Daybreak Weekend: Crypto Recap, Macau Recovery, Congress Wraps Up 2023

This is Bloomberg Daybreak Weekend, our global look at the 0:00:05.280 --> 0:00:07.760 top stories in the coming week from our Daybreak anchors 0:00:07.760 --> 0:00:10.200 all around the world, and straight ahead on the program. 0:00:10.320 --> 0:00:13.320 It's shaving up to be a very merry cryptomis with 0:00:13.400 --> 0:00:17.160 bitcoin and ethereum soaring in value. Will the surge continue 0:00:17.280 --> 0:00:20.600 in twenty twenty four with the SEC poise to approve 0:00:20.640 --> 0:00:23.800 the first ever spot bitcoin ETF. I'm Tom Busby in 0:00:23.880 --> 0:00:24.319 New York. 0:00:24.520 --> 0:00:27.200 I'm calin Hedge in London, where we're thinking about the 0:00:27.320 --> 0:00:30.120 lessons learned from the past year in stocks. 0:00:30.360 --> 0:00:32.560 I'm Doug Prisoner looking at the odds for a better 0:00:32.640 --> 0:00:35.320 gaming business in Macau for twenty twenty four. 0:00:35.560 --> 0:00:38.320 I'm Kaylie Lynes in Washington, where we're reflecting on a 0:00:38.400 --> 0:00:41.639 wild year in Congress and the legislative winners and losers. 0:00:42.680 --> 0:00:46.680 That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 0:00:46.680 --> 0:00:50.520 Eleve on Free Own New York, bloombergon ninety nine to one, Washington, DC, 0:00:50.840 --> 0:00:54.880 Bloomberg one O six one, Boston, Bloomberg nine sixty, San Francisco, 0:00:55.120 --> 0:00:58.920 DAB Digital Radio London, Sirius XM one to nineteen and 0:00:59.000 --> 0:01:01.920 around the world on Bloomberg Radio dot com and via 0:01:01.920 --> 0:01:03.240 the Bloomberg Business Appen. 0:01:07.360 --> 0:01:09.200 Good day to you. I'm Tom Busby, and we begin 0:01:09.280 --> 0:01:13.320 today's program with a look at cryptocurrencies. Bitcoin, starting the 0:01:13.400 --> 0:01:17.000 year just under seventeen thousand dollars. Fast forward nearly twelve 0:01:17.040 --> 0:01:21.200 months later, Bitcoin is more than double trading above forty thousand. 0:01:21.640 --> 0:01:24.680 Why the big rally and will it continue? We're pleased 0:01:24.680 --> 0:01:28.160 to welcome Mike McLoone. He's senior commodity strategist at Bloomberg 0:01:28.200 --> 0:01:31.880 Intelligence and Bloomberg Markets editor Michael Reagan. Thank you both 0:01:31.880 --> 0:01:34.920 for joining us. What is behind the big rally in 0:01:34.959 --> 0:01:37.760 bitcoin this past year and what has changed if anything? 0:01:38.400 --> 0:01:40.440 Hey, Tom, Well, the potential the US is going to 0:01:40.440 --> 0:01:45.240 be launching Bitcoin ETF starting nine. The dates really January tense, 0:01:45.600 --> 0:01:48.040 but that's kind of more than micro The market sorty price, 0:01:48.040 --> 0:01:50.360 and it's the macro. I think that matters is virtually 0:01:50.400 --> 0:01:52.760 all risk assets were pretty well beat up at the 0:01:52.840 --> 0:01:55.680 end of last year, and virtually all risk assets are 0:01:55.760 --> 0:01:58.400 up this year. Bitcoin is just the riskiest. It's the 0:01:58.520 --> 0:02:01.360 highest beta up the most. So that's what I look 0:02:01.400 --> 0:02:04.760 at next year. That tilt is a pendulum, Mike swing 0:02:04.800 --> 0:02:06.600 the other way and kind of just revert a little. 0:02:06.680 --> 0:02:09.000 To me, that's the key risk. And it's the example 0:02:09.080 --> 0:02:11.200 of you know, bitcoin's up one hundred and sixty percent 0:02:11.240 --> 0:02:14.240 this year and the NASSEX up about fifty three percent, 0:02:14.840 --> 0:02:17.720 and on a voweltily weighting basis, that's just about what 0:02:17.720 --> 0:02:18.680 Bitcoin should be up. 0:02:19.480 --> 0:02:21.839 And Michael Reagan, so it's kind of mirrored the rise 0:02:21.840 --> 0:02:23.040 in equities this past year. 0:02:23.440 --> 0:02:25.120 Yeah, mirrored it and really out on it. 0:02:25.240 --> 0:02:25.440 Yeah. 0:02:25.480 --> 0:02:28.120 You know, Mike's talking about the beta in the market, 0:02:28.120 --> 0:02:30.200 which is kind of a technical term for if you know, 0:02:30.360 --> 0:02:33.920 one asset is moving one percent, a higher bait asset 0:02:34.520 --> 0:02:36.840 might move two percent or three percent. So, you know, 0:02:36.880 --> 0:02:41.800 Bitcoin just more a beneficiary of this return in risk 0:02:41.840 --> 0:02:46.359 appetites than the equity market, even both are really just 0:02:46.400 --> 0:02:47.959 putting in tremendous rebounds this year. 0:02:48.840 --> 0:02:52.800 And as Michael alluded to, with the SEC expected to 0:02:52.880 --> 0:02:57.840 approve January tenth, the spot bitcoin ETF, this could change everything. 0:02:58.360 --> 0:02:59.560 Yeah, I mean that's the thinking. 0:02:59.600 --> 0:02:59.760 You know. 0:02:59.800 --> 0:03:03.120 The idea is that there are a lot of investors 0:03:03.120 --> 0:03:07.440 and financial advisors out there who were reluctant to invest 0:03:07.520 --> 0:03:10.840 in crypto because they didn't quite trust all the crypto 0:03:10.960 --> 0:03:15.440 native platforms FTX obviously giving the best example of that 0:03:15.480 --> 0:03:18.960 when it collapsed last year. So, you know, the thinking is, 0:03:19.040 --> 0:03:23.000 now that it's available in an ETF, you can buy 0:03:23.040 --> 0:03:26.840 it from your traditional brokerage whoever that is that you 0:03:26.960 --> 0:03:29.840 deal with, and there's a little bit more safety there 0:03:30.120 --> 0:03:33.440 involved now, you know, to Mike's point, I think the 0:03:33.520 --> 0:03:38.080 question is is all that priced into the market already 0:03:38.120 --> 0:03:40.240 for the price of bitcoin and then some you know, 0:03:40.360 --> 0:03:42.720 is it a sell the news event, And it's really 0:03:42.720 --> 0:03:45.760 hard to predict that when the CTF one and if 0:03:45.760 --> 0:03:51.120 it is actually approved. But you know, I think the 0:03:51.240 --> 0:03:54.440 general thinking is that even if even if investors allocate 0:03:54.520 --> 0:03:59.080 a tiny percent of their entire portfolio, say one or 0:03:59.080 --> 0:04:01.840 two percent to crypto, now that's going to add up 0:04:02.000 --> 0:04:07.120 to tens hundreds of billions of dollars potentially. So the 0:04:07.160 --> 0:04:10.400 optimism is that these ETFs will be a big hit, 0:04:10.960 --> 0:04:14.080 and that perhaps while they might not rally, bitcoin might 0:04:14.120 --> 0:04:18.320 not rally the way it did this year, once they're introduced, 0:04:18.320 --> 0:04:21.200 that it will be a support going forward in the market. 