Speaker 1: This is Bloomberg Daybreak Weekend or Global look at the
Speaker 1: top stories in the coming week from our day break
Speaker 1: anchors all around the world, and just to have on
Speaker 1: the program some insight into what the Reserve officials are
Speaker 1: really thinking. I'm John Tucker in New York.
Speaker 2: I'm Kaylee Lyones in Washington, where we're looking ahead to
Speaker 2: Tim Scott and Ron De Santis entering the presidential race.
Speaker 3: I'm Brian Curtis in Hong Kong. What might we learn
Speaker 3: about China's ev market through the prism of X Punk's earnings.
Speaker 4: I'm callin Heppy here in London. We're looking ahead to
Speaker 4: Bloomberg's cut our Economic forum in Doha.
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Speaker 1: Hi, everybody, I'm John Tucker. Let's start today's program with
Speaker 1: a federal Reserve Board, the US Center Bank will be
Speaker 1: releasing minutes of its last policy setting meeting, and for
Speaker 1: a look at that and more insight into everything to
Speaker 1: do with monetary policy. We're joined now by Bluebird's Mike McKee.
Speaker 1: I hope that captured everybody's attention there, Michael. But anyway,
Speaker 1: what are we expecting.
Speaker 6: Well, this is gonna be a little bit different minutes,
Speaker 6: and it may be a little bit more important. Usually
Speaker 6: we're pointing out that the minutes come out three weeks
Speaker 6: after a decision, and a lot changes in those three weeks,
Speaker 6: and Fed officials may have changed their views. But in
Speaker 6: this case, it doesn't look like much has changed. Inflation
Speaker 6: has come down just a little bit, but it's starting
Speaker 6: to slow at the rate of descent. Unemployment is still
Speaker 6: very very low, at a like forty to fifty year
Speaker 6: record low, and so the conditions are still about the same,
Speaker 6: which raises the question of is the Fed going to
Speaker 6: pause when it gets to June? And at this point
Speaker 6: the minutes may give us a real insight into a
Speaker 6: lot of their thinking. A lot of them have been
Speaker 6: talking lately and they all say pretty much the same thing.
Speaker 6: We don't want to decide yet because the data haven't
Speaker 6: been decisive and we're data dependent.
Speaker 1: Well, let me ask you that is really every It
Speaker 1: sounded to me like not everybody is on the same
Speaker 1: page at the Federal Reserve, and I'll harken back to
Speaker 1: Alan Greenspan, who seemed to rule the Federal Reserve with
Speaker 1: an iron fist. Everybody was on the same page. They
Speaker 1: better be or they were going to get slapped down
Speaker 1: by the chairman.
Speaker 6: Well that doesn't happen anymore. There's a little bit more
Speaker 6: democracy on the Fed board. But the overall impression you
Speaker 6: get is that some people are leaning towards a pause
Speaker 6: because they've gone up five hundred and twenty five basis
Speaker 6: points in the last year, and at some point you
Speaker 6: start to risk a recession. But they are all emphasize
Speaker 6: that they are very much locked on the idea of
Speaker 6: bringing down inflation, and inflation if it doesn't start to
Speaker 6: really drop soon could get them to continue raising rates
Speaker 6: at least one more time. And we have another CPI
Speaker 6: report and a PCEE inflation report before their meeting, So
Speaker 6: at this point people are going to be looking at
Speaker 6: the minutes to see what it is they are focused on,
Speaker 6: whether they think that the outlook for inflation is going
Speaker 6: to slow, or if they think the outlook for inflation
Speaker 6: is very mixed and maybe they need a little insurance.
Speaker 1: I found this quote from the late German economist Rudy Dormbusch.
Speaker 1: I think, you know it. Things take longer to happen
Speaker 1: than you think in economics than they will, and then
Speaker 1: they happen faster than you thought they could. So my
Speaker 1: question is when things turn. Are they turning in terms
Speaker 1: of the inflation front for the Federal Reserve? And when
Speaker 1: they turn? Today happened really fast. I mean, we've been
Speaker 1: waiting for these whatever long and variable lags, seems like forever.
Speaker 6: It's probably not going to barring some sort of outside shock,
Speaker 6: something with oil or energy, or the war in Ukraine
Speaker 6: or something like that. It's probably going to be a
Speaker 6: more gradual turn. Unemployment will start to go up. If
Speaker 6: it does slowly, then it could jump in a couple
Speaker 6: of months. But at this point the Fed is not
Speaker 6: expecting that to happen, so it's not going to be
Speaker 6: what their focus is in terms of short term economic policy.
Speaker 6: And even if it does go up. I talked to
Speaker 6: a number of them at the Atlanta Fed conference this
Speaker 6: past week, and they all said, we're not going to
Speaker 6: lower rates if unemployment starts to rise because we still
Speaker 6: need to bring inflation down. Now, inflation could start to
Speaker 6: fall relatively quickly because we've been waiting for over a
Speaker 6: year for dropping rents to bring down housing prices in
Speaker 6: the CPI and the PCE, and that hasn't really happened yet,
Speaker 6: but there are signals that could start happening, So we
Speaker 6: could see a relatively quick drop in overall inflation if
Speaker 6: that starts to happen. But again, FED wants to make
Speaker 6: sure that inflation is on its way down, so they're
Speaker 6: not going to be quick to move on it.
