Daybreak Weekend: Biden Prepares for Xi Meeting, Inflation Data, Government Shutdown

This is Bloomberg day Break Weekend, our global look at 0:00:04.400 --> 0:00:06.680 the top stories in the coming week from our Daybreak 0:00:06.720 --> 0:00:09.879 anchors all around the world, and straight ahead on the program, 0:00:10.080 --> 0:00:13.360 a huge week on the economic front. I'll have that story. 0:00:13.520 --> 0:00:16.000 I'm callin Hetcke here in London, where we're looking ahead 0:00:16.040 --> 0:00:18.439 to the Dubai Air Show and why airlines have a 0:00:18.520 --> 0:00:21.680 fear of missing out when it comes to plane orders. 0:00:21.960 --> 0:00:24.880 I'm deg Krisner. We preview the meeting of Presidents Biden 0:00:24.920 --> 0:00:27.520 and She on the sidelines of the APEC summit in 0:00:27.600 --> 0:00:28.400 San Francisco. 0:00:28.600 --> 0:00:31.360 I'm Keiley Lines in Washington, where Congress is racing to 0:00:31.400 --> 0:00:35.200 avert a government shutdown with just days until funding runs out. 0:00:35.479 --> 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. 0:00:51.840 --> 0:00:54.000 Good day to you. I'm Tom Busby. We begin today's 0:00:54.000 --> 0:00:58.880 program with a focus on the US economy and specifically inflation. 0:00:59.520 --> 0:01:02.800 Investor and the Fed will be scrutinizing two big readings 0:01:02.800 --> 0:01:05.320 on inflation. On Tuesday, we get the Consumer Price Index 0:01:05.400 --> 0:01:09.199 for October on Wednesday, the Producer Price Index and for more, 0:01:09.720 --> 0:01:12.720 we're pleased to welcome Anna Wong, chief US economist with 0:01:12.720 --> 0:01:18.640 Bloomberg Economics, and Michael McKee, Bloomberg International Economics and Policy correspondent. Well, 0:01:18.720 --> 0:01:22.160 let's start with Anna and that read on consumer inflation. Anna, 0:01:22.680 --> 0:01:24.960 what are you expecting to see this week? 0:01:25.080 --> 0:01:28.200 We are expecting the headline CPI to be very soft 0:01:28.319 --> 0:01:33.360 because seasonally adjusted gasoline prices actually came down over five 0:01:33.400 --> 0:01:38.680 percent in October, so a monthly reading of a monthly 0:01:38.800 --> 0:01:41.840 increase of zero point one percent on the headline CPI. 0:01:42.319 --> 0:01:45.960 And we are also expecting core CPI to come in, 0:01:46.440 --> 0:01:51.360 you know, in the zero two five range, so it 0:01:51.400 --> 0:01:55.400 could easily round to either point three or point two. 0:01:55.480 --> 0:02:00.400 But nonetheless, it is a reading that won't sound of 0:02:00.560 --> 0:02:03.520 alarm bells among the Fed officials. 0:02:03.800 --> 0:02:07.000 Well, and Michael, this sounds pretty good, not just won't 0:02:07.120 --> 0:02:08.360 set off alarm bells. 0:02:08.919 --> 0:02:12.960 Well, we are still almost six weeks away from the 0:02:12.960 --> 0:02:15.680 next FED meeting, and there will be another CPI report 0:02:15.680 --> 0:02:18.800 and a PCEE inflation report before we get to that, 0:02:19.040 --> 0:02:22.239 so they'll focus on the more recent data. But yes, 0:02:22.639 --> 0:02:25.760 this would if we get the scenario that Anna is 0:02:25.800 --> 0:02:28.120 talking about, and that's pretty much the consensus. 0:02:29.040 --> 0:02:29.760 It will tell the. 0:02:29.680 --> 0:02:31.800 FED that they are still on the right track, and 0:02:32.400 --> 0:02:36.200 it will suggest to them that they are in restrictive 0:02:36.320 --> 0:02:40.280 enough territory because they're pushing down on inflation, and so 0:02:41.000 --> 0:02:44.840 it won't change anyone's call to a higher rate or 0:02:44.880 --> 0:02:45.560 something like that. 0:02:45.720 --> 0:02:48.320 Well, month over month, Anna is zero point one percent. 0:02:48.440 --> 0:02:50.640 What is it? Year over year October to October? 0:02:50.919 --> 0:02:54.920 The year over year for core inflation is looking to 0:02:54.960 --> 0:02:59.680 be below three point six percent, and that means that 0:03:00.800 --> 0:03:03.040 at the end of this year, the fourth quarter year 0:03:03.080 --> 0:03:07.880 over year would be likely be undershooting the fed's own 0:03:07.960 --> 0:03:11.440 forecast of three point seven percent. So this, as Mike 0:03:11.520 --> 0:03:14.400 McKee was saying, this is the reason why the FED 0:03:14.440 --> 0:03:18.520 does not feel the urgency to do that extra realize. 0:03:18.560 --> 0:03:21.200 That extra twenty five basis point hike they had in 0:03:21.240 --> 0:03:24.680 the September dot plot is just because inflation is now 0:03:24.760 --> 0:03:27.320 on track to undershoot their forecast. 0:03:27.400 --> 0:03:31.080 But their long term forecasts two percent were still a 0:03:31.120 --> 0:03:34.400 ways away from there. Is there a dot plot for 0:03:34.440 --> 0:03:37.040 when we could reach that? Will we ever reach that? 0:03:37.240 --> 0:03:41.440 Mike? That's the question I asked JPU at the last 0:03:41.760 --> 0:03:46.360 FED news conference the FED in September said on the 0:03:46.680 --> 0:03:48.920 blot that there was an extra twenty five basis points 0:03:49.920 --> 0:03:53.560 priced in in their forecast before the end of the year. 0:03:54.200 --> 0:03:59.160 But as Powell answered me, those forecasts decay over time 0:03:59.400 --> 0:04:02.600 and just the data comes in market adjusts every day, 0:04:02.680 --> 0:04:06.160 minute by minute, the Fed once every three months. So 0:04:06.640 --> 0:04:09.720 he suggested that perhaps nobody would be putting that into 0:04:10.000 --> 0:04:12.600 not nobody, but almost nobody would be putting that into 0:04:12.680 --> 0:04:16.640 a dot plot today. The question is do we leave 0:04:16.680 --> 0:04:19.320 out the rate increase or do we leave out the 0:04:19.400 --> 0:04:22.479 time frame. If you leave out the idea that it 0:04:22.560 --> 0:04:25.000 had to be by the end of the year, that's 0:04:25.080 --> 0:04:27.960 probably more likely, but it doesn't mean that they're done. 0:04:28.120 --> 0:04:30.719 And if inflation should start to go back up again, 0:04:31.800 --> 0:04:34.600 that rate increase is still on the table, and then 0:04:34.640 --> 0:04:38.120 they could add more. So you have to look at 0:04:38.320 --> 0:04:41.360 every meeting December and then January and going forward as 0:04:41.360 --> 0:04:44.640 a potential rate increase until they tell us differently. 