Daybreak Weekend: Disney Set to Report, Republicans Prepare to Debate

This is Bloomberg day Break Weekend, our global look at 0:00:04.720 --> 0:00:07.160 the top stories in the coming week from our Daybreak 0:00:07.160 --> 0:00:10.119 anchors all around the world, and straight ahead on the program, 0:00:10.560 --> 0:00:13.520 Investors await another batch of earnings, and we'll tell you 0:00:13.560 --> 0:00:17.040 what to expect from Disney. I'm Tom Busby in New York. 0:00:17.160 --> 0:00:19.960 I'm Kaylie Lines in Washington, where we're looking forward to 0:00:20.000 --> 0:00:22.960 the third Republican presidential primary debate. 0:00:23.160 --> 0:00:25.600 I'm kallen Hecker here in London, where we're looking ahead 0:00:25.640 --> 0:00:28.280 to earnings from the Swiss banky Giant Ubs. 0:00:28.440 --> 0:00:31.160 I'm Brian Curtis in Hong Kong. We look at possible 0:00:31.240 --> 0:00:35.479 deliverables on the Australian Prime Minister Anthony Albanisi's trip to China. 0:00:35.520 --> 0:00:39.239 That's all straight ahead on Bloomberg Daybreak Weekend, the business 0:00:39.280 --> 0:00:41.600 news you need to wrap up your week in just 0:00:41.760 --> 0:00:46.320 one fifteen minute podcast, available on Apple, Spotify, The Bloomberg 0:00:46.360 --> 0:00:49.040 Business Appen everywhere you get your podcasts. 0:00:51.920 --> 0:00:54.440 Good day to you. I'm Tom Busby. We begin today's 0:00:54.440 --> 0:00:57.560 program with earnings. They continue with more than fifty companies 0:00:57.600 --> 0:00:59.720 in the S and P five hundred reporting this week 0:01:00.080 --> 0:01:03.560 and heading that list Disney, and for a preview, we 0:01:03.560 --> 0:01:07.840 welcome Bloomberg Intelligence US media analyst Getha Raganathan. Well, now, 0:01:07.840 --> 0:01:10.920 before we dive into Disney's upcoming earnings, let's talk about 0:01:10.959 --> 0:01:14.200 some big moves that the world's biggest media company just 0:01:14.480 --> 0:01:19.360 made this past week, announcing ESPN Bet, its official sports 0:01:19.360 --> 0:01:23.160 betting platform. That's a partnership with Penn Entertainment. It'll begin 0:01:23.200 --> 0:01:26.840 taking bets in seventeenth States November fourteenth. What does this 0:01:27.080 --> 0:01:28.319 mean for Disney? 0:01:28.560 --> 0:01:33.960 Yeah, it's It was a really important move by ESPN, Tom. 0:01:33.959 --> 0:01:35.640 I mean, they had kind of been putting this off 0:01:35.640 --> 0:01:39.320 for years. They'd been exploring deals with different sports betting partners, 0:01:39.360 --> 0:01:43.440 including you know, DraftKings. They finally did this deal with 0:01:43.480 --> 0:01:46.319 Pen Entertainment in August, and of course now Penn is 0:01:46.440 --> 0:01:50.760 rebranding its Barstool sportsbook as ESPN Bet. I think what 0:01:50.800 --> 0:01:54.000 it really tells us is the power of the ESPN brand. 0:01:54.360 --> 0:01:58.040 I mean this move comes just as Disney actually disclosed 0:01:58.600 --> 0:02:02.200 standalone financials for ESPN for the very first time in 0:02:02.240 --> 0:02:05.800 its history. And what we get to know about ESPN is, 0:02:06.080 --> 0:02:08.720 you know, it is of course, you know, the top 0:02:08.760 --> 0:02:11.359 line is under pressure, but it is still a very, 0:02:11.480 --> 0:02:14.880 very profitable business. This is This is a business that 0:02:15.000 --> 0:02:19.440 is generating roughly about sixteen seventeen billion dollars in revenue, 0:02:19.720 --> 0:02:22.680 but more importantly around three billion dollars than EBITDA, So 0:02:22.720 --> 0:02:25.799 it is definitely a cash cow. It is the biggest, 0:02:26.120 --> 0:02:29.720 one of the biggest linear TV properties for ESPN, and 0:02:29.760 --> 0:02:32.800 I think, you know, with when ESPN bet kind of 0:02:32.840 --> 0:02:35.800 goes out, you'll again get to see, you know, the 0:02:35.840 --> 0:02:37.920 power of that ESPN brand and it's going to be 0:02:37.919 --> 0:02:40.560 interesting to see how it kind of plays out for Disney. Remember, 0:02:40.560 --> 0:02:44.280 Disney is getting about two billion dollars over ten years 0:02:44.320 --> 0:02:48.400 for the use of that ESPN name. So again, I 0:02:48.440 --> 0:02:51.480 think it really plays into, you know, kind of what 0:02:51.639 --> 0:02:54.680 the strategic direction could be for ESPN in the future. 0:02:54.960 --> 0:02:58.080 Yeah, and another direction Disney's taking is a bigger bet 0:02:58.120 --> 0:03:02.200 into streaming by obtaining the one third stake in Hulu 0:03:02.360 --> 0:03:05.160 that it didn't already own. And what's what's the strategy there? 0:03:05.320 --> 0:03:08.320 Yea, I think it's really important for Disney to kind 0:03:08.320 --> 0:03:11.120 of consolidate its streaming properties. Obviously it has a huge 0:03:11.160 --> 0:03:14.760 powerhouse in Disney Plus, but with Hulu it's kind of 0:03:14.840 --> 0:03:16.800 been a little bit of a head scratcher because of 0:03:16.840 --> 0:03:19.320 the sixty six percent ownership that Disney owns, but the 0:03:19.360 --> 0:03:21.240 thirty three percent that it doesn't own, which you know, 0:03:21.240 --> 0:03:23.960 which is still kind of owned by Comcast. And so 0:03:24.080 --> 0:03:27.480 I think it's essential for Disney to kind of go 0:03:27.520 --> 0:03:31.160 ahead and acquire that remaining thirty three percent because then 0:03:31.200 --> 0:03:33.720 they kind of get to have, you know, a singular 0:03:33.760 --> 0:03:36.360 streaming strategy with all of their different products, whether it's 0:03:36.400 --> 0:03:39.400 Disney Plus, whether it's ESPN Plus, and then Hulu. And 0:03:39.440 --> 0:03:42.320 then of course the more important thing is you not 0:03:42.360 --> 0:03:46.160 only get to sell you know, an integrated product, an 0:03:46.200 --> 0:03:50.120 integrated bundle, but also you get to realize some really 0:03:50.280 --> 0:03:53.560 huge cost and revenue savings. I mean, we're estimating about 0:03:53.560 --> 0:03:55.480 anywhere from about one to one and a half billion 0:03:55.520 --> 0:03:58.640 dollars in cost savings once they're able to kind of 0:03:58.680 --> 0:04:01.800 bring Hulu under complete control and. 0:04:02.240 --> 0:04:04.920 Fifty million subscribers is nothing to sneeze that either. 0:04:05.040 --> 0:04:09.400 Absolutely. Plus, remember Hulu has a very very robust advertising business. 0:04:09.400 --> 0:04:11.240 I mean, this is a business that all regenerates about 0:04:11.240 --> 0:04:13.400 three and a half billion dollars in advertising. It is 0:04:13.480 --> 0:04:17.240 the most successful streaming ad product out there. Just as 0:04:17.279 --> 0:04:19.640 everybody else is kind of trying to get into that 0:04:19.720 --> 0:04:22.320 ad based tear, whether it's Netflix, whether it's Amazon Prime, 0:04:22.480 --> 0:04:24.160 and even Disney Plus. I mean, none of them have 0:04:24.320 --> 0:04:26.720 had the success that Hulu has had, so it's kind 0:04:26.760 --> 0:04:29.640 of really critical for Disney to build on that success 0:04:29.720 --> 0:04:32.240 that Hulu already has in the marketplace. 