0:04:22.160 --> 0:04:24.919 But to Mike's point, you know, this market rallied so 0:04:25.160 --> 0:04:28.720 hard this year that it would be sort of natural 0:04:28.720 --> 0:04:31.000 to expect a little bit of a pullback a correction 0:04:31.040 --> 0:04:31.280 from that. 0:04:32.080 --> 0:04:34.279 So what do you think, Mike mcloon, I'll address this 0:04:34.400 --> 0:04:37.200 to you. Why the change of heart from Gary Gensler 0:04:37.320 --> 0:04:40.400 federal regulators about now going forward with this? 0:04:40.920 --> 0:04:45.279 Oh, the good check and balances of courts. One example 0:04:45.440 --> 0:04:49.680 was coinbase and GBTC Gray Scale Bitcoin Trust. They won 0:04:50.120 --> 0:04:52.719 their actions in courts. There's been some other ones, but 0:04:53.279 --> 0:04:56.080 it's that pendulum and it's just a wonderful check and 0:04:56.120 --> 0:04:58.120 balance of our system. You might have people push back 0:04:58.120 --> 0:05:01.560 on this rapidly advancing technology, then people push forward, and 0:05:01.560 --> 0:05:04.440 that's what's happening. So I think what Michael pointed out 0:05:04.480 --> 0:05:06.479 is the key thing is there is just so much 0:05:06.560 --> 0:05:09.640 optimism and expectation. Okay, the ETFs are going to be launched. 0:05:09.839 --> 0:05:11.320 The key thing we like to say about it is 0:05:11.320 --> 0:05:14.039 that when we launched the Bloomberg Galaxy crypto inext in 0:05:14.040 --> 0:05:17.600 twenty eighteen, this was the goal to get ETFs tracking 0:05:17.920 --> 0:05:20.640 cryptos and most lightly a broad index, and we're just 0:05:20.680 --> 0:05:23.159 so far behind. Now they happen, They already exist in 0:05:23.200 --> 0:05:25.160 other countries. The US is just catching up. But it's 0:05:25.200 --> 0:05:28.080 Michael mentioned, it's the key thing that matters. The point 0:05:28.120 --> 0:05:30.960 I'm worried about is what it's doing for the space 0:05:31.200 --> 0:05:34.640 is since futures were launched in bitcoin in twenty seventeen, 0:05:34.839 --> 0:05:38.400 valtile is getting squashed. So what's happening is this teenager 0:05:38.480 --> 0:05:41.839 or this child acid is becoming an adult rapidly, and 0:05:41.839 --> 0:05:44.040 ETFs are going to push into the adult space really 0:05:44.040 --> 0:05:47.120 fast meeting. Can I expect those very big returns we've 0:05:47.120 --> 0:05:48.720 had in the past when it was trading at a 0:05:48.760 --> 0:05:51.600 volatility of one hundred to two hundred percent, and now 0:05:51.640 --> 0:05:53.840 that valtil is around thirty percent, that's the lowest ever. 0:05:53.960 --> 0:05:55.680 That's a two hundred and sixty day measure or an 0:05:55.720 --> 0:05:58.599 annual measure. And the thing is it's still much higher 0:05:58.680 --> 0:06:01.240 volatility than stock market goal. And that's where I think 0:06:01.240 --> 0:06:04.640 people I'm worried about if we do get that normal 0:06:04.720 --> 0:06:08.719 reversion in the stock market next year bitcoin keep thinking 0:06:08.720 --> 0:06:10.760 about Bitcoin. It's trades twenty four seven. It's one of 0:06:10.800 --> 0:06:13.280 the most significant leading indicators in the planet. It might 0:06:13.400 --> 0:06:15.760 lead that way down. That's why I look at is yes, 0:06:15.800 --> 0:06:18.920 there's always going to be small pullbacks. I'm looking at 0:06:18.960 --> 0:06:23.239 the pendulum for next year swinging more towards reversion as 0:06:23.440 --> 0:06:25.800 the best Maybe we've already seen the best buy the 0:06:25.880 --> 0:06:27.240 rumor in the markets. 0:06:27.680 --> 0:06:32.520 Michael, Yeah, and that falseeity issue is a fascinating once unpacked, 0:06:32.600 --> 0:06:35.039 because you know, that's something these traders like, you know, 0:06:35.040 --> 0:06:38.800 your typical buy and hold investor might not level lot 0:06:38.800 --> 0:06:43.080 of volatility in their portfolio, but crypto investors, that's that's 0:06:43.160 --> 0:06:46.440 their bread and butter, right, So you know, regardless of 0:06:46.440 --> 0:06:50.919 what Bitcoin does, it's fascinating to look at some of 0:06:50.960 --> 0:06:53.320 the other areas of crypto market and what's going on. 0:06:53.560 --> 0:06:56.799 I'll give you an example. Solana is the big star 0:06:56.920 --> 0:06:59.680 of the industry this year. Their native token soul is 0:06:59.720 --> 0:07:03.400 up like eight hundred percent. And the thinking there is 0:07:03.440 --> 0:07:07.520 this is a blockchain that's much faster and cheaper to 0:07:07.680 --> 0:07:12.760 run transactions on than Bitcoin or ethereum. So a lot 0:07:12.800 --> 0:07:17.239 of these really crazy sort of meme coins and NFTs 0:07:17.320 --> 0:07:20.600 and all that very very speculative and extra risky. I mean, 0:07:20.680 --> 0:07:24.120 all of crypto's risky, but this stuff is super ultra risky. 0:07:24.800 --> 0:07:29.080 Has really found a home on that blockchain and Avalanche, 0:07:29.880 --> 0:07:33.120 so you know, the market is kind of I think 0:07:33.160 --> 0:07:36.600 to Mike's point, there's a potential for sort of a 0:07:36.600 --> 0:07:40.000 a fork in the road where bitcoin becomes more of 0:07:40.040 --> 0:07:45.840 the mainstream, lower volatile the side of the market. But 0:07:45.880 --> 0:07:48.080 then you still have this sort of more wild west, 0:07:48.480 --> 0:07:52.680 wildly volatile and speculative angle of the market where all 0:07:52.720 --> 0:07:56.960 the true crypto you know, guys who like to trade 0:07:57.000 --> 0:08:00.680 and really actively go long, go short, we'll be happy 0:08:00.760 --> 0:08:02.920 to sort of move over to that side of the market. 0:08:03.000 --> 0:08:05.880 Well, it seems also there are always new ones, ones 0:08:06.240 --> 0:08:08.480 happening now you've never even heard of. Yeah. 0:08:08.520 --> 0:08:11.120 Absolutely, I mean it's so easy to create a new coin. 0:08:11.160 --> 0:08:13.640 You can basically copy the code from the last one, 0:08:13.800 --> 0:08:16.640 change a few variables in it, give it a new name, 0:08:17.120 --> 0:08:18.920 and you're off to the racist. And then it's you know, 0:08:19.400 --> 0:08:23.160 a matter of you know, how strongly can you market 0:08:23.200 --> 0:08:26.040 it and pump it up and get other people excited 0:08:26.080 --> 0:08:28.760 about it. It's kind of a crazy scheme, but that 0:08:29.000 --> 0:08:31.040 is sort of the nature of the market these days. 0:08:31.040 --> 0:08:33.760 Oh, it's a crazy scheme. Now, Mike mcgoon, I want 0:08:33.760 --> 0:08:36.000 to talk about something I know you have spoken about, 0:08:36.080 --> 0:08:40.760 referring to bitcoin as a form of digital gold. What 0:08:40.800 --> 0:08:42.920 do you mean, why is that and what do you mean? 0:08:44.320 --> 0:08:46.800 It really struck me when I was in Hong Kong, 0:08:46.840 --> 0:08:50.360 the twenty eighteen visying colleagues, and almost everybody met there 0:08:50.679 --> 0:08:53.079 when they're talking about mainland this and mainland that is 0:08:53.120 --> 0:08:55.840 a no. And that was a significant bear market cryptos. 