0:04:44.880 --> 0:04:49.359 There's always that doubt always. And let's switch now to 0:04:49.400 --> 0:04:51.760 the producer price index, because you brought up a big 0:04:51.800 --> 0:04:55.160 factor there and that is a decline in energy prices 0:04:55.160 --> 0:04:58.080 and how will that impact your forecast there? 0:04:58.760 --> 0:05:01.880 Yeah, I think the important of the PPI is what 0:05:02.040 --> 0:05:06.839 it implies for the FEDS preferred inflation metric, which is 0:05:06.839 --> 0:05:10.240 the PCE deflator. So the things in the PPI report 0:05:10.320 --> 0:05:14.040 that's very important for the FEDS preferred metric is airfares 0:05:14.200 --> 0:05:18.880 and also healthcare prices. So healthcare prices account for you know, 0:05:19.440 --> 0:05:23.240 over ten percent of the PCE basket. And we have 0:05:23.400 --> 0:05:25.640 seen over the last couple of years that there's still 0:05:25.680 --> 0:05:31.880 significant labor shortages in healthcare services sector, and also that 0:05:32.000 --> 0:05:37.200 a lot of the you know, wage increase is still 0:05:37.279 --> 0:05:40.120 coming from the healthcare sector. So it could be that 0:05:41.000 --> 0:05:47.800 through twenty twenty four, the remaining the lingering inflation impulse 0:05:47.920 --> 0:05:52.279 could be coming from sectors like healthcare wages, where you know, 0:05:52.360 --> 0:05:54.200 we still saw this year that there were a lot 0:05:54.240 --> 0:05:59.560 of labor strikes in you know, in UAW and Hollywood 0:05:59.600 --> 0:06:04.680 screen but you know, the healthcare workers still are the 0:06:04.720 --> 0:06:08.080 ones who who have been burned, who have been overworking 0:06:08.160 --> 0:06:11.000 during the pandemic, and their wage increase have not been 0:06:11.600 --> 0:06:14.279 catching up to inflation. So I think a risk is 0:06:14.320 --> 0:06:16.640 that next year we'll see more of the strikes coming 0:06:16.680 --> 0:06:20.000 from the healthcare sector and eventually those would be passed 0:06:20.000 --> 0:06:23.960 onto PC prices, so I would be paying attention to 0:06:24.000 --> 0:06:26.719 airfares and healthcare prices in the PPI. 0:06:27.480 --> 0:06:30.479 Well and Mike more on that. How are airfares looking. 0:06:30.560 --> 0:06:33.920 I mean, we've seen a demand still strong, especially in 0:06:34.000 --> 0:06:37.520 the national travel but it looks a little weakness domestically. 0:06:38.800 --> 0:06:43.320 We are still seeing some declines in air prices overall. 0:06:43.680 --> 0:06:46.120 The question on a month over month basis is how 0:06:46.200 --> 0:06:49.120 they get accounted for, because, as anybody who's tried to 0:06:49.160 --> 0:06:52.359 buy an airline ticket knows, the prices are quite volatile. 0:06:52.400 --> 0:06:55.880 They go up and down. But this is the time 0:06:55.880 --> 0:06:59.880 of year when prices tend to decline because everybody's gone 0:06:59.880 --> 0:07:02.960 by school, it's fall, weather's not great, so the tourists 0:07:03.040 --> 0:07:06.680 kind of stop. We'll see airfares probably go up again 0:07:07.160 --> 0:07:10.000 when we get closer, well, we're getting pretty close to 0:07:10.000 --> 0:07:16.440 Thanksgiving and then the Christmas New Year's period airfares should 0:07:16.480 --> 0:07:20.000 go up again, but the government does seasonally adjust that, 0:07:20.080 --> 0:07:22.480 so we'll have to see how it all plays out. 0:07:22.640 --> 0:07:26.600 One of the interesting areas in all of these price 0:07:26.640 --> 0:07:29.480 indexes has used cars, and they have just fallen off 0:07:29.480 --> 0:07:33.600 a cliff lately, so that could be something that puts 0:07:33.640 --> 0:07:36.280 downward pressure on these inflation measures. 0:07:36.480 --> 0:07:39.080 Now we talked about Thanksgiving, which is coming a lot 0:07:39.160 --> 0:07:41.800 faster than I think anyone realizes. Christmas just a few 0:07:41.840 --> 0:07:44.520 weeks ahead, and that leads us to retail sales, because 0:07:44.520 --> 0:07:47.920 we get a read on retail sales for October this week, 0:07:48.320 --> 0:07:52.240 and a lot of the biggies, Walmart, Target, Amazon all 0:07:52.360 --> 0:07:56.080 had early Black Friday sales during the month of October, 0:07:56.880 --> 0:07:59.120 and what are we expecting to see for retail sales? 0:07:59.120 --> 0:08:01.160 And my I'll ask you what it tells us about 0:08:01.200 --> 0:08:01.680 the consumer? 0:08:01.880 --> 0:08:04.960 Yeah, I think the early Black Friday sales. What it 0:08:05.000 --> 0:08:08.120 does is that it could potentially make for a retail 0:08:08.160 --> 0:08:11.920 reading that's stronger than what the consensus is penciling in. 0:08:12.040 --> 0:08:15.360 So we have been saying that the consumption should be 0:08:15.360 --> 0:08:20.320 slowing down and retail sales should be entering into negative 0:08:20.720 --> 0:08:24.720 territory in the fall. However, if it's true that there's 0:08:24.800 --> 0:08:27.960 a lot of early Black Friday sales and people took 0:08:28.040 --> 0:08:31.360 advantage of that those sales, it could mean that they 0:08:31.400 --> 0:08:35.280 won't be they would be stronger seasonally adjusted sales. But 0:08:35.320 --> 0:08:38.800 that doesn't mean that that's permanent, because what that means 0:08:38.880 --> 0:08:41.360 is that it will just pull forward to Christmas. Spending, 0:08:41.400 --> 0:08:44.119 so that will be weaker November and December. 0:08:44.520 --> 0:08:47.839 You think so much. You think it seems like people 0:08:47.920 --> 0:08:50.160 just spend, spend, spend, but you know, maybe they are 0:08:50.160 --> 0:08:50.720 pulling back. 0:08:50.840 --> 0:08:55.320 Well, the question is when they spend and how it 0:08:55.400 --> 0:08:59.600 will compare. Obviously to what we saw in the last 0:08:59.600 --> 0:09:04.040 couple of year. Everything's been very distorted by the pandemic. 