WEBVTT - US CPI, China Industrial Policy

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<v Speaker 1>Good morning. I'm Brian Curtis and I'm Doug Krisner. Here

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<v Speaker 1>are the stories we're following today.

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<v Speaker 2>Ukraine's President Vladimir Zelenski has spent the day meeting with

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<v Speaker 2>President Joe Biden and members of Congress. Let's get right

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<v Speaker 2>to Ed Baxter in San Francisco with all the latest.

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<v Speaker 3>Did all right, Thank you very much, Brian. Yeah, he

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<v Speaker 3>of course is asking for additional aid for the war effort.

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<v Speaker 3>Apparently will leave empty handed from Congress, at least at

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<v Speaker 3>the White House, though a pledge of support and the

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<v Speaker 3>signing by the President of a two hundred million dollar

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<v Speaker 3>draw down from Defense Department's budget. Biden and Zelenski held

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<v Speaker 3>a joint news conference too, focusing on the success of

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<v Speaker 3>the Ukraine US partnership to date.

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<v Speaker 4>Remember how far Ukraine has come, Russia's failed, failed US

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<v Speaker 4>far and trying to erase Ukraine from the map and

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<v Speaker 4>subsume it into Russia ever since.

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<v Speaker 5>We talked about today will help us in the year

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<v Speaker 5>twenty twenty four. Today's discussions in the White House and

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<v Speaker 5>then kumvres across booth and both chambers with a speaker.

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<v Speaker 5>We are very productive. I thank you for the bipotesan support.

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<v Speaker 3>Now, Zelenski's saying support for both and we'll wait for

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<v Speaker 3>the final result over the packages and border policy to

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<v Speaker 3>come together. House Speaker Mike Johnson is explaining domestic first

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<v Speaker 3>in that debate.

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<v Speaker 1>I've also made very clear from day one that our

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<v Speaker 1>first condition on any national security supplemental spending package is

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<v Speaker 1>about our own national security first.

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<v Speaker 3>And in the Senate, Lindsey Graham was part of the

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<v Speaker 3>meetings and his tie to border security is very strong.

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<v Speaker 6>The likelihood of an attack on our homelands going up,

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<v Speaker 6>and we're doing nothing in my view to secure the

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<v Speaker 6>border from a national security perspective, with the proposals being

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<v Speaker 6>made and sent a majority Leader Chuck Schumer.

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<v Speaker 7>President Zelensky made it so clear how he needs help,

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<v Speaker 7>but if he gets the help, he can win this war,

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<v Speaker 7>and he outlined in some great detail a the kind

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<v Speaker 7>of help he needs and how it will help win.

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<v Speaker 3>But apparently he will leave with a White House money

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<v Speaker 3>but no movement on the supplemental from Congress. Bloomberg e

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<v Speaker 3>Saan Marie hor Dern is noting the stark difference between

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<v Speaker 3>this year and last.

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<v Speaker 8>He was really welcomed in Congress. Of course, at the

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<v Speaker 8>White House, which he still is, but a war hero's welcome.

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<v Speaker 8>It was triumphant, it was jubilant. Remember, everyone was even

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<v Speaker 8>so shocked he was able to get to the United

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<v Speaker 8>States safely, and this time he comes to the US

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<v Speaker 8>feeling a bit more desperate and really trying to make

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<v Speaker 8>his case behind closed doors with key senators and key

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<v Speaker 8>congressmen and women.

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<v Speaker 3>Meanwhile, President Biden has said today that Benjamin Nett and

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<v Speaker 3>Yahoo will have to change or lose global support. At

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<v Speaker 3>the news conference, he expanded saying that what Hamas has

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<v Speaker 3>done and the terror and bloodshot at has spread cannot

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<v Speaker 3>be ignored, but that strategy may need to be altered.