Speaker 1: All right, If you look at the market betting market participants,
Speaker 1: they're betting that they're going to be not just a
Speaker 1: pause at the Fed's meeting in June, but they're also
Speaker 1: betting that they're going to be actual interest rate counts
Speaker 1: by the Federal Reserve this year. Why is there such
Speaker 1: a disconnect, it seems, between what the market participants are
Speaker 1: thinking and what the Federal Reserve officials are actually saying.
Speaker 6: Well, there seem to be two reasons. One is that
Speaker 6: a lot of participants in the markets are using FED
Speaker 6: fun futures as a hedge in case we had a
Speaker 6: debt ceiling collapse. So that puts some weight on the
Speaker 6: FED cutting rate, Fed having to cut rates if the
Speaker 6: United States defaulted in June, and so that's one reason
Speaker 6: that we've seen some movement. The other is that there
Speaker 6: is a feeling in the markets perhaps that the FED
Speaker 6: is going to see inflation coming down quickly and cut rates,
Speaker 6: and the Fed's view is we're going to see inflation
Speaker 6: come down quickly and not cut rates. But that's going
Speaker 6: to be a face off for the coming months between
Speaker 6: the markets and the Fed.
Speaker 1: The FED has this dual mandate price stability. That's the
Speaker 1: part where you try to keep inflation somewhere near their
Speaker 1: target and the employment part of it. What's the employment
Speaker 1: part doing well.
Speaker 6: The employment part is not doing what the FED thought
Speaker 6: it would be doing. The FED thought, based on what's
Speaker 6: happened in the past, that they raise interest rates and
Speaker 6: businesses don't want to pay higher rates, so they stop investing,
Speaker 6: business goes down, and they end up cutting employees. That
Speaker 6: hasn't happened. This is an unusual situation coming out of
Speaker 6: the pandemic, where companies could not find workers. And again
Speaker 6: at the Atlanta FED conference, the FED people I talked
Speaker 6: to all said that the companies in their districts are
Speaker 6: telling them they're going to hoard workers for now. They're
Speaker 6: not going to let people go right away because it
Speaker 6: was so hard to find them before. So unemployment's been
Speaker 6: very sticky. As I mentioned, it's come down to the
Speaker 6: lowest since nineteen sixty nine at three point four percent,
Speaker 6: and it is it's an open question as to how
Speaker 6: fast that might move.
Speaker 1: Okay, how far away are we from the Fed's goal
Speaker 1: of what is a two percent rate of inflation in
Speaker 1: the United States?
Speaker 6: Well, it's an interesting question because we're a lot closer
Speaker 6: than we were. We're at four point nine percent on
Speaker 6: the CPI and we were at nine. So it's come
Speaker 6: down quickly given the FED restraint. But from here on
Speaker 6: it gets harder to do. We get into categories that
Speaker 6: are more sticky, harder for the FED to effect, and
Speaker 6: so they don't really know how fast it can come down.
Speaker 6: Their latest forecast, which was made at the March meeting,
Speaker 6: was that we would not get to two percent until
Speaker 6: twenty twenty five. We'll see if they change that when
Speaker 6: they get to.
Speaker 1: June is that carved in stone or can they amend that?
Speaker 6: They can amend that, they will amend it. And also
Speaker 6: we have to realize that these forecasts that we always
Speaker 6: talk about, it's not a forecast. I keep getting reminded
Speaker 6: of that by FED people. These are nineteen different outlooks
Speaker 6: for various economic indicators based on what these FED officials
Speaker 6: individually think is the proper monetary policy. So we tend
Speaker 6: to look at the sort of combined number and average
Speaker 6: it out and say this is the FED forecast, and
Speaker 6: it's it's not really a forecast, but it's the closest
Speaker 6: thing we have. So that's how the markets react.
Speaker 1: Well, let's get back to the projection, at least by
Speaker 1: the markets, that there could be rate cuts sometime this year.
Speaker 1: Does that if there were to be, doesn't that strike
Speaker 1: at the heart of the credibility of the Federal Reserve?
Speaker 1: In one turn they're raising rights and then a few
Speaker 1: months later they're cutting. That's like an admission of we
Speaker 1: blew it.
Speaker 6: It could be. But FED funds futures are only one
Speaker 6: small part.
Speaker 5: Of the market.