0:09:04.920 --> 0:09:08.840 It's been hard to know exactly what's happening with consumer 0:09:08.880 --> 0:09:12.640 spending because of the pandemic bonuses you got from the 0:09:12.640 --> 0:09:15.080 government and the fact that when everybody went back to 0:09:15.120 --> 0:09:19.600 work they got raises, so it isn't quite clear what's 0:09:19.679 --> 0:09:22.720 going to happen, and all of that sort of distorted 0:09:22.760 --> 0:09:26.280 the timing of spending as well. But now the question 0:09:26.440 --> 0:09:31.560 is do we see a rebound because people still have 0:09:31.800 --> 0:09:37.080 money in the bank and they still they're making more money, 0:09:37.080 --> 0:09:39.800 they spend their paychecks and they're feeling good enough to 0:09:39.800 --> 0:09:43.680 go out and buy stuff, or do they pull back somewhat. 0:09:43.720 --> 0:09:48.840 Now last year we saw a rise in retail sales 0:09:49.040 --> 0:09:54.280 for October that then was eliminated in November and we 0:09:54.320 --> 0:09:57.599 went way way down. November and December were week. Do 0:09:57.720 --> 0:10:02.400 we see that same pattern again or do we get 0:10:02.400 --> 0:10:04.640 back to what we were seeing before the pandemic. And 0:10:04.760 --> 0:10:07.920 the one thing I wonder about is going into the pandemic, 0:10:07.960 --> 0:10:10.600 the psychology for a lot of buyers was wait till 0:10:10.640 --> 0:10:13.160 the last minute and prices will go down. While in 0:10:13.200 --> 0:10:16.720 an inflationary environment like this, maybe that's what people are 0:10:16.760 --> 0:10:19.560 going to start doing again. And then we wait and 0:10:19.600 --> 0:10:22.040 see what happens in November December. 0:10:22.120 --> 0:10:25.439 All right, well, our thanks to Annawong, Chief US Economists 0:10:25.440 --> 0:10:30.320 with Bloomberg Economics, Michael McKee, Bloomberg International Economics and Policy correspondent. 0:10:30.600 --> 0:10:32.800 Thank you both for being here and coming up on 0:10:32.840 --> 0:10:35.640 Bloomberg day Break Weekend. What to look for at this 0:10:35.720 --> 0:10:39.880 week's Dubai Air Show. I'm Tom Busby, and this is Bloomberg. 0:10:50.000 --> 0:10:52.360 This is Bloomberg day Break Weekend, our global look ahead 0:10:52.360 --> 0:10:54.560 of the top stories for investors in the coming week. 0:10:54.720 --> 0:10:57.559 I'm Tom Busby in New York. Up later in our 0:10:57.600 --> 0:11:00.640 program we preview one of the year's most crucial and 0:11:00.720 --> 0:11:04.400 a meeting of US and Chinese leaders. But first, it's 0:11:04.440 --> 0:11:06.520 shaping up to be among the hottest years ever for 0:11:06.720 --> 0:11:10.520 large aircraft deals and the buying spree expected to continue 0:11:10.559 --> 0:11:13.000 at the Dubai Air Show. In the days ahead. This 0:11:13.120 --> 0:11:15.600 comes has production at both Airbus and Boeing are having 0:11:15.679 --> 0:11:18.800 trouble meeting demand because of a shortage of parts, and 0:11:18.920 --> 0:11:22.960 that's intensifying the race among airlines for the last remaining 0:11:23.000 --> 0:11:26.080 production slots available this decade. And for more we head 0:11:26.080 --> 0:11:29.520 to London and Bloomberg Daybreak Europe anchor Caroline. 0:11:29.000 --> 0:11:32.600 Hepgar Tom The Dubai Air Show is an important barometer 0:11:32.760 --> 0:11:35.440 for the health of the aviation industry, measured by the 0:11:35.480 --> 0:11:38.960 appetite for deals. The industry's last big gathering was in 0:11:39.000 --> 0:11:42.560 Paris in June. It resulted in about one three hundred 0:11:42.640 --> 0:11:46.480 aircraft sales, and the organizer of the Dubai Air Show 0:11:47.280 --> 0:11:50.600 they are hoping to see something similar. The event caters 0:11:50.640 --> 0:11:53.560 to some of the world's largest wide body operators. The 0:11:53.679 --> 0:11:56.760 local champion Emirates has already teased that it wants to 0:11:56.960 --> 0:11:59.600 order more. Anna Edwards and I have been speaking to 0:11:59.640 --> 0:12:03.320 ours aviation reporters, Saidel Philip about what to expect from 0:12:03.360 --> 0:12:07.000 this major event, but first to get a flavor of 0:12:07.040 --> 0:12:11.640 the industry. Air Boss CEO Gillumfori says that the company 0:12:11.679 --> 0:12:15.880 expects higher output in twenty twenty four thanks to surging demand. 0:12:16.280 --> 0:12:18.199 He's been speaking to bring back to the main Bostic 0:12:18.280 --> 0:12:22.280 and Guy Johnson after Airbus's third quarter results. 0:12:22.200 --> 0:12:27.160 The single ale business, so the short and mid range 0:12:27.480 --> 0:12:32.200 activity will continue to dominate a number of planes. We've 0:12:32.200 --> 0:12:36.080 seen the activity on the single isle recovering much faster 0:12:36.679 --> 0:12:40.800 after COVID than it was for white bodies for long range, 0:12:41.840 --> 0:12:45.800 but we think long range will follow up, will also 0:12:46.559 --> 0:12:50.719 recover first and probably even stronger moving forward. And when 0:12:50.760 --> 0:12:54.440 we look at the long term perspectives for the market, 0:12:54.840 --> 0:12:59.920 we expect both single lile and white bodies to significantly grow, 0:13:00.679 --> 0:13:03.920 to the extent that we believe there will be around 0:13:04.040 --> 0:13:07.360 forty thousand plans to be delivered in the next twenty years. 0:13:08.360 --> 0:13:10.280 You're ramping up, as you just confirmed to me the 0:13:10.720 --> 0:13:13.679 three fifty program. You're going to go to ten a 0:13:13.720 --> 0:13:17.520 month twenty twenty six. That's not a big push higher. 0:13:18.200 --> 0:13:20.559 You're basically going from eight to nine to ten by 0:13:20.600 --> 0:13:24.320 twenty twenty six. Picking up on Romain's point is that 0:13:24.880 --> 0:13:28.319 you talk you signaling caution that you actually think the 0:13:28.600 --> 0:13:31.440 big push we're saying for long haul demand at the 0:13:31.440 --> 0:13:35.320 moment is not sustainable. Could you take that program higher 0:13:35.360 --> 0:13:38.600 by that point? If demand remains as robust as it 0:13:38.679 --> 0:13:39.080 is now. 0:13:39.400 --> 0:13:42.079 Actually, we see the demand growing, we see a recovery 0:13:42.160 --> 0:13:45.400 in the demand, and we will at a low point 0:13:45.600 --> 0:13:48.960 of a rate four on the every fifty during COVID. 