WEBVTT - Daybreak Weekend: Home Sales Preview, Qatar Economic Forum, Baidu Earnings 0:00:00.280 --> 0:00:07.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:10.280 --> 0:00:12.639 This is Bloomberg day Break Weekend, our global look at 0:00:12.640 --> 0:00:15.000 the top stories in the coming week from our Daybreak 0:00:15.040 --> 0:00:17.759 anchors all around the world. Straight Ahead on the program, 0:00:17.840 --> 0:00:20.599 we'll look ahead to some key home sales data in 0:00:20.640 --> 0:00:23.160 the US during the heart of the spring home buying rush. 0:00:23.360 --> 0:00:26.759 Also the latest earnings from retail giant Target. I'm Tom 0:00:26.800 --> 0:00:27.840 Busby in New York. 0:00:28.040 --> 0:00:30.639 I'm Caroline Hedger in London, where we're looking ahead to 0:00:30.680 --> 0:00:32.720 be Cutaw Economic Forum. 0:00:32.760 --> 0:00:36.080 I'm Doug Chrisner looking ahead to earnings from Chinese Answer 0:00:36.200 --> 0:00:37.280 to Google by DO. 0:00:38.360 --> 0:00:42.440 That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 0:00:42.440 --> 0:00:46.160 eleven three Yeero, New York, Bloomberg ninety nine to one, Washington, DC, 0:00:46.640 --> 0:00:50.920 Bloomberg ninety two to nine, Boston, DAB Digital Radio, London, 0:00:51.320 --> 0:00:54.520 Sirius XM one twenty one, and around the world on 0:00:54.600 --> 0:00:57.760 Bloomberg Radio, dot Com and the Bloomberg Business app. 0:01:02.920 --> 0:01:05.480 Good day to you. I'm Tom Busby. We begin today's 0:01:05.480 --> 0:01:08.959 program with reads on existing and new home sales for 0:01:09.040 --> 0:01:12.120 the month of April, the obstacles the housing industry is 0:01:12.120 --> 0:01:14.840 facing right now, and what this week's earnings from the 0:01:14.920 --> 0:01:18.280 nation's big home improvement retailers can tell us about the 0:01:18.319 --> 0:01:21.360 housing market. For more on all of that, we're joined 0:01:21.360 --> 0:01:26.240 by Drew Reading, Bloomberg Intelligence, US home building analyst. Well, Drew, 0:01:26.280 --> 0:01:28.720 thank you so much for being here, and well, why 0:01:28.760 --> 0:01:30.440 don't we start with what are you expecting to see 0:01:30.440 --> 0:01:33.679 in these April home sales reports coming out this week? 0:01:34.160 --> 0:01:37.559 So, look, the spring selling season has been a dud. 0:01:37.680 --> 0:01:40.679 To put it simply. The latest housing data that we 0:01:40.760 --> 0:01:44.160 have from Redfincho's pending home sales down about three percent, 0:01:44.200 --> 0:01:46.720 which is the lowest on record for this time of year. 0:01:47.240 --> 0:01:49.600 You have home sitting on the market longer, and for 0:01:49.800 --> 0:01:53.400 sale inventory is rising up about fourteen percent last year. 0:01:53.680 --> 0:01:55.240 On the new home side, we just got data on 0:01:55.240 --> 0:01:58.840 purchase applications from the builders which show sales down five percent, 0:02:00.200 --> 0:02:01.320 and if you look at some of the names that 0:02:01.360 --> 0:02:04.840 we cover, orders in one Q we're down about ten percent. 0:02:04.920 --> 0:02:08.440 So it's certainly been a challenging market. You know, some 0:02:08.480 --> 0:02:11.919 of the builder conbinants data that we look at is 0:02:12.200 --> 0:02:15.359 the lowest going back to late twenty twenty two, and 0:02:15.760 --> 0:02:19.320 the measure of present sales expectations is near the lowest 0:02:19.360 --> 0:02:23.000 since twenty twelve, So the outlook for sales isn't all 0:02:23.040 --> 0:02:24.040 that strong right now? 0:02:24.160 --> 0:02:24.400 Wow? 0:02:24.680 --> 0:02:27.600 Is this just a perfect storm of sky high prices, 0:02:27.639 --> 0:02:30.960 elevated mortgage rates, and a lot of economic uncertainty. 