September 26, 2025 • 38 mins
Bloomberg Daybreak Weekend with Host Tom Busby take a look at some of the stories we'll be tracking in the coming week.
- In the US – a look ahead to the U.S jobs report and the Electric vehicle sector.
- In the UK – a look ahead to the Bloomberg Women, Money, Power conference in London.
- In Asia – a look ahead to the China PMI data.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:10):
This is Bloomberg day Break Weekend, our global look at
the top stories in the coming week from our Daybreak
anchors all around the world. Straight ahead on the program,
what this week's September jobs report could tell the Federal Reserve.
I'm Tom Busby in New York.
Speaker 3 (00:23):
I'm Caline Hecker here in London, where we're shining a
spotlight on the women's shaping our global economic future.
Speaker 4 (00:30):
I'm dek Prisner looking at whether China's pro growth pivot
is succeeding.
Speaker 1 (00:36):
That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg
eleven three h New York, Bloomberg ninety nine to one, Washington, DC,
Bloomberg ninety two nine Boston, DAB Digital Radio, London, Syria
XM one T one, and around the world on Bloomberg Radio,
dot Com and the Bloomberg Business App.
Speaker 2 (01:00):
Good day to you. I'm Tom Busby, and we begin
today's program with the September jobs report out this Friday.
What might another anemic report mean just weeks ahead of
another Federal Reserve rate decision? And for more, we welcome
Stuart paul Us, Economists with Bloomberg Economics. Stuart, thank you
so much for being here. Now let's start with some
good news, and there was good news. Q two economic
(01:22):
growth a lot better than forecasts three point eight percent,
consumer spending strong in August, even if inflation was still
a little sticky, and Wall Street up until this past week,
had been hitting one all time high after another. All
good news. But it's not all good news, is it.
There's a lot of worries out there.
Speaker 5 (01:39):
Well.
Speaker 6 (01:40):
The thing that everybody seems to be anchoring on with
the Q two GDP data was this major upward revision
to headline GDP growth and to household spending, and household
spending ended up growing at an annualized rate of about
two and a half percent in the second quarter. As
you mentioned when we finally got the August personal consumption
(02:01):
expenditures report. It even looks like household spending continued growing
into the third quarter. So that's all good news there.
What I'm thinking most about, though, from the last week,
is that corporate profits for the second quarter were revised
down pretty significantly. Corporate profits only grew about seven billion
dollars in the second quarter. That's down from an initial
(02:24):
estimate of nearly seventy billion dollars, and if that's the case,
that's a big revision. If that's the case, you would
have to think that expansion, investment and hiring plans are
going to start to simmer. And when we look at
let's say small business surveys, capital expenditure plans have never
been this low outside of a recession. Capex plans are low,
(02:46):
investment and expansion plans are low. Hiring plans are also low.
So the thing that I'm thinking most about in the
outlook is the currently tenuous labor market balance between supply
and demand for labor and what that means for the
pace of hiring going forward. Now, when we think about
(03:07):
the September jobs report coming out this coming Friday, we
think there is going to be about fifty five thousand
jobs added during the month. But one thing that we
need to continue keeping in mind is that a lot
of workers are going to be rolling off government payrolls.
These are the folks who took the buy out earlier
in the year because of DOGE cuts. And when that's
(03:27):
the case, the pace of hiring could resume slowing to
the pace that we saw earlier this summer. This is
a very tenuous balance between labor supply and labor demand,
which makes us very cautious about the growth and spending
outlook as we head into year end.
Speaker 2 (03:43):
And just those federal workers, you're talking thousands or tens
of thousands, not just in Washington and Baltimore, but in
National Park services across the US, and adjuncts of the
Social Security Administration all over.
Speaker 6 (03:57):
That's right. This is not the sort of thing that's regionally.
I this is the sort of thing that affects workers
around the country. And so I think that when we
think about consumer spending, this is not something that just
affects businesses locally in Washington. This is something that materially
affects or outlook for spending growth.
Speaker 2 (04:14):
Now, let's talk more about the jobs, not just those
federal jobs, because we know about those, but we've seen manufacturing,
despite the Trump administrations, you know, promoting and touting of
more manufacturing jobs coming back here, Manufacturing, construction, energy, especially
in oil, all seeing declines. And that's not good.
Speaker 6 (04:34):
It's not It's basically every month since April, the manufacturing
industry has been shedding jobs. And look, Tom, that's the
normal state of affairs in an economy that's increasingly services oriented.
That's not the state of affairs that policymakers want when
they are pursuing industrial policy and protectionism. So there is
(04:56):
a part of me that thinks, look, the effect of towers,
the effect of industrial policy. We're just not quite feeling
it yet. We're not seeing any sort of boost to
manufacturing and construction yet. We should wait to see the
effects of the policies that the administration is rolling out.
But right now, yes, the manufacturing industry is shedding jobs.
(05:16):
Thinking back to the August industrial production report, and this
is a win for the administration. There is accelerating auto production,
there's accelerating steel production, there's accelerating pharmaceutical production, and accelerating
textile production. Those are all winds, but those are very recent.
It's too early to say that there's been material progress
(05:38):
shown in domestic production as a consequence of tariffs. Instead,
it looks like the growth negative consequences of uncertainty are
weighing on aggregate economic activity and aggregate hiring. Until we
see those isolated benefits booying domestic production, it's really it's
(06:00):
really just a growth negative story right now, and.
Speaker 2 (06:03):
We won't know if the latest tariffs that the President
announced on pharmaceutic was one hundred percent, twenty five percent
on heavy duty trucks, thirty percent on sofas and upholstered furniture.
It's just too soon to tell. That could be months
down the road before we see any impact of that domestically, right.
Speaker 6 (06:19):
That's right. So again August, from an industrial production perspective,
it looks like those favorite industries were doing relatively well.
But I'm not going to read too much into one
month's data. It's going to take some time to see
the full effects of those specific those industry specific tariffs.
Speaker 2 (06:35):
Now, this past week, FED Chairman Jerome Powell, he said
there are serious risks to the economy involving inflation, which
we know is well above the target two point nine percent,
but it hasn't gotten any worse, but also the weakening
labor market. What does he see? Did he see all
these things? Is he seeing months out that I'm not seeing?
Maybe even you're not seeing that. We are going to
(06:57):
see things continue to digress in the labor market.
Speaker 6 (07:00):
Which is really difficult right now, is that labor supply
and labor demand have this really treacherous balancing acts right now,
where growth in labor supply is very slow and labor
demand is waning. If we rewind the clock, let's say
a year ago, there were about ten percent more job
openings than there were unemployed or available workers. Now there
(07:22):
are just slightly fewer job openings than there are available workers.
We expect looking ahead to next week when we get
the job openings and labor turnover survey data, we expect
the number of job openings to fall further. It's about
seven point one five million, So again, now we're going
to have almost five percent fewer job openings.
Speaker 2 (07:43):
The September Jobs report out this Friday, eight thirty am
Wall Street Time. Our thanks to Stuart Paul, us economists
with Bloomberg Economics. Well, next, we turn to a big
change coming this week to the US auto industry, the
end of the seventy five hundred dollars federal tax credit
for EV buyers. What will for EV makers and for
EV prices? What about Detroit's Big Three who spent billions
(08:05):
preparing for an electric engine future? For more, and on
who wins and who loses? We're joined by Steve Man,
Bloomberg Intelligence, Global Autos and Industrials Research analysts. Well, Steve,
thank you so much for being here. Can you tell us,
can you just set it up what happens this week
with that Biden era tax credit and what that program?
What has it meant to the EV industry.
Speaker 5 (08:26):
Yeah, the seventy five hundred dollars Biden tax credit is
set to expire at the end of September, and the
tax credit has been very helpful to the industry. It
helpful to the automakers, helpful to the consumers, and sales
of EV's have been growing until you know, recent on
the last couple of years, and you know, when it falls,
(08:50):
I think EV sales is going to fall off the cliff.
And a lot of automakers are actually preparing for that
drop off after September thirtieth.
Speaker 2 (08:59):
And how are they preparing for that drop off and
expected drop off in sales?