Speaker 6: It's not a very deep or liquid market. And what
Speaker 6: you also have is things like tip yields, tips shields
Speaker 6: and other inflation break even indicators that suggest the FED
Speaker 6: is going to be bringing down inflation. Inflation is going
Speaker 6: to fall off. So then it just becomes a question
Speaker 6: of does the FED keep rates high because it wants
Speaker 6: to make sure it's going to get to two percent
Speaker 6: and they don't think that will happen until twenty twenty five,
Speaker 6: or do they respond to falling inflation by saying we
Speaker 6: need to cut rates a little bit because otherwise we
Speaker 6: get too restrictive. Real rates will start to go up
Speaker 6: even farther. So at this point, again it's kind of
Speaker 6: an open question, which brings the minutes back into it
Speaker 6: in terms of being something that might actually provide us
Speaker 6: with some guidance on how they're thinking about this.
Speaker 1: As always, Bloomberg's Mike McKeith, thanks very much for stopping,
Speaker 1: but I appreciate it, and just to hend on Bloomberg
Speaker 1: Daybreak Weekend, the Middle Eastern Focus. Final preparations underway for
Speaker 1: Bloomberg's Guitar and Economic Forum. I'm John Tucker. This is Bloomberg.
Speaker 1: This is Bloomberg Daybreak Weekend, our global look ahead at
Speaker 1: the top stories for investors in the coming week. I'm
Speaker 1: John Tucker in New York. Up later in the program
Speaker 1: Florida Governorrohan DeSantis and the race for the Republican presidential nomination.
Speaker 1: But first, Bloomberg's Guitar Economic Forum taking place next week
Speaker 1: with newsmakers from the urgeoning Middle East, and for more,
Speaker 1: let's send to London and bring in Bloomberg Daybreak Europe
Speaker 1: anchor Caroline hepger.
Speaker 4: John Gulf nations like Cutter may be expected to grow
Speaker 4: more slowly in the short term with the oil prices down,
Speaker 4: but their ambition in recent years has soared. Remember Cutter
Speaker 4: hosted the World Cup in twenty twenty two is looking
Speaker 4: now to increase local stock trading to diversify its economy,
Speaker 4: as many other countries in the region are attempting to
Speaker 4: do so. A moment for unique perspectives from business and
Speaker 4: government leaders and Bloomberg anchor and editor at large Francine
Speaker 4: Lackwell will be in Doha force and he joined me
Speaker 4: now today discussed before the big trip. Look, first of all,
Speaker 4: I suppose this is a moment to think about cut
Speaker 4: on its role in the global economy, right, yes.
Speaker 7: And Ei, Caroline, I mean the question is that there
Speaker 7: are so many uncertainties. When it comes to global growth,
Speaker 7: it's of course the US China tensions, it's all the
Speaker 7: supply chain issues, it's inflation, and really China's reopening providing
Speaker 7: this welcome boost to global growth, off setting weakness in Europe,
Speaker 7: but we're not one hundred percent sure how long this lasts,
Speaker 7: and then this lingering recession risk in the US. So
Speaker 7: I think when we go to Doha and Qatar for
Speaker 7: the third annual Qatar Economic Forum, we'll try and take
Speaker 7: stock on what role the Middle East plays into all
Speaker 7: of this, not only geopolitical, of course, these are very
Speaker 7: energy intensive countries because of oil and gas, but really
Speaker 7: how they're capitalizing on this new world So the region's
Speaker 7: sovereign wealth funds, a lot of them, will be their
Speaker 7: flush with oil and gas revenue, and they're really trying
Speaker 7: to compete to fill the three trillion dollar liquidity gap
Speaker 7: left by Wall Street retreat. So if you look at
Speaker 7: you know, the warring World, so on geopolitics, US China
Speaker 7: with Europe somewhere in the middle you know, the Rush
Speaker 7: attentions because of the invasion of Ukraine. The real question
Speaker 7: is how do the oil rich nations behave going forward?
Speaker 7: Do they buy things up. I know there's a lot
Speaker 7: of speculation about, for example, the Katari's getting into British
Speaker 7: football and in general, like what role do they have
Speaker 7: to play in the next five ten years? Where do
Speaker 7: they deploy cash? Where did they see the best opportunities?
Speaker 4: Yeah? Absolutely, I mean look just at the Guitar Investment
Speaker 4: Authority with four hundred and fifty billion dollars in the
Speaker 4: Sovereign Wealth Fund. I mean this is a huge amount
Speaker 4: of money. But as you say, although these GCC and
Speaker 4: Middle Eastern countries are trying to diversify away from oil,
Speaker 4: the energy picture is so important. I mean I remember
Speaker 4: at the beginning of my career the idea of peak
Speaker 4: oil was kind of crack pots, right, And yeah, we
Speaker 4: have come so far since then, and this is the
Speaker 4: big issue, isn't it, the energy transition.
Speaker 7: I mean I've been a lot around so long. I
Speaker 7: used to go jogging. I used to cover Opek that
Speaker 7: was my first job at Bloomberg, and we used to
Speaker 7: go jogging with the Densaudi oil minister and he'd I
Speaker 7: mean he'd say one word and the old price would
Speaker 7: move by four or five dollars. I mean, there were
Speaker 7: kings and the complex has really changed.