0:08:55.880 --> 0:08:57.839 Yet there was one bull market, and that was the 0:08:57.880 --> 0:09:00.920 market capitalization of the number one stable going called Teather. 0:09:01.520 --> 0:09:03.720 And the key thing that really struck me is now 0:09:04.040 --> 0:09:06.160 on a global basis, sort of first time in history, 0:09:06.200 --> 0:09:08.680 everybody in the planet with an iPhone, which you can 0:09:08.760 --> 0:09:11.240 get now a phone in India for twelve bucks, has 0:09:11.280 --> 0:09:15.559 access to a stable currency or something more like digital 0:09:15.600 --> 0:09:19.720 like bitcoin, through their digital assistant or their phones. And 0:09:19.760 --> 0:09:21.920 the key thing I like to stay about bitcoin is 0:09:22.000 --> 0:09:25.040 in terms of gold is average Ask your average thirty 0:09:25.080 --> 0:09:27.319 something person or someone like the age of my kids. 0:09:27.640 --> 0:09:30.000 They don't really care about goal. And that to me 0:09:30.080 --> 0:09:31.560 is like to say, is if you are in the 0:09:31.600 --> 0:09:34.160 gold space, you're bullish gold. I'm bullish gold, You're you're 0:09:34.200 --> 0:09:36.319 involved in gold. That's kind of you have to have 0:09:36.400 --> 0:09:40.400 some consideration of the world's going digital and bitcoin being 0:09:40.440 --> 0:09:41.920 in that space. So it's me it has to have 0:09:42.000 --> 0:09:43.839 some bitcoin in that space. Now, how much you put 0:09:43.880 --> 0:09:47.080 in there is subject, but the world is going digital, 0:09:47.080 --> 0:09:48.839 and it's just a better way to transact. But one 0:09:48.880 --> 0:09:50.800 thing I really want to touch on it's happening in 0:09:50.800 --> 0:09:52.960 this space is Michael alluded to a little bit with 0:09:52.960 --> 0:09:57.880 Solona is proliferation of stable coins. This technology allows everybody 0:09:57.920 --> 0:10:00.160 in the planet to get access to the dollar. Call 0:10:00.160 --> 0:10:02.120 them stable coins, I call them crypto dollars because they 0:10:02.120 --> 0:10:04.560 all track the dollar and the AUM. And these crypto 0:10:04.600 --> 0:10:07.200 dollars now are almost about one hundred and twenty five billion, 0:10:07.960 --> 0:10:10.319 and that's something that's just happening more and more, and 0:10:10.400 --> 0:10:13.240 it's because the technology allows everybody in the will to 0:10:13.240 --> 0:10:15.120 get access to this, particularly when you live in a 0:10:15.160 --> 0:10:17.880 country with a melting currency, which most hour in the 0:10:17.920 --> 0:10:20.960 long term is just the dollars, the most, the strongest, 0:10:20.960 --> 0:10:24.199 and just in terms of bitcoin, to me, it's digital 0:10:24.240 --> 0:10:28.240 gold versus regular golden analog gold. You probably should put 0:10:28.240 --> 0:10:30.760 them together. And then in the space, what's significant is 0:10:30.840 --> 0:10:34.000 just the technologies allowing people to get to the dollar. 0:10:34.040 --> 0:10:37.720 And what's really it's called basically tokenization. What's next in 0:10:37.760 --> 0:10:39.840 tokenization through the technology, And a lot of people I 0:10:39.840 --> 0:10:41.160 hear say, are US treasuries? 0:10:41.520 --> 0:10:43.160 Yeah, well they've got a lot to look forward to. 0:10:43.480 --> 0:10:46.840 Our thanks to Mike McLoone, senior commodity strategist at Bloomberg 0:10:46.840 --> 0:10:50.720 Intelligence and Bloomberg Market editor Michael Reagan. Coming up on 0:10:50.760 --> 0:10:55.360 Bloomberg Daybreak Weekend runaway, inflation, raid hikes, job cuts and more. 0:10:55.440 --> 0:10:58.880 What lessons have we learned from this past year? I'm 0:10:58.920 --> 0:11:12.640 Tom Busby and this is Bloomberg. This is Bloomberg day 0:11:12.640 --> 0:11:15.000 Break Weekend, our global look ahead at the top stories 0:11:15.040 --> 0:11:17.640 for investors in the coming week. I'm Tom Busby in 0:11:17.679 --> 0:11:21.200 New York. Up later in our program the big winners 0:11:21.320 --> 0:11:25.440 in this year's do Nothing Congress. But first, twenty twenty 0:11:25.440 --> 0:11:28.720 three has been a year of inflation, rate debates, job cuts, 0:11:28.760 --> 0:11:32.520 geopolitical tensions. We'll look back at twenty twenty three through 0:11:32.520 --> 0:11:35.160 a number of different lenses and ask what lessons can 0:11:35.160 --> 0:11:37.600 be learned from the past year and how they can 0:11:37.640 --> 0:11:40.240 help us navigate the next twelve months. For more, let's 0:11:40.280 --> 0:11:43.959 go to London and bring in Bloomberg Daybreak anchor Caroline Hepger. 0:11:44.440 --> 0:11:48.160 Some might be asking what twenty twenty four could possibly 0:11:48.240 --> 0:11:51.720 throw at markets after a year packed with every challenge 0:11:51.760 --> 0:11:54.240 in the book. Again, as the year draws to a close, 0:11:54.320 --> 0:11:57.200 investors have been hit with a curveball at tax on 0:11:57.320 --> 0:11:59.880 merchant ships in the Red Sea, threatening to d stable 0:12:00.000 --> 0:12:02.880 as the global economy. There's also been a final surprise 0:12:03.080 --> 0:12:07.160 in the UK this week's CPI data showing that inflation 0:12:07.320 --> 0:12:09.320 slowed to three point nine percent. Now, that was a 0:12:09.360 --> 0:12:12.440 bigger drop than had been originally forecast. No one saw 0:12:12.480 --> 0:12:17.600 it coming, including Bloomberg's Markets Today reporter Dave Goodman. Here's 0:12:17.720 --> 0:12:18.680 his reaction. 0:12:18.920 --> 0:12:21.560 Pretty stll in reading, wasn't it. I sit next to Connor, 0:12:21.600 --> 0:12:24.040 who deserves squalwk on on Bloomberg, and I think everyone 0:12:24.080 --> 0:12:27.000 heard me shout wow loudly in the background as he 0:12:27.040 --> 0:12:29.800 was reading out to people a three point nine percent 0:12:29.920 --> 0:12:33.160 No one we Bloomberg had surveyed thirty five economists, Not 0:12:33.200 --> 0:12:35.400 one of them saw of reading below four point two percent. 