0:02:32.160 --> 0:02:33.919 I think you hit the nail on the head. It's 0:02:34.000 --> 0:02:36.720 really those two things. First, affordability. You know, this piece 0:02:36.760 --> 0:02:39.079 isn't new, but it's not improving. You know, we came 0:02:39.120 --> 0:02:41.760 into the year thinking that we might get some relief 0:02:41.800 --> 0:02:43.280 on rates, and earlier in the year it looked like 0:02:43.360 --> 0:02:45.040 mortgage rates did come down a little bit, but now 0:02:45.040 --> 0:02:47.640 we're headed back up towards seven percent, and you know, 0:02:47.680 --> 0:02:51.320 with home prices continuing to climb, affordability remains near the 0:02:51.360 --> 0:02:53.880 worst level on record. And then the second piece is 0:02:54.200 --> 0:02:56.640 what you mentioned, it's uncertainty, which is leading to a 0:02:56.720 --> 0:02:59.320 lack of urgency among buyers. You know, there's been a 0:02:59.360 --> 0:03:01.560 lot of discussion out there about, you know, the soft 0:03:01.600 --> 0:03:03.880 data versus the hard data, and when does the weakening 0:03:03.880 --> 0:03:06.720 and the soft data translate, if ever, into what we're 0:03:06.720 --> 0:03:08.200 seeing into the numbers. And I can tell you that, 0:03:08.320 --> 0:03:10.440 at least from a housing perspective, it is having an 0:03:10.480 --> 0:03:14.600 impact when you're thinking about big ticket purchases like buying 0:03:14.600 --> 0:03:16.919 a home, or you know, in the home improvement space 0:03:16.960 --> 0:03:19.600 taking on a large remodeling project. You want to have 0:03:19.600 --> 0:03:21.600 confidence in the economy in your job, and we've seen 0:03:21.639 --> 0:03:24.799 those numbers start to come down. We've heard from almost 0:03:24.840 --> 0:03:27.720 every builder out there that there's just a lack of 0:03:27.840 --> 0:03:30.160 urgency as buyers wait to see what happens with prices, 0:03:30.280 --> 0:03:33.800 what happens with rates. So for us, it's certainly having 0:03:33.880 --> 0:03:35.040 an impact at this point. 0:03:35.480 --> 0:03:38.240 Wow, well the only good news I've seen. And you 0:03:38.280 --> 0:03:40.560 tell me how this could change things. The number of 0:03:40.600 --> 0:03:43.400 homes that are listed seems to be rising. I mean, 0:03:43.440 --> 0:03:46.400 are sellers giving up any hope for lower mortgage rates 0:03:46.480 --> 0:03:48.520 right now? Just saying we've got to pull this trigger now. 0:03:49.840 --> 0:03:52.280 Well, I think it could be good or bad, depending 0:03:52.280 --> 0:03:55.200 on who you ask. I mean, we think that more 0:03:55.240 --> 0:03:59.360 inventory coming to the market could support modestly improve volumes 0:03:59.680 --> 0:04:02.320 in the existing home market as a whole. But I 0:04:02.320 --> 0:04:04.800 do think that over time that will come with more 0:04:04.840 --> 0:04:09.000 moderate price increases in a lot of markets outright price declines, 0:04:09.000 --> 0:04:12.320 and we're already seeing that in some markets, predominantly in 0:04:12.360 --> 0:04:15.600 the South and the Southwest. When you think about it 0:04:15.600 --> 0:04:18.960 from a builder's perspective. You know, one of the key 0:04:19.040 --> 0:04:21.159 drivers over the last several years have been a lack 0:04:21.200 --> 0:04:24.520 of listings, which have forest fires into the new home market. 0:04:25.040 --> 0:04:27.240 Now and some of the biggest markets that the builders 0:04:27.279 --> 0:04:30.039 are in Florida and Texas, you have inventory levels which 0:04:30.040 --> 0:04:33.080 are back above twenty nineteen. So what we're seeing is 0:04:33.120 --> 0:04:35.239 that in order for the builders to compete in these markets, 0:04:35.279 --> 0:04:37.960 they're having them more heavily discount So, you know, they're 0:04:37.960 --> 0:04:40.920 having to increase these sales incentives. Maybe in some cases 0:04:40.960 --> 0:04:44.119 they're lowering base prices, but it's becoming harder and harder 0:04:44.160 --> 0:04:46.279 to get each sale for the builders. 0:04:46.520 --> 0:04:50.400 Wow, so they're changing their tactics. Are I know that 0:04:50.440 --> 0:04:52.719 there are some things they can do as far as 0:04:53.360 --> 0:04:57.200 economic incentives. Are they building smaller homes? Are they putting 0:04:57.240 --> 0:05:01.440 in you know, maybe not a Bosch dishwasher, but a whirlpool? 0:05:01.520 --> 0:05:05.320 You know what I mean? Are are are they struggling. 