Speaker 4: Yeah, and so I suppose they're role in terms of
Speaker 4: the energy picture. Then how do you think people at
Speaker 4: the forum are going to be thinking about this issue?
Speaker 7: So it'll be interesting, and we have a couple of
Speaker 7: energy ministers, including of course the guitar Energy Minister or
Speaker 7: Minister for State Affairs and Energy. He will probably talk
Speaker 7: about the energy trilemma. So this is the idea that
Speaker 7: they need to balance energy and reliability with security, affordability
Speaker 7: and sustainability. Again, this could be a long way off
Speaker 7: given how the price of oil has behaved. We did
Speaker 7: also have this really interesting report yesterday from the International
Speaker 7: Energy Agency, which we'll probably ask the energy ministers about,
Speaker 7: because they said global oil demand climb more strongly than
Speaker 7: previously estimated this year because of the post pandemic rebound
Speaker 7: from China. That beat expectations. But remember the IA we're
Speaker 7: really telling OPEK Plus of course, which Qatar is a
Speaker 7: member of, saying you should not cut production at this point.
Speaker 7: This is a mistake going forward, but if you look
Speaker 7: at the complex, maybe they were right to do so
Speaker 7: because they also had to readjust their demand for last year.
Speaker 7: So again, oil demand never walks in a simple line,
Speaker 7: and so it'll be interesting on the ground, I think
Speaker 7: to get some of the also hopes or fears for
Speaker 7: them to get more gas in Europe through various ways
Speaker 7: because of the invasion in Ukraine.
Speaker 4: Yeah, and also the changing picture in China of course,
Speaker 4: which is moving quite swiftly, has done certainly in the
Speaker 4: last bits of economic data around China's recovery not perhaps
Speaker 4: being as strong as we thought that so many factors.
Speaker 4: The region though, is also a very important in terms
Speaker 4: of demand for plane makers. We know some of the
Speaker 4: big names are going to be out the forum and
Speaker 4: supply chain issues. How does cutoff fits in with that?
Speaker 7: So I have a panel which I'm looking forward to
Speaker 7: with the Qatar Airways chief executive officer and the Boeing
Speaker 7: chief executive officer and now companies like you know, General Electric,
Speaker 7: Nike and Boeing have all had supply issues. So I
Speaker 7: think when we speak to Boeing it'll be one of
Speaker 7: the first times to really sit down after that massive
Speaker 7: order that he got from Ryanair and go through right
Speaker 7: you're getting the orders in. We understand that Katar also
Speaker 7: wants to impose new roots or get new roots because
Speaker 7: travel demand is back a what does that mean for sustainability?
Speaker 7: What does it mean for their green ambitions? But two,
Speaker 7: is Boeing going to see a supply chain issue exacerbated
Speaker 7: because these new orders are going to come through and
Speaker 7: will they be able to deliver on a lot of
Speaker 7: these supply chain issues? So I think again there, you
Speaker 7: know a lot of these big chief executives show up
Speaker 7: because they can get orders from these companies. Right, Katar
Speaker 7: is a very energy intensive country with a lot of
Speaker 7: money to spend, so the envy really of a lot
Speaker 7: of our G seven country And I think he'll probably
Speaker 7: speak quite candidly about how many orders they can get
Speaker 7: and how much they can deliver, and it'll be interesting
Speaker 7: to get his thoughts on how we change the way
Speaker 7: that we travel.
Speaker 4: Yeah, definitely. And then there are some other major chief
Speaker 4: executives that we have to think about and speaking to Bloomberg,
Speaker 4: one of whom, of course is the boss of TikTok.
Speaker 4: At a very pivotal moment.
Speaker 7: I'm so excited Caroline heid Is sitting down at the
Speaker 7: chief executive TikTok and this really has everything. It has,
Speaker 7: you know, the youth wanting to be on TikTok and
Speaker 7: has like the lawmakers in the US saying, how do
Speaker 7: we regulated. If we stamp it down completely, maybe we
Speaker 7: lose voters because people are so addicted to the product.
Speaker 7: One of TikTok's most senior officials in charge of ensuring
Speaker 7: safety also had left the company just a couple of
Speaker 7: months ago, and he's been one of the most prominent
Speaker 7: officials in this all out effort to convince skeptical lawmakers
Speaker 7: and policymakers that the app is safe in the US.
Speaker 7: So it'll be interesting to hear firsthand from the executive
Speaker 7: about what he's doing to speak to US lawmakers. Sometimes
Speaker 7: they don't speak, you know, with the same words. And again,
Speaker 7: Katar will be pivotal for that because we know that
Speaker 7: they're also helping Elon Musk for example on Twitter, so
Speaker 7: they're you know, they invest a lot in tech across
Speaker 7: the world and also in China.
Speaker 4: Yeah, and I think maybe it's not even just the
Speaker 4: US conversation. The European conversation is so important. UK lawmakers.