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<v Speaker 4>And so the action they're taking must be consistent with

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<v Speaker 4>attempting to do everything possible to prevent innocent Palestinian civilians

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<v Speaker 4>being hurt, murdered, killed, lost.

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<v Speaker 3>Center Biden also saying Israel needs to start thinking about

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<v Speaker 3>a Palestinian state solution post war. And Time magazine is

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<v Speaker 3>pushing out a story today saying there's an explosion in

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<v Speaker 3>gambling addiction in the United States, saying that it shouldn't

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<v Speaker 3>come as a surprise with the explosion of online and

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<v Speaker 3>sports betting. The article quotes a study out of the

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<v Speaker 3>University of Buffalo saying that one out of ten college

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<v Speaker 3>students is a pathological gambler. That is more than a

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<v Speaker 3>twenty five percent of the US population with a problem. No,

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<v Speaker 3>I'm sorry, two point five percent of the population with

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<v Speaker 3>a problem. It says it is going as far as

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<v Speaker 3>in many cases as students depleting their aid money to

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<v Speaker 3>feed their new habit Global news twenty four hours a

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<v Speaker 3>day and whenever you want it with Bloomberg News Now

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<v Speaker 3>in San Francisco. I'm at Baxter and this is Bloomberg Now.

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<v Speaker 2>It's time for the top business stories of the hour.

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<v Speaker 2>And we just had this flash across the terminal that

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<v Speaker 2>takes Interactive will join the Nasdaq one hundred index. CGEN

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<v Speaker 2>will leave. Nasdaq is updating its annual changes to that index,

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<v Speaker 2>and we'll have more throughout the program. Well. One metric

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<v Speaker 2>of US consumer price is picked up in November on

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<v Speaker 2>increases in housing and other service sector costs. We heard

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<v Speaker 2>from David Leibovitz, global market strategists at JP Morgan Asset Management.

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<v Speaker 2>He tells us what he thinks today's data means for

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<v Speaker 2>the FED at its two day meeting.

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<v Speaker 9>I think that the tone tomorrow is going to be

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<v Speaker 9>more balanced than it's been in the past. I think

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<v Speaker 9>that they're going to begin to view kind of the

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<v Speaker 9>risks as being more two sided. To use a bit

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<v Speaker 9>of a bit of Fed speak, but I think that

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<v Speaker 9>they're going to push back again against what the market

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<v Speaker 9>is pricing, which is a cut in the late spring

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<v Speaker 9>and early summers. By our lights, the FED is probably

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<v Speaker 9>going to remain on hold at least until the third

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<v Speaker 9>quarter of next year. And again, I think that they

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<v Speaker 9>want to see more progress on core inflation and even

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<v Speaker 9>that supercore measure before they begin to signal easier policy,

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<v Speaker 9>because we've seen this trade play out time and time again.

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<v Speaker 9>The market gets a whiff that the FED may ease,

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<v Speaker 9>and all of a sudden, financial conditions loosen.

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<v Speaker 2>David Liebowitz, there a global market strategist at jp Morgan

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<v Speaker 2>Asset Management. The FED will issue its latest monetary policy

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<v Speaker 2>decision tomorrow, as you heard there, and we'll have live

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<v Speaker 2>coverage of FED share Jpowell's news conference right here on

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<v Speaker 2>Bloomberg Radio.

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<v Speaker 1>Argentina has devalued its currency, the paso, by fifty four percent.

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<v Speaker 1>The exchange rate is now eight hundred pesos per US dollar.

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<v Speaker 1>This is part of an economic shock therapy program from

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<v Speaker 1>newly inaugurated President Javi R. Milai. It was on Sunday.

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<v Speaker 1>Mela said Argentines will have to endure months of pain

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<v Speaker 1>while he works to pull the country from an economic

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<v Speaker 1>crisis inherited by or from his predecessor. Inflation in Argentina

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<v Speaker 1>is already running at more than one hundred and forty

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<v Speaker 1>percent annually. Other measures announced by the government include reducing

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<v Speaker 1>the number of ministries by half, cutting transfers to provinces,

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<v Speaker 1>and suspending public works. Argentina's government will also reduce subsidies

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<v Speaker 1>to both the transport and energy sectors.