0:05:05.720 --> 0:05:08.560 With Yeah, builders have done a handful of things to 0:05:08.640 --> 0:05:12.600 try to get that affordability equation back in better check one. 0:05:12.640 --> 0:05:15.520 They are building smaller square footage homes. It's we've seen 0:05:15.520 --> 0:05:18.120 over the last several years, you're not seeing as highly 0:05:18.200 --> 0:05:22.000 amenditized offerings, particularly for builders at the lower end of 0:05:22.040 --> 0:05:24.080 the market who are catering to the entry level buyer 0:05:24.120 --> 0:05:27.640 who are more looking for shelter in the first place. 0:05:28.279 --> 0:05:31.920 So you're seeing less less amenities in those offerings. You're seeing, 0:05:32.040 --> 0:05:35.320 you know, higher density options, so maybe more talent home 0:05:35.360 --> 0:05:36.960 construction than things of those nature. 0:05:37.560 --> 0:05:40.720 Now, another thing I'm hearing about is possibly the administration's 0:05:40.720 --> 0:05:44.760 tough immigration policies. Has that impacted builders in a big 0:05:44.760 --> 0:05:47.240 way yet or is that still being flushed out that 0:05:47.279 --> 0:05:51.279 they're just don't have the workers availability that they did before. 0:05:52.680 --> 0:05:56.400 Yeah, So, the lack of lyabor supply in the residential 0:05:56.400 --> 0:05:59.159 construction industry has been an issue for you know, a 0:05:59.200 --> 0:06:01.720 handful of years really since the bottom of the last cycle. 0:06:02.920 --> 0:06:05.560 We've seen things start to improve more recently, and that's 0:06:05.600 --> 0:06:08.599 because volumes in the industry have come down, so there's 0:06:08.640 --> 0:06:11.080 not as much a need. But that being said, you know, 0:06:11.160 --> 0:06:14.279 the immigration policies and all that discussion is certainly a 0:06:14.320 --> 0:06:16.520 headline risk for the group. To this point, the builders 0:06:16.600 --> 0:06:19.400 we talked to haven't really seen an impact from that, 0:06:19.440 --> 0:06:21.040 but it's certainly something that we're going to keep our 0:06:21.040 --> 0:06:24.039 eye on because to the extent that you know, maybe 0:06:24.080 --> 0:06:26.040 housing does start to come back a little bit. If 0:06:26.120 --> 0:06:29.480 rates are able to fall, then you have more builders 0:06:29.520 --> 0:06:32.280 competing for less supply, which would raise labor costs. 0:06:32.720 --> 0:06:34.160 Got it, got it now? 0:06:34.240 --> 0:06:34.440 Drew. 0:06:34.800 --> 0:06:37.400 This coming week we get first quarter earnings from the 0:06:37.480 --> 0:06:39.920 Nation's Too big as do it Yourself, home improvement chains, 0:06:39.920 --> 0:06:43.400 Home Depot and Lows. Now, what do you think those 0:06:43.480 --> 0:06:45.400 results are going to tell us about the housing market 0:06:45.480 --> 0:06:48.680 right now and about what people are doing to their homes. 0:06:50.320 --> 0:06:51.840 Yeah, good question. I think this is going to be 0:06:51.880 --> 0:06:54.960 an interesting quarter for home improvement retail. It seemed like 0:06:55.000 --> 0:06:56.800 coming out of last quarter the industry was starting to 0:06:56.800 --> 0:06:59.159 get a little bit of momentum. We had the first 0:06:59.160 --> 0:07:02.479 same store sales growth in about two years, you know, 0:07:02.520 --> 0:07:05.719 certainly not going gangbusters, but perhaps indicating that the worst 0:07:05.760 --> 0:07:07.719 was behind it. As we gotten through the first few 0:07:07.720 --> 0:07:10.600 months of this year, we've had some volatility in the weather, 0:07:11.600 --> 0:07:14.320 We've had an increased amount of certainty given the commentary 0:07:14.360 --> 0:07:17.400 around economic growth and political developments, and we think that 0:07:17.440 --> 0:07:20.600 will probably be reflected in both results and guidance. And 0:07:20.640 --> 0:07:22.880 when you think about, you know, how they're being impacted 0:07:22.880 --> 0:07:25.800 by housing and what it means is is we're really 0:07:25.800 --> 0:07:29.000 seeing it on the big ticket side of the business, 0:07:29.040 --> 0:07:32.560 so think of things like kitchen and bathroom