0:04:32.520 --> 0:04:35.279 Well, let's turn to earnings then. For last quarter, we expect, 0:04:35.600 --> 0:04:39.440 as always, Theme Parks Cruise division having another blockbuster quarter, 0:04:40.000 --> 0:04:42.280 but there's a lot more to the company. And what 0:04:42.520 --> 0:04:44.640 are you expecting to see this coming. 0:04:44.440 --> 0:04:48.000 Weekam, It's really interesting. So it's not really the results 0:04:48.040 --> 0:04:50.719 so much, but it's just this whole barrage of other 0:04:50.920 --> 0:04:54.960 issues that is kind of weighing on the Disney stock 0:04:55.080 --> 0:04:57.680 right now. I mean, whether it is the ESPN strategic 0:04:57.680 --> 0:05:01.080 direction as you just spoke about, or Hulu. They're even 0:05:01.160 --> 0:05:03.840 looking at getting rid of some of their linear TV assets, 0:05:04.160 --> 0:05:06.320 you know, they were looking at the ABC network, the 0:05:06.360 --> 0:05:09.640 ABC stations for instance. They're looking to get out of 0:05:09.680 --> 0:05:12.400 their India business. So there's just so many different things. 0:05:13.040 --> 0:05:15.240 There's so much of different work that needs to be done. 0:05:15.279 --> 0:05:18.000 But I would say arguably the most important thing for 0:05:18.120 --> 0:05:20.040 them to do right now is to kind of really 0:05:20.120 --> 0:05:24.040 rev up their content engine. Right We've seen them kind 0:05:24.040 --> 0:05:26.039 of put out a whole bunch of movies, whether it 0:05:26.160 --> 0:05:29.480 was you know, Indiana Jones or Elemental that didn't really 0:05:29.640 --> 0:05:33.280 perform or live up to expectations at the global box office. 0:05:33.600 --> 0:05:36.440 And so they're really kind of rethinking their content strategy 0:05:36.520 --> 0:05:39.640 right now, looking at how to kind of reinvigorate a 0:05:39.680 --> 0:05:42.359 lot of you know, the existing franchises, a lot of 0:05:42.360 --> 0:05:45.920 the sequels, so you know, there's a lot going on. 0:05:46.760 --> 0:05:49.640 And of course I think, you know, obviously bar Bieger 0:05:49.720 --> 0:05:52.080 has made considerable progress on a lot of the different things, 0:05:52.080 --> 0:05:54.880 whether it's restructuring, whether it's bringing down costs. They're doing 0:05:54.960 --> 0:05:58.279 everything that they can whatever seems fixable. But again a 0:05:58.320 --> 0:05:59.960 lot of questions still remain. 0:06:00.720 --> 0:06:03.880 And they've had talks about shedding some of those media 0:06:03.920 --> 0:06:07.680 assets as not ESPN, but as you mentioned, the Disney Channel, 0:06:07.760 --> 0:06:11.280 National Geographic, A and E Lifetime, a whole bunch of 0:06:11.360 --> 0:06:15.960 linear assets. But have we seen any progress on that. 0:06:16.040 --> 0:06:18.599 I know we've seen Byron Allen saying he made a bid, 0:06:18.920 --> 0:06:22.080 some others in talks, but is there any movement not. 0:06:22.279 --> 0:06:25.880 Since you know, those pieces of news came out, there 0:06:25.880 --> 0:06:29.279 hasn't been any significant movement. The only thing that we've 0:06:29.279 --> 0:06:31.000 heard in the meantime is that they're really kind of 0:06:31.040 --> 0:06:34.760 looking hard at, you know, getting somebody to buy out 0:06:34.800 --> 0:06:37.880 their India business, which which could be worth upwards of 0:06:37.920 --> 0:06:40.200 ten billion dollars. So that would be a huge cash 0:06:40.279 --> 0:06:43.120 in flux in for Disney. But we really haven't seen 0:06:43.160 --> 0:06:45.760 any movement on the rest of the linear TV portfolio. 0:06:45.920 --> 0:06:49.240 Well, let's talk about Disney also playing hardball this past 0:06:49.320 --> 0:06:53.320 quarter with Charter Communications Spectrum cable platform on a carriage deal, 0:06:53.960 --> 0:06:57.720 and Spectrum says they lost one hundred thousand subscribers. That's 0:06:57.760 --> 0:07:00.560 after a ten day blackout of all Disney channel just 0:07:00.600 --> 0:07:03.520 as including ESPN, just as college football was starting up. 0:07:03.560 --> 0:07:07.680 But could this change or maybe accelerate the implementation of 0:07:07.680 --> 0:07:10.040 an alla carte menu from cable providers. 0:07:10.280 --> 0:07:14.320 I definitely think that deal had huge ramifications across the 0:07:14.400 --> 0:07:18.520 PATV landscape. You know, one thing that we definitely got 0:07:18.560 --> 0:07:21.080 to know is I think when we have these carriage 0:07:21.120 --> 0:07:23.360 deals come up in the future between the content owners 0:07:23.400 --> 0:07:25.760 and the PATV distributors, it is going to be a 0:07:25.800 --> 0:07:28.080 hybrid distribution model. I mean, it is going to be 0:07:28.120 --> 0:07:31.560 a combination of both linear TV and streaming. And you 0:07:31.600 --> 0:07:34.200 bring up a very very good point in terms of, 0:07:34.240 --> 0:07:38.200 you know, does that kind of expedite this whole transition 0:07:38.360 --> 0:07:41.120 into ESPN going a la carte And I think to 0:07:41.160 --> 0:07:43.400 a certain extent it does. I mean, they've already kind 0:07:43.400 --> 0:07:47.840 of secured carriage with Charter for when that actually does happen. Now, 0:07:47.880 --> 0:07:50.200 of course, we don't know the date just yet. One 0:07:50.240 --> 0:07:52.560 of the things that is spending is the renewal of 0:07:52.600 --> 0:07:56.120 the NBA deal because they do need to secure digital rights, 0:07:56.880 --> 0:07:59.080 you know, for the NBA game. So that will happen 0:07:59.120 --> 0:08:01.760 only sometime in twenty two, twenty twenty five, but it 0:08:01.840 --> 0:08:03.800 is definitely going to happen, and Disney has said this 0:08:03.920 --> 0:08:07.800 multiple times and yes, so you know they are trying 0:08:07.840 --> 0:08:10.480 to I mean, the PATV bundle is obviously not going 0:08:10.480 --> 0:08:14.320 to go away completely, but it is definitely losing its its, 0:08:14.400 --> 0:08:18.120 you know, relevance in some ways, at least the linear 0:08:18.160 --> 0:08:21.080 TV portion of it, as more and more consumers move 0:08:21.120 --> 0:08:21.600 to streaming. 