Speaker 5 (09:04):
You know a few examples. You know, GM have already
announced that you know, they're probably gonna stop EV production
for the month of December. Uh, and then they're also
rolling out they do have plans to roll out a
very popular subcompact compact EV called a Bolt, which sold
really well for them in the past. But instead of
(09:27):
you know, going full on production for for that new EV.
This is going to start with one shift and then
maybe ramp it up to two shifts in the new year,
depending on demand. And then the couple others, the Japanese
automakers are actually discontinuing, Acuras discontinuing their one of their
evs as well as Nissan in the North American market.
Speaker 2 (09:50):
And how about Ford, I mean, Ford made a big
splash with the F one fifty lightning the Mustang Mocky,
but have things uh you know, have things really dialed back?
Speaker 7 (10:00):
Uh?
Speaker 5 (10:01):
Yeah, I mean Ford, Ford continues to lose a lot
of money on their EV business. They do sell the Mocky.
You know, electric pickup truck is not resonating with the
US consumer at all. So but you know, they are
still planning to launch a more affordable pickup truck, but
(10:23):
that's not until twenty twenty seven. So they've delayed those
plants a number of times already. So now it's twenty
twenty seven, we'll have to go. We'll have to see
what the demand is like in twenty twenty six. You know,
wouldn't be surprised if they pushed that out even further.
Speaker 2 (10:38):
And Stilantis they have, you know, earmarked a jeep that'll
be all electric. Is that still in the pipeline or
is that being pushed back?
Speaker 5 (10:45):
It looks like it's going to be pushed back. Also, Ram,
which is their pickup truck division, they've they've stopped. They
basically not going to roll out that electric pickup truck
that they was slated for next year.
Speaker 2 (10:59):
All right, So that's Detroit's big three. Let's talk about
the companies that only make EV's. The big one of
course on everyone's Tesla, but also Rivian, Lucid, we have Faraday,
There's a whole bunch of smaller ones. What will it
mean Let's just talk about Tesla, that's the one everybody knows.
Speaker 5 (11:15):
Yeah, Look, I think I think the the seventy five
hundred dollars EV credit going away is actually a transition
period for the EV industry in a couple of ways.
One is definitely consolidation. We've we've talked about some of
the automaker's discontinuing sale of EV's in the North American market.
(11:35):
But what it means is, uh, you know, probably more
business for the likes of Tesla and Rivian. You know,
their their business is only EV's and uh SO choices
for consumers are are dwindling and the really the only
ones that consumer can look to to buy EV's or
or the likes of these peer plays. The other thing
(11:57):
with this EV credit going on way is a transition
period for the EV industry. Now the consumer cannot rely
or the automaker. The industry cannot rely on monetary incentives
to drive demand anymore. It really now needs to go
back to the basic. The industry needs to address a
(12:19):
lot of the concern that the consumers have with evs,
which is high costs, high prices, as well as the
lack of charging infrastructure. We actually put out a deep
dive report recently looking at the EVE charging industry and
we actually think there's still continued to be a lot
of investment in that thirty billion to be exact, between
(12:43):
now and twenty thirty five.
Speaker 2 (12:45):
Well, the federal tax credit for buyers of new end
used evs expiring this Tuesday. Our thanks to Steve Mann,
Bloomberg Intelligence Global Autos and Industrials research analysts and coming
up on Bloomberg day Break weekend will shine a spotlight
on the women shaping our global economic future. I'm Tom
Busby And this is Bloomberg. This is Bloomberg day Break weekend,
(13:16):
our global look ahead at the top stories for investors
in the coming week. I'm Tom Busby in New York.
Up later in our program, we'll try to gauge the
health of the Chinese economy with the release of official
PMI data. But first, Bloomberg's Women Money Power Conference returns
to London this week, bringing together some of the most
influential names in finance, business, and sport to discuss the
(13:38):
major issues facing the world, including AI and other new technologies.
For more, Let's go to London and bring in Bloomberg
day Break Europe anchor Caroline Hepgar Tom.
Speaker 3 (13:48):
In the midst of a massive reallocation of capital and
tech driven changes to the global financial system, women are
controlling a greater share of wealth and making more of
the key financial decisions now. In the coming days, Bloomberg's
Women Money and Power Event will convene the most influential
(14:09):
voices from across the global finance industry for the second
year to debate and discuss the critical issues facing the
future of investing, real estate, consumer banking, and private markets,
as well as philanthropists, owners and CEOs, it's an issue
that is fast rising up the global agenda. In the UK,
(14:29):
this year, Bloomberg analysis found that the average woman working
in the UK financial sector earns about a fifth less
than their male colleagues, a reflection of how the gender
pay gap has stubbornly persisted even during a period when
businesses have pledged to address workplace inequality through diversity, equity
(14:49):
and inclusion schemes. At the same time, women a rising
in terms of the world of wealth. A little more
than a decade ago, think that they controlled less than
a third of total US assets. Now by twenty thirty,
that's expected to jump to thirty eight percent, reaching an
estimated thirty four trillion dollars. That disparity is likely to
(15:13):
feature heavily in discussions at the upcoming Bloomberg Women, Money
and Power Conference. At last year's gathering, participants anticipated a
bumper m and a year in twenty twenty five, optimistic
that deal making would pick up due to an anticipated
loosening of regulations under President Trump's administration. While those hopes
(15:36):
have only partially materialized, there is perhaps more uncertainty in
the market now than was expected. Either way, women remain
at the forefront of change. Just this month, Citygroup CEO
Jane Fraser told Bloomberg her clients have been much more
active in cattle markets, investing, and deal making after getting
(15:57):
greater clarity on taxes, tariffs, and deregulation. Here is Jane
Fraser speaking to Bloomberg's Jimana Bissetci.
Speaker 7 (16:05):
You've got to look at the collective impact of the
tax policy, what's been happening with tariffs, and indeed the
increasing deregulation that we're seeing, and they work together as
a package, I think the most important piece for a
corporate clarity. We hate uncertainty, We like clarity. And our
client base now is really starting to act with more
(16:28):
confidence now that we've got clarity on those three fronts.
So active in the capital market, arena in financing, active
in much more active in investing, less sitting on the sidelines.
And M and A has been very very active indeed,
as we talked about, and on the consumer side, pretty
robust spending through the summer, and we saw that really
(16:50):
across all categories. Helped a bit by lower gas prices,
but the consumers being fiscally responsible, being more mindful around
some spend, but still the spending levels were very pleasing.
Speaker 8 (17:05):
So the momentum was pretty strong across all lines of
your business in the second quarter. And of course, you know,
I don't want to precipitate upcoming earnings, but can that
momentum continue into the end of the year, just in
terms of you know what you're seeing an advisory in
deal making and in trading because there was a very
strong quarter for trading as well.
Speaker 7 (17:23):
It was exceptional for us on all fronts. I still
see very strong pipelines, I see high level of engagement
from clients. I see a sense of urgency as well.
Given the speed with which industry structures are changing and
there is still growth opportunity. I think growth will be
a notch lower. We're keeping an eye on the labor market.
(17:45):
It's a low churn market, so not everything is rosy,
but we don't see a recession on the horizon.
Speaker 8 (17:52):
The city increasing in a global bank, obviously establishing here,
your presence over here as well. But at the same time,
we talk about ultiple geopolitical shocks that we were speaking
about the latest Russian incursion into Poland's We talk about
geopolitical of here, we talk about tensions between US and China.
As a bank, how do you navigate all of those
(18:13):
potential geopolitical sensitivities and the barriers that are going up
around the world.
Speaker 7 (18:18):
We were in doing business in about one hundred and
sixty countries around the world. We have local banking license
people on the ground in almost one hundred and we've
been in many of these countries for a very very
long time. So this isn't classic suitcase bankers fly and
fly out, and there's a really deep knowledge of what's
going on and a lot of the kit services we
(18:40):
provide are what helped the economies and the companies do
business every single day. So for us, there is a
mission to make sure that we are operating with resiliency
and with rigor to support our clients. And we tend
to move activity around the world as clients ebb and
flow in fring geographies. So the Middle East is probably
(19:03):
on a rip for the next decade or so in
terms of how much investment and new industries new clients
coming in. Other areas will probably see some more diminishment
in so we just we flex where it is. Our
people were globally minded. They move around the world as
to where opportunities are and it's a moment where City shines,
(19:26):
where there is volatility, the clients need us.