models, flooring projects, 0:07:32.600 --> 0:07:35.160 and things along those lines. It's the discretionary side of 0:07:35.160 --> 0:07:38.559 the business is certainly softer, and part of the reason 0:07:38.640 --> 0:07:40.760 for that is because rates are so high and these 0:07:40.760 --> 0:07:44.400 are projects that are typically financed, So we're seeing relative 0:07:44.400 --> 0:07:47.360 softness on that side of the business. If we look 0:07:47.360 --> 0:07:49.360 at some of the more race recent data we have 0:07:49.520 --> 0:07:52.840 on traffic, you know, it shows that February was week, 0:07:53.920 --> 0:07:57.240 March improved a little bit and it was mixed in April. 0:07:57.520 --> 0:07:59.640 On a relative basis, it looks like home depots maybe 0:07:59.680 --> 0:08:02.520 doing a little bit better from a traffic perspective, and 0:08:02.560 --> 0:08:04.440 I think we're going to see that in performance at 0:08:04.440 --> 0:08:07.920 the same store sales because Loews has that higher exposure 0:08:07.920 --> 0:08:10.200 to the DIY customer, which is a little bit weaker 0:08:10.200 --> 0:08:10.840 at this point. 0:08:11.120 --> 0:08:13.480 Well a lot to look forward to existing home sales. 0:08:13.480 --> 0:08:15.880 That's the biggie for April that's out on Thursday. New 0:08:15.920 --> 0:08:18.520 home sales for that same month out on Friday. Our 0:08:18.600 --> 0:08:22.239 thanks to Drew Redding, Bloomberg Intelligence US home building analyst. 0:08:22.880 --> 0:08:25.080 We move next to earnings and this week we get 0:08:25.080 --> 0:08:28.080 first quarter results from the retail giant Target, which has 0:08:28.120 --> 0:08:31.160 faced some real struggles lately, and not just because of 0:08:31.280 --> 0:08:34.440 US consumers pulling back on their spending. For more on 0:08:34.480 --> 0:08:38.400 what to expect, we're joined by Jennifer bartashis Bloomberg Intelligence 0:08:38.400 --> 0:08:42.000 Senior Analysts Retail, Staples and packaged Foods. Well, Jen, thank 0:08:42.040 --> 0:08:44.000 you for being here. You know, just this past week, 0:08:44.480 --> 0:08:47.560 Walmart reported strong earnings for last quarter, but warrened, it'll 0:08:47.559 --> 0:08:51.080 have to start raising prices talking about the Trump tariffs 0:08:51.200 --> 0:08:54.640 the economic turbulence that they've caused. Are you expecting to 0:08:54.640 --> 0:08:56.880 see something pretty similar from Target? 0:08:57.920 --> 0:09:00.720 Yeah? It was interesting when you've we've got a company 0:09:00.760 --> 0:09:03.360 as big as Walmart saying that they're not going to 0:09:03.400 --> 0:09:06.680 be able to offset the full cost of tariffs. That 0:09:06.840 --> 0:09:10.040 really means that for every other retailer out there, they're 0:09:10.040 --> 0:09:12.640 in the same boat, or maybe even slightly worse off. 0:09:12.720 --> 0:09:16.480 And so we definitely expect Target to be hit a 0:09:16.520 --> 0:09:19.560 little bit harder than Walmart, even just because of the 0:09:19.679 --> 0:09:24.480 mix of products that Target sells, and we expect to 0:09:24.480 --> 0:09:26.600 hear a lot of similar commentary coming out of the 0:09:26.640 --> 0:09:27.600 retailer this week. 0:09:28.160 --> 0:09:30.960 Now, some of those problems or some of those challenges 0:09:31.040 --> 0:09:35.520 for Walmart, where Walmart makes about half its money from groceries, 0:09:35.559 --> 0:09:38.360 Target maybe about a quarter percent. Is that part of 0:09:38.400 --> 0:09:39.280 the equation there? 0:09:40.600 --> 0:09:43.840 That is definitely part of the equation because food is 0:09:44.000 --> 0:09:47.079 generally for the most part produced and made in the 0:09:47.160 --> 0:09:49.960 United States, so it's not subject to tariffs. And a 0:09:50.000 --> 0:09:52.600 lot of food that is imported is coming from Mexico 0:09:52.679 --> 0:09:56.160 or Canada, which is also currently free from tariffs based 0:09:56.160 --> 0:10:01.600 off of the North America. Mexico wedded a Mexico US 0:10:01.640 --> 0:10:05.439 trade agreement, and so there's limited exposure to tariffs in 0:10:05.480 --> 0:10:08.200 a food business. So the bigger your food business, the 0:10:08.200 --> 0:10:12.480 better you offer are in this tariff situation. So for Target, 0:10:12.640 --> 0:10:16.520 their food business is a lot smaller, and so it 0:10:16.559 --> 0:10:18.680 doesn't give them as much of a cushion as it 0:10:18.720 --> 0:10:19.600 does for Walmart. 