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<v Speaker 2>Brian well X, the social network formerly known as Twitter,

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<v Speaker 2>is on track to finish the year hundreds of millions

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<v Speaker 2>of dollars behind ad revenue predictions. Where's all the platforms

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<v Speaker 2>generated just over six hundred million dollars from advertising in

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<v Speaker 2>each of the first three quarters of this year. X

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<v Speaker 2>on pace to make the same amount this quarter, and

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<v Speaker 2>that may be disappointing to some. Last year, Twitter's ad

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<v Speaker 2>revenue was more than a billion dollars per quarter. X

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<v Speaker 2>has historically relied on advertising for the bulk of its sales,

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<v Speaker 2>but that business has been in decline since the takeover

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<v Speaker 2>by Elon Musk. Musk has blamed the decline on activists

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<v Speaker 2>who've encouraged marketers to halt spending on the service.

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<v Speaker 1>Want to know how many people are watching your favorite

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<v Speaker 1>show on Netflix, Well now you can. Today Netflix released

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<v Speaker 1>its global midyear viewer data for every title on its service,

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<v Speaker 1>and the company is now planning to publish viewer data

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<v Speaker 1>reports twice a year. Here's Bloomberg's Lucas Shaw.

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<v Speaker 10>Netflix has clearly gotten the point where it is so

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<v Speaker 10>big and commands so much viewership that, after years of

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<v Speaker 10>not wanting to disclose anything for competitive reasons, it now

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<v Speaker 10>feels very comfortable sharing because it makes.

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<v Speaker 2>It look really good.

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<v Speaker 1>That is Bloomberg's Lucas Shaw.

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<v Speaker 5>Now.

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<v Speaker 1>Netflix said its political thriller The Night Agent was the

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<v Speaker 1>most watched title globally in the first half of twenty

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<v Speaker 1>twenty three.

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<v Speaker 2>Brian Well China has vowed to make industrial policy its

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<v Speaker 2>top economic priority next year. Bloomberg's Yvon Mann has more.

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<v Speaker 11>From Hong Kong, the annual Economic Work Conference saw an

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<v Speaker 11>emphasis on supporting companies to produce high value products. It

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<v Speaker 11>also called for steps to vigorously develop the digital economy

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<v Speaker 11>and AI technologies. The news is likely to disappoint investors

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<v Speaker 11>hoping for consumer focused stimulus to boost growth, but policymakers

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<v Speaker 11>did hint at providing subsidies for households to spur consumption.

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<v Speaker 11>On the property crisis, leaders pledged to meet developers financing needs.

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<v Speaker 11>There was also so a vague vow to launch a

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<v Speaker 11>new round of tax reform. The overall focus of the

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<v Speaker 11>conference was to emphasize structural reform rather than cyclical stimulus.

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<v Speaker 11>In Hong Kong, I'm von Mann Bloomberg Radio.

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<v Speaker 1>Chinese President Chichenping has pledged to prioritize diplomacy with Vietnam.

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<v Speaker 1>The story from Bloomberg's Juan Wong in Hong Kong.

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<v Speaker 10>President she says the partnership was annoyed needs to be deepened.

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<v Speaker 10>The two nations signed thirty seven agreements, including China funding

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<v Speaker 10>a cross border railway a maritime issues. She said that

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<v Speaker 10>two sides should manage differences and turn challenges into opportunities.

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<v Speaker 10>They've agreed to hold joint maritime patrols. The two nations

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<v Speaker 10>also agreed to boost trade. Shees foul comes as Vietnam

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<v Speaker 10>for just closer ties with the US and its allies.