Speaker 3 (19:28):
That was City Group's Jane Fraser there. She's one of
a host of senior women leading teams who are at
the forefront of the global economy this year, many of
whom will be in London for Bluemberg's Women Money and
Power Conference. Also taking part is Blueberg's Lizzie Burden. We've
been speaking about the key themes on the agenda, what
(19:49):
she's most looking forward to at the event, who the
big players are going to be in attendance.
Speaker 5 (19:56):
Sol I.
Speaker 9 (19:56):
We've rustled up some of the most influential voices from
across global finance. We're going to hear from Julia Hoggett,
the CEO of the London Stock Exchange. I'll be sitting
down with her. We've got Emma Walmsley, the CEO of GSK,
the Bank of England's Catherine Mann, Maggie Murphy, managing director
of aston Villa Women's Football Club, and Victoria Bateman, who
you might know just wrote this book Economica, a Global
(20:18):
History of Women, Wealth and Power. It's almost as if
she knew that we were going to have this event again,
but hosting these conversations, we're also going to have the
best of our Bloomberg journalists. We've got Stephanie Flanders, head
of Economics and Government, Michelle Hussein, our new editor at
large of Bloomberg Weekend, Ruth David Arlunda bureau chief. Danny
Berger is in from New York. Shamanamaset she's in from Dubai.
(20:38):
So it's a global affair this one. And then in
the audience we'll have hundreds of senior finance professionals who've
taken part in our New Voices program, which, if you
haven't heard of, it is a Bloomberg initiative that funds
all this intensive media training around the world to amplify
expert views. I'm really proud of that. And they'll be
in amongst all the C suite executives as well.
Speaker 3 (21:00):
Yeah, so, then of all of these leading women, what
do you think the topics for conversation are going to
be all about?
Speaker 9 (21:07):
Well, let me say this clearly. What this is not
is a conference about women in leadership or gender focus issues.
They're really important issues. But what this is is a
global finance conference that just happens to have all female
panelists and moderators. So we're going to tackle the critical
issues that are facing the finance industry at the moment,
whether that's real estate, consumer banking, private markets, investing. Are
(21:31):
also going to be hearing the future for philanthropists, owners
and CEOs as well.
Speaker 3 (21:37):
And in terms of major developments since last year's conference.
Speaker 9 (21:41):
There's a small matter of the man in the White House.
Of course, he's changed all of everything that I've just
talked about. We are in the middle of a stock
market rally. Views on whether that can continue, whether this
is the new normal, whether it's a bubble, and look,
we have the wars in Gaza and Ukraine rumbling on,
while at the same time private markets are on a
tare bringing together those themes.
Speaker 3 (22:02):
And when it comes to central banking around the world,
there are more women than ever who are making global
monetary policy decisions and some under pressure. What's the significance
of that.
Speaker 9 (22:14):
Yeah, well, let me take you through some of those,
because we've got Christine Lagarde often pointing out the underrepresentation
of women in senior roles in economics, finance and central banks.
In fact, her and Isabelle Schnabel at the ECB, as
seen as real thought leaders on the Governing Council, and
you especially watch what they say. Even if Schnarbile is
a known hawk, she's especially respected as an influential voice
(22:35):
on the Governing Council. Here at the Bank of England
across the road we have Claire Lombardelli, a Deputy governor.
Remember she dissented in that last but one vote when
they had to vote again. She's particularly worried about food inflation.
And we're also, as I say, talking to Catherine Mann
at this event, she's seen as a bit of a
maverick on the monetary policy. She went from hawk to
dove and then kind of back again. So we look
(22:59):
forward to hearing what she has been thinking about the
UK economy recently. She's definitely bold in her opinions and
she's kind of at the end of the spectrum a
thought leader again. Finally at the Fed, of course, we
lost Adriana Cougler, we don't really know why, and Lisa
Cook remains under threat from President Trump. So, as you say, Caroline,
(23:20):
women on global monetary policy committees really significant in the
news right now, So looking forward to hearing particularly from
Catherine Mann.
Speaker 3 (23:29):
And then you mentioned that you're going to be speaking
to Julia Hoggart at the London Stock Exchange. Of course
at this event now, delistings are surely going to be
something that you'll mention a primary concern for her.
Speaker 9 (23:41):
Yeah, just in the past few days we've had Peters
Hill looking to delist from the London Stock Exchange, so
bad news there for Julia. Hoggart will be discussing how
to prevent delistings, more of them from happening, but also
how to encourage more companies to list in London. And
I know that's something that she's got lots of views about,
something that she's already working to wards. We've got the
(24:01):
UK government forming a Listing's task Force, so I'm really
interested to hear how the Capital Markets Industry task Force
that she's on is going to join up with this
new body from Rachel Reeves. And you've got the PISCES,
the Private Intermittent Securities and Capital Exchange System bit of
a mouthful that came in earlier this year. I'm interested
(24:23):
to hear what kind of companies want to take part
in that. Also what she wants to see out of
Rachel Reeves's budget when it comes at the end of November.
But there's the question of what pension funds do in
terms of investing, and then there's the question of retail investing.
How do you get that going When the latest research
from Hargreave's Landsdowne shows that the number of Brits investing
(24:44):
in the stock market is twenty three percent. In the
US that's sixty one percent. How do you bridge that gap?
Speaker 3 (24:50):
Yeah, that's really significant, isn't it. How to make investing
just more attractive? My thanks there to Bloomberg TV and
UK correspondent Lizzie Burden. We will of course have full
coverage of Bloomberg's second annual Women Money Power Conference. I'll
be there, hope you'll be there too. I'm Caroline Hepga
(25:12):
in London. You can catch us every weekday morning for
Bloomberg Daybreak here at beginning at six am in London.
That's one am on Wall Street.
Speaker 2 (25:19):
Tom, Thanks Caroline, and coming up on Bloomberg day Break weekend.
Some key economic data out this week in China. I'm
Tom Busby and this is Bloomberg. This is Bloomberg day
(25:41):
Break weekend, our global look ahead at the top stories
for investors in the coming week. I'm Tom Busby in
New York. We'll be getting a closer look at China's
economy this week is Beijing releases fresh PMI data. We
get more from Doug Krisner, host of the Daybreak Asia podcast.
Speaker 4 (25:58):
Tom, it's been one year since the Chinese government changed
course on economic policy. A clear pro growth plan was
unveiled back in September twenty twenty four. This was shock
and awe a package of monetary, fiscal, stock and housing policies.
So we're a little curious about whether the plan produced
the desired results. For a closer look, I'm joined by
(26:20):
Bloomberg's John lu He is our Greater China correspondent based
in Beijing. John, thank you so much for making time
to chat with me about this. So what do you think?
How have things been performing over the last twelve months.
Speaker 10 (26:33):
I would say the results, Doug, have been mixed, and
they've been mixed in the sense that if you look
at Chinese markets, I think Chinese stocks are up tremendously
over the last year. We've seen a big pop, especially
for tech names like Ali Baba, like Tencent, But if
you look at the fundamental economic data, what we see
(26:56):
is continued weakness and in some ways the economy actually
getting even more weak and signs that potentially the government
is even more alarmed.
Speaker 4 (27:07):
I mentioned the fact that we have the official PMI
figures in the week ahead. How do you think we're
going to understand sentiment on the part of businesses in
China as a result of these numbers.
Speaker 10 (27:17):
I would expect the data that we will get coming
up to show a continued weakness. So the PMI has
been in contraction territory for the last five months in
a row, and I would expect it will continue to
be in contraction. That ultimately goes back to a new
(27:37):
campaign that the Chinese government has undertaken. I don't know
if you've heard about this anti evolution campaign, which it's
a big word, it's hard to define, but essentially it
means that Beijing is trying to rein in excessive competition
and by doing that ultimately tackled the question of over
capacity and then in turn the issue of deflation.
