around

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Speaker 1: the world with our own Mary Nicola. But before that,

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Speaker 1: an interesting little story. It's the Festus season. I wonder

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Speaker 1: if in all of the holiday parties maybe that you've

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Speaker 1: been to, whether you've been eating more caveat. There's a

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Speaker 1: really nice piece on the Blueberg terminal from my colleague

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Speaker 1: Andria Strong, who's been writing and with lots of caviar recommendations,

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Speaker 1: about how it's increasingly popular and apparently it's going to

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Speaker 1: be popping up on menus in twenty twenty five even

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Speaker 1: more than before. She's got all the data listed, and

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Speaker 1: how it's actually a booming global market because of the

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Speaker 1: improved quality of farmed sturgeon, something I didn't know. Have

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Speaker 1: a read of it. It's on the Bloomberg terminal and

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Speaker 1: also on the website this morning.

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Speaker 7: Now.

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Speaker 1: Socks in Asia are gaining in relatively thin holiday trading

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Speaker 1: this morning. Many markets will be closed on Wednesday, except

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Speaker 1: for China and Japan, and yet we're coming to the

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Speaker 1: end of the year and the S and P five

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Speaker 1: hundred it's on the way to a stellar annual return.

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Speaker 1: Joining me now, it's Blinebig's multi asset reporter at Mary Nicola. Mary,

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Speaker 1: good morning, lovely to speak to you, not a year

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Speaker 1: it's been in US stocks, and especially for the Magnificent Seven.

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Speaker 1: How would you characterize it?

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Speaker 8: Yeah, as you mentioned, it's been a stellar year for

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Speaker 8: the US, and to be fair, it has.

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Speaker 9: Also been backed by strong fundamentals.

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Speaker 8: So, for example, a lot of the companies have come

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Speaker 8: out with really strong earnings time and time again. Sure

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Speaker 8: in the last quarter it wasn't as strong as many

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Speaker 8: had expected, but there are still.

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Speaker 9: Pretty strong and pretty resilient.

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Speaker 8: And then when you compare that to what some of

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Speaker 8: the other markets are delivering, it still boats pretty well

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Speaker 8: for a lot of the companies in the US and

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Speaker 8: most importantly for the Magnificent Seven.

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Speaker 3: Yeah.

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Speaker 1: Absolutely. I mean even in the last quarter, s and

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Speaker 1: P five founded seeing a gain of in the region

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Speaker 1: of three point seven percent, the MASCI Asia Pacific index

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Speaker 1: heading for quarterly loss. So US stocks are radiating all

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Speaker 1: of this holiday cheer and sparkle. And the big question

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Speaker 1: is are we going to see things broaden out to

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Speaker 1: the other four ninety three stocks next year? Are we

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Speaker 1: going to see as strong a performance in twenty twenty five?

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Speaker 8: I think for the US it really depends on how

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Speaker 8: growth plays out. I think if growth continues to be resilient,

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Speaker 8: especially in the face of the fact that we know

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Speaker 8: that the FED is not planning on raising rates as

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Speaker 8: sorry cutting rates as quickly as we had initially anticipated

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Speaker 8: heading in to twenty twenty four. The main thing has

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Speaker 8: to be that activity data holds up well, so they're

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Speaker 8: not getting the impetus from monetary policy, so they need

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Speaker 8: the impetus from growth.

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Speaker 9: And as long as that.

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Speaker 8: Continues, there's no reason why we shouldn't see the US

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Speaker 8: equities broadening.

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Speaker 9: Out into the four ninety three and supportive.

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Speaker 8: The only real caveat is just how this trade par

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Speaker 8: and fiscal policy plays out, the uncertainty surrounding that. So

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Speaker 8: last time when we saw that the trade policy, there

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Speaker 8: was a lot of concern about business investment.

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Speaker 9: There was a lot of concern about.

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Speaker 8: How companies within the US will be able to cope

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Speaker 8: with something like tariffs, and I think that is really

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Speaker 8: the key wild card. But so far, if activity data

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Speaker 8: holds up, then they should also do well.

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Speaker 1: Yeah. Absolutely, there are lots of questions about how Trump's

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Speaker 1: policies may affect so many asset classes. What's the perspective

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Speaker 1: from Asia on China assets for example, that have also

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Speaker 1: been mired with their own deep difficulties.

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Speaker 8: Well, you mentioned earlier about the poor performance of the

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Speaker 8: MSCI Asia, and it has been a really difficult quarter

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Speaker 8: for Asian markets, So they're battling weak China growth, not

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Speaker 8: to mention the underwhelming messages that we're getting from China.