0:08:21.680 --> 0:08:21.880 Wow. 0:08:21.920 --> 0:08:24.239 Well, let's shift it back then to what you're looking 0:08:24.520 --> 0:08:27.560 forward to this week in Disney earning. So all these 0:08:27.600 --> 0:08:31.560 moving parts, all these different divisions they have, what does 0:08:31.600 --> 0:08:34.320 it mean for investors? What are we expecting to see? 0:08:34.480 --> 0:08:36.920 I think the biggest thing that we're really looking for, 0:08:37.360 --> 0:08:39.360 and I think this could be a huge catalyst for 0:08:39.360 --> 0:08:43.480 the stock if there's any language surrounding streaming profitability and 0:08:43.640 --> 0:08:46.520 how quickly Disney can kind of cut costs. Remember, they 0:08:46.559 --> 0:08:51.079 have made a lot of progress on you know, reducing 0:08:51.120 --> 0:08:54.520 streaming losses, but they still did lose about four billion 0:08:54.600 --> 0:08:57.760 dollars last year on Disney Plus, and they are still 0:08:57.760 --> 0:09:00.880 set to lose about two point seven billion dollars again 0:09:00.920 --> 0:09:03.400 this year. Yes, they're making progress, but if they can 0:09:03.440 --> 0:09:05.280 get there faster, if they can get to a break 0:09:05.320 --> 0:09:07.800 even faster, if they can get to positive profits faster, 0:09:08.280 --> 0:09:11.600 that would bring investors a lot of cheer. We also 0:09:11.600 --> 0:09:13.920 know that they did raise their streaming prices for the 0:09:13.960 --> 0:09:17.000 second time this year. They upped the monthly price of 0:09:17.080 --> 0:09:20.400 the ad free Disney Plus by about twenty twenty five percent. 0:09:20.480 --> 0:09:22.360 So again it would be interesting to see if there's 0:09:22.400 --> 0:09:25.720 been some increasing cancelations because of that, you know, how 0:09:25.760 --> 0:09:29.040 that has been trending, and if that really had made 0:09:30.000 --> 0:09:33.199 you know, some significant dent in terms of their you know, 0:09:33.640 --> 0:09:34.760 revenue numbers as well. 0:09:35.040 --> 0:09:37.360 Now, one more thing I want to talk about, and 0:09:37.400 --> 0:09:42.480 that is Bob Iger, the former and president CEO. Any 0:09:42.600 --> 0:09:45.800 idea on how long he's going to stay there succession plans? 0:09:45.880 --> 0:09:49.320 Are we going to see another big drama unfold if 0:09:49.679 --> 0:09:50.960 it doesn't work out the first time? 0:09:52.679 --> 0:09:54.760 Yeah, this has just been such a constant pain point 0:09:54.760 --> 0:09:56.920 for Disney. So we know that Bob Iger has another 0:09:56.960 --> 0:10:00.600 two years. He definitely needs those extra two years. We 0:10:00.640 --> 0:10:03.000 know Disney definitely needs the two years to kind of 0:10:03.040 --> 0:10:08.800 get there this whole turnaround in motion. The immediate thing 0:10:08.840 --> 0:10:10.840 that they do need as a permanent CFO because we 0:10:10.880 --> 0:10:14.559 know the current CFO is just temporary, So they definitely 0:10:14.600 --> 0:10:18.840 need that. You know, about the succession drama, I mean, Tom, 0:10:18.840 --> 0:10:21.319 it's any anybody's guess is as good as mine. I mean, 0:10:22.640 --> 0:10:24.400 you know, they do have a little bit of time, 0:10:24.960 --> 0:10:27.480 you know, but we'll have to really see how it 0:10:27.559 --> 0:10:29.120 kind of plays out. I know it is top of 0:10:29.160 --> 0:10:31.080 mind for Bob Bieger, and I'm sure he has a 0:10:31.080 --> 0:10:32.920 lot of candidates that he's lined up. 0:10:33.160 --> 0:10:35.960 Oh yeah, he's retired before, so I'm sure he's already 0:10:35.960 --> 0:10:39.319 thinking about it again. Well, our thanks to Bloomberg Intelligence 0:10:39.400 --> 0:10:43.200 US media analyst Githa Raganathin and coming up bom Bloomberg 0:10:43.240 --> 0:10:47.240 day Break Weekend Republicans get set for their third presidential debate, 0:10:47.520 --> 0:10:51.560 Will Donald Trump participate? I'm Tom Busby and this is Bloomberg. 0:11:01.840 --> 0:11:04.560 This is Bloomberg Daybreak weekend, our global look ahead at 0:11:04.559 --> 0:11:07.080 the top stories for investors in the coming week. I'm 0:11:07.120 --> 0:11:09.680 Tom Busby in New York. Up later in our program 0:11:09.800 --> 0:11:12.600 we take you to Europe and preview earnings from ubs. 0:11:12.640 --> 0:11:16.840 But first, the third Republican presidential debate taking place this 0:11:16.960 --> 0:11:19.880 Wednesday in Miami. For more, let's add to our Bloomberg 0:11:19.960 --> 0:11:23.320 ninety nine to one newsroom in Washington and Bloomberg Sound On. 0:11:23.520 --> 0:11:25.160 Co host Kaylee Lines. 0:11:25.480 --> 0:11:28.520 That's right, Tom, We're gearing up for round three, the 0:11:28.559 --> 0:11:32.520 third primary debate between the Republican presidential hopefuls. It takes 0:11:32.559 --> 0:11:35.959 place in Miami this coming Wednesday, and despite it being 0:11:36.080 --> 0:11:39.360 in his adoptive home state, No, the former president and 0:11:39.400 --> 0:11:42.439 front runner Donald Trump will not be in attendance again, 0:11:43.080 --> 0:11:45.080 and a few others who had been on the stage 0:11:45.080 --> 0:11:47.640 in the prior debates will not be on this one, 0:11:47.880 --> 0:11:51.199 partially because the threshold to qualify was raised. A candidate 0:11:51.240 --> 0:11:53.360 needs to have multiple polls that show them at four 0:11:53.400 --> 0:11:55.880 percent or higher and need to have at least seventy 0:11:56.000 --> 0:11:59.680 thousand unique donors, so that might be a bummer for some. Plus, 0:12:00.080 --> 0:12:04.000 former Vice President Pence won't be there because well, he 0:12:04.080 --> 0:12:06.439 dropped out of the race entirely last weekend. 0:12:06.800 --> 0:12:09.960 The Bible tells us that there's a time for every 0:12:10.000 --> 0:12:13.400 purpose under heaven. Traveling across the country over the past 0:12:13.440 --> 0:12:16.120 six months, I came here to say, it's become clear 0:12:16.120 --> 0:12:18.040 to me this is not my time. 0:12:18.280 --> 0:12:20.880 So with that, it's going to be a much smaller 0:12:20.920 --> 0:12:23.680 group on the third stage here with a preview before 0:12:23.720 --> 0:12:26.080 she makes the trip to Florida, herself as Nancy Cook, 0:12:26.080 --> 0:12:28.959 who covers national politics for US here at Bloomberg and 0:12:29.040 --> 0:12:33.040 All Things twenty twenty four. So Nancy first question of 0:12:33.080 --> 0:12:35.040 the five were expecting to be on the stage, that 0:12:35.080 --> 0:12:39.520 would be DeSantis, Haley, Ramaswami, Christi and Senator Tim Scott. 0:12:39.720 --> 0:12:41.920 Who has the most to gain and who has the 0:12:41.960 --> 0:12:42.559 most to lose? 0:12:42.720 --> 0:12:45.840 Well, I would say Nikki Haley probably has the most 0:12:45.880 --> 0:12:49.920 to gain. She has had two really good prior debates. 0:12:50.200 --> 0:12:53.120 We've seen her poll numbers rising. A lot of donors 0:12:53.160 --> 0:12:57.360 who have become disenchanted with a DeSantis's campaign have been 0:12:57.440 --> 0:12:59.960 flocking towards her, and I do think that she has 0:13:00.080 --> 0:13:04.120 as a real chance to emerge as the alternative to 0:13:04.320 --> 0:13:07.520 Donald Trump. She's also been spending a ton of time 0:13:07.520 --> 0:13:10.200 in New Hampshire over the past six months, and we've 0:13:10.200 --> 0:13:12.560 seen her poll numbers go up in Iowa, and so 0:13:12.679 --> 0:13:15.160 she is definitely on the rise. And if she can 0:13:15.200 --> 0:13:17.040 have a good debate, and she has shown that she 0:13:17.160 --> 0:13:20.640 is a good debater, she really could capitalize on that momentum, 0:13:20.720 --> 0:13:24.360 impress more donors, and sort of continue to reintroduce herself 0:13:24.360 --> 0:13:25.280 to the American public. 