Speaker 4 (28:01):
So when I hear that, I'm reminded of the electric
vehicle industry in China, and we know there's been tremendous
overcapacity in that area. It's something that I think the
government was concerned about, and many trading partners were very critical.
But because for a while there it seemed as though
Beijing was trying to export its way out of that
overcapacity problem. Has that been addressed well.
Speaker 10 (28:24):
Exports have been growing continuously. China's on pace for a
record trade surplus this year, somewhere in excess of a
trillion US dollars. And so I think that is an
ongoing issue that's not going to be resolved anytime shortly.
But the underlying issue, the underlying problem is that the
production capacity within China far exceeds its domestic consumption needs.
(28:49):
And so all of this excess stuff, be it electric cars,
be it solar panels, be it consumer electronics, that all
has to go somewhere, and it is going overseas.
Speaker 4 (29:00):
John, Let's talk a little bit about trade tensions between
Washington and Beijing. In the last week, President Trump formalized
and agreement for a group of American investors to take
control of the US operations of TikTok. I'm curious as
to how this story fits into the broader narrative in
terms of trade between these two countries.
Speaker 10 (29:20):
The negotiations between the United States and China have been
sort of an ongoing, step by step process. I think
when it comes to TikTok, I do get the sense
that the US administration puts a lot more value on
that as an issue than Beijing does. I think for
Beijing it is the most important things when it comes
(29:42):
to TikTok are that it shows a domestic audience that
it is standing up for the rights of Chinese companies,
that it's protecting Chinese interests, that it's not being cowed
by threats from Washington DC. Ultimately, whether or not TikTok
or Byte downs the company has a thriving business in
the United States, I think is less important to Beijing,
(30:04):
although I would say within that the ability of Bite
Dance to hold on to that algorithm I think is
very important to Beijing, because again it shows that Beijing
is able to protect these assets of Chinese companies technologies
owned by Chinese interests, and that I think is ultimately
what Beijing wants to show coming out of this deal.
Speaker 4 (30:26):
But might not that be required to get some terra
for relief from the United States.
Speaker 10 (30:31):
I'm sure that Beijing would have asked for some concession
in return for helping close a TikTok deal. We don't
have a great sense of what exactly that concession might be,
and indeed, I think it's also possible that you know,
Beijing is often playing the long game, and so maybe
(30:53):
the concession is not something that's immediate. It might be
something a bit further off, and we just don't have
a great view of that at the moment.
Speaker 4 (31:02):
You mentioned domestic demand in China being as weak as
it is right now, and obviously deflation is a big
part of that story, whether you're looking at the wholesale
or retail level. Any signs these days that things are improving.
Speaker 10 (31:15):
Unfortunately, Doug, I think the signs all point to things
getting more severe, if anything. So we have had negative CPI,
so deflationary consumer prices for five of the eight months
that we've had data for in twenty twenty five. That
is a big increase from last year when we only
had one month where CPI came in negative. And so
(31:38):
I think as policymakers in Beijing are looking across the economy,
that is a real concern because everyone knows what happened
in Japan. Everyone understands that as deflation gets more embedded
into an economy. As people start to change their behavior
because they expect prices to go down, it becomes really hard,
(31:59):
much much harder to undo.
Speaker 4 (32:01):
So what's operating in the psychology here, I'm curious about that.
We know that the housing market has been a big
negative overhang. You mentioned the fact that the equity market
has been performing reasonably well lately, and I'm thinking that
maybe encouraged some animal spirits. But I'm trying to understand
what's overhanging this negativity, where this is coming from, and
(32:24):
how people's sentiment toward economic activity is so weak.
Speaker 10 (32:29):
So I would split up the question of deflation into
a demand side issue and a supply side issue. Right, So,
I think on the demand side, what you mentioned about
real estate, that is the fundamental issue because so much
of the population in China, so much of household wealth
was saved in property in a family's home, that when
(32:51):
the price of those homes, and I would say broadly
across China, people have seen the price of their homes
fall thirty or more percent from the peak in twenty
twenty one or so everywhere, and so when people's biggest
asset becomes worth a lot less money, everybody feels poorer,
they feel like they need to save more for retirement,
and so that really hits demand. At the same time,
(33:14):
we've had a supply issue where we've had this overcapacity
that we've talked about, and so people are churning out
lots and lots of product and they're trying to sell
all that product, and the way that they've been competing
is they've been cutting prices, and so that's also fueled
this expectation that prices are going to go down, and
so Beijing has actually started this campaign anti involution to
(33:34):
try and address the supply side in a way that
they've never done before. They are going out to a
provincial level, local level governments telling them not to provide
the sort of subsidies that have helped these manufacturers churn
out their goods. They've gone to companies themselves to say, hey,
(33:54):
let's not do this cutthrough competition, and they've been pushing
on that. It's partly why we've seen the weakness that
we've seen in both manufacturing when it comes to PMI
and also in fixed asset investment over the last couple
of months. But the fact that Beijing is willing to
do these things something that they've never done before. That's
actually giving the stock market and financial markets a sense
(34:20):
of optimism that we might have reached an inflection point,
and that's why you've seen asset prices being as brilliant
as they have been.
Speaker 4 (34:28):
So I'm curious then if you were to take that
analysis and kind of related to the way in which
the labor market is holding up right now. Are things
improving there or is the labor story in China very
much a story of continued weakness.
Speaker 10 (34:42):
So unfortunately, again this is a point of weakness. And
so in August, in the data that we got in
the month of September for August, it actually showed an
unexpected increase in unemployment in China, so up to five
point three percent. The economists we're expecting five point two.
And so it does show that as manufacturing is weakened,
(35:04):
job prospects have also weakened. And so that again is
another point of I think concern for the government. But
when it comes to the stock market, the stock market
is always looking forward, and I think they're thinking, hey,
this bad news is good news because it's going to
force the government to take action, and so that means
the future prospects for the economy are getting brighter.
Speaker 4 (35:26):
You and I've spoken about the problem with youth unemployment
in the past, and I'm sure that that continues to
be a major negative. I'm wanting to find some positivity here,
and I'm drawn to the artificial intelligence narrative, where we
know the Deep Seek moment was enormously positive for tech
in China, and I'm wondering how that's playing out these days.
(35:47):
Still a lot of positivity as it relates to artificial
intelligence and the industries maybe that could benefit from AI.
Speaker 10 (35:55):
There is and the most recent iteration of that positivity
has been in the form of semiconductors, right, And so
the big issue in the past was could China create
AI if the US cut off access to Nvidia chips
to all of these AI processors that would be necessary
to train these large language models. And what we've seen
(36:18):
are companies like Ali, Baba, Baidu, Huawei, a smaller startup
named Cambra Con that have started to introduce chips that
they say are able to get to a level that
is getting nearer and nearer what an Nvidia chip can do.
And so that has actually created a lot of optimism
(36:39):
about the prospects for technology for AI and innovation in
China going forward.
Speaker 4 (36:45):
When we talk about AI in the States, one of
the things that comes up as a part of the
conversation the demand for power, the demand for electricity to
drive these data centers. How is China tackling that problem?
Are they still using is a primary source for generating
electricity or are they moving in other directions these days?
Speaker 10 (37:07):
Two parts to my answer. One is is there enough
electricity for AI in China? And this is actually an
area where China has a huge advantage and so it
is growing very quickly. There is not the same concern
about access to electricity that the hyperscalars in the US
have at the moment. The other question is how is
(37:29):
China generating that electricity. It is still dependent by far
on fossil fuels, so coal and oil. It is using
more natural gas, which is relatively cleaner. But at the
same time, what China has done that what we've not
seen in the US, especially under the Trump administration, there's
been a real push for wind, for solar, for alternative energies.
(37:54):
China is also building lots and lots of nuclear power plants,
and so that of energy is moving very quickly towards
cleaner sources, but still the vast majority today is created
by burning coal and oil and fossil fuels.