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Speaker 8: So there's saying all the right things, but it hasn't

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Speaker 8: been a clear follow through in terms of policy. The

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Speaker 8: strong dollar, uncertainty surrounding US trade policy, and of course

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Speaker 8: we had the political drama and Korea that put the

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Speaker 8: market under stress. So the lingering concerns over US policy uncertainty,

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Speaker 8: the lingering concerns over what's going to come from China policy,

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Speaker 8: any sort of concrete stimulus that comes through to really

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Speaker 8: bolster growth. These are still questions that are weighing on

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Speaker 8: sentiment in Asia and are likely to continue to resonate

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Speaker 8: into the new year.

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Speaker 1: Yeah, Mary, thank you so much. Yes for that thought. Then,

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Speaker 1: as we come to the end of twenty twenty four

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Speaker 1: thinking about the new year, thank you so much for

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Speaker 1: your time. Mary Nikola has been in Berg's multi asset reporter.

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Speaker 1: Good to speak to you.

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Speaker 5: Now.

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Speaker 1: The past year has seen the Middle East undergo dramatic change,

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Speaker 1: only part of which is the future of Syria and

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Speaker 1: the growing influence of Turkey. Now, Turkey's both a member

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Speaker 1: of NATO and yet also a participant in the Bricks dialogue,

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Speaker 1: and Anchor is positioning itself as a key regional power

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Speaker 1: broker and a stabilizing force in the Middle East. Anchor

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Speaker 1: maintains ties with Russia and also within coming President Donald Trump.

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Speaker 1: It's a very complex foreign policy landscape, and yet the

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Speaker 1: country's economic outlook remains quite precarious. I thought, as we

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Speaker 1: come to the end of twenty twenty four, we should

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Speaker 1: think about this in particular and bring in Bloomberg editor

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Speaker 1: Honor and who is live in Istanbul Force this morning, Honor,

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Speaker 1: good to speak to you. The emergence of Turkey. How

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Speaker 1: has that happened? What has been the background?

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Speaker 5: Well, the emergence of Turkey, I think has been in

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Speaker 5: the works for quite some time now. But I think

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Speaker 5: what brought the country to the four this recently has

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Speaker 5: been the developments in Syria, where longtime dictator a shadow

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Speaker 5: the sub has been toppled in a very rapid and

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Speaker 5: unexpected way over the past few weeks. And we have

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Speaker 5: seen that Turkey sort of took the lead in both

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Speaker 5: engaging the new rulers and it's restoring the plomatic ties

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Speaker 5: with the country, and everyone suddenly sort of walk up

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Speaker 5: to the fact that Turkey, in its region and its

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Speaker 5: surroundings was a very powerful and key player, something that

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Speaker 5: incoming US President Donald Trump also very recently talked about publicly.

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Speaker 5: And that's probably part of the reason now Turkey, more

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Speaker 5: than at any other point in the recent history, is

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Speaker 5: now being looked at at this emerging regional power with

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Speaker 5: influence across the Middle East and North Africa.

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Speaker 1: Yeah, Turkey's expanding influence then, I mean, they do have

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Speaker 1: vested interest in Syria, particularly in preventing Kurdish autonomy near

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Speaker 1: its borders. And as I mentioned in the introduction, a

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Speaker 1: huge balancing act NATO bricks Ukraine and dealing with Trump,

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Speaker 1: that they are doing a lot of juggling politically, aren't they.

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Speaker 5: They are, And it's exactly that, as you said, Carolan,

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Speaker 5: it's a balancing act. Eteria is a good microcosm for

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Speaker 5: us to be able to see the kind of competing

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Speaker 5: interests and priorities that the company has. On the one hand,

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Speaker 5: it has this national security issue top priority one for

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Speaker 5: ANKA which is to prevent Kurdish forces armed forces from

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Speaker 5: basically coming too close to its borders where they can

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Speaker 5: launch attacks into Turkey. But at the same time those

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Speaker 5: forces happen to be back by the US, which is

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Speaker 5: a Key Turkey ally, which is a native ally Turkey,

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Speaker 5: and a company that it has had great relationship with historically,

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Speaker 5: although those ties haven't been strong over the last ten

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Speaker 5: years or so.

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Speaker 1: Turkey's economic outlook, though, is not that strong.

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Speaker 7: Its strengths probably the accusio so to speak, for the country.

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Speaker 7: Despite all these regional ambitions the Turkey has. Its economy

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Speaker 7: has been doing some of less than stellar over the

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Speaker 7: last decade, especially when you look at the last two

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Speaker 7: decades under Dan.

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Speaker 5: Yet the economy has more of triple in size or quadrupled.

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Speaker 5: But we have seen currency crisis pretty much every couple

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Speaker 5: of years up until last year. When we look ahead though,

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Speaker 5: we see that coming from an ultra tight mon Street

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Speaker 5: policy which has driven down the men. We're going to

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Speaker 5: see economic growth probably around the range of three percent

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Speaker 5: this year, and it was what we pick up to

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Speaker 5: four percent next year and eventually took five percent in

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Speaker 5: twenty twenty.

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Speaker 10: So this is Bloomberg Daybreak Europe, your morning brief on

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