0:13:49.440 --> 0:13:53.800 So we went from four and we keep growing and 0:13:53.840 --> 0:13:58.280 we are now targeting ten. It's slightly or it's very 0:13:58.280 --> 0:14:01.760 comparable to what we had recovered, and we had said 0:14:01.760 --> 0:14:05.920 that the traffic itself would be recovering back to pre 0:14:06.000 --> 0:14:09.520 COVID levels between twenty three to twenty five, twenty twenty 0:14:09.559 --> 0:14:13.640 three to twenty twenty five. So I think we are 0:14:13.720 --> 0:14:19.040 consistent with the evaluation, the assessment we made of the 0:14:19.080 --> 0:14:22.880 recovery of the market going just out of COVID. Do 0:14:22.920 --> 0:14:25.840 we have the potential for more Yes, the three fifty 0:14:25.880 --> 0:14:29.280 has the potential to go up to rate thirteen based 0:14:29.320 --> 0:14:32.640 on the existing production system, and we will continue to 0:14:32.680 --> 0:14:35.640 monitor the demand, the recovery of the demand with a 0:14:35.720 --> 0:14:39.480 big replacement cycle for white bodies that is just starting, 0:14:40.200 --> 0:14:44.240 and also some expectations for growth. So the market has 0:14:44.280 --> 0:14:47.479 the potential to go higher, and we have the potential 0:14:47.520 --> 0:14:50.840 to continue to serve that market by further ramping up. 0:14:50.880 --> 0:14:51.680 But I'd like to. 0:14:52.080 --> 0:14:55.080 Just confirm that rate ten on the three fifty is 0:14:55.120 --> 0:14:56.440 already a very big number. 0:14:56.720 --> 0:15:00.520 So that was the airbus CI high hypes. Then airlines 0:15:00.560 --> 0:15:05.320 will continue expanding, but there are plenty of headwinds for 0:15:05.400 --> 0:15:09.200 the industry, including obviously the disruption in the Middle East, 0:15:09.280 --> 0:15:13.000 the war in Ukraine, high all prices and why do 0:15:13.200 --> 0:15:17.200 economic uncertainty, So I asked our own said Oar Philip 0:15:17.440 --> 0:15:20.320 ahead of the Dubai Air Show, what he thinks the 0:15:20.360 --> 0:15:23.200 mood in the industry is going into the event. 0:15:24.000 --> 0:15:26.720 In terms of the mood for the industry at the moment, 0:15:27.080 --> 0:15:30.400 the industry is sort of struggling to get any aircraft. 0:15:30.720 --> 0:15:33.680 So everyone's sort of trying to order as many aircraft 0:15:33.680 --> 0:15:37.360 as they can as they look to tap into growth 0:15:37.400 --> 0:15:41.240 and demand over the next coming years. Remember that during 0:15:41.280 --> 0:15:44.720 the pandemic everything really slowed down and so now airlines 0:15:44.720 --> 0:15:46.800 are sort of ramped up again and they're trying to 0:15:46.800 --> 0:15:50.480 get as much demand de indicter to as much demand 0:15:50.480 --> 0:15:53.400 as they can, and that involves by new aircraft. 0:15:54.960 --> 0:15:57.720 Yes, it does involves by new aircraft. Hello, good to 0:15:57.760 --> 0:15:59.320 speak to you. So what are the orders that we're 0:15:59.360 --> 0:16:00.880 expecting to get in Dubai. 0:16:02.120 --> 0:16:05.880 So, yeah, we're expecting to we're expecting Emerits, which is 0:16:05.880 --> 0:16:10.600 the local carrier of the UAE of Dubai, is basically 0:16:10.640 --> 0:16:14.280 expected to make a massive splash. And Tim Clark has 0:16:14.360 --> 0:16:16.760 been saying that he's in the market for more white 0:16:16.800 --> 0:16:20.000 body jets. In June he talked about how he might 0:16:20.160 --> 0:16:22.000 order as many as one hundred, two hundred and fifty 0:16:22.000 --> 0:16:25.040 eCraft and he said he was looking at both Boeing 0:16:25.080 --> 0:16:28.280 and Airbas's largest models. So it's really a question of 0:16:28.320 --> 0:16:31.120 seeing how much Emeritz actually does sort of manage to 0:16:31.120 --> 0:16:34.280 succeed in terms of trying to get those orders across 0:16:34.320 --> 0:16:36.600 the line. We're also going to see some action possibly 0:16:36.640 --> 0:16:40.000 from Ria. There they're a brand new airline that Saudi 0:16:40.040 --> 0:16:43.440 Arabia is building from scratch and that's run by the 0:16:43.480 --> 0:16:47.600 former Etihad CEO Tony Douglas, and they've said that they're 0:16:47.640 --> 0:16:49.960 putting the final touches on what's going to be a 0:16:50.000 --> 0:16:55.600 sizeable order involving narrowbody plane. And we understand that RIA 0:16:55.680 --> 0:16:59.400 they're likely to order the Boeing seven thry seven Max 0:16:59.480 --> 0:17:04.000 jets and that's still not finalized but and talks ongoing, 0:17:04.119 --> 0:17:07.080 but we should be able to see how that plays 0:17:07.080 --> 0:17:08.560 out in the next couple of days. 0:17:09.040 --> 0:17:13.480 Okay, But with so many orders, what about the squeeze consumer? 0:17:13.640 --> 0:17:16.160 Are they pulling back on travel? What an airline's saying 0:17:16.200 --> 0:17:17.440 about demand? 0:17:18.080 --> 0:17:20.000 It seems to be a mixed picture at the moment. 0:17:20.119 --> 0:17:23.840 Some airlines are talking about how demand is slowing in 0:17:23.920 --> 0:17:27.320 terms of growth, So demand hasn't actually fallen down, but 0:17:27.400 --> 0:17:30.760 the growth percentages is slowing, especially in the US. We've 0:17:30.800 --> 0:17:35.040 seen some carriers talking about slowing demand growth. And also, 0:17:35.119 --> 0:17:40.480 I mean there's been some experienced industry watchers, including Steven 0:17:40.600 --> 0:17:44.920 Udvarhazi who's the chairman of Allies, and he's been talking 0:17:44.920 --> 0:17:49.280 about how there's a concern that airlines are over ordering aircraft, 0:17:49.800 --> 0:17:53.600 especially because of the fact that they've gone from virtually 0:17:53.640 --> 0:17:56.680 no traffic to one hundred percent and now everyone's sort 0:17:56.680 --> 0:17:58.320 of binging on aircraft. 