0:10:20.360 --> 0:10:24.120 And let's talk about the consumer, because I know that's 0:10:24.160 --> 0:10:26.880 why a lot of them go to Walmart and also 0:10:27.000 --> 0:10:29.760 to Target. But we saw some just this past week 0:10:30.160 --> 0:10:33.160 retail sales for April that was the month those Trump 0:10:33.200 --> 0:10:36.440 tariffs were announced, and yet they edged a little bit 0:10:36.480 --> 0:10:39.360 higher unexpectedly, only one tenth of a percent, but it 0:10:39.400 --> 0:10:42.559 was an increase. What is the consumer doing right now? 0:10:43.240 --> 0:10:44.120 How are they acting. 0:10:44.840 --> 0:10:45.040 Well. 0:10:45.080 --> 0:10:47.880 What was interesting I think about those numbers is that 0:10:48.200 --> 0:10:52.559 there were consumers who cautiously pulled forward some of their 0:10:52.600 --> 0:10:56.360 spending because they weren't sure when price hikes related to 0:10:56.400 --> 0:10:59.000 tariffs were going to take effect. And so although we 0:10:59.040 --> 0:11:03.600 didn't see a run on stores where inventory just disappeared 0:11:03.679 --> 0:11:07.200 and things were in shortage, there was some pull forward 0:11:07.280 --> 0:11:09.680 and spending where people were planning and they said, you know, 0:11:09.800 --> 0:11:12.080 I usually buy this, I'm just going to buy a 0:11:12.080 --> 0:11:14.440 little bit extra because I don't know what's going to happen. 0:11:14.880 --> 0:11:18.520 So now that we have a little bit more clarity, 0:11:18.640 --> 0:11:22.120 people haven't seen prices move too quickly. I think that 0:11:22.240 --> 0:11:26.200 the consumer is just staying very cautious. You know, they're 0:11:26.240 --> 0:11:29.880 looking for value. Now. Value applies in different ways to 0:11:29.920 --> 0:11:33.360 different people. It could be just price, it could be convenience, 0:11:33.440 --> 0:11:37.079 it could be quality. So what's really important for retailers 0:11:37.240 --> 0:11:41.520 is to figure out how to translate that value message 0:11:41.960 --> 0:11:45.280 appropriately even in the with the backdrop of the economic 0:11:45.360 --> 0:11:46.440 environment in tariffs. 0:11:46.720 --> 0:11:49.840 Yeah, it's a fine line, a tricky line to pull 0:11:49.880 --> 0:11:50.360 this off. 0:11:50.679 --> 0:11:53.600 Oh no, it definitely is a tricky balance, just because 0:11:54.000 --> 0:11:56.959 you don't want to risk the loyalty of your consumers, 0:11:57.000 --> 0:11:58.880 but at the same time you still have to make 0:11:59.040 --> 0:12:01.920 a profit, and so it's going to be interesting to 0:12:01.960 --> 0:12:05.960 see which retailers are best able to navigate that situation. 0:12:06.440 --> 0:12:08.959 There will Target's earnings are out this Wednesday, and our 0:12:09.000 --> 0:12:13.640 thanks to Jennifer Bartashes Bloomberg Intelligence senior analysts retail staples 0:12:13.640 --> 0:12:17.200 and packaged foods. Coming up on Bloomberg Daybreak weekend, world 0:12:17.280 --> 0:12:21.600 and business leaders head to the Cutter Economic Forum. I'm 0:12:21.600 --> 0:12:35.480 Tom Busby and this is Bloomberg. This is Bloomberg day 0:12:35.520 --> 0:12:37.720 Break weekend, our global look ahead at the top stories 0:12:37.720 --> 0:12:40.319 for investors in the coming week. I'm Tom Busby in 0:12:40.400 --> 0:12:43.120 New York. Up later in our program and look ahead 0:12:43.120 --> 0:12:46.320 to earnings from the Chinese tech giant Bad but first. 0:12:46.679 --> 0:12:49.000 In the wake of President Trump's visit to the Middle East, 0:12:49.360 --> 0:12:51.880 the region will be in the spotlight again this week 0:12:51.920 --> 0:12:56.480 as world and business leaders touchdown for the Qatar Economic Forum. 