0:13:25.960 --> 0:13:29.200 So is Nikki Hayley's gain than kind of on the 0:13:29.240 --> 0:13:32.320 other side of the coin, Ron DeSantis's loss, because you 0:13:32.360 --> 0:13:34.520 mentioned how she's been gaining in say polls in Iowa 0:13:34.640 --> 0:13:37.200 won this past week showed them tied exactly. 0:13:37.240 --> 0:13:40.079 And the other interesting data points from that Iowa poll 0:13:40.240 --> 0:13:42.720 was that she know she's doing really well with suburban 0:13:42.840 --> 0:13:47.080 voters and she's also appealing to independence. So one hundred 0:13:47.120 --> 0:13:50.880 percent her gain is DeSantis's loss. And speaking of him, 0:13:50.920 --> 0:13:52.520 I do think that he is the one that has 0:13:52.559 --> 0:13:55.559 the most to lose. He has not managed to land 0:13:55.640 --> 0:13:58.560 a breakout performance or even really a breakout moment in 0:13:58.600 --> 0:14:02.160 the last two debates, although he has tried, and I 0:14:02.280 --> 0:14:05.520 just think his debates have been performances have been sort 0:14:05.520 --> 0:14:08.560 of meh. And I think that if he has sort 0:14:08.559 --> 0:14:11.800 of registered a third one and Haley sort of is 0:14:11.840 --> 0:14:14.760 taking off again, donors are just going to keep going 0:14:14.800 --> 0:14:17.760 towards her. And I think the challenge for him is, 0:14:18.559 --> 0:14:20.920 you know, the donor space. The donors are sort of 0:14:21.280 --> 0:14:23.840 souring on him. They already have soured on him a bit. 0:14:23.920 --> 0:14:26.120 And at some point you have to have enough money 0:14:26.160 --> 0:14:27.560 to stay in the race for a while. 0:14:27.720 --> 0:14:29.440 And we know he's had a bit of a money 0:14:29.480 --> 0:14:32.480 management problem over the course of his campaign as well. 0:14:32.400 --> 0:14:34.560 Right, Like, he has taken a lot of money in 0:14:34.800 --> 0:14:37.320 and his super pack has money. But part of the 0:14:37.360 --> 0:14:39.960 problem is is that they spend a lot of money. 0:14:40.000 --> 0:14:43.160 You know, he flies private everywhere. You know, he has 0:14:43.200 --> 0:14:46.120 to charter planes to go wherever he goes. And so 0:14:46.240 --> 0:14:48.600 that really which is his own choice. I should say 0:14:49.720 --> 0:14:52.680 it's a choice, but it's definitely they they you know, 0:14:52.960 --> 0:14:55.200 go through money more so than other folks, and so 0:14:55.360 --> 0:14:57.640 you're really trying to see, well, can he lasts not 0:14:57.720 --> 0:15:00.520 just through Iowa, but like could he last through Super 0:15:00.560 --> 0:15:03.880 Tuesday in March? And so that that's really what I'll 0:15:03.880 --> 0:15:04.560 be looking. 0:15:04.320 --> 0:15:07.600 For So we talk about lasting through Iowa. And it's 0:15:07.600 --> 0:15:11.240 interesting that South Carolina Senator Tim Scott qualified for this 0:15:11.280 --> 0:15:14.080 debate this past week after he really has shifted his 0:15:14.160 --> 0:15:18.080 campaign strategy to essentially focus only on Iowa. I believe 0:15:18.120 --> 0:15:21.520 he's been recently quoted as saying it's Iowa or bust. 0:15:21.880 --> 0:15:25.040 Is there really any oxygen for him in this race, 0:15:25.160 --> 0:15:27.240 on this debate stage when so much of the focus 0:15:27.320 --> 0:15:29.000 is on Nikki Haley and Rond DeSantis. 0:15:29.400 --> 0:15:32.800 Not really, he hasn't a Senator, Scott has not distinguished 0:15:32.880 --> 0:15:35.760 himself on the debate stage at all so far. I 0:15:35.800 --> 0:15:38.880 do think that he could, you know, pick up some 0:15:39.160 --> 0:15:43.160 Penns voters in Iowa. You know, Tim Scott really has 0:15:43.200 --> 0:15:46.160 made a play for evangelical voters. He really plays up 0:15:46.160 --> 0:15:48.880 his faith on the campaign trail. So Penns dropping out, 0:15:49.200 --> 0:15:53.120 particularly in Iowa where there are so many evangelical voters, 0:15:53.160 --> 0:15:56.120 could help Scott, But I don't think enough so at 0:15:56.160 --> 0:15:58.800 this point to earn the nomination. 0:15:59.280 --> 0:16:01.440 Well, you say that Scott hasn't really been able to 0:16:01.480 --> 0:16:04.360 distinguish himself in one of these candidates who was able 0:16:04.360 --> 0:16:06.520 to at least suck up a lot of oxygen in 0:16:06.560 --> 0:16:09.760 the prior debates we've seen as viviak Ramaswami. Where is 0:16:09.800 --> 0:16:11.720 his campaign right now? I feel like we heard so 0:16:11.840 --> 0:16:14.120 much about him after the first debate because he really 0:16:14.120 --> 0:16:16.400 did kind of make a mark. He took a lot 0:16:16.440 --> 0:16:18.920 of attacks from the other candidates as well, and then 0:16:18.920 --> 0:16:20.000 I feel like it kind of faded. 0:16:20.680 --> 0:16:23.320 Yeah, he's been out and about lately. He was up 0:16:23.360 --> 0:16:26.600 in New Hampshire. You know, for some appearances, he has 0:16:26.680 --> 0:16:28.400 spent a lot of time in New Hampshire. So he's 0:16:28.400 --> 0:16:31.640 still definitely out there campaigning. I will it will be 0:16:31.640 --> 0:16:34.080 interesting to see what he does in the debate, because 0:16:34.600 --> 0:16:36.600 you know, he did suck up so much oxygen in 0:16:36.640 --> 0:16:40.200 the first debate and people were sort of impressed by that. 0:16:40.320 --> 0:16:43.680 But then also he annoyed people because people felt like 0:16:43.720 --> 0:16:46.600 he was sort of the kid brother, you know, harassing 0:16:46.640 --> 0:16:49.280 people and taking attention by the end of it, and 0:16:49.400 --> 0:16:51.040 so I felt like it was sort of a double 0:16:51.160 --> 0:16:54.720 edged sword there. You know, he is a very skilled debater. 0:16:54.840 --> 0:16:58.520 He was a college debater. You know, he is articulate. 0:16:59.040 --> 0:17:01.760 The interesting thing about him is that he loves Trump, 0:17:01.800 --> 0:17:04.399 and so he sort of refuses to break from Trump, 0:17:04.640 --> 0:17:07.359 whereas the other candidates on the stage are really trying 0:17:07.359 --> 0:17:10.919 to distinguish themselves from the former president, and that's a 0:17:11.040 --> 0:17:12.440 sort of difference between them. 0:17:12.359 --> 0:17:15.480 Or just go after them intentionally, like Governor Chris Christy 0:17:15.560 --> 0:17:18.280 has done in the past couple debates. Remember in the 0:17:18.280 --> 0:17:20.800 second debate, he looked directly at the camera and said, Trump, 0:17:20.840 --> 0:17:24.080 I know you're watching, So I'll be interested to see 0:17:24.080 --> 0:17:26.520 if we get some kind of reiteration of that in 0:17:26.560 --> 0:17:28.600 the third go around. But on the subject of the 0:17:28.600 --> 0:17:32.159 former president, how heavily is he going to feature? He 0:17:32.280 --> 0:17:35.000 still very much as the front runner, perhaps even cemented 0:17:35.040 --> 0:17:37.879 even more so in the lead up to this, So 0:17:38.080 --> 0:17:39.880 once again unavoidable topic. 