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<v Speaker 10>That has not gone unnoticed by China. She recently said

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<v Speaker 10>Vietnam to remember its traditional friendship with its neighbor in

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<v Speaker 10>Hong Kong. Join Wang Bloomberg Radio.

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<v Speaker 2>This is Bloomberg Daybreak Asia. I'm Brian Curtis along with

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<v Speaker 2>Paul Allen in Sydney, and our guest is Edward Harrison,

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<v Speaker 2>Bloomberg team leader for the Americas on FX and rates.

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<v Speaker 2>To take a closer look at this CPIDA, Edward, the

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<v Speaker 2>latest data was essentially in line, although you did have

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<v Speaker 2>that CPIX food and energy ticking up month on month,

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<v Speaker 2>and that has led to a little bit of speculation

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<v Speaker 2>that the Fed's not going to be in any hurry

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<v Speaker 2>to claim victory on inflation or start lowering interest rates.

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<v Speaker 2>The only interesting thing about this is that the market's

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<v Speaker 2>actually moved a little bit higher today in terms of

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<v Speaker 2>the equity market, and perhaps because the data also suggests

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<v Speaker 2>that consumers are still spending. Your take on the.

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<v Speaker 12>Data, Yeah, very good questions about where we are, and

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<v Speaker 12>I think that there aren't any answers until the FED

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<v Speaker 12>comes out, particularly with dot pot, because you can read

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<v Speaker 12>the data in many different ways. For example, the CPI

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<v Speaker 12>month on month was up zero point one percent, which

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<v Speaker 12>is which is relatively low, especially we had a zero

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<v Speaker 12>point zero in the prior reading, which suggests that overall

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<v Speaker 12>inflation's coming down. On the same day we saw gasoline

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<v Speaker 12>prices and oil prices go down considerably. We saw a

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<v Speaker 12>WTI in the United States below seventy dollars a barrel,

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<v Speaker 12>and that is leading to inflation expectations going down. We

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<v Speaker 12>have the lowest break even on tips, which are the

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<v Speaker 12>inflation exation component of Treasury inflation protected securities, since June,

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<v Speaker 12>and that's telling us that the Fed has room to

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<v Speaker 12>cut as the market is expecting. So it's not clear

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<v Speaker 12>what the Fed's going to do in terms of its

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<v Speaker 12>dot plot, which shows what it's forward guidance for two

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<v Speaker 12>thousand and twenty four will be.

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<v Speaker 13>So the Fans got room to cuts, but the question

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<v Speaker 13>doesn't need to because typically it stopped easing if the

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<v Speaker 13>economy was in trouble and it's looking pretty robust.

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<v Speaker 12>Yeah, and that's the big question is are we in

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<v Speaker 12>a different paradigm it Does the FED have room to

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<v Speaker 12>cut and if they do, because they're concerned that we're

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<v Speaker 12>real interest rates will choke off the economy. Do they

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<v Speaker 12>actually forecast that they expect that to happen. I mean

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<v Speaker 12>the last time that the Fed made these sorts of projections,

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<v Speaker 12>that was in September. They said that they were going

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<v Speaker 12>to reduce and to raised by fifty basis points and

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<v Speaker 12>a half percentage point in twenty twenty four, and so

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<v Speaker 12>there's speculation about what they're going to do. The market

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<v Speaker 12>is talking more than one hundred basis points. Bloomberg Economics

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<v Speaker 12>is expecting seventy five. But given how much of a

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<v Speaker 12>loosing of financial conditions we've seen recently, it go either

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<v Speaker 12>way for the Fed. So there's a lot of speculation.

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<v Speaker 12>There's a lot of anticipation for this next meeting.

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<v Speaker 2>Yeah, I suppose the people who really love goldilocks, So

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<v Speaker 2>we'll be happy with this latest data because it does,

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<v Speaker 2>you know, it does suggest that while inflation is coming down,

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<v Speaker 2>it's a little choppy and spending is still holding in there.