0:12:57.000 --> 0:13:00.440 Amidst growing global instability. Could twenty twenty five herald a 0:13:00.480 --> 0:13:03.640 new era of dominance for golf nations. For more, Let's 0:13:03.640 --> 0:13:05.520 get to London and bring in Bloomberg day Break euro 0:13:05.640 --> 0:13:07.240 banker Caroline Hepgar. 0:13:07.679 --> 0:13:08.000 Tom. 0:13:08.120 --> 0:13:11.839 It's the fifth edition of the Cutar Economic Forum, an 0:13:11.840 --> 0:13:15.640 event underwritten by the State of Katar and powered by Bloomberg. 0:13:16.040 --> 0:13:19.760 This year, the theme is transforming the global economy. It's 0:13:19.760 --> 0:13:22.680 an apt topic at a time when the world's trade 0:13:22.679 --> 0:13:27.680 and capital flows, economies, investment, and energy industry are all 0:13:27.720 --> 0:13:32.520 in flux. There's also the question of geopolitical uncertainty, a 0:13:32.600 --> 0:13:37.200 phenomenon the region has battled with in Gaza, Lebanon, Iran, 0:13:37.400 --> 0:13:41.600 and elsewhere. But residents and investors are keen to showcase 0:13:41.880 --> 0:13:45.760 the Middle East potential as an emerging global player and 0:13:45.960 --> 0:13:49.840 investment partner. It's a factor President Donald Trump emphasized during 0:13:49.840 --> 0:13:54.559 his recent visit to Saudi Arabia. Despite acknowledging current barriers 0:13:54.600 --> 0:13:56.040 to progress. 0:13:55.840 --> 0:14:00.000 The Golf Nations are at the forefront of creating a stable, peaceful, 0:14:00.120 --> 0:14:04.440 and prosperous Middle East. And I have to say that 0:14:05.080 --> 0:14:09.480 I've seen such progress. It's really incredible. I've also seen 0:14:09.520 --> 0:14:12.760 great unity and friendships. I've spent a little time with 0:14:12.840 --> 0:14:16.840 you just before this, and I've seen tremendous unity, tremendous friendship. 0:14:16.920 --> 0:14:19.720 And the whole world is watching the Middle East, and 0:14:19.800 --> 0:14:23.160 many are watching with envy. You have something very special 0:14:23.200 --> 0:14:27.680 going on. Incredible opportunities are within reach for this region 0:14:28.520 --> 0:14:31.200 if we can simply stop the aggression from a small 0:14:31.240 --> 0:14:33.040 group of pretty bad actors. 0:14:33.600 --> 0:14:36.840 That was President Trump speaking during his time in Riad, 0:14:36.920 --> 0:14:40.520 Saudi Arabia as part of his Middle East tour. The 0:14:40.560 --> 0:14:44.240 praise and the deals that President Trump lavished on Cuta, 0:14:44.440 --> 0:14:47.760 saying that the friendship between the US and Cutter has 0:14:47.800 --> 0:14:51.040 never been stronger, will surely be on the minds of 0:14:51.080 --> 0:14:55.560 participants at the upcoming Cutter Economic Forum. So what should 0:14:55.560 --> 0:14:58.920 we expect. I've been speaking to Blueberg's managing editor for 0:14:58.960 --> 0:15:01.880 the Middle East and North Africa on and to get 0:15:01.880 --> 0:15:04.800 a sense of what the main themes at the forum 0:15:04.880 --> 0:15:05.640 are likely to be. 0:15:06.120 --> 0:15:10.400 The overarching theme these officially will be that will shape 0:15:10.400 --> 0:15:14.120 the discussions that the Cutar Economic Forum will be the 0:15:14.200 --> 0:15:18.240 transforming transformation of the global economy on the road to 0:15:18.480 --> 0:15:22.840 twenty thirty. And that's especially relevant to the region to 0:15:22.960 --> 0:15:27.040 the Middle East Gulf, where oil producers are at the 0:15:27.080 --> 0:15:31.760 forefront of that transformation as they are trying to diversify 0:15:32.200 --> 0:15:36.960 their sources of income and their economy more broadly away 0:15:37.000 --> 0:15:40.600 from hydrocarbons. And that is an effort led by the 0:15:40.800 --> 0:15:43.040 likes of cutter, as well as Saudi Arabia and of 0:15:43.040 --> 0:15:46.960 course the United Arab Emirates where Abu Dhabi is the 0:15:47.040 --> 0:15:50.520 capital and Dubai is the commercial heartland. 0:15:52.040 --> 0:15:55.200 I talked about the praise, but there are also lots 0:15:55.200 --> 0:15:57.880 of questions and there are certainly plenty of tensions. The 0:15:58.040 --> 0:16:04.760 backdrop of global trade, disruption of geopolitical instability will that 0:16:04.840 --> 0:16:08.040 surely play into the discussions definitely. 