0:17:39.680 --> 0:17:41.960 I think, an unvotable topic. I felt like in the 0:17:42.040 --> 0:17:44.719 last debate, you know, they covered so much ground. I 0:17:44.800 --> 0:17:47.840 was just reading some coverage of it to remind myself yesterday. 0:17:48.119 --> 0:17:51.480 You know, they talked about inflation and housing and China 0:17:52.119 --> 0:17:55.240 and you know, the flow of LYSID drugs over the border. 0:17:55.600 --> 0:17:58.679 They did talk about Trump, and some people went after Trump, 0:17:58.760 --> 0:18:01.560 but you know, it wasn't like everybody wanted to take 0:18:01.600 --> 0:18:04.600 down the former president, even though he's really the front 0:18:04.640 --> 0:18:07.919 runner and loomed over the debate. His absence loomed over it. 0:18:08.320 --> 0:18:10.359 What will be interesting Wednesday night is that he is 0:18:10.400 --> 0:18:13.679 holding a counter program made event also in Florida, like 0:18:13.800 --> 0:18:15.399 not that far away from the debate. 0:18:15.480 --> 0:18:19.160 Yeah, the two Florida men in Florida, in their home 0:18:19.200 --> 0:18:22.080 state essentially, So this will be an interesting dynamic. You 0:18:22.119 --> 0:18:24.520 mentioned there, Nancy, how a lot of ground was covered 0:18:24.560 --> 0:18:28.400 in the second debate topic wise, from inflation, to schools, 0:18:28.440 --> 0:18:31.439 to other aspects of it. One thing that hadn't happened 0:18:31.520 --> 0:18:34.760 yet though, was October seventh and the conflict erupting between 0:18:34.800 --> 0:18:37.199 Israel and Hamas. So I would imagine they're going to 0:18:37.200 --> 0:18:40.040 face some questions about that this time around. Do we 0:18:40.119 --> 0:18:43.200 have a sense of where the different candidates are on 0:18:43.240 --> 0:18:43.960 that issue. 0:18:44.119 --> 0:18:47.199 Well, that's a great point. And the candidates really have 0:18:47.400 --> 0:18:51.280 tried to appear all over this conflict, particularly DeSantis and 0:18:51.359 --> 0:18:54.959 Nikki Haley. So DeSantis made this big show of you know, 0:18:55.080 --> 0:18:58.199 trying like sending a plane from Florida to try to 0:18:58.240 --> 0:19:01.200 get you know, Americans, or really is bring them back 0:19:01.200 --> 0:19:03.440 to Florida and try to appear on top of it. 0:19:03.680 --> 0:19:06.320 You know, Haley has really you know, she was the 0:19:06.480 --> 0:19:09.720 UN ambassador and the Trump administration, she does have some 0:19:09.840 --> 0:19:13.399 concrete foreign policy experience. She has really tried to appear 0:19:13.600 --> 0:19:15.600 very out front of that. So I do feel like 0:19:15.680 --> 0:19:19.440 foreign policy not just the Israeli Hamas war, but also 0:19:19.480 --> 0:19:21.600 the Ukraine war. Do you whatny mean, what this means 0:19:21.600 --> 0:19:23.919 for Iran? I feel like this will be potentially a 0:19:24.119 --> 0:19:25.840 very foreign policy heavy debate. 0:19:26.080 --> 0:19:28.280 One of the most memorable moments of the first debate 0:19:28.280 --> 0:19:30.720 for me was Nikki Haley telling Vive Grumswami that he 0:19:30.760 --> 0:19:33.080 had no foreign policy experience, and it showed. So I 0:19:33.119 --> 0:19:36.119 wonder how he might address that this time around, because 0:19:36.160 --> 0:19:38.960 he has been in the prior debates pretty vocal about 0:19:39.119 --> 0:19:41.760 not wanting to provide further support for Ukraine, and a 0:19:41.760 --> 0:19:43.520 lot of people see these issues as tied together. 0:19:43.840 --> 0:19:46.479 They do, and I mean that's sort of a divide 0:19:46.520 --> 0:19:49.320 in the Republican Party at this point about who wants 0:19:49.359 --> 0:19:52.320 to support Israel financially. I would say that there's more 0:19:52.359 --> 0:19:55.280 broad support for that, and who wants to keep giving 0:19:55.359 --> 0:19:58.000 aid to Ukraine. And there's a ton of Republicans who 0:19:58.000 --> 0:20:02.120 feel like the A to Ukraine shoul should stop. Ramaswami 0:20:02.240 --> 0:20:04.160 is one of them. DeSantis has sort of gone back 0:20:04.160 --> 0:20:06.600 and forth on that and then there's a bunch of 0:20:06.600 --> 0:20:10.200 House Republicans, including the new Speaker, who are much more 0:20:10.240 --> 0:20:13.040 skeptical of ongoing a to Ukraine. 0:20:13.160 --> 0:20:15.320 Yep, it's a hot topic on Capitol Hill, and I 0:20:15.320 --> 0:20:17.840 would imagine it'll be a hot topic on the stage 0:20:17.880 --> 0:20:20.440 this coming week as well. Safe travels to Florida. Nancy, 0:20:20.480 --> 0:20:23.400 Thank you so much. That's Nancy Cook, who helps cover 0:20:23.840 --> 0:20:27.400 national politics for us here at Bloomberg and Tom, make 0:20:27.440 --> 0:20:29.080 sure to turn the TV on on Wednesday night. 0:20:29.240 --> 0:20:32.040 Thank you, Kaylee. That was Bloomberg sound On co host 0:20:32.119 --> 0:20:35.280 Kaylee Lines, reporting from our Bloomberg ninety nine one newsroom 0:20:35.320 --> 0:20:37.880 in Washington, and you can hear sound on weekdays one 0:20:37.920 --> 0:20:40.600 to three pm on Bloomberg Radio and coming up on 0:20:40.640 --> 0:20:43.280 Bloomberg day Break weekend. We get you ready for earnings 0:20:43.520 --> 0:20:58.200 from UBS. I'm Tom Busby and this is Bloomberg. I'm 0:20:58.240 --> 0:21:00.439 Tom Busby in New York with your global ahead at 0:21:00.440 --> 0:21:03.040 the top stories for investors in the coming week. We 0:21:03.119 --> 0:21:05.840 heard from all the big US banks and now Switzerland's 0:21:05.920 --> 0:21:10.200 UBS reports earnings this week. UBS the second quarter includes 0:21:10.240 --> 0:21:13.200 one month of credit SWIEE numbers and for more, let's 0:21:13.200 --> 0:21:15.639 head to London and bring in Bloomberg Daybreak, europe banker 0:21:15.960 --> 0:21:17.320 Caroline Hepger. 0:21:17.280 --> 0:21:21.960 Tom Bloomberg Intelligence expects US banks to outperform European peers. 