0:17:59.400 --> 0:18:02.119 That was a feature of the of the airline industry 0:18:02.160 --> 0:18:05.240 decades ago, wasn't it said they're sort of overordering in 0:18:05.320 --> 0:18:07.439 good times and then paying the price sending all the 0:18:07.440 --> 0:18:09.359 planes to the desert in the bad times. How are 0:18:09.400 --> 0:18:12.560 the big planemakers then coping with this surge in demand? 0:18:12.560 --> 0:18:15.399 Are there are there still supply issues or are they 0:18:15.440 --> 0:18:16.800 able to deliver. 0:18:18.119 --> 0:18:20.000 There are still Supply issues have been We heard from 0:18:20.000 --> 0:18:22.520 Elbas and Eirbus was talking about how the supply chain 0:18:22.560 --> 0:18:25.680 continues to be constrained, and everyone's been trying to ramp 0:18:25.760 --> 0:18:29.160 up production ever since the lows of COVID, and they 0:18:29.160 --> 0:18:31.680 haven't yet been able to. That's partly because they're sort 0:18:31.680 --> 0:18:35.520 of cut back, especially smaller suppliers in the supply chain, 0:18:35.640 --> 0:18:38.560 cut back on staffing, they cut back on tooling, they 0:18:38.640 --> 0:18:41.680 cut back on facilities, and so bringing all of that 0:18:41.840 --> 0:18:45.600 back has been much harder than they anticipated. We've seen 0:18:45.720 --> 0:18:48.280 EBS talking about how they want to go to seventy 0:18:48.320 --> 0:18:50.919 five aircraft a month by twenty twenty six on the 0:18:51.040 --> 0:18:54.159 eighty twenty one wide narrowbodies, and they've talked about how 0:18:54.160 --> 0:18:56.560 they want to go to ten a month on the 0:18:56.600 --> 0:18:59.679 eight three fifty wide body, and so but at the 0:18:59.720 --> 0:19:02.040 moment they're still trying to ramp up. I mean, Boeing's 0:19:02.040 --> 0:19:05.520 had its own issues with suppliers. It's currently trying to 0:19:05.560 --> 0:19:10.320 rework issues with its seventy seven Max jets, which because 0:19:10.359 --> 0:19:13.520 of an issue with a Spirit Aero system in terms 0:19:13.560 --> 0:19:16.920 of production, and so everyone sort of trying to bring 0:19:17.040 --> 0:19:20.800 back production, but so far it is pretty slow going. 0:19:21.280 --> 0:19:24.280 So that was our senior aviation reporter, said our Philip 0:19:24.359 --> 0:19:27.359 speaking to me an to Bloomberg's Anna Edwards. I'm Caroline 0:19:27.359 --> 0:19:29.560 Hepkee here in London. You can catch us every weekday 0:19:29.600 --> 0:19:31.760 morning for Boomberg day Break you at beginning at six 0:19:31.800 --> 0:19:34.560 am in London. That's one am on Wall Street. 0:19:34.640 --> 0:19:34.960 Tom. 0:19:35.320 --> 0:19:38.199 Thank you, Caroline, And coming up on Bloomberg day Break weekend, 0:19:38.240 --> 0:19:41.840 we preview a big scheduled meeting with President Biden and 0:19:41.920 --> 0:19:46.440 Chinese President Chi Jinping. I'm Tom Busby, and this is Bloomberg. 0:19:57.840 --> 0:20:00.000 I'm Tom Busby in New York with your global look ahead, 0:20:00.080 --> 0:20:02.639 the top stories for investors in the coming week. On 0:20:02.720 --> 0:20:06.000 the sidelines of this week's Asia Pacific Economic Summit in 0:20:06.040 --> 0:20:09.280 San Francisco, a crucial meeting between the leaders of the 0:20:09.359 --> 0:20:12.480 US and China taking place. And for more, let's check 0:20:12.480 --> 0:20:15.200 in with Bloomberg Daybreak Asia anchor Doug Krisner. 0:20:15.400 --> 0:20:18.399 Tom. The last meeting of Presidents Biden and She was 0:20:18.440 --> 0:20:21.080 one year ago at the G twenty summit in Bali. 0:20:21.119 --> 0:20:24.280 Back then, the goal was to improve relations, but those 0:20:24.280 --> 0:20:27.520 talks were derailed when a suspected Chinese spy balloon flew 0:20:27.600 --> 0:20:31.119 over the US. Well, now both sides have reason to reset. 0:20:31.600 --> 0:20:34.520 Biden is seeking stability as he gears up for a 0:20:34.560 --> 0:20:37.560 presidential election next year, and she wants to attract more 0:20:37.600 --> 0:20:42.080 foreign investment to help reinvigorate china slowing economy. For some 0:20:42.200 --> 0:20:45.560 help previewing this meeting, I'm joined by Bloomberg's Chill diesis, 0:20:45.640 --> 0:20:49.360 our China Economy and Government editor. She joins us from 0:20:49.400 --> 0:20:52.200 our studios in Hong Kong. What do we know about 0:20:52.240 --> 0:20:54.959 the preparations for this face to face? What type of 0:20:55.040 --> 0:20:56.240 groundwork has been laid? 0:20:57.200 --> 0:20:59.320 Hi, Doug, Yeah, well, I think that at this point 0:20:59.359 --> 0:21:01.919 it really feels like we've been preparing for this meeting 0:21:02.040 --> 0:21:04.960 since she and Biden last met in Bali a year ago. 0:21:05.119 --> 0:21:09.560 I mean, as you mentioned, the Chinese spy balloon incident 0:21:09.960 --> 0:21:12.720 earlier this year certainly seemed to derail some of the 0:21:12.720 --> 0:21:15.080 preparation for this. But what we've seen the US in 0:21:15.160 --> 0:21:19.679 particular do over the past several months is send various 0:21:19.760 --> 0:21:23.400 high level delegations to China trying to lay the groundwork 0:21:23.400 --> 0:21:26.800 for this meeting. We saw Secretary of State Anthony Blincoln 0:21:27.040 --> 0:21:29.520 go to China. We saw the US Secretary of Commerce 0:21:29.920 --> 0:21:31.960 Juina Ramando go to China. We saw Janet yell and 0:21:31.960 --> 0:21:34.840 go to China, the US Treasurer Secretary, and all of 0:21:34.840 --> 0:21:37.639 this prep to try to lay the groundwork for this 0:21:37.720 --> 0:21:40.560 eventual She Biden meeting. So there's been a lot of 0:21:40.560 --> 0:21:44.000 these sort of high level talks between people who either 0:21:44.000 --> 0:21:47.080 aren't Sheer Biden or in some cases She meeting with 0:21:47.480 --> 0:21:50.880 some of the top level Biden officials to kind of 0:21:51.760 --> 0:21:54.760 pave the way for what I think both sides eventually 0:21:54.840 --> 0:21:57.040 hope is a very smooth meeting between their top leaders. 0:21:57.200 --> 0:21:59.760 You and I were talking a short while ago about 0:22:00.080 --> 0:22:04.320 He's written by Bloomberg opinion columnist Mention Pay and he 0:22:04.480 --> 0:22:07.280 was basically taking the view that this meeting holds very 0:22:07.280 --> 0:22:07.960 little in the way. 0:22:07.880 --> 0:22:08.960 Of upside for Biden. 