Speaker 4: They know I've got an or in this also. I mean,
Speaker 4: we had the gym Sharks CEO speaking to Bimberg Radio
Speaker 4: and TV just this week, a kind of he's one
Speaker 4: of the youngest billionaires in the UK, and he's built
Speaker 4: the business largely around these social media channels, including TikTok. So, yeah,
Speaker 4: it was kind of interesting to say, Tim, what happens
Speaker 4: if TikTok were to disappear, let's say, not totally out
Speaker 4: of the realms of possibility.
Speaker 7: And also what happens with AI and that transforms right,
Speaker 7: everything that we're seeing with with our social media channels.
Speaker 7: So what if the algorithm changes, even if lawmakers don't
Speaker 7: step in and stomp it out completely. I don't know
Speaker 7: how you find me if you have a personal friend
Speaker 7: like chat, GPT that you can just ask things. Do
Speaker 7: you spend less time on social media? And so many
Speaker 7: questions that we're going to try to get to the
Speaker 7: bottom of.
Speaker 4: Yeah, absolutely, and other big interviews that we have to
Speaker 4: watch out for them, thinking about the run down next
Speaker 4: week and the big names.
Speaker 8: It's eclectic.
Speaker 7: We like an eclectic forum. So we're speaking to Steve Schwartzman.
Speaker 7: He's the chairman, chief executive officer and founder of Blackstone.
Speaker 7: The other one that really caught my eyes general portray
Speaker 7: us now he's a KKR, but of course he was
Speaker 7: one of the most important generals for the US will
Speaker 7: be interesting to talk to him about foreign policy and
Speaker 7: national security. And then I have a third one Steve Munuchin,
Speaker 7: again a critical he was Treasury secretary under Donald Trump.
Speaker 7: He'll be critical, critical in trying to understand where he
Speaker 7: thinks the US debt scene. Conversation is going.
Speaker 4: Okay, Frosine, I wish you luck. I hope you have
Speaker 4: a fantastic trip. Lots of reporting for us on Bloomberg Radio.
Speaker 4: Report pack great. I'm going to beg for some live
Speaker 4: interviews in amidst all of these high level interviews that
Speaker 4: you're going to be doing. My thanks to Farci lackw
Speaker 4: of course, Bloomberg anchor and editor at large. I'm Caroline
Speaker 4: Hepge Here in London. You can catch us every weekday
Speaker 4: morning for Bloomberg Daybreak. You at beginning at six am
Speaker 4: in London. That's one am on Wall Street.
Speaker 1: John, Caroline, thanks a lot, just to hit on Bloomberg
Speaker 1: day Break weekend the race for the GOP presidential nomination.
Speaker 1: I'm John Tucker. This is Bloomberg.
Speaker 5: Broadcasting live from the Bloomberg it a active Brokers studio
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Speaker 1: I'm John Tucker in New York with your global Okay
Speaker 1: Ahead at the Tom Stories for investors in the coming week,
Speaker 1: a lot of talk about Florida Governor Ron DeSantis throwing
Speaker 1: his hat in the ring for the GOP nomination for
Speaker 1: president and for more on what DeSantis candidacy means for
Speaker 1: the GOP. Let's end to our Bloomberg ninety nine one
Speaker 1: newsroom in Washington and sound on co host Kaylee Lines.
Speaker 2: Kaylee, thank you, John. Yeah, We're gearing up for go time.
Speaker 2: Watching closely this coming week when Governor DeSantis will have
Speaker 2: multiple events and it's not just him either. Senator Tim Scott,
Speaker 2: the Republican from South Carolina, has a big one too.
Speaker 2: Joining me now to talk more about this is Nancy Cook,
Speaker 2: one of our national politics reporters who covers all things
Speaker 2: twenty twenty four for us. So, Nancy, let's start with DeSantis.
Speaker 2: It's a moment we've seen coming for a long time,
Speaker 2: him finally officially throwing his hat in the ring. I
Speaker 2: know you'll be making the trip down to Florida this
Speaker 2: coming week, So what exactly are we expecting is going
Speaker 2: to happen?
Speaker 9: So we're expecting that Governor DeSantis is going to announce
Speaker 9: his candidacy in some way. He has to basically file
Speaker 9: this paperwork with the FEC to do that, so we're
Speaker 9: expecting him to do that sometime next week, and then
Speaker 9: he's going to go down to Miami. We're expecting him
Speaker 9: to announce it in some fashion the candidacy, like maybe
Speaker 9: through a video social media post. And then on Thursday,
Speaker 9: there's a big donor meet up in Miami. So Wednesday
Speaker 9: night they have a reception. Thursday, the donors are getting
Speaker 9: it briefing, and then they're expected to make a bunch
Speaker 9: of fundraising calls. Really, the purpose of that trip is
Speaker 9: to really show that they have a lot of financial support,
Speaker 9: and that's the plan. And then we're expecting him to
Speaker 9: have a more traditional campaign rally, most likely the week
Speaker 9: of June first. I think that's going to be in
Speaker 9: his hometown of Duneed and Florida.