0:12:35.880 --> 0:12:37.839 So that kind of shows you how much of a 0:12:37.920 --> 0:12:40.439 shock in terms of a downward surprise. It's it's the 0:12:40.480 --> 0:12:42.360 biggest since February twenty twenty one. 0:12:42.679 --> 0:12:45.440 That was Bloomberg's David Goodman there. So what are the 0:12:45.520 --> 0:12:49.600 takeaways then from an unforgettable year for global equities? We 0:12:49.720 --> 0:12:53.720 asked Bloomberg Stocks Guru, our director of Research, Tim Craighead, 0:12:53.720 --> 0:12:56.199 to help us make sense of it all, starting by 0:12:56.200 --> 0:12:59.880 asking him his biggest lesson from the past year in stocks. 0:13:00.320 --> 0:13:01.480 Here's what he had to say. 0:13:01.600 --> 0:13:03.880 I guess one thing that really comes to mind is 0:13:03.920 --> 0:13:08.360 that composition matters. If you look at the nature of 0:13:08.400 --> 0:13:11.120 the markets that have worked in Europe, or think about 0:13:11.120 --> 0:13:15.360 Europe versus the US, it really does boiled down the composition. 0:13:15.880 --> 0:13:21.360 The SMI has been awful basically because of four stocks Rosa, 0:13:21.440 --> 0:13:26.200 nov Artists, Nesle, and Richmond. If you take those out, 0:13:26.559 --> 0:13:29.920 that market's up twenty one percent. It's equal to the US. 0:13:30.200 --> 0:13:33.840 If you look at Europe, it looks awful at up 0:13:33.880 --> 0:13:37.080 twelve percent versus the US up twenty one percent. But 0:13:37.160 --> 0:13:41.520 if you look at the Eurostocks fifty, which is concentrated 0:13:41.679 --> 0:13:45.280 into some of the biggest important names in the Eurozone, 0:13:45.480 --> 0:13:49.160 it's up nineteen percent. That's call it roughly in line. 0:13:49.679 --> 0:13:54.679 It's the UK and Switzerland that have been awful for 0:13:54.920 --> 0:13:57.480 Europe and taking the whole index if you look at 0:13:57.520 --> 0:14:00.520 the stock six hundred down, So composition really matter. 0:14:01.240 --> 0:14:03.800 So then how do you think about Europe and how 0:14:03.840 --> 0:14:05.800 it will fare against the United States? 0:14:05.800 --> 0:14:10.040 Looking to next Yeah, yeah, well two things here come 0:14:10.200 --> 0:14:14.240 immediately to mind. One is clearly the US has gotten 0:14:14.240 --> 0:14:18.320 an awful lot more TMT and that's been a huge 0:14:18.440 --> 0:14:24.920 driver of the rally that we've seen since the October lows. 0:14:25.680 --> 0:14:29.720 They tend to be higher duration in terms of longer 0:14:29.800 --> 0:14:32.440 term cash flow growth if you get into the math, 0:14:33.000 --> 0:14:36.240 which makes them more sensitive to interest rate changes as 0:14:36.240 --> 0:14:39.280 well as longer term secular growth drivers. So that is 0:14:39.320 --> 0:14:42.160 a big difference in the last six weeks. That's really mattered. 0:14:44.280 --> 0:14:47.280 It brings up what happens from here, and we can 0:14:47.280 --> 0:14:49.160 talk a little bit more about that from the standpoint 0:14:49.160 --> 0:14:51.760 of how much the market is now baked in central 0:14:51.800 --> 0:14:55.800 bank pivots, which I think is definitely the case across 0:14:55.880 --> 0:15:00.120 both continents, but probably even more so in the US. 0:15:00.840 --> 0:15:04.520 The second thing is China. China is a big deal 0:15:04.560 --> 0:15:09.360 for Europe. Call it four hundred and sixty billion dollars 0:15:09.400 --> 0:15:13.320 in a billion euros in revenue across eighty big companies 0:15:13.400 --> 0:15:17.720 in Europe. That's a lot of exposure. It's roughly thirty 0:15:17.760 --> 0:15:21.880 percent of the market index that that's got China exposure. 0:15:22.120 --> 0:15:25.360 That's a tough first half comparison. I think there's a 0:15:25.360 --> 0:15:28.520 tale of two halts for European markets looking into twenty 0:15:28.600 --> 0:15:33.960 twenty four. Tough earnings to begin with, but maybe an 0:15:34.000 --> 0:15:37.000 interesting second half looking towards twenty twenty five. 0:15:37.440 --> 0:15:39.560 So there's loads to unpack there. But I just want 0:15:39.560 --> 0:15:41.160 to hone in on what you said about the UK. 0:15:41.960 --> 0:15:44.840 When do you think people will start deciding that Britain's 0:15:44.920 --> 0:15:47.239 cheap and it's a bargain and it's time to buy. 0:15:47.680 --> 0:15:49.040 Never buy. 0:15:51.040 --> 0:15:53.600 So it is cheap, but it's cheap for a reason, 0:15:53.680 --> 0:15:57.000 and that goes back to the composition issue. It's got 0:15:57.440 --> 0:16:00.000 a bunch of banks. Banks tend to trade cheap relative 0:16:00.160 --> 0:16:01.960 to do a lot of other sectors. It's got a 0:16:02.120 --> 0:16:07.920 heavy heavy dose of oil and metals and mining. Those 0:16:08.320 --> 0:16:10.960 are contra to earnings, and right now we're still at 0:16:11.000 --> 0:16:14.200 relatively higher earnings, so you're at relatively low valuations. The 0:16:14.200 --> 0:16:17.120 only time you're going to see real revaluation in those 0:16:17.200 --> 0:16:19.320 is when you have a down cycle in the commodity 0:16:19.360 --> 0:16:25.480 prices that really depresses earnings and inflates multiples. But as 0:16:25.520 --> 0:16:27.760 you look at it's interesting if you look over a 0:16:27.800 --> 0:16:32.000 two year period, the Footsie's actually outperformed both the EERO 0:16:32.160 --> 0:16:34.240 stocks and the S and P five hundred. Take a 0:16:34.240 --> 0:16:37.440 look at that. Going back to January one, twenty twenty two, 0:16:37.840 --> 0:16:40.760 and it's because it was relatively flat and when we 0:16:40.880 --> 0:16:44.600 had down drafts in the market, the FOOTE totally outperformed. 0:16:45.200 --> 0:16:50.200 So if you're concerned for whatever reason tactically at certain 0:16:50.240 --> 0:16:52.400 points in time, the Footsie is a safe haven. If 0:16:52.440 --> 0:16:56.640 you're looking for juice, you know, the foot sis global 0:16:56.680 --> 0:17:00.760 defensives don't give you that a space. The pounds a 0:17:00.800 --> 0:17:04.560 little bit stronger. Depends on what you think about commodity markets. 