0:21:22.280 --> 0:21:25.960 There is particular focus though on UBS, given the integration 0:21:26.400 --> 0:21:30.080 of credit swite. UBS is skewed to equities trading, which 0:21:30.119 --> 0:21:34.960 has exceeded expectations. In the aggregate. Overall shares in European 0:21:35.000 --> 0:21:37.600 financials are up about eight percent year to date, with 0:21:37.640 --> 0:21:40.720 the ECB sticking to its higher for longer view. So 0:21:40.760 --> 0:21:43.159 Bloomberg's Critty g Gooptur and I have been speaking to 0:21:43.320 --> 0:21:46.600 our Swiss banking and wealth reporter Marin health Dema to 0:21:46.640 --> 0:21:49.680 get a preview of what to expect from UBS and 0:21:49.840 --> 0:21:53.560 on the overall banking picture. Our Bloomberg opinion columnist Paul J. 0:21:53.840 --> 0:21:57.520 Davies I began by asking Paul about why banks seem 0:21:57.560 --> 0:22:00.680 to be benefiting from higher interest rates and yet still 0:22:00.680 --> 0:22:04.119 not actually feeling a hit from higher default rates and 0:22:04.240 --> 0:22:08.560 other issues that might affect them. We asked him why not, Well, I. 0:22:08.480 --> 0:22:11.679 Think the I mean, the interesting thing is that the 0:22:11.720 --> 0:22:15.560 economy is still, you know, much stronger than perhaps many 0:22:15.560 --> 0:22:17.880 people you know expected it to be. All well, much 0:22:17.880 --> 0:22:19.560 stronger is maybe a bit of an exaggeration. It's not 0:22:20.080 --> 0:22:23.120 you know, turning down or slowing down quite as rapidly 0:22:23.160 --> 0:22:25.120 as we might have expected. I mean, in the US, 0:22:26.280 --> 0:22:29.280 you know, the economy is going great and banks are 0:22:29.359 --> 0:22:32.879 doing really really well. Over there, in Europe it's a 0:22:32.880 --> 0:22:35.760 bit different. It's a lot slower. You know, Germany has 0:22:35.840 --> 0:22:38.320 started to shrink and is dragging down you know, some 0:22:38.359 --> 0:22:41.840 of the other economies. But so long as employment isn't rising, 0:22:41.960 --> 0:22:44.200 so long as people aren't losing their jobs, so long 0:22:44.240 --> 0:22:48.000 as you know, companies aren't yet you know, going bust 0:22:48.560 --> 0:22:52.280 or really struggling, then you know that then that's why 0:22:52.320 --> 0:22:54.800 sort of banks aren't feeling the pain yet. But I mean, 0:22:54.840 --> 0:22:56.840 I think in Europe it's sort of it's starting to 0:22:56.840 --> 0:22:58.560 feel a lot more likely that we're going to see 0:22:58.560 --> 0:23:00.600 a bit more of that going into next year. 0:23:01.480 --> 0:23:03.919 And when we do, when we do inevitably hit that 0:23:03.960 --> 0:23:06.520 potential peak RaSE, whether it's next year or the year after, 0:23:06.640 --> 0:23:12.159 whenever that is eventually hit, the burden on some of 0:23:12.200 --> 0:23:15.480 these banks to kind of find alternative revenue that isn't 0:23:15.480 --> 0:23:18.240 coming from interest income seems all the more important. What 0:23:18.320 --> 0:23:19.399 might that actually look like? 0:23:21.080 --> 0:23:24.200 Well, I mean, you know, interest income has been it 0:23:24.240 --> 0:23:26.480 has been the thing that banks have, especially in Europe, 0:23:26.480 --> 0:23:29.240 have been forced to live without for like, you know, 0:23:29.280 --> 0:23:31.880 well over a decade already. I mean the last year 0:23:32.080 --> 0:23:36.639 or so, we've seen net interesting income rise very very rapidly, 0:23:36.680 --> 0:23:40.440 obviously with rising interest rates. I mean in the UK especially, 0:23:41.320 --> 0:23:44.240 it's already peaked. I think you know one of the 0:23:44.280 --> 0:23:47.119 banks last week that reported that had a bit of 0:23:47.119 --> 0:23:49.840 a rough time, as Barclays, and that's because they kind 0:23:49.840 --> 0:23:54.240 of somewhat surprisingly adjusted their expected net interest margins for 0:23:54.280 --> 0:23:59.040 the full year down already, So you know, interest income 0:23:59.119 --> 0:24:02.840 maybe as interest margins at least may well have peaked already. 0:24:03.200 --> 0:24:07.080 Loan demand isn't isn't particularly strong, and in some areas 0:24:07.080 --> 0:24:08.959 it's going to start to come down. So I mean, 0:24:09.000 --> 0:24:11.239 what they're going to replace it with is you know 0:24:11.280 --> 0:24:13.199 what they've been trying to replace it with for a 0:24:13.200 --> 0:24:16.640 decade already. And in some banks that's about what more 0:24:16.720 --> 0:24:20.560 wealth management. Others it's going to be about you desperately 0:24:20.600 --> 0:24:23.879 hoping for a pickup in investment banking, and you know, 0:24:23.920 --> 0:24:27.359 a continuation of some slightly better trends in kind of 0:24:27.359 --> 0:24:28.800 trading and markets as well. 0:24:30.280 --> 0:24:32.840 Marian half Tamar, let me bring you in our Swiss 0:24:32.880 --> 0:24:35.520 Banking and Wealth Reporter to look, I suppose that the 0:24:35.520 --> 0:24:39.639 specifics around UBS and it's earnings, I mean, do you 0:24:39.720 --> 0:24:41.920 think that the bank is going to see the benefits 0:24:41.920 --> 0:24:43.920 from the integration of Credit Suite. I mean, this is 0:24:43.960 --> 0:24:47.240 a specific example. Some people even see UBS as a 0:24:47.280 --> 0:24:50.040 potential kind of European banking champion. Do you think we 0:24:50.080 --> 0:24:51.399 can go as far as to say that. 0:24:53.320 --> 0:24:55.160 I think time will tell on that Brant. They still 0:24:55.200 --> 0:24:57.320 have a lot to go through with the integration, but 0:24:57.960 --> 0:25:00.439 we're are going to be seeing their earnings next this week, 0:25:00.880 --> 0:25:03.479 hopefully we'll have a bit more clarity on just how 0:25:03.560 --> 0:25:07.040 much Credit Suite is still losing in terms of profitability. 0:25:07.640 --> 0:25:09.040 They had kind of guided that they were going to 0:25:09.080 --> 0:25:12.600 be losing two billion dollars worth of profit already this quarter, 0:25:12.760 --> 0:25:15.600 So we'll see how UBS absorbs. That key will be 0:25:15.800 --> 0:25:18.240 to see that come down over the next couple of 0:25:18.320 --> 0:25:22.160 quarters and not eat into UBS's business because in two 0:25:22.280 --> 0:25:25.560 Q for example, Credit Sweeze is loss completely wiped out 0:25:25.640 --> 0:25:29.000 UBS profit. So we need to see that calibration happen, 0:25:30.400 --> 0:25:32.840 and then you know, eventually, once they've able to they've 0:25:32.840 --> 0:25:34.960 been able to sort of fully integrate and capitalize on 0:25:35.000 --> 0:25:38.280 Credit Squee's business. You know, that's the goal is can 0:25:38.320 --> 0:25:41.040 they be, you know, a champion in the way that 0:25:41.080 --> 0:25:44.800 a Goldman Sachs is or JP Morgan is for investment banking, 0:25:44.880 --> 0:25:46.440 but instead for wealth management. 0:25:47.440 --> 0:25:50.120 Where does the next leg of growth actually come from? Though, 0:25:50.160 --> 0:25:53.640 I mean, Caroline just mentioned being kind of a European champion, 0:25:53.680 --> 0:25:55.919 but in terms of the international push, You've done some 0:25:55.960 --> 0:25:57.040 reporting on the Middle East. 0:25:58.480 --> 0:26:01.560 Yeah, so UBS doesn't see it self as a European champion. 