0:16:08.080 --> 0:16:12.160 So the forces unleashed by the global trade war, if 0:16:12.200 --> 0:16:14.640 we can call it that at this point, or maybe 0:16:14.680 --> 0:16:18.680 more cautiously, disruptions to the global trade are weighing down 0:16:18.680 --> 0:16:22.080 on economies across the world, but the impact is likely 0:16:22.160 --> 0:16:26.320 to be more profound in the region than elsewhere, especially 0:16:26.360 --> 0:16:32.400 taking into account taking into account the effect on oil 0:16:32.480 --> 0:16:38.160 prices as well as sources of geopolitical instability that you 0:16:38.240 --> 0:16:46.240 have already mentioned. Trade disruptions amplified by other factor other 0:16:46.320 --> 0:16:50.360 factors such as Ope's own decision to bring forward some 0:16:50.520 --> 0:16:56.080 of the planned production boosts already is having a great 0:16:56.720 --> 0:17:00.800 impact on oil prices and they're pushing them down and 0:17:00.880 --> 0:17:05.560 those revenues, the revenues from oil in general makes up 0:17:05.560 --> 0:17:08.320 the backbone of common revenues, so that is definitely going 0:17:08.400 --> 0:17:11.480 to be a part of the discussion at the Katar 0:17:11.600 --> 0:17:16.199 Economic Forum. And obviously we should add to that the 0:17:16.400 --> 0:17:20.200 violent conflicts, including the war in Gaza between Israel and Hamas, 0:17:20.560 --> 0:17:23.600 which now has been raging for more than a year 0:17:24.200 --> 0:17:28.720 and a half, and it's something that forum participants will 0:17:28.760 --> 0:17:32.359 definitely discuss as it does affect everything from the capital 0:17:32.440 --> 0:17:35.320 flows to a perception of risk, which has obviously a 0:17:35.400 --> 0:17:40.320 huge impact on investors' propensity to increase exposure to the region. 0:17:41.080 --> 0:17:44.520 And the conflicts in Gaza, the war in Yemen, you know, 0:17:44.800 --> 0:17:48.959 whether the sanctions against Syria may be lifted by the US, 0:17:49.080 --> 0:17:53.560 you know, the whole issue of security. But just tell 0:17:53.640 --> 0:17:56.080 us about the people who are going to be there, 0:17:56.119 --> 0:17:58.760 Who are going to be attending. I mean you've got 0:17:58.800 --> 0:18:01.720 speakers from you know, the likes of the TESTA CEO 0:18:01.760 --> 0:18:06.560 Elon Musk, to central bankers, even to you know, former 0:18:06.560 --> 0:18:09.359 British politician Dominic rab is going to be there. So 0:18:10.160 --> 0:18:13.000 who are you going to be thinking about and listening 0:18:13.000 --> 0:18:13.720 to the event. 0:18:15.440 --> 0:18:19.040 That's true, a wide range of speakers. The highlight is 0:18:19.040 --> 0:18:24.800 definitely Elon Musk with everything he has to say about 0:18:25.080 --> 0:18:28.359 his efforts to increase government efficiency in the US to 0:18:28.600 --> 0:18:32.400 Tesla and the competition that he is facing from manufacturers 0:18:32.440 --> 0:18:36.000 elsewhere in the world, including in China. But besides that, 0:18:36.200 --> 0:18:41.240 we will see finance ministers, global investors and venture capitalists 0:18:41.760 --> 0:18:44.320 who will be coming together during the Cutar Economic Form 0:18:44.359 --> 0:18:47.679 to discuss everything from transformation of the global economy, the 0:18:47.720 --> 0:18:52.440 regional economies, trade disputes, energy prices, and of course geopolitics 0:18:52.440 --> 0:18:54.960 of the Middle East. And I think that's where Dominic 0:18:55.000 --> 0:18:58.960 rabb among a few others such as David Petris, the 0:18:59.080 --> 0:19:03.720 former general, former American General, will be coming to the 0:19:03.720 --> 0:19:06.879 fort to discuss your politics and conflicts in the region. 0:19:07.280 --> 0:19:12.360 Yeah, David Patres, Yes, indeed. But you mentioned investment opportunities 0:19:12.600 --> 0:19:17.159 and the idea of diversifying away from hydrocarbons, obviously a 0:19:17.320 --> 0:19:20.880 huge undertaking in the Middle East. Do you think that 0:19:21.119 --> 0:19:24.919 GCC countries and others are going to try to hedge 0:19:24.960 --> 0:19:29.320 their dependence on the kind of US led global financial order. 