Speaker 4 (38:12):
John will leave it there. Thank you so much for
helping us understand what's happening these days in the Chinese
economy as we look ahead to the official PMI figures
in the week ahead. John lou is our Greater China
correspondent based in Beijing. I'm Doug Prisner. You can catch
us weekdays for the Daybreak Asia podcast. It's available wherever
you get your podcast. Tom.
Speaker 2 (38:33):
Thanks Doug, and that does it for this edition of
Bloomberg day Break Weekend. Join us again Monday morning at
five am Wall Street Time for the latest on markets
overseas and the news you need to start your day.
I'm Tom Buzby. Stay with us. Top stories and global
business headlines are coming up right now.
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:10):
This is Bloomberg day Break Weekend, our global look at
the top stories in the coming week from our Daybreak
anchors all around the world. Straight ahead on the program,
what this week's September jobs report could tell the Federal Reserve.
I'm Tom Busby in New York.
Speaker 3 (00:23):
I'm Caline Hecker here in London, where we're shining a
spotlight on the women's shaping our global economic future.
Speaker 4 (00:30):
I'm dek Prisner looking at whether China's pro growth pivot
is succeeding.
Speaker 1 (00:36):
That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg
eleven three h New York, Bloomberg ninety nine to one, Washington, DC,
Bloomberg ninety two nine Boston, DAB Digital Radio, London, Syria
XM one T one, and around the world on Bloomberg Radio,
dot Com and the Bloomberg Business App.
Speaker 2 (01:00):
Good day to you. I'm Tom Busby, and we begin
today's program with the September jobs report out this Friday.
What might another anemic report mean just weeks ahead of
another Federal Reserve rate decision? And for more, we welcome
Stuart paul Us, Economists with Bloomberg Economics. Stuart, thank you
so much for being here. Now let's start with some
good news, and there was good news. Q two economic
(01:22):
growth a lot better than forecasts three point eight percent,
consumer spending strong in August, even if inflation was still
a little sticky, and Wall Street up until this past week,
had been hitting one all time high after another. All
good news. But it's not all good news, is it.
There's a lot of worries out there.
Speaker 5 (01:39):
Well.
Speaker 6 (01:40):
The thing that everybody seems to be anchoring on with
the Q two GDP data was this major upward revision
to headline GDP growth and to household spending, and household
spending ended up growing at an annualized rate of about
two and a half percent in the second quarter. As
you mentioned when we finally got the August personal consumption
(02:01):
expenditures report. It even looks like household spending continued growing
into the third quarter. So that's all good news there.
What I'm thinking most about, though, from the last week,
is that corporate profits for the second quarter were revised
down pretty significantly. Corporate profits only grew about seven billion
dollars in the second quarter. That's down from an initial
(02:24):
estimate of nearly seventy billion dollars, and if that's the case,
that's a big revision. If that's the case, you would
have to think that expansion, investment and hiring plans are
going to start to simmer. And when we look at
let's say small business surveys, capital expenditure plans have never
been this low outside of a recession. Capex plans are low,
(02:46):
investment and expansion plans are low. Hiring plans are also low.
So the thing that I'm thinking most about in the
outlook is the currently tenuous labor market balance between supply
and demand for labor and what that means for the
pace of hiring going forward. Now, when we think about
(03:07):
the September jobs report coming out this coming Friday, we
think there is going to be about fifty five thousand
jobs added during the month. But one thing that we
need to continue keeping in mind is that a lot
of workers are going to be rolling off government payrolls.
These are the folks who took the buy out earlier
in the year because of DOGE cuts. And when that's
(03:27):
the case, the pace of hiring could resume slowing to
the pace that we saw earlier this summer. This is
a very tenuous balance between labor supply and labor demand,
which makes us very cautious about the growth and spending
outlook as we head into year end.
Speaker 2 (03:43):
And just those federal workers, you're talking thousands or tens
of thousands, not just in Washington and Baltimore, but in
National Park services across the US, and adjuncts of the
Social Security Administration all over.
Speaker 6 (03:57):
That's right. This is not the sort of thing that's regionally.
I this is the sort of thing that affects workers
around the country. And so I think that when we
think about consumer spending, this is not something that just
affects businesses locally in Washington. This is something that materially
affects or outlook for spending growth.
Speaker 2 (04:14):
Now, let's talk more about the jobs, not just those
federal jobs, because we know about those, but we've seen manufacturing,
despite the Trump administrations, you know, promoting and touting of
more manufacturing jobs coming back here, Manufacturing, construction, energy, especially
in oil, all seeing declines. And that's not good.
Speaker 6 (04:34):
It's not It's basically every month since April, the manufacturing
industry has been shedding jobs. And look, Tom, that's the
normal state of affairs in an economy that's increasingly services oriented.
That's not the state of affairs that policymakers want when
they are pursuing industrial policy and protectionism. So there is
(04:56):
a part of me that thinks, look, the effect of towers,
the effect of industrial policy. We're just not quite feeling
it yet. We're not seeing any sort of boost to
manufacturing and construction yet. We should wait to see the
effects of the policies that the administration is rolling out.
But right now, yes, the manufacturing industry is shedding jobs.
(05:16):
Thinking back to the August industrial production report, and this
is a win for the administration. There is accelerating auto production,
there's accelerating steel production, there's accelerating pharmaceutical production, and accelerating
textile production. Those are all winds, but those are very recent.
It's too early to say that there's been material progress
(05:38):
shown in domestic production as a consequence of tariffs. Instead,
it looks like the growth negative consequences of uncertainty are
weighing on aggregate economic activity and aggregate hiring. Until we
see those isolated benefits booying domestic production, it's really it's
(06:00):
really just a growth negative story right now, and.
Speaker 2 (06:03):
We won't know if the latest tariffs that the President
announced on pharmaceutic was one hundred percent, twenty five percent
on heavy duty trucks, thirty percent on sofas and upholstered furniture.
It's just too soon to tell. That could be months
down the road before we see any impact of that domestically, right.
Speaker 6 (06:19):
That's right. So again August, from an industrial production perspective,
it looks like those favorite industries were doing relatively well.
But I'm not going to read too much into one
month's data. It's going to take some time to see
the full effects of those specific those industry specific tariffs.
Speaker 2 (06:35):
Now, this past week, FED Chairman Jerome Powell, he said
there are serious risks to the economy involving inflation, which
we know is well above the target two point nine percent,
but it hasn't gotten any worse, but also the weakening
labor market. What does he see? Did he see all
these things? Is he seeing months out that I'm not seeing?
Maybe even you're not seeing that. We are going to
(06:57):
see things continue to digress in the labor market.
Speaker 6 (07:00):
Which is really difficult right now, is that labor supply
and labor demand have this really treacherous balancing acts right now,
where growth in labor supply is very slow and labor
demand is waning. If we rewind the clock, let's say
a year ago, there were about ten percent more job
openings than there were unemployed or available workers. Now there
(07:22):
are just slightly fewer job openings than there are available workers.
We expect looking ahead to next week when we get
the job openings and labor turnover survey data, we expect
the number of job openings to fall further. It's about
seven point one five million, So again, now we're going
to have almost five percent fewer job openings.
Speaker 2 (07:43):
The September Jobs report out this Friday, eight thirty am
Wall Street Time. Our thanks to Stuart Paul, us economists
with Bloomberg Economics. Well, next, we turn to a big
change coming this week to the US auto industry, the
end of the seventy five hundred dollars federal tax credit
for EV buyers. What will for EV makers and for
EV prices? What about Detroit's Big Three who spent billions
(08:05):
preparing for an electric engine future? For more, and on
who wins and who loses? We're joined by Steve Man,
Bloomberg Intelligence, Global Autos and Industrials Research analysts. Well, Steve,
thank you so much for being here. Can you tell us,
can you just set it up what happens this week
with that Biden era tax credit and what that program?
What has it meant to the EV industry.
Speaker 5 (08:26):
Yeah, the seventy five hundred dollars Biden tax credit is
set to expire at the end of September, and the
tax credit has been very helpful to the industry. It
helpful to the automakers, helpful to the consumers, and sales
of EV's have been growing until you know, recent on
the last couple of years, and you know, when it falls,
(08:50):
I think EV sales is going to fall off the cliff.