Speaker 2: Well, you mentioned that he's going to talk to donors,
Speaker 2: and obviously he's already been in communication with them. I
Speaker 2: actually want to read out a quote from a call
Speaker 2: that the governor had with donors this past week. The
Speaker 2: New York Times was able to monitor it and reported
Speaker 2: that the governor said, you basically have three people at
Speaker 2: this point that are credible in this whole thing, Biden, Trump,
Speaker 2: and me. And I think of those three two have
Speaker 2: a chance to get elected President Biden and me based
Speaker 2: on all the data in the swing stage, which is
Speaker 2: not great for the former president. And yet Nancy DeSantis
Speaker 2: has been consistently trailing former President Trump in the polls.
Speaker 9: So he's not wrong that in polling, you know, he
Speaker 9: is matching up as a very strong candidate against President Biden.
Speaker 9: That is right. But I think so far we haven't
Speaker 9: seen the Republican electorate really care about this so called
Speaker 9: electability argument. You know, they don't care that they perhaps
Speaker 9: DeSantis is a lot younger than Trump, perhaps he is
Speaker 9: more electable, Maybe he would do better in Wisconsin and
Speaker 9: Michigan and Pennsylvania. That sort of remains to be seen.
Speaker 9: So many Republican primary voters still remain very loyal to
Speaker 9: President Trump. He has that steadfast based of thirty percent
Speaker 9: of Republican voters and that has really been immovable so far.
Speaker 9: And just his relentless attacks on DeSantis have really weakened
Speaker 9: the governor over the past three months. And I think
Speaker 9: that real challenge for DeSantis getting into the race at
Speaker 9: this point is trying to overcome that.
Speaker 2: Yeah, and how does he also differentiate himself when it
Speaker 2: comes down to actual policy, the issues that they're going
Speaker 2: to run on. When you're trying to get, you know,
Speaker 2: primary voters to pick one of you, what's DeSantis's kind
Speaker 2: of game plan there? What do we know at this point?
Speaker 9: So I think that DeSantis is really going to talk
Speaker 9: a lot about his record in Florida and what he
Speaker 9: has done. He has passed a six week abortion ban
Speaker 9: through the state legislature, which is actually something a majority
Speaker 9: of Floridians did not want him to do, but he
Speaker 9: did it anyway, which will definitely increase his appeal to
Speaker 9: evangelicals the anti abortion community. He did a permitless carry law,
Speaker 9: which meant that you can in Florida carry a gun
Speaker 9: without a permit. He has made education a very central thing,
Speaker 9: and also gender issues around transgender people. I would actually
Speaker 9: say on policy he has been further right than President
Speaker 9: Trump has, at least when he is president, and Trump
Speaker 9: has been catching up with Dysantis on some of these things.
Speaker 9: I think that those things, though, are also not appealing
Speaker 9: to general election voters. Those policies are not appealing to
Speaker 9: suburban women. We've seen from polling, they're not appealing to independence.
Speaker 9: So I think DeSantis is going to face a very
Speaker 9: tough road in a general election trying to tout this
Speaker 9: Florida record that he touts everywhere.
Speaker 6: Yeah.
Speaker 2: Well, of course, in addition to everything he's done legislatively,
Speaker 2: there's also this ongoing fight with the Disney Company. We
Speaker 2: saw just this past week, Disney announcing they're canceling plans
Speaker 2: for a new campus in Florida, not going to move
Speaker 2: two thousand employees to the state. And I know, Nancy,
Speaker 2: you've done a lot of reporting about how donors are
Speaker 2: kind of viewing this battle he has with what is
Speaker 2: kind of a behemoth in corporate America. How problematic has
Speaker 2: that been for him?
Speaker 9: I think it's problematic with donors. I don't know how
Speaker 9: much the American public is paying attention to this escalating
Speaker 9: fight between the Florida governor and Disney, because they're still
Speaker 9: kind of trying to figure out like who is Desanta's
Speaker 9: But donors don't like it. They feel like it's anti
Speaker 9: business to pick a fight with the state's largest employer.
Speaker 9: The Disney thing has not been playing well with sort
Speaker 9: of the big billionaires that he will need to court.
Speaker 2: So what does the war chest kind of look like
Speaker 2: at this point and how does it compare to some
Speaker 2: of the others that are out there. President Trump obviously
Speaker 2: front and center, but then we know there's others shocking
Speaker 2: for position too.
Speaker 9: So I would say President Trump, you know, doesn't have
Speaker 9: as much money as he had last time, but he's
Speaker 9: still and he but he's never really been extremely popular
Speaker 9: with billionaires, and a lot of the billionaire class has
Speaker 9: turned away from him. Where he has always really succeeded
Speaker 9: is in getting small dollar donations, So people who are
Speaker 9: mad about the indictment sending him twenty dollars, he has
Speaker 9: always really been quite successful with that and is continuing
Speaker 9: to be. DeSantis has a fair amount of money in
Speaker 9: his war chest from his governor's campaign, and so he's
Speaker 9: trying to transfer that money over to what will be
Speaker 9: his presidential campaign. His super pack has also raised about
Speaker 9: thirty three million dollars so far, and I think that,
Speaker 9: you know, they're going to try to raise more. So
Speaker 9: he's doing ok financially, So that's something that I'll be watching,
Speaker 9: you know, sort of that burn rate with the cash
Speaker 9: and how that ends up affecting them.