0:22:09.040 --> 0:22:12.360 The China issue on the US side has become so toxic. 0:22:12.920 --> 0:22:16.119 Minchin was saying, any diplomatic outreach can be cast as 0:22:16.160 --> 0:22:18.720 appeasement and by extension, I'm thinking weakness. 0:22:19.280 --> 0:22:19.520 Now. 0:22:19.680 --> 0:22:23.440 She, on the other hand, has several reasons to maybe 0:22:23.480 --> 0:22:26.720 shift this downward spiral in relations with the US. Most 0:22:26.720 --> 0:22:31.399 obviously is this problem with investor confidence and the notion 0:22:31.480 --> 0:22:35.480 that China is uninvestable. Does Minchin have an accurate read 0:22:35.520 --> 0:22:36.720 on this dynamic, do you think. 0:22:37.440 --> 0:22:39.719 I do think he has a good point. I mean, look, 0:22:39.840 --> 0:22:41.880 I think that on the Biden side of things, it's 0:22:41.920 --> 0:22:45.680 definitely about politics here. I mean, Biden has a year 0:22:45.720 --> 0:22:49.200 to gear up for the next presidential election. Certainly Democrats 0:22:49.240 --> 0:22:52.360 were winning in some key races leading. 0:22:52.240 --> 0:22:52.639 Up to that. 0:22:53.160 --> 0:22:55.800 They just had a slew of victories and various US 0:22:55.840 --> 0:22:59.800 states that seemed very promising for the Democratic Party. But 0:22:59.840 --> 0:23:04.200 I think that as Biden gears up to challenge whoever 0:23:04.320 --> 0:23:06.840 his kind of part is going to be in the 0:23:06.880 --> 0:23:09.240 next presidential election, it looks most likely to be Trump. 0:23:09.600 --> 0:23:12.280 He's really got to project this idea that he's going 0:23:12.320 --> 0:23:14.159 to be very tough on China, and I think that 0:23:14.240 --> 0:23:17.399 the risk with any kind of meeting with she is 0:23:17.440 --> 0:23:20.720 that he comes across as a concessionary depending on what 0:23:20.800 --> 0:23:24.479 exactly he says. That though, I think really pales in 0:23:24.520 --> 0:23:27.720 comparison to some of the big problems that are facing 0:23:27.720 --> 0:23:30.960 presidents chijin Ping and China. As you mentioned, I think 0:23:31.000 --> 0:23:34.480 foreign investments in particular is a pretty significant issue for 0:23:34.560 --> 0:23:39.320 China right now. The most recent information on foreign direct 0:23:39.320 --> 0:23:42.159 investment into China, this came from the country's balance of 0:23:42.160 --> 0:23:46.000 payments data that was just released recently showed falling into 0:23:46.000 --> 0:23:48.280 the negative for the first time since records were kept 0:23:48.320 --> 0:23:51.600 since nineteen ninety eight. And we've seen all year long 0:23:51.720 --> 0:23:55.520 this big push by China, by Xijin Ping to try 0:23:55.520 --> 0:23:58.240 to lure foreign investment back. It's just really not taken 0:23:58.320 --> 0:24:01.680 hold that's obviously due to a number of reasons, whether 0:24:01.720 --> 0:24:04.159 it's holdover from COVID zero and all of the different 0:24:04.160 --> 0:24:07.160 restrictions that were placed on China over the last several years, 0:24:07.160 --> 0:24:11.440 whether it's regulatory issues, whether it's lack of clarity over 0:24:11.520 --> 0:24:14.360 how exactly the government is handling a lot of those 0:24:14.359 --> 0:24:17.159 regulatatory issues. That's all really led to this level of 0:24:17.440 --> 0:24:21.040 lack of confidence and mistrust in China from foreign investors. 0:24:21.040 --> 0:24:22.760 And I think that she is really on a mission 0:24:22.800 --> 0:24:23.800 here to try to bring that back. 0:24:23.880 --> 0:24:26.119 Yeah, maybe we can also talk about the role that 0:24:26.280 --> 0:24:30.199 geopolitics plays in that level of unease. Taiwan, we know, 0:24:30.280 --> 0:24:32.720 gets a lot of attention when it comes to flashpoints, 0:24:33.359 --> 0:24:36.199 but increasingly the Philippines has become a little bit of 0:24:36.720 --> 0:24:40.080 a concern. The US recently renewing a warning that it 0:24:40.119 --> 0:24:43.000 would defend the Philippines in case of an armed attack 0:24:43.480 --> 0:24:46.240 under a nineteen fifty one treaty that was after some 0:24:46.560 --> 0:24:50.879 Chinese ships blocked and collided with two Filipino vessels. Do 0:24:50.920 --> 0:24:53.040 you think this is a hot topic right now for 0:24:53.119 --> 0:24:55.000 the relationship between Biden and She. 0:24:55.880 --> 0:24:56.120 Yes. 0:24:56.160 --> 0:24:58.680 I mean, I think that anything involving the South China 0:24:58.680 --> 0:25:02.040 Sea is certainly going to some particular issues. This issue 0:25:02.040 --> 0:25:04.640 with the Philippines has been kind of unfolding for many 0:25:04.680 --> 0:25:08.000 many months now, leading to obviously some of these military 0:25:08.040 --> 0:25:12.000 confrontations there. I think that Biden's willingness to kind of 0:25:12.000 --> 0:25:13.919 come out in the US's willingness to kind of come 0:25:14.000 --> 0:25:17.119 up publicly and you know, issue that support for the 0:25:17.119 --> 0:25:22.040 Philippines does obviously signify that any kind of relationships military, 0:25:22.080 --> 0:25:25.960 geopolitical relationships that the US has in the South China 0:25:26.040 --> 0:25:28.760 see with any of its allies there or any other 0:25:28.840 --> 0:25:32.440 nations there are really particularly you know, important, strategically important 0:25:32.480 --> 0:25:35.760 for the US to you know, kind of protect you know, 0:25:36.480 --> 0:25:38.680 I don't know one hundred percent whether this is going 0:25:38.720 --> 0:25:41.000 to come up at the She Biden meeting, but certainly 0:25:41.040 --> 0:25:44.320 you would think that it's probably pretty top of mind 0:25:44.400 --> 0:25:48.600 for Biden to you know kind of you know, bring 0:25:48.680 --> 0:25:51.920 up the fact that this is a geopolitical flashpoints, as 0:25:51.960 --> 0:25:53.840 is Taiwan, as as many other issues here. 0:25:54.000 --> 0:25:57.080 Yeah, and I think that geopolitics extends to the Mid East. 0:25:57.080 --> 0:25:58.600 A but we were told there was a story on 0:25:58.600 --> 0:26:01.679 the Bloomberg Terminal highlight lighting the fact that President Biden 0:26:01.720 --> 0:26:06.200 had been briefed recently on what his invisors see as 0:26:06.200 --> 0:26:09.160 a Chinese plan to build a military facility in Oman. 0:26:09.440 --> 0:26:12.720 I mean that seems to probably be very concerning, I 0:26:12.720 --> 0:26:14.560 would imagine to the Biden administration. 