And a lot of automakers are actually preparing for that
drop off after September thirtieth.
Speaker 2 (08:59):
And how are they preparing for that drop off and
expected drop off in sales?
Speaker 5 (09:04):
You know a few examples. You know, GM have already
announced that you know, they're probably gonna stop EV production
for the month of December. Uh, and then they're also
rolling out they do have plans to roll out a
very popular subcompact compact EV called a Bolt, which sold
really well for them in the past. But instead of
(09:27):
you know, going full on production for for that new EV.
This is going to start with one shift and then
maybe ramp it up to two shifts in the new year,
depending on demand. And then the couple others, the Japanese
automakers are actually discontinuing, Acuras discontinuing their one of their
evs as well as Nissan in the North American market.
Speaker 2 (09:50):
And how about Ford, I mean, Ford made a big
splash with the F one fifty lightning the Mustang Mocky,
but have things uh you know, have things really dialed back?
Speaker 7 (10:00):
Uh?
Speaker 5 (10:01):
Yeah, I mean Ford, Ford continues to lose a lot
of money on their EV business. They do sell the Mocky.
You know, electric pickup truck is not resonating with the
US consumer at all. So but you know, they are
still planning to launch a more affordable pickup truck, but
(10:23):
that's not until twenty twenty seven. So they've delayed those
plants a number of times already. So now it's twenty
twenty seven, we'll have to go. We'll have to see
what the demand is like in twenty twenty six. You know,
wouldn't be surprised if they pushed that out even further.
Speaker 2 (10:38):
And Stilantis they have, you know, earmarked a jeep that'll
be all electric. Is that still in the pipeline or
is that being pushed back?
Speaker 5 (10:45):
It looks like it's going to be pushed back. Also, Ram,
which is their pickup truck division, they've they've stopped. They
basically not going to roll out that electric pickup truck
that they was slated for next year.
Speaker 2 (10:59):
All right, So that's Detroit's big three. Let's talk about
the companies that only make EV's. The big one of
course on everyone's Tesla, but also Rivian, Lucid, we have Faraday,
There's a whole bunch of smaller ones. What will it
mean Let's just talk about Tesla, that's the one everybody knows.
Speaker 5 (11:15):
Yeah, Look, I think I think the the seventy five
hundred dollars EV credit going away is actually a transition
period for the EV industry in a couple of ways.
One is definitely consolidation. We've we've talked about some of
the automaker's discontinuing sale of EV's in the North American market.
(11:35):
But what it means is, uh, you know, probably more
business for the likes of Tesla and Rivian. You know,
their their business is only EV's and uh SO choices
for consumers are are dwindling and the really the only
ones that consumer can look to to buy EV's or
or the likes of these peer plays. The other thing
(11:57):
with this EV credit going on way is a transition
period for the EV industry. Now the consumer cannot rely
or the automaker. The industry cannot rely on monetary incentives
to drive demand anymore. It really now needs to go
back to the basic. The industry needs to address a
(12:19):
lot of the concern that the consumers have with evs,
which is high costs, high prices, as well as the
lack of charging infrastructure. We actually put out a deep
dive report recently looking at the EVE charging industry and
we actually think there's still continued to be a lot
of investment in that thirty billion to be exact, between
(12:43):
now and twenty thirty five.
Speaker 2 (12:45):
Well, the federal tax credit for buyers of new end
used evs expiring this Tuesday. Our thanks to Steve Mann,
Bloomberg Intelligence Global Autos and Industrials research analysts and coming
up on Bloomberg day Break weekend will shine a spotlight
on the women shaping our global economic future. I'm Tom
Busby And this is Bloomberg. This is Bloomberg day Break weekend,
(13:16):
our global look ahead at the top stories for investors
in the coming week. I'm Tom Busby in New York.
Up later in our program, we'll try to gauge the
health of the Chinese economy with the release of official
PMI data. But first, Bloomberg's Women Money Power Conference returns
to London this week, bringing together some of the most
influential names in finance, business, and sport to discuss the
(13:38):
major issues facing the world, including AI and other new technologies.
For more, Let's go to London and bring in Bloomberg
day Break Europe anchor Caroline Hepgar Tom.
Speaker 3 (13:48):
In the midst of a massive reallocation of capital and
tech driven changes to the global financial system, women are
controlling a greater share of wealth and making more of
the key financial decisions now. In the coming days, Bloomberg's
Women Money and Power Event will convene the most influential
(14:09):
voices from across the global finance industry for the second
year to debate and discuss the critical issues facing the
future of investing, real estate, consumer banking, and private markets,
as well as philanthropists, owners and CEOs, it's an issue
that is fast rising up the global agenda. In the UK,
(14:29):
this year, Bloomberg analysis found that the average woman working
in the UK financial sector earns about a fifth less
than their male colleagues, a reflection of how the gender
pay gap has stubbornly persisted even during a period when
businesses have pledged to address workplace inequality through diversity, equity
(14:49):
and inclusion schemes. At the same time, women a rising
in terms of the world of wealth. A little more
than a decade ago, think that they controlled less than
a third of total US assets. Now by twenty thirty,
that's expected to jump to thirty eight percent, reaching an
estimated thirty four trillion dollars. That disparity is likely to
(15:13):
feature heavily in discussions at the upcoming Bloomberg Women, Money
and Power Conference. At last year's gathering, participants anticipated a
bumper m and a year in twenty twenty five, optimistic
that deal making would pick up due to an anticipated
loosening of regulations under President Trump's administration. While those hopes
(15:36):
have only partially materialized, there is perhaps more uncertainty in
the market now than was expected. Either way, women remain
at the forefront of change. Just this month, Citygroup CEO
Jane Fraser told Bloomberg her clients have been much more
active in cattle markets, investing, and deal making after getting
(15:57):
greater clarity on taxes, tariffs, and deregulation. Here is Jane
Fraser speaking to Bloomberg's Jimana Bissetci.
Speaker 7 (16:05):
You've got to look at the collective impact of the
tax policy, what's been happening with tariffs, and indeed the
increasing deregulation that we're seeing, and they work together as
a package, I think the most important piece for a
corporate clarity. We hate uncertainty, We like clarity. And our
client base now is really starting to act with more
(16:28):
confidence now that we've got clarity on those three fronts.
So active in the capital market, arena in financing, active
in much more active in investing, less sitting on the sidelines.
And M and A has been very very active indeed,
as we talked about, and on the consumer side, pretty
robust spending through the summer, and we saw that really
(16:50):
across all categories. Helped a bit by lower gas prices,
but the consumers being fiscally responsible, being more mindful around
some spend, but still the spending levels were very pleasing.
Speaker 8 (17:05):
So the momentum was pretty strong across all lines of
your business in the second quarter. And of course, you know,
I don't want to precipitate upcoming earnings, but can that
momentum continue into the end of the year, just in
terms of you know what you're seeing an advisory in
deal making and in trading because there was a very
strong quarter for trading as well.
Speaker 7 (17:23):
It was exceptional for us on all fronts. I still
see very strong pipelines, I see high level of engagement
from clients. I see a sense of urgency as well.
Given the speed with which industry structures are changing and
there is still growth opportunity. I think growth will be
a notch lower. We're keeping an eye on the labor market.
(17:45):
It's a low churn market, so not everything is rosy,
but we don't see a recession on the horizon.
Speaker 8 (17:52):
The city increasing in a global bank, obviously establishing here,
your presence over here as well. But at the same time,
we talk about ultiple geopolitical shocks that we were speaking
about the latest Russian incursion into Poland's We talk about
geopolitical of here, we talk about tensions between US and China.
As a bank, how do you navigate all of those
(18:13):
potential geopolitical sensitivities and the barriers that are going up
around the world.