0:17:04.600 --> 0:17:06.320 It's got a lot of exposure there, but right now 0:17:06.400 --> 0:17:09.280 those are relatively depressed, and it's got a heavy dose 0:17:09.320 --> 0:17:13.359 in financials where margins are very inflated. And if you 0:17:13.440 --> 0:17:15.840 think we're going to have a central bank pivot, that 0:17:16.600 --> 0:17:20.240 puts those margins at risk a little bit of deflating. 0:17:21.000 --> 0:17:24.280 So how do we think about then the central bank pivots. 0:17:24.359 --> 0:17:27.680 I mean, we've been slower in pricing in the potential 0:17:27.720 --> 0:17:29.800 of interest rate cuts on the Bank of England than 0:17:29.840 --> 0:17:31.840 we have for the ECB and the FED, but it 0:17:31.960 --> 0:17:35.280 is there. And if you think about the GDP data 0:17:35.359 --> 0:17:39.200 that some are concerned about the stagnation slash recession story 0:17:39.240 --> 0:17:41.680 for the UK, you know, how do you think about 0:17:41.680 --> 0:17:42.119 the pivot? 0:17:42.560 --> 0:17:47.160 So between now and say year in twenty twenty four. 0:17:47.840 --> 0:17:50.159 I think it's a positive backdrop and it's good for 0:17:50.160 --> 0:17:51.800 the foot seat, and it's going to be good for 0:17:51.840 --> 0:17:56.680 the European markets because both central banks are humble opinion, 0:17:57.160 --> 0:17:59.080 likely to either be pivoting. You know, there's a lot 0:17:59.080 --> 0:18:03.280 more visibility on that progress continuing into twenty twenty five. 0:18:04.840 --> 0:18:08.359 The concern I suppose right now is that we've had 0:18:08.480 --> 0:18:13.240 in all markets such a big discounting of a pivot 0:18:13.480 --> 0:18:18.320 in the past six weeks that you know, just technically 0:18:18.760 --> 0:18:22.280 we're getting a little bit extended, and you know, does 0:18:22.359 --> 0:18:26.800 that balk a little bit, especially for the UK market 0:18:27.520 --> 0:18:30.280 and Europe as we get into January February and have 0:18:30.320 --> 0:18:33.760 to face fourth quarter earnings that are probably going to 0:18:33.800 --> 0:18:38.960 be similar to third quarter, where yeah, they were somewhat resilient, 0:18:39.880 --> 0:18:43.120 but we saw negative revisions and we think you could 0:18:43.119 --> 0:18:45.760 see a bit more on the negative revision front. So 0:18:46.040 --> 0:18:49.520 first quarter I think is a little dicey, especially at 0:18:49.560 --> 0:18:53.679 these elevated market levels, but an interesting second half of 0:18:53.720 --> 0:18:54.080 the year. 0:18:54.880 --> 0:18:58.520 My thanks there to Bloomberg's director of research, Tim Craighead. 0:18:58.600 --> 0:19:01.040 I'm Caroline hepget here in London. You can catch us 0:19:01.040 --> 0:19:04.240 every weekday morning for Bloomberg Daybreak Europe, beginning at six 0:19:04.280 --> 0:19:06.959 am in London. That's one am on Wall Street. 0:19:07.640 --> 0:19:10.280 Thanks Carolina. Coming up on Bloomberg day Break weekend and 0:19:10.359 --> 0:19:13.879 look at how Mcow's casino industry has weathered the challenges 0:19:13.920 --> 0:19:18.080 of a global pandemic and a slow economic recovery in China. 0:19:18.440 --> 0:19:21.359 I'm Tom Busby, and this is Bloomberg. 0:19:29.440 --> 0:19:34.640 Broadcasting from the Bloomberg It a active brokers studio in. 0:19:34.640 --> 0:19:38.320 New York, Bloomberg Eleving free own to Washington, DC, Bloomberg 0:19:38.400 --> 0:19:41.520 ninety nine one to Boston, Bloomberg one O six one 0:19:41.640 --> 0:19:45.159 to San Francisco, Bloomberg nine sixty to the Country, Serious 0:19:45.359 --> 0:19:48.800 XM one one and around the globe, the Bloomberg Business 0:19:48.840 --> 0:19:53.080 app in Bloomberg Radio dot Com. This is Bloomberg Daybreak. 0:20:01.840 --> 0:20:04.439 This is Bloomberg Daybreak weekend, our global look ahead at 0:20:04.480 --> 0:20:07.000 the top stories for investors in the coming week. I'm 0:20:07.040 --> 0:20:10.480 Tom Busby in New York. After a devastating pandemic and 0:20:10.520 --> 0:20:14.880 a prolonged economic slowdown in China, how has Macow's casino 0:20:14.920 --> 0:20:18.480 and gaming business recovered? For more, we go to Bloomberg 0:20:18.560 --> 0:20:21.320 Daybreak Asia co host Doug Krisner. 0:20:21.280 --> 0:20:23.800 Tom The major casinos in Macau are still in the 0:20:23.840 --> 0:20:27.119 process of recovering after being hard hit by the pandemic 0:20:27.240 --> 0:20:31.359 obviously when China closed its borders. Despite the sluggishness of 0:20:31.400 --> 0:20:34.600 the overall Chinese economy, though, many analysts have a positive 0:20:34.640 --> 0:20:37.720 outlook for Macau as we approach the new year. The city, 0:20:37.800 --> 0:20:40.840 if you didn't know, is the world's largest gambling center 0:20:40.920 --> 0:20:43.960 by revenue. For a closer look at gaming and McCaw 0:20:44.040 --> 0:20:48.240 let's bring in Bloomberg's Angela han Lee, gaming and Hospitality 0:20:48.280 --> 0:20:52.080 analyst for the apack at Bloomberg Intelligence. It's a pleasure 0:20:52.119 --> 0:20:53.919 to have the chance to chat with you, and I 0:20:54.040 --> 0:20:57.840 know that in peak times, Macau gets a lot of 0:20:57.880 --> 0:21:00.639 activity during the Lunar New Year festivity and the Golden 0:21:00.640 --> 0:21:04.359 Week holiday in October. But since the Christmas holiday is 0:21:04.400 --> 0:21:07.919 upon us and New Year's is just around the corner, Angela, 0:21:08.000 --> 0:21:12.000 I'm curious will these holidays produce any traffic in a 0:21:12.080 --> 0:21:13.600 meaningful way for the casinos. 0:21:13.760 --> 0:21:16.679 Yes, I think that in the past, the Luna New 0:21:16.760 --> 0:21:19.680 Year and October Golden Week were the major events for 0:21:19.800 --> 0:21:23.320 McCall casinos because that's basically where mainland China has the 0:21:23.400 --> 0:21:27.159 longest holidays. But now I think it's a bit different 0:21:27.359 --> 0:21:29.480 because we are having more young people who likes to 0:21:29.520 --> 0:21:34.159 celebrate Christmas. And also given that this consumption downgraade trend, 0:21:34.520 --> 0:21:37.479 people cannot travel too far. That's why they prefer to 0:21:37.560 --> 0:21:40.800 go make shock hold trips. And Macau is one of 0:21:40.840 --> 0:21:43.679 the popular places because it's outside Mala in China but 0:21:43.760 --> 0:21:48.760 still very attractive. So and also because the Macau's integrity 0:21:48.800 --> 0:21:52.320 results now have much more amenities. They are hosting a 0:21:52.359 --> 0:21:54.960 lot of concerts and also events. So you see that 0:21:55.080 --> 0:21:58.040 some TV stations of China is hosting some year end 0:21:58.240 --> 0:22:00.720 concerts and events in Macau as well, so that it's 0:22:00.720 --> 0:22:04.480 going to also bring more traffic from mailing Chinese people. 