0:26:01.600 --> 0:26:04.679 It does see itself as a global champion. One of 0:26:04.720 --> 0:26:08.119 the big areas you mentioned the Middle East. They gained 0:26:08.160 --> 0:26:10.720 a lot of foothold there with the Credit Suite acquisition 0:26:10.760 --> 0:26:13.480 because Credit speech is probably one of the biggest banks there, 0:26:13.520 --> 0:26:16.120 particularly for wealth management and how that ties into doing 0:26:16.160 --> 0:26:19.160 big deals with the sovereigns and royals and large business 0:26:19.240 --> 0:26:22.960 entrepreneurs there. So that's definitely putting them ahead of the game. 0:26:23.200 --> 0:26:25.360 But there are other large players as well, so they'll 0:26:25.400 --> 0:26:27.280 have to keep an eye on that. And then there's 0:26:27.320 --> 0:26:30.439 a geopolitical angle with that region right now, where you 0:26:30.440 --> 0:26:32.800 know they've recently had to cancel a big wealth conference 0:26:32.840 --> 0:26:37.520 in Qatar because of the conflict so whether the short 0:26:37.600 --> 0:26:40.440 term conflict will affect the long term plans is sup 0:26:40.440 --> 0:26:42.439 remains to be seen. But that's certainly putting a bit 0:26:42.480 --> 0:26:44.760 of a delay in potentially their ability to put the 0:26:44.760 --> 0:26:48.119 pieces together with this acquisition. And then of course, you 0:26:48.119 --> 0:26:50.480 know you're looking at the US as a big wealth 0:26:50.480 --> 0:26:52.560 pool and Asia as well. It's a bit more on 0:26:52.600 --> 0:26:56.240 the back burner because of the geopolitical tensions, Paul. 0:26:56.320 --> 0:27:00.040 That's interesting, isn't it about the regional push of the 0:27:00.160 --> 0:27:04.000 different banks. Do you see more job cuts coming for 0:27:04.320 --> 0:27:08.679 big European banks certainly as some of them try to 0:27:08.760 --> 0:27:11.359 refocus on different parts of the globe, perhaps, you know, 0:27:11.359 --> 0:27:14.000 push away from China into the Middle East or in 0:27:14.080 --> 0:27:16.439 other places. You know how it does feel like a 0:27:16.480 --> 0:27:19.000 moment where banks are repositioning somewhat globally. 0:27:20.920 --> 0:27:23.680 Yeah, so, I mean in terms of job cuts, I mean, 0:27:23.920 --> 0:27:26.719 I guess we've had a few already, probably more from 0:27:26.760 --> 0:27:30.560 the US banks in Europe and elsewhere. I mean, I think, 0:27:31.040 --> 0:27:33.440 you know, one of the things in investment banking and 0:27:33.480 --> 0:27:37.320 trading and such like among the Europeans is that they 0:27:37.359 --> 0:27:42.879 didn't really hire quite so rapidly and quite so extensively 0:27:43.400 --> 0:27:45.360 during sort of you know, twenty twenty one and into 0:27:45.400 --> 0:27:47.159 twenty two when we had that real sort of boom 0:27:47.200 --> 0:27:50.920 in market. So they've kind of, you know, they've got 0:27:51.000 --> 0:27:54.120 less people, fewer sort of you know, excess resources. 0:27:54.119 --> 0:27:54.320 Now. 0:27:54.359 --> 0:27:56.640 I mean, I think you know, Barkley's is certainly talking 0:27:56.680 --> 0:28:00.000 about finding lots of efficiencies and making a few cut 0:28:00.240 --> 0:28:02.119 We don't really know exactly where they're going to do 0:28:02.119 --> 0:28:03.840 that yet. They've been quite sort of coy about what 0:28:04.840 --> 0:28:07.200 their plans are. But I mean, for the most part, 0:28:07.280 --> 0:28:09.240 and again especially in investment banking, one of the things 0:28:09.240 --> 0:28:12.320 that we've been seeing recently is it's actually quite a 0:28:12.320 --> 0:28:14.560 lot of hiring going on among kind of you know 0:28:14.640 --> 0:28:19.360 deal makers, really good deal makers as you know, smaller 0:28:19.400 --> 0:28:23.119 banks and you know, unexpected banks, banks like Santander for example, 0:28:23.520 --> 0:28:26.000 you know, really stuck up on sort of talent that's 0:28:26.040 --> 0:28:28.120 available that they can get their hands on now during 0:28:28.119 --> 0:28:31.000 this sort of relatively quiet period in the hope that 0:28:31.000 --> 0:28:33.840 that means that they'll get a head start and see 0:28:33.840 --> 0:28:35.320 a lot more be able to generate a lot more 0:28:35.359 --> 0:28:38.560 revenue when markets and deal making and so on picks 0:28:38.640 --> 0:28:41.400 up once you know, interest rates have settled down or 0:28:41.440 --> 0:28:43.560 whatever is the driver that brings back that confidence to 0:28:43.560 --> 0:28:44.600 get markets going again. 0:28:45.440 --> 0:28:47.480 I love that you mentioned Santander because of course we 0:28:47.520 --> 0:28:49.880 know they're trying to expand their their Wall Street presence 0:28:49.920 --> 0:28:52.720 as well over over in the state. Paul, very quickly, 0:28:52.720 --> 0:28:55.160 if you can talk to us about what other banks 0:28:55.200 --> 0:28:57.000 are in the rat race to kind of take up 0:28:57.120 --> 0:28:59.240 some of the market share that perhaps Credit Suite has 0:28:59.320 --> 0:28:59.800 left behind. 0:29:01.800 --> 0:29:03.840 I guess it kind of depends on the sorts of 0:29:03.880 --> 0:29:06.200 areas that you're talking about. I mean, you know, the 0:29:06.560 --> 0:29:09.560 kind of the boutiques have been doing a lot of hiring, 0:29:10.800 --> 0:29:13.520 mainly in the US, but in Europe too. That's the 0:29:13.600 --> 0:29:18.120 kind of you know, the ever cause pg T's you know, 0:29:18.400 --> 0:29:22.320 these they are quite large boutiques nowadays. Jeffries too like 0:29:22.400 --> 0:29:25.200 kind of you know, the real sort of tear expanding 0:29:25.240 --> 0:29:27.600 in the last couple of years. So and I think, 0:29:27.840 --> 0:29:30.000 you know, that's where some of the market share has 0:29:30.040 --> 0:29:32.640 been going in sort of you know, classic investment banking 0:29:33.160 --> 0:29:36.000 and in terms of trading. I mean, you know, it's 0:29:36.040 --> 0:29:42.640 still a long ongoing story of just you know, everything 0:29:42.680 --> 0:29:46.760 gravitating to the biggest, you know, most efficient shops. So 0:29:46.800 --> 0:29:50.160 it's just it's still just the JP Morgan's Goldman Saxes, 0:29:50.680 --> 0:29:53.720 you know, sort of taking slowly more and more share 0:29:53.800 --> 0:29:56.840 from pretty much everybody everywhere else anywhere in the world. 0:29:57.400 --> 0:29:59.600 That was Pritty Group Tour and I speaking to Blueberg 0:29:59.600 --> 0:30:03.160 Swiss King and Wealth reportermar and Healthtamara and our Bloomberg 0:30:03.160 --> 0:30:06.520 opinion columnist Paul J. Davies. I'm Caroline Hepge here in London. 0:30:06.600 --> 0:30:09.840 You can catch us every weekday morning for Bloomberg Daybreak Europe, 0:30:09.880 --> 0:30:12.840 beginning at six am in London. That's one am on 0:30:13.000 --> 0:30:13.600 Wall Street. 0:30:14.080 --> 0:30:16.880 Tom Our thanks to Bloomberg day Break Europe. Banker Caroline 0:30:16.880 --> 0:30:19.440 Hepgar and coming up here on Bloomberg day Break weekend, 0:30:19.880 --> 0:30:23.040 the Prime Minister of Australia heads to China and we 0:30:23.120 --> 0:30:26.920 head to Asia next. I'm Tom Busby and this is Bloomberg. 0:30:37.440 --> 0:30:39.760 This is Bloomberg day Break Weekend, our global look ahead 0:30:39.760 --> 0:30:41.960 at the top stories for investors in the coming week, 0:30:42.480 --> 0:30:46.280 Diplomacy and trade in focus. As a top government official 0:30:46.320 --> 0:30:48.720 heads to Asia for more, Let's go to Hong Kong 0:30:48.760 --> 0:30:52.080 and Bloomberg Daybreak Asia host Brian Curtis. 