Speaker 7 (18:18):
We were in doing business in about one hundred and
sixty countries around the world. We have local banking license
people on the ground in almost one hundred and we've
been in many of these countries for a very very
long time. So this isn't classic suitcase bankers fly and
fly out, and there's a really deep knowledge of what's
going on and a lot of the kit services we
(18:40):
provide are what helped the economies and the companies do
business every single day. So for us, there is a
mission to make sure that we are operating with resiliency
and with rigor to support our clients. And we tend
to move activity around the world as clients ebb and
flow in fring geographies. So the Middle East is probably
(19:03):
on a rip for the next decade or so in
terms of how much investment and new industries new clients
coming in. Other areas will probably see some more diminishment
in so we just we flex where it is. Our
people were globally minded. They move around the world as
to where opportunities are and it's a moment where City shines,
(19:26):
where there is volatility, the clients need us.
Speaker 3 (19:28):
That was City Group's Jane Fraser there. She's one of
a host of senior women leading teams who are at
the forefront of the global economy this year, many of
whom will be in London for Bluemberg's Women Money and
Power Conference. Also taking part is Blueberg's Lizzie Burden. We've
been speaking about the key themes on the agenda, what
(19:49):
she's most looking forward to at the event, who the
big players are going to be in attendance.
Speaker 5 (19:56):
Sol I.
Speaker 9 (19:56):
We've rustled up some of the most influential voices from
across global finance. We're going to hear from Julia Hoggett,
the CEO of the London Stock Exchange. I'll be sitting
down with her. We've got Emma Walmsley, the CEO of GSK,
the Bank of England's Catherine Mann, Maggie Murphy, managing director
of aston Villa Women's Football Club, and Victoria Bateman, who
you might know just wrote this book Economica, a Global
(20:18):
History of Women, Wealth and Power. It's almost as if
she knew that we were going to have this event again,
but hosting these conversations, we're also going to have the
best of our Bloomberg journalists. We've got Stephanie Flanders, head
of Economics and Government, Michelle Hussein, our new editor at
large of Bloomberg Weekend, Ruth David Arlunda bureau chief. Danny
Berger is in from New York. Shamanamaset she's in from Dubai.
(20:38):
So it's a global affair this one. And then in
the audience we'll have hundreds of senior finance professionals who've
taken part in our New Voices program, which, if you
haven't heard of, it is a Bloomberg initiative that funds
all this intensive media training around the world to amplify
expert views. I'm really proud of that. And they'll be
in amongst all the C suite executives as well.
Speaker 3 (21:00):
Yeah, so, then of all of these leading women, what
do you think the topics for conversation are going to
be all about?
Speaker 9 (21:07):
Well, let me say this clearly. What this is not
is a conference about women in leadership or gender focus issues.
They're really important issues. But what this is is a
global finance conference that just happens to have all female
panelists and moderators. So we're going to tackle the critical
issues that are facing the finance industry at the moment,
whether that's real estate, consumer banking, private markets, investing. Are
(21:31):
also going to be hearing the future for philanthropists, owners
and CEOs as well.
Speaker 3 (21:37):
And in terms of major developments since last year's conference.
Speaker 9 (21:41):
There's a small matter of the man in the White House.
Of course, he's changed all of everything that I've just
talked about. We are in the middle of a stock
market rally. Views on whether that can continue, whether this
is the new normal, whether it's a bubble, and look,
we have the wars in Gaza and Ukraine rumbling on,
while at the same time private markets are on a
tare bringing together those themes.
Speaker 3 (22:02):
And when it comes to central banking around the world,
there are more women than ever who are making global
monetary policy decisions and some under pressure. What's the significance
of that.
Speaker 9 (22:14):
Yeah, well, let me take you through some of those,
because we've got Christine Lagarde often pointing out the underrepresentation
of women in senior roles in economics, finance and central banks.
In fact, her and Isabelle Schnabel at the ECB, as
seen as real thought leaders on the Governing Council, and
you especially watch what they say. Even if Schnarbile is
a known hawk, she's especially respected as an influential voice
(22:35):
on the Governing Council. Here at the Bank of England
across the road we have Claire Lombardelli, a Deputy governor.
Remember she dissented in that last but one vote when
they had to vote again. She's particularly worried about food inflation.
And we're also, as I say, talking to Catherine Mann
at this event, she's seen as a bit of a
maverick on the monetary policy. She went from hawk to
dove and then kind of back again. So we look
(22:59):
forward to hearing what she has been thinking about the
UK economy recently. She's definitely bold in her opinions and
she's kind of at the end of the spectrum a
thought leader again. Finally at the Fed, of course, we
lost Adriana Cougler, we don't really know why, and Lisa
Cook remains under threat from President Trump. So, as you say, Caroline,
(23:20):
women on global monetary policy committees really significant in the
news right now, So looking forward to hearing particularly from
Catherine Mann.
Speaker 3 (23:29):
And then you mentioned that you're going to be speaking
to Julia Hoggart at the London Stock Exchange. Of course
at this event now, delistings are surely going to be
something that you'll mention a primary concern for her.
Speaker 9 (23:41):
Yeah, just in the past few days we've had Peters
Hill looking to delist from the London Stock Exchange, so
bad news there for Julia. Hoggart will be discussing how
to prevent delistings, more of them from happening, but also
how to encourage more companies to list in London. And
I know that's something that she's got lots of views about,
something that she's already working to wards. We've got the
(24:01):
UK government forming a Listing's task Force, so I'm really
interested to hear how the Capital Markets Industry task Force
that she's on is going to join up with this
new body from Rachel Reeves. And you've got the PISCES,
the Private Intermittent Securities and Capital Exchange System bit of
a mouthful that came in earlier this year. I'm interested
(24:23):
to hear what kind of companies want to take part
in that. Also what she wants to see out of
Rachel Reeves's budget when it comes at the end of November.
But there's the question of what pension funds do in
terms of investing, and then there's the question of retail investing.
How do you get that going When the latest research
from Hargreave's Landsdowne shows that the number of Brits investing
(24:44):
in the stock market is twenty three percent. In the
US that's sixty one percent. How do you bridge that gap?
Speaker 3 (24:50):
Yeah, that's really significant, isn't it. How to make investing
just more attractive? My thanks there to Bloomberg TV and
UK correspondent Lizzie Burden. We will of course have full
coverage of Bloomberg's second annual Women Money Power Conference. I'll
be there, hope you'll be there too. I'm Caroline Hepga
(25:12):
in London. You can catch us every weekday morning for
Bloomberg Daybreak here at beginning at six am in London.
That's one am on Wall Street.
Speaker 2 (25:19):
Tom, Thanks Caroline, and coming up on Bloomberg day Break weekend.
Some key economic data out this week in China. I'm
Tom Busby and this is Bloomberg. This is Bloomberg day
(25:41):
Break weekend, our global look ahead at the top stories
for investors in the coming week. I'm Tom Busby in
New York. We'll be getting a closer look at China's
economy this week is Beijing releases fresh PMI data. We
get more from Doug Krisner, host of the Daybreak Asia podcast.
Speaker 4 (25:58):
Tom, it's been one year since the Chinese government changed
course on economic policy. A clear pro growth plan was
unveiled back in September twenty twenty four. This was shock
and awe a package of monetary, fiscal, stock and housing policies.
So we're a little curious about whether the plan produced
the desired results. For a closer look, I'm joined by
(26:20):
Bloomberg's John lu He is our Greater China correspondent based
in Beijing. John, thank you so much for making time
to chat with me about this. So what do you think?
How have things been performing over the last twelve months.
Speaker 10 (26:33):
I would say the results, Doug, have been mixed, and
they've been mixed in the sense that if you look
at Chinese markets, I think Chinese stocks are up tremendously
over the last year. We've seen a big pop, especially
for tech names like Ali Baba, like Tencent, But if
you look at the fundamental economic data, what we see
(26:56):
is continued weakness and in some ways the economy actually
getting even more weak and signs that potentially the government
is even more alarmed.
Speaker 4 (27:07):
I mentioned the fact that we have the official PMI
figures in the week ahead. How do you think we're
going to understand sentiment on the part of businesses in
China as a result of these numbers.