0:26:15.480 --> 0:26:18.800 Yes, I think that's particularly concerning in light of how 0:26:18.920 --> 0:26:22.200 China has really stepped up its diplomatic involvement in that region. 0:26:22.320 --> 0:26:24.680 I mean that, you know, sort of predates the Hamas 0:26:24.720 --> 0:26:28.879 attack in Israel we've saw earlier this year. Obviously, she 0:26:29.040 --> 0:26:31.680 has really kind of played this role or tried to 0:26:31.680 --> 0:26:34.240 play this role as a peacemaker in the region. He 0:26:34.240 --> 0:26:38.000 helped broker a tentative to tent between Iran and Saudi Arabia. 0:26:38.480 --> 0:26:40.720 He's also held joint naval drills not just with Iran 0:26:40.760 --> 0:26:43.639 but with Russia in the Gulf of Oman just around 0:26:43.680 --> 0:26:46.280 that time. So I think that the Biden administration is 0:26:46.400 --> 0:26:50.159 likely keen to you know, look to see what China 0:26:50.280 --> 0:26:54.080 is doing in the Middle East as the conflict between 0:26:54.160 --> 0:26:58.399 Israel and Hamas continues to unfold. Obviously, whatever role China 0:26:58.440 --> 0:27:02.359 plays with you know, broker, any other relationships in that region, 0:27:02.440 --> 0:27:04.520 particularly with Iran, I think is going to be top 0:27:04.560 --> 0:27:05.960 of mind for the Biden administration. 0:27:06.119 --> 0:27:08.800 Well, you mentioned Russia there, and I'm curious about the 0:27:08.840 --> 0:27:13.280 recent comments from Vladimir Putin telling a senior Chinese military 0:27:13.320 --> 0:27:17.679 official that Moscow and Beijing should expand their cooperation on 0:27:17.760 --> 0:27:22.320 military satellites and other prospective defense technologies. And I'm wondering 0:27:22.880 --> 0:27:27.199 how China's relationship with Russia complicates anything that she is 0:27:27.240 --> 0:27:29.639 attempting to get out of the US. 0:27:30.440 --> 0:27:33.160 Well, I think what we've seen over the past couple 0:27:33.160 --> 0:27:36.240 of years in particular, is certainly she has not been 0:27:36.280 --> 0:27:42.200 afraid to tout this diplomatic alliance with Russia in many ways. 0:27:42.240 --> 0:27:44.920 I mean, we just saw a few weeks ago at 0:27:44.960 --> 0:27:48.919 the Belton Road Conference in Beijing, Putin attended, He was 0:27:48.960 --> 0:27:53.040 there with She. They talked side by side certainly a lot. 0:27:53.080 --> 0:27:57.720 I mean, this is a particularly important relationship for she 0:27:57.920 --> 0:28:00.879 to uphold, and I think that as we were continuing 0:28:00.920 --> 0:28:05.119 to see fallout from Russia's invasion in Ukraine. That is 0:28:05.200 --> 0:28:07.639 again I think sort of a sticking point with the 0:28:07.640 --> 0:28:08.600 Biden administration. 0:28:09.440 --> 0:28:11.399 Does there need to be a lot more in the 0:28:11.440 --> 0:28:14.639 way of good communication happening between the US and China 0:28:14.960 --> 0:28:16.360 where the military is concerned. 0:28:17.040 --> 0:28:20.080 Yes, I mean I think that it's certainly true. Look, Doug, 0:28:20.240 --> 0:28:23.520 over the past several years in particular, I don't think 0:28:23.560 --> 0:28:27.440 that you can discount also the relationship that COVID zero 0:28:27.480 --> 0:28:29.760 has had with you know, sort of fracturing a lot 0:28:29.760 --> 0:28:33.200 of these ties and communication between the US and China. 0:28:33.359 --> 0:28:35.360 I mean, when it's difficult to get into the country, 0:28:35.400 --> 0:28:38.000 difficult to get diplomats into the country, you sort of 0:28:38.080 --> 0:28:41.600 lose or those lines of communication or those lines of 0:28:41.640 --> 0:28:46.240 communication between those medium level, mid level, you know, diplomats 0:28:46.360 --> 0:28:48.920 in the US and China get certainly very freed. 0:28:49.200 --> 0:28:51.400 Jill, thank you so much for helping us preview the 0:28:51.440 --> 0:28:55.160 meeting between Presidents Biden and she. Bloomberg's Jill desis our 0:28:55.320 --> 0:28:58.800 China Economy and Government editor. I'm Doug Prisner. You can 0:28:58.840 --> 0:29:02.400 catch Brian Kurta and myself weekdays here for Bloomberg Day 0:29:02.400 --> 0:29:05.760 Break Asia, beginning at seven am in Hong Kong six 0:29:05.840 --> 0:29:07.600 PM on Wall Street, Tom. 0:29:07.440 --> 0:29:10.160 Our thanks to Bloomberg day Break Asia anchor Doug Krisner, 0:29:10.160 --> 0:29:13.360 And coming up here on Bloomberg day Break weekend, another 0:29:13.600 --> 0:29:17.200 possible government shutdown looming. We take you to Washington next 0:29:17.360 --> 0:29:20.640 for the latest. I'm Tom Busby, and this is Bloomberg. 0:29:31.320 --> 0:29:33.680 This is Bloomberg day Break Weekend, our global look ahead 0:29:33.680 --> 0:29:35.760 at the top stories for investors in the coming week. 0:29:35.880 --> 0:29:39.480 I'm Tom Busby in New York. Could the federal government 0:29:39.560 --> 0:29:43.320 be hurtling toward a devastating shutdown? Could happen? 0:29:43.440 --> 0:29:43.800 For more? 0:29:43.880 --> 0:29:45.920 Let's head to our Bloomberg ninety nine to one newsroom 0:29:45.920 --> 0:29:50.360 in Washington and Bloomberg Sound On. Co host Kaylee lines. 