0:22:04.760 --> 0:22:05.240 So did the. 0:22:05.240 --> 0:22:09.080 Gaming companies use the opportunity of a decline in business 0:22:09.160 --> 0:22:12.919 during the pandemic to really reinvest and put some of 0:22:12.960 --> 0:22:17.560 these new venues in place so that hopefully when things 0:22:17.880 --> 0:22:21.159 emerged from the pandemic that a lot of new venues 0:22:21.200 --> 0:22:23.240 would be in place for people to take advantage of. 0:22:24.080 --> 0:22:27.800 Yes, there are some new casinos that open during the pandemic, 0:22:27.960 --> 0:22:31.959 say s GM's grandl Isba Palace and recently Galaxy Macau 0:22:32.000 --> 0:22:36.880 also expanded fifty three, so it's new capacity and its 0:22:36.920 --> 0:22:40.439 new capacity can bring much more traffic because in the 0:22:40.480 --> 0:22:44.240 past those hotel rooms were only for big rollers, but 0:22:44.440 --> 0:22:46.840 now there are much more hotel rooms in Macau. So 0:22:47.040 --> 0:22:49.600 that's why, like some young people can also pay for 0:22:49.640 --> 0:22:51.840 the hotel biers by themselves and stay in Macau. 0:22:52.240 --> 0:22:53.240 So I think the. 0:22:53.200 --> 0:22:57.359 Whole maccaunt is changing towards this type of mass lasor 0:22:57.640 --> 0:22:59.880 travel thing rather than pure gambling. 0:23:00.400 --> 0:23:03.200 So younger people, I understand. What about for the family, 0:23:03.320 --> 0:23:06.280 if you have even younger children, is it a good destination? 0:23:06.960 --> 0:23:07.240 True? 0:23:07.280 --> 0:23:10.920 If you go to Macau, you will find some fancy facilities, 0:23:11.280 --> 0:23:12.959 say in Galaxy Macau. 0:23:13.280 --> 0:23:14.680 There are places like. 0:23:14.880 --> 0:23:17.840 You know, artificial Beach that you can go and enjoy 0:23:17.920 --> 0:23:20.600 video kids. And also there is a water park in 0:23:20.680 --> 0:23:23.120 Still City face two. And you also see many other 0:23:23.160 --> 0:23:25.680 events and shows that you can go with kids. So 0:23:25.960 --> 0:23:30.159 Macau is transforming. I would say mask gaming revenue is 0:23:30.160 --> 0:23:33.680 something coming with the higher profit margin, so I guess 0:23:33.680 --> 0:23:37.919 that also benefits Macaus casinos to achieve itBit the improvement 0:23:38.040 --> 0:23:39.480 faster than gaming revenue. 0:23:39.520 --> 0:23:43.000 So I suggested that many analysts have upgraded their opinion 0:23:43.040 --> 0:23:46.119 of twenty twenty four in terms of outlook for revenue. 0:23:46.320 --> 0:23:49.280 What is driving a lot of this optimism if. 0:23:49.080 --> 0:23:52.439 They say so the pre pandemic numbers by ten percent. 0:23:52.560 --> 0:23:55.880 It's about the mask gaming revenue, meaning the people who 0:23:55.920 --> 0:23:59.120 go and gamble with their own cash, excluding the gaming 0:24:00.240 --> 0:24:02.240 revenue coming from credit gamblers. 0:24:02.400 --> 0:24:04.480 But this is a major driver for ma CAA casinos. 0:24:04.520 --> 0:24:07.479 That makes sense, and the major reason is orgain because 0:24:07.480 --> 0:24:11.239 of the hotel inventory has increased in Macau, making like 0:24:11.440 --> 0:24:13.919 people to be like the hotel rooms are much more 0:24:13.920 --> 0:24:16.360 affordable for some people as well, So I think that's 0:24:16.359 --> 0:24:19.440 one thing. The other is because the people who used 0:24:19.480 --> 0:24:22.280 to travel long hauld don't go there far because too 0:24:22.320 --> 0:24:25.560 expensive for them, so they prefer coming to Macau. So 0:24:25.680 --> 0:24:28.960 Macau is kind of benefiting from this consumption downreature in 0:24:29.000 --> 0:24:29.520 China too. 0:24:29.920 --> 0:24:32.280 I'm wondering if the government has been involved in helping 0:24:32.320 --> 0:24:35.960 to promote the industry from countries like South Korea, Malaysia, 0:24:36.000 --> 0:24:39.320 Philippines and Singapore. Has there been an active campaign to 0:24:39.359 --> 0:24:42.840 try to get tourists from those jurisdictions to come to Macau. 0:24:43.080 --> 0:24:45.200 I think that's the trend as well. 0:24:45.480 --> 0:24:48.960 So to start with, I would say Macau's hirola business, 0:24:49.000 --> 0:24:52.760 which means credit gamblers, junket business has been under crackdown, 0:24:53.080 --> 0:24:55.440 so some people has been who used to play in 0:24:55.520 --> 0:24:59.600 Macau with credit facilitated by underground banks in China are 0:24:59.640 --> 0:25:02.720 also to like cash gamblers. That is also a type 0:25:02.720 --> 0:25:05.520 of thing that Macau and Melan government is urging those 0:25:05.560 --> 0:25:08.520 players and the whole industry to become much more transparent. 0:25:08.720 --> 0:25:09.360 That's one thing. 0:25:09.680 --> 0:25:12.320 The other is that you know, like there are a 0:25:12.359 --> 0:25:16.040 lot of crackdowns going on regarding some human trafficking and 0:25:16.119 --> 0:25:19.520 some organized crimes in Southea Asia. You may also have 0:25:19.680 --> 0:25:22.400 seen some news saying that, like China has sent their 0:25:22.400 --> 0:25:26.600 own military forces to crack down those organized crimes in Miyama. 0:25:27.040 --> 0:25:30.760 So all the things together, I think even government and 0:25:30.800 --> 0:25:33.080 even some like a media in China are kind of 0:25:33.119 --> 0:25:35.800 promoting that, you know, like a be more careful when 0:25:35.800 --> 0:25:38.919 you travel out and try to try to be like 0:25:38.960 --> 0:25:40.520 a stay in safe places. 0:25:40.760 --> 0:25:43.240 Angela, We've touched on two things, and I'm wondering whether 0:25:43.280 --> 0:25:46.919 there's a connection. The interesting attracting young people to a 0:25:46.920 --> 0:25:49.399 lot of these casinos, and you're talking about the extent 0:25:49.440 --> 0:25:53.080 to which these gaming companies are more reliant on cash 0:25:53.560 --> 0:25:56.760 rather than credit. And I'm wondering whether young people now 0:25:56.800 --> 0:26:00.320 are using the latest technology when they walk into these 0:26:00.359 --> 0:26:03.320 gaming facilities, so they're able to take their phone and 0:26:03.480 --> 0:26:05.560 essentially gamble using the phone. 0:26:05.640 --> 0:26:06.760 Is that is that happening? 