0:30:51.960 --> 0:30:55.160 Tom Australian Prime Minister Anthony Albanize. He will be in 0:30:55.240 --> 0:30:59.760 China during the coming week, looking to further stabilize bilateral relations. 0:31:00.120 --> 0:31:03.080 Albanesi's visit will be the first by an Australian leader 0:31:03.200 --> 0:31:07.280 since twenty sixteen. While there have been some advances of late, 0:31:07.680 --> 0:31:11.840 China still has restrictions on Australian lobsters and beef, and 0:31:11.880 --> 0:31:15.760 there's a review on wine duties that is ongoing. One 0:31:15.800 --> 0:31:19.560 other recent positive was China released Australian journalist Chang Lei 0:31:19.920 --> 0:31:23.000 last month. She had been detained in China for almost 0:31:23.000 --> 0:31:27.200 three years under espionage related charges. Joining us for some 0:31:27.280 --> 0:31:30.760 insights here on how to gauge success or failure for 0:31:30.880 --> 0:31:36.880 the Albanesi trip is Ben Westcott, Bloomberg Government reporter in Canberra. So, first, Ben, 0:31:37.040 --> 0:31:39.720 before we get into some of the teeth about overall 0:31:39.720 --> 0:31:44.880 relations in indications of progress in areas like beef and 0:31:44.920 --> 0:31:47.880 lobsters that may have been done behind the scenes that 0:31:48.000 --> 0:31:49.360 hasn't been made public. 0:31:49.480 --> 0:31:53.120 In recent wait. So I'd say is that Australia has 0:31:53.160 --> 0:31:56.120 been highlighting the lobs to issue more which suggests that 0:31:56.120 --> 0:31:59.960 that might be an easy win for both China and Australia. 0:32:00.280 --> 0:32:03.400 A quick announcement, as they say, out of this trip, 0:32:03.640 --> 0:32:06.560 and obviously much less complicated than the wine sanctions which 0:32:06.560 --> 0:32:09.480 are currently under review, more than the release of the 0:32:09.520 --> 0:32:13.920 remaining Australian in China right at Young Hang June, who's 0:32:13.960 --> 0:32:17.040 been in prison there for more than four years. So 0:32:17.360 --> 0:32:20.040 you know, in comparison to that, a win on lobsters 0:32:20.120 --> 0:32:22.520 or a win on beef would be a much more 0:32:22.800 --> 0:32:24.760 more easy thing away with them to sell. 0:32:25.000 --> 0:32:28.080 And you mentioned that they're setting aside for the moment 0:32:28.160 --> 0:32:32.560 the WTO wine dispute and China has this review underway, 0:32:32.600 --> 0:32:35.360 does the Prime Minister does the government generally expect a 0:32:35.400 --> 0:32:36.400 positive outcome on that? 0:32:36.960 --> 0:32:39.720 I mean generally I think there is there is hope 0:32:39.800 --> 0:32:43.640 that that will come out well. But what people have 0:32:43.720 --> 0:32:45.880 been saying is that this isn't as simple as the 0:32:45.920 --> 0:32:48.800 barley tariffs. So the protest we saw for the barley 0:32:48.880 --> 0:32:52.080 tariffs earlier this year was that once the WTO report 0:32:52.120 --> 0:32:56.120 had been handed down, we then saw Chinese and Australians 0:32:56.480 --> 0:33:01.800 review the report, which was then led to a review 0:33:01.960 --> 0:33:05.040 of those tariffs by the Chinese side. They're eventual lifting 0:33:05.040 --> 0:33:07.160 and that took three months with a one month extension. 0:33:07.480 --> 0:33:11.040 Now already even straight off the bat, these wine tariffs 0:33:11.040 --> 0:33:13.520 have been given a five month review, and I've been told, 0:33:13.600 --> 0:33:16.400 you know, off the record, that it's much more complicated 0:33:18.000 --> 0:33:21.160 than the Bali tariffs were. So there's good hope. Treasury 0:33:21.240 --> 0:33:25.800 wine stocks have gone up, but no one's counting any 0:33:26.000 --> 0:33:27.040 chickens at this point. 0:33:27.160 --> 0:33:30.040 Will Prime Minister Albanzi have both the carrot and stick 0:33:30.360 --> 0:33:32.400 in his arsenal on this trip? 0:33:32.520 --> 0:33:35.640 Prim minist abaniniti faces a really tough challenge in this trip. 0:33:35.680 --> 0:33:38.120 He has to step the line between not insulting his 0:33:38.240 --> 0:33:43.000 hosts but not giving any reason for any people watching 0:33:43.080 --> 0:33:46.240 in the US or any sort of conservatives back home 0:33:46.280 --> 0:33:51.000 who are watching, to gain any sort of fears about 0:33:51.000 --> 0:33:55.360 the relationship with China. What he says repeatedly is that 0:33:55.560 --> 0:33:58.960 Australia and China will cooperate where they can, disagree where 0:33:58.960 --> 0:34:00.840 they must. And I think that it's going to be 0:34:00.880 --> 0:34:02.360 the trip, This is going to be the angle he 0:34:02.440 --> 0:34:04.960 follows for his whole trip. I had someone say to me, 0:34:04.960 --> 0:34:06.280 you know, when you're walking down the Great Hall of 0:34:06.320 --> 0:34:08.239 the People towards changing Ping, it can be easy to 0:34:08.239 --> 0:34:10.799 get or so it's going to be very interesting to 0:34:10.800 --> 0:34:14.000 see how he handles this very delicate balancing act exactly. 0:34:14.120 --> 0:34:16.560 Not the easiest time to bring up human rights or 0:34:16.719 --> 0:34:18.000 conditions in Shinjong. 0:34:18.280 --> 0:34:20.880 I mean exactly, and I mean the one thing that 0:34:20.920 --> 0:34:24.719 has characterized Australian diplomacy is since May twenty twenty two, 0:34:24.880 --> 0:34:28.120 when the Central Left Labor government took power, was that 0:34:28.160 --> 0:34:31.879 they've done all that behind closed doors. With a few exceptions, 0:34:33.200 --> 0:34:38.040 they've generally kept criticism of China's human rights abuses behind 0:34:38.080 --> 0:34:42.080 closed doors, hidden meetings with Premier League At Chuang and 0:34:42.160 --> 0:34:44.719 President of Chijing Ping And as a result, I mean, 0:34:44.800 --> 0:34:46.480 or possibly as a results, possibly a result the other 0:34:46.520 --> 0:34:49.280 things they have actually had those meetings which had eluded 0:34:49.360 --> 0:34:53.200 previous governments who've been more vocal. So there has been 0:34:53.200 --> 0:34:55.960 one major difference in Australia's diplomacy in recent years. 0:34:56.000 --> 0:34:59.200 Ben, Thank you so much, Ben Westcott, Bloomberg Government reporter 0:34:59.440 --> 0:35:02.840 in Ken. I'm Brian Curtis along with Doug Krisner. You 0:35:02.880 --> 0:35:05.680 can catch us every weekday here for Bloomberg day Break 0:35:05.719 --> 0:35:09.000 Asia beginning at six am in Hong Kong and six 0:35:09.080 --> 0:35:11.359 pm on Wall Street tom. 0:35:11.120 --> 0:35:14.040 Our thanks to Bloomberg day Break Asia host Brian Curtis. 0:35:14.280 --> 0:35:16.359 And that does it for this edition of Bloomberg day 0:35:16.360 --> 0:35:19.520 Break Weekend. Join us again Monday morning, five am Wall 0:35:19.560 --> 0:35:21.960 Street Time for the latest on markets overseas and the 0:35:22.000 --> 0:35:25.080 news you need to start your day. I'm Tom Busby. 0:35:25.239 --> 0:35:28.080 Stay with US. Top stories and global business headlines are 0:35:28.120 --> 0:35:29.520 coming up right now