0:29:50.160 --> 0:29:52.280 Yeah, Tom, we're running out of sand in the hour 0:29:52.360 --> 0:29:55.600 glass here, and yes, we've been here before. Remember in 0:29:55.680 --> 0:29:58.840 government funding almost ran out at the end of September. Well, 0:29:58.840 --> 0:30:02.640 we avoided that though a continuing resolution that ultimately costs 0:30:02.640 --> 0:30:05.960 former Speaker Kevin McCarthy his job was the price, and 0:30:06.000 --> 0:30:08.160 that just kicked the can down the road, a road 0:30:08.200 --> 0:30:11.720 that ends on November seventeenth. So this coming week, it's 0:30:11.760 --> 0:30:13.760 going to be up to the new Speaker, Mike Johnson 0:30:14.040 --> 0:30:16.040 and the rest of Congress to figure out how to 0:30:16.080 --> 0:30:20.280 extend funding again and avoid a government shutdown. So how 0:30:20.320 --> 0:30:22.560 do they get it done? Here with some insight, hopefully 0:30:22.600 --> 0:30:26.320 is Megan Scully. He leads our congressional coverage here at Bloomberg, 0:30:26.760 --> 0:30:28.920 So Megan. Obviously they're not going to be able to 0:30:28.920 --> 0:30:31.560 get all of the different appropriation bills done by the 0:30:31.680 --> 0:30:34.520 end of next week. There's no time. So it's going 0:30:34.600 --> 0:30:36.000 to have to be another CR. 0:30:36.520 --> 0:30:39.960 It will be another continuing resolution, yes, if they can 0:30:40.280 --> 0:30:43.960 agree to one. The House is currently trying to figure 0:30:44.000 --> 0:30:47.280 out what exactly could get through that chamber. The new speaker, 0:30:47.320 --> 0:30:50.280 Speaker Mike Johnson, is finding himself in the same difficult 0:30:50.320 --> 0:30:54.360 position that his predecessor, Kevin McCarthy was in just about 0:30:54.680 --> 0:30:58.680 two months ago, and he's trying to get consensus within 0:30:59.000 --> 0:31:02.360 the Republican party in the House. But whatever they do 0:31:02.640 --> 0:31:06.320 decide on still has to pass muster with the Senate, 0:31:06.400 --> 0:31:09.280 which is controlled by Democrats. So there's going to be 0:31:09.320 --> 0:31:11.080 a lot of maneuvering in the week ahead. 0:31:11.640 --> 0:31:13.960 Absolutely, And of course one of the big sticking points 0:31:14.000 --> 0:31:17.160 between Republicans and Democrats, or the big policy differences, is 0:31:17.920 --> 0:31:21.480 people who want greater fiscal restraint versus maybe not so much. Right, 0:31:21.680 --> 0:31:24.000 Can something clean get through? Are we going to have 0:31:24.040 --> 0:31:25.360 to see spending cuts involved? 0:31:25.680 --> 0:31:29.800 There's discussion about a clean cr maybe one that lasts 0:31:29.920 --> 0:31:34.160 until January. There's also been sort of this new made 0:31:34.240 --> 0:31:37.680 up concept of a laddered cr H. What is that 0:31:37.960 --> 0:31:42.440 some government agencies would close earlier than others, and the 0:31:42.560 --> 0:31:46.440 dates could be December and January or January and February. 0:31:46.680 --> 0:31:50.320 Sort of a rolling shutdown that would decrease the at 0:31:50.400 --> 0:31:53.800 least the initial impact of a shutdown. You know, maybe 0:31:53.800 --> 0:31:56.560 the Defense Department stays open for a couple of extra weeks, 0:31:57.160 --> 0:32:00.160 but it doesn't solve the problem of we need to 0:32:00.200 --> 0:32:05.200 fund the government until the fiscal year ends on September thirtieth. 0:32:05.640 --> 0:32:09.080 So basically they are trying to negotiate exactly what to do, 0:32:09.120 --> 0:32:13.080 whether to take this laddered approach that is perhaps clean, 0:32:13.800 --> 0:32:17.400 or another clean spending bill that is very short and 0:32:17.520 --> 0:32:20.760 just buys the House sometime to figure out what to 0:32:20.840 --> 0:32:23.240 do next. Because remember this is sort of the first 0:32:23.240 --> 0:32:26.640 time this new speaker is involved in these high stakes 0:32:26.760 --> 0:32:28.160 Washington negotiations. 0:32:28.240 --> 0:32:30.440 Well, and it's not just a question of Senate Democrats. 0:32:30.440 --> 0:32:33.040 It feels like there's also a good deal of daylight 0:32:33.080 --> 0:32:36.120 between Republicans in the Senate and Republicans in the House. 0:32:36.440 --> 0:32:42.240 Absolutely, especially over sort of extra issues, things that aren't 0:32:42.240 --> 0:32:47.080 necessarily directly tied to the government shut down, but are 0:32:47.200 --> 0:32:49.960 extraneous to that. And that is, of course the emergency 0:32:50.040 --> 0:32:56.000 spending on Ukraine, on Israel, on Taiwan, and along the border. 0:32:56.400 --> 0:32:58.720 Well, on the subject of the border funding, talk to 0:32:58.800 --> 0:33:02.400 us about how that is fitting into the equation here, 0:33:02.400 --> 0:33:05.360 because obviously that's something Republicans are pushing really heavily for, 0:33:05.440 --> 0:33:07.800 and it seems like that's something the White House is 0:33:07.840 --> 0:33:11.440 willing to give, right at least in terms of monetary giving. 0:33:11.760 --> 0:33:14.600 Yes, the devil is certainly in the details. Immigration is 0:33:14.640 --> 0:33:19.760 an issue that has long dogged lawmakers in Washington and 0:33:19.800 --> 0:33:23.200 the White House. The migrant crisis right now that is 0:33:23.200 --> 0:33:27.560 affecting not just communities along the border, but cities like 0:33:27.600 --> 0:33:33.240 New York and Chicago, really blue areas, areas that Democratic 0:33:33.320 --> 0:33:37.120 strongholds are being affected by this migrant crisis, which is 0:33:37.160 --> 0:33:42.200 making Democrats perhaps more willing to deal on border and 0:33:42.240 --> 0:33:43.640 immigration policies. 0:33:43.800 --> 0:33:46.600 All right, Well, the clock is ticking, as it always 0:33:46.600 --> 0:33:50.040 seems to be. Megan Scully, the leader of Bloomberg's congressional coverage. 0:33:50.080 --> 0:33:53.280 Thank you so much. And Tom, you better watch that clock. 0:33:53.400 --> 0:33:56.000 Thank you, Kaylee. That was Bloomberg's sound on co host 0:33:56.040 --> 0:33:59.000 Kaylee Lines, reporting from our Bloomberg ninety nine one newsroom 0:33:59.040 --> 0:34:01.760 in Washington. And you can hear sound on weekdays one 0:34:01.800 --> 0:34:05.040 to three pm on Bloomberg Radio. And that does it 0:34:05.080 --> 0:34:07.960 for this edition of Bloomberg Daybreak Weekend. Join us again 0:34:08.000 --> 0:34:10.520 Monday morning, five am Wall Street Time for the latest 0:34:10.560 --> 0:34:12.840 on the markets, overseas and the news you need to 0:34:12.880 --> 0:34:16.239 start your day. I'm Tom Buzby. Stay with us. Top 0:34:16.239 --> 0:34:20.080 stories and global business headlines are coming up right now.