0:26:07.240 --> 0:26:09.760 You are not allowed to use phone when you're gambling. 0:26:10.000 --> 0:26:12.840 If you take out your phone to take pictures. They 0:26:12.920 --> 0:26:15.520 were coming say like, don't take pictures of the casinos. 0:26:15.760 --> 0:26:18.439 That's about privacy thing. And also because they want to 0:26:18.440 --> 0:26:22.560 prevent this phone gambling, they don't want people to do 0:26:22.600 --> 0:26:25.399 the video streaming with the gaming tables because that is 0:26:25.440 --> 0:26:29.280 allowing another kind of proxy gambling online that used to 0:26:29.320 --> 0:26:31.960 happen more like in other parts of the world, like 0:26:32.200 --> 0:26:35.639 in Philippines, which was which used to be legal. In 0:26:35.720 --> 0:26:38.399 Macau it has been illegal for a long time, like 0:26:38.560 --> 0:26:40.960 for the past I think Alice in my memory should 0:26:41.000 --> 0:26:44.960 be more than seven years. So Macaw's gaming business is 0:26:45.080 --> 0:26:49.160 really about in person gambling thing rather than online streaming. 0:26:49.280 --> 0:26:50.840 If you do online stream you get caught. 0:26:51.240 --> 0:26:55.200 But what about using new forms of money technology. I'm 0:26:55.240 --> 0:26:59.560 not necessarily saying a cryptocurrency, but are there technological platforms 0:26:59.560 --> 0:27:02.040 that you might have on your phone where you could 0:27:02.160 --> 0:27:05.159 use the phone just in a moment to transfer money 0:27:05.520 --> 0:27:07.639 at the casino so that you could get cash in 0:27:07.680 --> 0:27:09.679 hand and then go to a table and play. 0:27:10.359 --> 0:27:12.720 So one to start with that, you know, China has 0:27:12.760 --> 0:27:15.720 some limits if you want to vitual money off show. 0:27:16.040 --> 0:27:18.359 If you are we're doing the money which is under 0:27:18.400 --> 0:27:21.840 the like a lot amount, then you obviously can do 0:27:21.920 --> 0:27:25.399 through the union pay. But if you want to do 0:27:25.720 --> 0:27:27.800 more than a lot of amount, then you have to 0:27:27.800 --> 0:27:29.919 do something else, which is like a weed chad or 0:27:29.960 --> 0:27:33.000 something else that you know, like some underground banks will facilitate. 0:27:33.080 --> 0:27:35.600 So at the end, what Macau will do is that 0:27:35.840 --> 0:27:39.359 Macau casinos will try to make money from more people 0:27:39.600 --> 0:27:41.000 who spend less than before. 0:27:41.119 --> 0:27:44.360 I'm wondering how the office of the Chief Executive in Macau, 0:27:44.960 --> 0:27:48.880 how that office is expressing a view on the business, 0:27:48.880 --> 0:27:52.080 whether or not the office of the Chief Executive is 0:27:52.119 --> 0:27:54.320 as optimistic as many of the animals that we've been 0:27:54.359 --> 0:27:55.160 talking about. 0:27:55.320 --> 0:27:59.160 He's also optimistic, and government is always trying to express 0:27:59.200 --> 0:28:02.480 that the most important is promoting non gaming business and 0:28:02.520 --> 0:28:07.040 then they don't like gaming business. But from casino product perspective, 0:28:07.240 --> 0:28:10.320 casino business is the best business with better ROI. 0:28:10.440 --> 0:28:11.879 So there's some suggle over there. 0:28:12.119 --> 0:28:14.120 But we come to a point that you know, casino 0:28:14.119 --> 0:28:17.040 products now understand that if they want to draw more 0:28:17.080 --> 0:28:20.160 traffic and keep players longer, they should have more non 0:28:20.160 --> 0:28:24.000 gaming amenities to people to let peper use. So on, 0:28:24.040 --> 0:28:27.399 this says, I believe casino operators will keep investing in 0:28:27.440 --> 0:28:32.520 non gaming amenities including hotel rooms or other like you know, say, 0:28:32.720 --> 0:28:36.520 other retail shops or even like a concert. There are 0:28:36.560 --> 0:28:39.240 so many concerts going on and this is driving so 0:28:39.360 --> 0:28:39.960 much traffic. 0:28:40.320 --> 0:28:41.200 They did like a. 0:28:41.200 --> 0:28:44.880 Black Pink in the middle of this year, and Brunomas 0:28:44.960 --> 0:28:47.560 is also coming like the next year. They also have 0:28:47.720 --> 0:28:50.520 like some big Canton pop stars like a Jackie Chen 0:28:50.600 --> 0:28:53.280 as well like this year. Everyone is just trying to 0:28:53.320 --> 0:28:56.120 bring more people to the property so that they can 0:28:56.200 --> 0:28:58.360 generate more gaming and on gaming revenue. 0:28:58.480 --> 0:29:01.120 Angela, You've given us a lot of good information. Thanks 0:29:01.160 --> 0:29:03.360 for taking the time to chat with us. That is 0:29:03.440 --> 0:29:06.800 Angela Han League Gaming and Hospitality analyst for the apack 0:29:06.840 --> 0:29:10.080 at Bloomberg Intelligence. I'm Doug Prisner in New York and 0:29:10.120 --> 0:29:13.520 you can catch Brian Curtison myself weekdays here for Bloomberg 0:29:13.560 --> 0:29:17.120 Daybreak Asia beginning at seven am in Hong Kong six 0:29:17.200 --> 0:29:19.680 pm on Wall Street, Tom. 0:29:19.280 --> 0:29:22.000 Thank you Doug. Coming up on Bloomberg day Break weekend. 0:29:22.040 --> 0:29:25.120 The US Congress this past year passing the fewest laws 0:29:25.400 --> 0:29:28.320 in decades. How did that benefit some of the biggest 0:29:28.320 --> 0:29:32.240 players on Wall Street. I'm Tom Busby and this is Bloomberg. 0:29:41.240 --> 0:29:43.160 I'm Tom Busby in New York with your global look 0:29:43.160 --> 0:29:45.520 ahead at the top stories for investors in the coming week. 0:29:46.080 --> 0:29:49.160 Turmoil this year in the one hundred and eighteenth Congress, 0:29:49.160 --> 0:29:52.160 which went through several House speakers even voted out one 0:29:52.160 --> 0:29:55.560 of its own members while lawmakers did little to actually govern. 0:29:56.080 --> 0:29:59.760 That meant good news for banks, tech giants, and big pharma. 0:30:00.120 --> 0:30:00.200 More. 0:30:00.320 --> 0:30:02.880 Let's head to our Bloomberg ninety nine one Newsomen Washington 0:30:02.920 --> 0:30:06.040 and Bloomberg Sound on co host Kaylee Lines. 