0:19:29.560 --> 0:19:33.359 Obviously it comes on the back of President Trump's major tour, 0:19:33.480 --> 0:19:38.119 his first sort of big overseas tour other than the 0:19:38.200 --> 0:19:41.359 visit to the Vatican. Do you think that there's going 0:19:41.440 --> 0:19:45.479 to be discussion of that, of that balance of power 0:19:45.600 --> 0:19:48.440 and kind of investment relationships. 0:19:49.920 --> 0:19:56.240 This is a very tricky balance for golf oil producers, 0:19:56.400 --> 0:20:01.680 and if anything, since Donald Trump's to be the second 0:20:02.040 --> 0:20:04.920 to be the president of the US for a second time, 0:20:05.680 --> 0:20:08.919 the nature of the relationship between the US and this 0:20:09.040 --> 0:20:13.840 region is becoming more transactional, and it's affecting the narrative 0:20:15.040 --> 0:20:20.800 that's dominating, that's dominating the discussions and the ties between 0:20:21.240 --> 0:20:24.920 the US and the region. So because of the fact 0:20:25.000 --> 0:20:27.800 that the US relationship with the region is but becoming 0:20:27.840 --> 0:20:31.720 more trans is actional than it used to be, we 0:20:31.960 --> 0:20:37.560 are going to see an increasing pressure or increasing tendency 0:20:37.600 --> 0:20:41.679 by the US to force the countries in the region 0:20:42.160 --> 0:20:46.119 to make a clear choice in terms of their preferred 0:20:46.200 --> 0:20:50.560 partners for trade, especially in sensitive areas such as AI, 0:20:51.080 --> 0:20:56.719 high technology, defense equipment, and aviation. One of the things 0:20:56.800 --> 0:21:01.119 that the US administration has been trying to think the 0:21:01.160 --> 0:21:04.240 purchases of such sensitive and high technology coming from the 0:21:04.400 --> 0:21:08.080 US for countries in the region is that they should 0:21:08.119 --> 0:21:13.200 not be doing trade in such sssive areas with sort 0:21:13.200 --> 0:21:17.360 of the other pole in the global financial and economic order, 0:21:17.440 --> 0:21:20.399 and that is China. So we are going to see 0:21:20.560 --> 0:21:24.880 I think a tendency by the region by members of 0:21:24.920 --> 0:21:28.440 the GCC, especially these top three producers of oil and gas, 0:21:29.320 --> 0:21:34.200 to prioritize the US as a trading partner, as it 0:21:34.320 --> 0:21:37.040 was evident during Trump's trip to the Gulf, as you 0:21:37.119 --> 0:21:40.800 mentioned over their relationship with the rest of the world 0:21:40.880 --> 0:21:41.879 and possibly China. 0:21:42.200 --> 0:21:45.879 That was Bloomberg's Managing editor for Middle East and North Africa, honor, 0:21:45.960 --> 0:21:48.960 and my thanks to him for joining me ahead of 0:21:49.000 --> 0:21:53.040 the fifth Cutter Economic Forum underwritten by the State of Cutter, 0:21:53.200 --> 0:21:56.960 empowered by Bloomberg. I'm Caroline Hepge here in London where 0:21:57.000 --> 0:22:00.000 you can catch us every weekday morning for Bloomberg Daybreak. 0:22:00.000 --> 0:22:02.400 Thank you at beginning at six am in London. That's 0:22:02.480 --> 0:22:03.639 one am on Wall Street. 0:22:03.720 --> 0:22:07.280 Tom, Thanks Caroline, and coming up on Bloomberg day Break weekend, 0:22:07.320 --> 0:22:09.760 we look ahead to earnings from China's answer to Google 0:22:10.240 --> 0:22:24.600 by DO. I'm Tom Busby and this is Bloomberg. This 0:22:24.680 --> 0:22:26.879 is Bloomberg day Break weekend, our global look ahead of 0:22:26.920 --> 0:22:29.400 the top stories for investors in the coming week. I'm 0:22:29.480 --> 0:22:33.200 Tom Busby in New York. BYD's early lead in AI 0:22:33.359 --> 0:22:36.520 is being eroded by fast moving competitors and its core 0:22:36.600 --> 0:22:40.280 search business continues to lose ground to short form video apps. 0:22:40.680 --> 0:22:42.639 For more on what's going on, let's get to the 0:22:42.640 --> 0:22:45.400 host of the Daybreak Asia podcast, Doug Krisner. 0:22:45.800 --> 0:22:49.480