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<v Speaker 2>We did see some increase in housing in the CPI report,

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<v Speaker 2>but we've also been led to believe that that housing

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<v Speaker 2>is actually coming down and it's just delayed to be

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<v Speaker 2>to show up in the data. Can you clarify that

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<v Speaker 2>for us? Yeah?

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<v Speaker 12>You know, I think that when we think about owners

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<v Speaker 12>a clue rent going up. That's you know, there's a

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<v Speaker 12>delay of fact in terms of when that actually gets

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<v Speaker 12>and put it into the actual data. So these are

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<v Speaker 12>numbers that are more consistent with what we saw, say

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<v Speaker 12>six or twelve months ago, and that the real data

0:12:49.400 --> 0:12:54.079
<v Speaker 12>on an actual basis is going down, and so therefore

0:12:54.200 --> 0:12:57.520
<v Speaker 12>we should expect that particular component to add to the

0:12:57.559 --> 0:13:00.840
<v Speaker 12>disinflation that we've seen thus far. So we see good disinflation,

0:13:01.120 --> 0:13:05.600
<v Speaker 12>we see housing disinflation. But then the question becomes core services.

0:13:05.800 --> 0:13:09.440
<v Speaker 12>That is, you know, the sticky component is everything else

0:13:09.640 --> 0:13:14.920
<v Speaker 12>in the sector at say three percent even four percent,

0:13:15.000 --> 0:13:17.000
<v Speaker 12>and that's the worrying factor that would keep the Fed

0:13:17.080 --> 0:13:17.760
<v Speaker 12>on hold.

0:13:18.920 --> 0:13:21.960
<v Speaker 13>It would you're an fix guy as well. Can you

0:13:21.960 --> 0:13:24.680
<v Speaker 13>give us a sense of what this means for the

0:13:24.720 --> 0:13:25.560
<v Speaker 13>dollar going forward?

0:13:27.080 --> 0:13:29.360
<v Speaker 12>Yeah, So for the dollar going forward, I think that

0:13:29.520 --> 0:13:34.679
<v Speaker 12>it puts it a bit under pressure. The dollar, you know,

0:13:35.600 --> 0:13:39.480
<v Speaker 12>fell in November as interest rates fell, and to the

0:13:39.559 --> 0:13:43.240
<v Speaker 12>degree that interest rates could continue to fall, then we

0:13:43.280 --> 0:13:47.120
<v Speaker 12>would see the dollar under pressure. But at the same time,

0:13:47.840 --> 0:13:51.040
<v Speaker 12>there are a number of other central banks that are

0:13:51.040 --> 0:13:54.760
<v Speaker 12>going to be easing, in particular the ECB and to

0:13:54.800 --> 0:13:57.359
<v Speaker 12>the degree that the ECB is easing some other European

0:13:57.760 --> 0:14:01.160
<v Speaker 12>central banks like the S and B, the Swiss National Bag,

0:14:01.440 --> 0:14:04.960
<v Speaker 12>and so therefore, you know, even though you would think

0:14:04.960 --> 0:14:07.600
<v Speaker 12>it would put the dollar under pressure, it's not. It's

0:14:07.600 --> 0:14:11.240
<v Speaker 12>not decisive as to which direction the dollar will go

0:14:11.400 --> 0:14:15.600
<v Speaker 12>ultimately over say, you know, the next month, two months,

0:14:15.880 --> 0:14:19.160
<v Speaker 12>because the Europe's in a recession, and it may well

0:14:19.200 --> 0:14:23.000
<v Speaker 12>be that the ECB cuts first, S and B also follows,

0:14:23.280 --> 0:14:25.920
<v Speaker 12>and that the Fed stays a pat which would mean

0:14:25.920 --> 0:14:30.960
<v Speaker 12>that the dollar also is bid somewhat in that scenario.

0:14:31.520 --> 0:14:34.360
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