0:30:06.520 --> 0:30:06.760 Yeah. 0:30:06.800 --> 0:30:07.040 Tom. 0:30:07.040 --> 0:30:10.080 Congress is officially done for twenty twenty three, and what 0:30:10.160 --> 0:30:10.480 a year. 0:30:10.520 --> 0:30:10.840 It was. 0:30:11.280 --> 0:30:13.560 Started off with fifteen rounds of votes to elect Kevin 0:30:13.600 --> 0:30:16.080 McCarthy Speaker of the House, continued on to a dead 0:30:16.120 --> 0:30:19.760 ceiling fight, multiple almost shutdowns, the ouster of Kevin McCarthy, 0:30:19.880 --> 0:30:22.240 the election of a new Speaker, My Johnson, the expulsion 0:30:22.680 --> 0:30:25.360 of New York Congressman George Santos, and for all of 0:30:25.360 --> 0:30:28.080 the drama in the headlines outside of major must pass 0:30:28.160 --> 0:30:32.000 legislation that barely squeaked through, what was actually accomplished and 0:30:32.080 --> 0:30:35.080 who were the winners and losers within that. Megan Scully, 0:30:35.120 --> 0:30:38.040 who leads Bloomberg's congressional coverage, took a closer look at 0:30:38.040 --> 0:30:42.040 that exact question and is joining me now with the answers. So, Megan, 0:30:42.080 --> 0:30:43.520 there were winners this year. 0:30:44.560 --> 0:30:49.960 There were largely thanks to inaction on Congress's part, which is, 0:30:50.480 --> 0:30:52.920 you know, how lobbyists make their money in Washington is 0:30:53.240 --> 0:30:56.600 trying to prevent legislation from happening more times than not. 0:30:57.120 --> 0:31:00.760 So you had big winners such as banks and the 0:31:00.800 --> 0:31:06.040 tech industry certainly walked away from this year without any 0:31:06.160 --> 0:31:10.720 new stringent regulations placed against them. Railroad industry as well, 0:31:10.760 --> 0:31:15.520 you know, following the East Palestine disaster, the real push 0:31:15.760 --> 0:31:20.640 to enact new reforms for that industry fell by the 0:31:20.680 --> 0:31:24.560 wayside amid you know, partisan fighting on Capitol Hill. 0:31:25.320 --> 0:31:28.920 So when we think about legislation that didn't pass, often, 0:31:29.040 --> 0:31:31.280 you know, legislation can be viewed as a threat to 0:31:31.400 --> 0:31:34.120 industries in some senses. You mentioned banks and the railroads, 0:31:34.400 --> 0:31:36.760 but there also were a few industries that were actually 0:31:36.800 --> 0:31:39.720 pushing for legislation to get through that actually hasn't fully 0:31:40.080 --> 0:31:42.560 come through yet, like crypto. Yeah, you had a couple 0:31:42.640 --> 0:31:45.280 bills passed out of house financial Services of course, helmed 0:31:45.280 --> 0:31:49.920 by chair Patrick McHenry, and yet didn't get anywhere in 0:31:49.960 --> 0:31:52.680 twenty twenty three beyond that. So in that sense, I 0:31:52.680 --> 0:31:54.760 guess it's a loss that the bills didn't happen. 0:31:54.840 --> 0:31:58.000 Yes, there are occasions, you know, certainly in the semiconductor 0:31:58.040 --> 0:32:01.720 industry as well, and new regulations on China. You know 0:32:01.760 --> 0:32:03.840 that China hawks tried to push through at the end 0:32:03.840 --> 0:32:06.280 of the year and that fell by the wayside. Those 0:32:06.280 --> 0:32:10.320 were certainly all losers this year. Perhaps the biggest loser 0:32:10.760 --> 0:32:14.000 we sort of reversed it on our list, but was Ukraine, 0:32:14.120 --> 0:32:19.440 which is walking away without aid. Yet Congress is going 0:32:19.480 --> 0:32:24.000 to come back to that early January when they return, 0:32:24.120 --> 0:32:26.800 you know, on our list we made that Putin certainly 0:32:26.840 --> 0:32:29.760 is walking away with some bragging rights this year, or 0:32:29.800 --> 0:32:34.479 at least attempting to use congressional inaction to say that 0:32:34.520 --> 0:32:38.920 this demonstrates a weakening resolve in the US to fund 0:32:39.080 --> 0:32:39.920 Ukraine in this war. 0:32:40.320 --> 0:32:42.080 So you mentioned this is something they're going to have 0:32:42.120 --> 0:32:44.160 to come back to. Of course, that's not the only 0:32:44.200 --> 0:32:46.480 big item they're going to have to deal with very 0:32:46.520 --> 0:32:48.479 early on in the year, and when you're dealing with 0:32:48.560 --> 0:32:53.240 so much big picture must deal with stuff, does all 0:32:53.240 --> 0:32:57.000 of these other legislative efforts, you know, targeted at specific industries, 0:32:57.280 --> 0:32:59.320 other bills just kind of fall to the wayside? Again, 0:32:59.360 --> 0:33:00.920 is that what we're in. We're in twenty twenty four. 0:33:01.280 --> 0:33:05.600 So if you look at the last several congresses, the 0:33:05.640 --> 0:33:08.560 first year of a Congress, which was twenty twenty three, 0:33:09.520 --> 0:33:13.840 doesn't tend to have much legislative action. This one was 0:33:13.920 --> 0:33:17.000 unusually low. There are only twenty two bills as of 0:33:17.800 --> 0:33:20.240 December nineteenth that were passed. Maybe some more will be 0:33:20.360 --> 0:33:23.920 enacted before the end of the year, and usually that 0:33:24.000 --> 0:33:25.640 numbers in the seventies or eighties. 0:33:26.240 --> 0:33:27.280 We will see. 0:33:27.080 --> 0:33:30.760 Some a flurry of activity next year, even though it's 0:33:30.760 --> 0:33:34.080 an election year. Probably some of these pieces of legislation 0:33:34.160 --> 0:33:39.120 getting attached to other bills, be it spending bills or 0:33:39.240 --> 0:33:42.800 the Annual Defense Authorization Bill that somehow managed to squeak 0:33:42.840 --> 0:33:46.440 through at the end of each year. So there is 0:33:46.480 --> 0:33:49.840 another hope legislation doesn't expire at the end of a year. 0:33:49.880 --> 0:33:52.240 It expires at the end of a congress, so they 0:33:52.240 --> 0:33:54.880 do have a second chance to get this done. 0:33:55.200 --> 0:33:58.040 Bloomberg Congressional team leader Megan Schully, thank you so much 0:33:58.040 --> 0:34:00.360 as always, and Tom, I guess we'll see what they 0:34:00.360 --> 0:34:01.840 can do in twenty twenty four. 0:34:02.480 --> 0:34:04.960 Thank you, Kaylee. That was Bloomberg's sound on co host 0:34:05.000 --> 0:34:07.600 Kaylee Lines reporting from our Bloomberg ninety nine to one 0:34:07.640 --> 0:34:10.000 news from in Washington. And you can hear sound on 0:34:10.200 --> 0:34:14.040 weekdays one to three pm Wall Street Time on Bloomberg Radio. 0:34:14.200 --> 0:34:16.120 And that does it for this edition of Bloomberg day 0:34:16.120 --> 0:34:18.600 Break Weekend. Join us again Monday morning at five am 0:34:18.640 --> 0:34:20.920 Wall Street Time for the latest on the markets, overseas 0:34:21.000 --> 0:34:23.600 and the news you need to start your day. I'm 0:34:23.640 --> 0:34:26.560 Tom Busby. Stay with us. Top stories and global business 0:34:26.560 --> 0:34:29.400 headlines are coming up right now.