Speaker 2: And of course, you know, we focus so much on
Speaker 2: just the matchup between Trump and DeSantis because it right
Speaker 2: now does feel like a kind of number one and
Speaker 2: number two scenario when it comes to the Republican primaries.
Speaker 2: There's authors as well, Tim Scott officially going to do
Speaker 2: the thing too. So what are the real prospects for
Speaker 2: the senator?
Speaker 9: Tim Scott is announcing his candidacy on Monday, May twenty second,
Speaker 9: and I think that he is really hoping to try
Speaker 9: to capitalize on Desanta's slipping in the polls and the
Speaker 9: fact that some of these donors don't like some of
Speaker 9: his policies. Tim Scott is pretty popular with Wall Street donors,
Speaker 9: who have given a lot to his Senate campaigns in
Speaker 9: the past. He is on the Senate Banking Committee, Senate
Speaker 9: Financial Services Committee. The interesting thing about Scott, I think
Speaker 9: is that, you know, unlike Trump and DeSantis, who have
Speaker 9: sort of angry messages us versus them really doubling down
Speaker 9: on the culture wars, Scott really tries to speak with
Speaker 9: a message of hope and optimism. So his tone is
Speaker 9: much different, even if his policies aren't that different. And
Speaker 9: I think that's where he is trying to sort of
Speaker 9: make his mark.
Speaker 2: And he obviously is going to have a lot of
Speaker 2: catching up to do in theory based on the pulling
Speaker 2: we have seen to this point on what the primary
Speaker 2: would look like. But do we know how he would
Speaker 2: stack up against President Biden if he were to get
Speaker 2: to a general.
Speaker 9: I mean, he has much more conservative policies. I think
Speaker 9: that what he has going for him is that he's
Speaker 9: in his fifties, you know, he's much younger. He has
Speaker 9: an optimistic message like Biden. You know, I think it
Speaker 9: remains to be seen if he can get that far
Speaker 9: in Iowa for instance. I know he's really trying to
Speaker 9: appeal to evangelicals. You know, he himself has a deep
Speaker 9: faith and he's trying to make that case. He's very,
Speaker 9: very good at retail politics, and then I think that
Speaker 9: he's hoping that his home state of South Carolina can
Speaker 9: really carry him through.
Speaker 2: So when we think about how the larger Republican primary
Speaker 2: field is now stacking up, as we were talking about,
Speaker 2: you know, Senator Tim Scott trying to message a little
Speaker 2: bit differently than someone like DeSantis, who is trying to
Speaker 2: outrte President Trump. What is the broad signal here about
Speaker 2: the state of the Republican Party and frankly just the
Speaker 2: different factions within it.
Speaker 9: I think the state of the Republican Party is that
Speaker 9: Trump is still dominant. Trump is not really a political
Speaker 9: figure anymore in the Republican Party. He's kind of like
Speaker 9: a movement. And what I have seen on the campaign
Speaker 9: trail is that voters are still very devoted to him.
Speaker 9: Many voters are still very devoted to him. Despite the
Speaker 9: legal challenges that he faces, the indictment. You know some
Speaker 9: people who say that they are exhausted about the drama
Speaker 9: surrounding him. He is really still the dominant figure. And
Speaker 9: you know, we've seen in polling he is ahead of
Speaker 9: Desantas by about an average of thirty six percentage points
Speaker 9: in the polling. That's and he's far ahead of Dysantas,
Speaker 9: but like even further ahead of the rest of the field.
Speaker 9: And so you know, whoever is going to join the
Speaker 9: GOP primary fight at this point for the nomination is
Speaker 9: really has to take on Trump. He is sort of
Speaker 9: the big gorilla in the room.
Speaker 2: All Right, Our national politics reporter Nancy Cook, thank you
Speaker 2: so much. We've traveled to Florida this coming week, John,
Speaker 2: things are about to get a whole lot more exciting
Speaker 2: in the twenty twenty four race.
Speaker 1: All right, Thanks Kelly. That was Bloomberg's sound on co
Speaker 1: host Kaylee Lions reporting from our Bloomberg ninety nine to
Speaker 1: one newsroom at Washington, and you can hear sound on
Speaker 1: weekdays one to three pm on Bloomberg Radio and coming
Speaker 1: up on Bloomberg day Break Weekend. Competition in the EV
Speaker 1: industry rev thing into high gear in Asia. I'm John Tucker.
Speaker 1: This is Bloomberg. This is Bloomberg day Break Weekend, our
Speaker 1: global look ahead at the top stories for investors in
Speaker 1: the coming week. I'm John Tucker in New York. Growing
Speaker 1: competition in the electric vehicle space, in particular in Asia,
Speaker 1: and for more, let's go to Hong Kong and Bloomberg
Speaker 1: day Break Asia host Brian Curtis and his colleague Doun Krisner.
Speaker 3: John we preview Chinese EV maker x Punk's earnings due
Speaker 3: out in the coming week. We wanted to get a
Speaker 3: good reading on the EV market in China now.
Speaker 8: Price cuts and falling sales have the potential to undermine
Speaker 8: gross margins and the much bollyhooed recovery in the mainland
Speaker 8: economy seems to be sputtering a little.
Speaker 3: And with that, Bloomberg Intelligence estimates that Xpun's deliveries in
Speaker 3: the first quarter will have dropped about forty seven percent
Speaker 3: or so, and that will likely give earnings a whak.
Speaker 3: Revenue might see declines of more than forty percent. Tesla's
Speaker 3: price cuts are taking a toll on companies, although we
Speaker 3: did see very strong earnings from BYD, but will be
Speaker 3: interested to see what we get from xpung, Le, Auto,
Speaker 3: Neo and Zeker. Joining us now for some discussion of
Speaker 3: this is Johanna Chen, Bloomberg Intelligence Asia Auto analyst. Joanna,
Speaker 3: thanks very much for being with us. So if you
Speaker 3: take a really big broad look at this, China's beating
Speaker 3: the world really in the EV rollout, and we already
Speaker 3: had the byd earnings and they were a lot up
Speaker 3: four hundred percent or so, But there are questions that
Speaker 3: still loom over the sector, particularly over the short to
Speaker 3: medium term. What's chief among those concerns.
Speaker 10: So basically, some investors are worried about China's TV industry
Speaker 10: because we do see competition is heating up after the
Speaker 10: government unplug the purchased subsidies at the end of twenty twenty,
Speaker 10: and then we also see Tesla cutting prices so that
Speaker 10: the other automakers might feel the heat a little bit.
Speaker 10: But I think we are also looking at battery costs
Speaker 10: dropping significantly in the first half of this year, and
Speaker 10: we also see that there are a lot of new
Speaker 10: models coming to the market, and also we have consumer
Speaker 10: sentiment picking up from a COVID period, so that we
Speaker 10: do see all those like positive factors also coming into
Speaker 10: the picture. So I think China's EV sales is continue
Speaker 10: to be very strong. We do see competition here, but
Speaker 10: the overall industry trend is still there.
Speaker 8: It's interesting to hear you say that battery costs are
Speaker 8: coming down. I mean, China really leads the world when
Speaker 8: it comes to making EV batteries, and we know from
Speaker 8: wholesale inflation data that factory gate prices are in deflation
Speaker 8: in China overall. Are our auto manufacturers really in a
Speaker 8: better position now that the wholesale prices are coming down
Speaker 8: steel not only batteries, but are of the materials that
Speaker 8: they need to produce cars.
Speaker 10: Yes, the material costs have been like coming down a
Speaker 10: little bit, and especially for like battery materials for exam
Speaker 10: Holy throm Litheran, costs like spiked in one and two,
Speaker 10: but then in the first half of this year it
Speaker 10: came down as much as like seventy percent off November's peak.
Speaker 3: Doug mentioned how China's kind of cornered the market globally
Speaker 3: on a lot of these materials like cobol, lithium, you
Speaker 3: just talked about, nickel, other materials. Does that give China
Speaker 3: an advantage forever over other producers or can they play
Speaker 3: catch up?
Speaker 10: So China definitely has a huge advantage right now in
Speaker 10: the battery material supply chains, Like the majority of lithm
Speaker 10: are refined here in China. And you do see like
Speaker 10: the other capital costs, labor costs, all those costs are
Speaker 10: much cheaper in China. China will definitely have an advantage
Speaker 10: and will continue to have advantage in the coming years.
Speaker 10: But we do see the other countries. They are trying
Speaker 10: to build up their supply chains. For example, we have
Speaker 10: USIRI Infission Reduction Act requires automakers to basically build their
Speaker 10: evs and build their EV supply chains locally in North America.
Speaker 8: Joanna, thank you so much for helping us understand more
Speaker 8: about what's happening in the auto market in China as
Speaker 8: we look forward to the earnings in the week ahead
Speaker 8: from x pun Joanna Chen Bloomberg Intelligence Asia auto analysts
Speaker 8: joining us here. I'm Doug Krisner along with Brian Curtis
Speaker 8: in hongko You can catch us weekdays here from Bloomberg
Speaker 8: Daybreak Asia beginning at six am in Hong Kong six
Speaker 8: pm on Wall Street.
Speaker 1: John, Brian and Doug. Thanks very much. That does it
Speaker 1: for this edition of Bloomberg Daybreak Weekend. Join us again
Speaker 1: Monday morning at five am Wall Street time for the
Speaker 1: latest on markets overseas and the news you need to
Speaker 1: start your day. I'm John Tucker.
Speaker 5: Stay with us.
Speaker 1: Top stories global business headlines are coming up right now.