Speaker 10 (27:17):
I would expect the data that we will get coming
up to show a continued weakness. So the PMI has
been in contraction territory for the last five months in
a row, and I would expect it will continue to
be in contraction. That ultimately goes back to a new
(27:37):
campaign that the Chinese government has undertaken. I don't know
if you've heard about this anti evolution campaign, which it's
a big word, it's hard to define, but essentially it
means that Beijing is trying to rein in excessive competition
and by doing that ultimately tackled the question of over
capacity and then in turn the issue of deflation.
Speaker 4 (28:01):
So when I hear that, I'm reminded of the electric
vehicle industry in China, and we know there's been tremendous
overcapacity in that area. It's something that I think the
government was concerned about, and many trading partners were very critical.
But because for a while there it seemed as though
Beijing was trying to export its way out of that
overcapacity problem. Has that been addressed well.
Speaker 10 (28:24):
Exports have been growing continuously. China's on pace for a
record trade surplus this year, somewhere in excess of a
trillion US dollars. And so I think that is an
ongoing issue that's not going to be resolved anytime shortly.
But the underlying issue, the underlying problem is that the
production capacity within China far exceeds its domestic consumption needs.
(28:49):
And so all of this excess stuff, be it electric cars,
be it solar panels, be it consumer electronics, that all
has to go somewhere, and it is going overseas.
Speaker 4 (29:00):
John, Let's talk a little bit about trade tensions between
Washington and Beijing. In the last week, President Trump formalized
and agreement for a group of American investors to take
control of the US operations of TikTok. I'm curious as
to how this story fits into the broader narrative in
terms of trade between these two countries.
Speaker 10 (29:20):
The negotiations between the United States and China have been
sort of an ongoing, step by step process. I think
when it comes to TikTok, I do get the sense
that the US administration puts a lot more value on
that as an issue than Beijing does. I think for
Beijing it is the most important things when it comes
(29:42):
to TikTok are that it shows a domestic audience that
it is standing up for the rights of Chinese companies,
that it's protecting Chinese interests, that it's not being cowed
by threats from Washington DC. Ultimately, whether or not TikTok
or Byte downs the company has a thriving business in
the United States, I think is less important to Beijing,
(30:04):
although I would say within that the ability of Bite
Dance to hold on to that algorithm I think is
very important to Beijing, because again it shows that Beijing
is able to protect these assets of Chinese companies technologies
owned by Chinese interests, and that I think is ultimately
what Beijing wants to show coming out of this deal.
Speaker 4 (30:26):
But might not that be required to get some terra
for relief from the United States.
Speaker 10 (30:31):
I'm sure that Beijing would have asked for some concession
in return for helping close a TikTok deal. We don't
have a great sense of what exactly that concession might be,
and indeed, I think it's also possible that you know,
Beijing is often playing the long game, and so maybe
(30:53):
the concession is not something that's immediate. It might be
something a bit further off, and we just don't have
a great view of that at the moment.
Speaker 4 (31:02):
You mentioned domestic demand in China being as weak as
it is right now, and obviously deflation is a big
part of that story, whether you're looking at the wholesale
or retail level. Any signs these days that things are improving.
Speaker 10 (31:15):
Unfortunately, Doug, I think the signs all point to things
getting more severe, if anything. So we have had negative CPI,
so deflationary consumer prices for five of the eight months
that we've had data for in twenty twenty five. That
is a big increase from last year when we only
had one month where CPI came in negative. And so
(31:38):
I think as policymakers in Beijing are looking across the economy,
that is a real concern because everyone knows what happened
in Japan. Everyone understands that as deflation gets more embedded
into an economy. As people start to change their behavior
because they expect prices to go down, it becomes really hard,
(31:59):
much much harder to undo.
Speaker 4 (32:01):
So what's operating in the psychology here, I'm curious about that.
We know that the housing market has been a big
negative overhang. You mentioned the fact that the equity market
has been performing reasonably well lately, and I'm thinking that
maybe encouraged some animal spirits. But I'm trying to understand
what's overhanging this negativity, where this is coming from, and
(32:24):
how people's sentiment toward economic activity is so weak.
Speaker 10 (32:29):
So I would split up the question of deflation into
a demand side issue and a supply side issue. Right, So,
I think on the demand side, what you mentioned about
real estate, that is the fundamental issue because so much
of the population in China, so much of household wealth
was saved in property in a family's home, that when
(32:51):
the price of those homes, and I would say broadly
across China, people have seen the price of their homes
fall thirty or more percent from the peak in twenty
twenty one or so everywhere, and so when people's biggest
asset becomes worth a lot less money, everybody feels poorer,
they feel like they need to save more for retirement,
and so that really hits demand. At the same time,
(33:14):
we've had a supply issue where we've had this overcapacity
that we've talked about, and so people are churning out
lots and lots of product and they're trying to sell
all that product, and the way that they've been competing
is they've been cutting prices, and so that's also fueled
this expectation that prices are going to go down, and
so Beijing has actually started this campaign anti involution to
(33:34):
try and address the supply side in a way that
they've never done before. They are going out to a
provincial level, local level governments telling them not to provide
the sort of subsidies that have helped these manufacturers churn
out their goods. They've gone to companies themselves to say, hey,
(33:54):
let's not do this cutthrough competition, and they've been pushing
on that. It's partly why we've seen the weakness that
we've seen in both manufacturing when it comes to PMI
and also in fixed asset investment over the last couple
of months. But the fact that Beijing is willing to
do these things something that they've never done before. That's
actually giving the stock market and financial markets a sense
(34:20):
of optimism that we might have reached an inflection point,
and that's why you've seen asset prices being as brilliant
as they have been.
Speaker 4 (34:28):
So I'm curious then if you were to take that
analysis and kind of related to the way in which
the labor market is holding up right now. Are things
improving there or is the labor story in China very
much a story of continued weakness.
Speaker 10 (34:42):
So unfortunately, again this is a point of weakness. And
so in August, in the data that we got in
the month of September for August, it actually showed an
unexpected increase in unemployment in China, so up to five
point three percent. The economists we're expecting five point two.
And so it does show that as manufacturing is weakened,
(35:04):
job prospects have also weakened. And so that again is
another point of I think concern for the government. But
when it comes to the stock market, the stock market
is always looking forward, and I think they're thinking, hey,
this bad news is good news because it's going to
force the government to take action, and so that means
the future prospects for the economy are getting brighter.
Speaker 4 (35:26):
You and I've spoken about the problem with youth unemployment
in the past, and I'm sure that that continues to
be a major negative. I'm wanting to find some positivity here,
and I'm drawn to the artificial intelligence narrative, where we
know the Deep Seek moment was enormously positive for tech
in China, and I'm wondering how that's playing out these days.
(35:47):
Still a lot of positivity as it relates to artificial
intelligence and the industries maybe that could benefit from AI.
Speaker 10 (35:55):
There is and the most recent iteration of that positivity
has been in the form of semiconductors, right, And so
the big issue in the past was could China create
AI if the US cut off access to Nvidia chips
to all of these AI processors that would be necessary
to train these large language models. And what we've seen
(36:18):
are companies like Ali, Baba, Baidu, Huawei, a smaller startup
named Cambra Con that have started to introduce chips that
they say are able to get to a level that
is getting nearer and nearer what an Nvidia chip can do.
And so that has actually created a lot of optimism
(36:39):
about the prospects for technology for AI and innovation in
China going forward.
Speaker 4 (36:45):
When we talk about AI in the States, one of
the things that comes up as a part of the
conversation the demand for power, the demand for electricity to
drive these data centers. How is China tackling that problem?
Are they still using is a primary source for generating
electricity or are they moving in other directions these days?
Speaker 10 (37:07):
Two parts to my answer. One is is there enough
electricity for AI in China? And this is actually an
area where China has a huge advantage and so it
is growing very quickly. There is not the same concern
about access to electricity that the hyperscalars in the US
have at the moment. The other question is how is
(37:29):
China generating that electricity. It is still dependent by far
on fossil fuels, so coal and oil. It is using
more natural gas, which is relatively cleaner. But at the
same time, what China has done that what we've not
seen in the US, especially under the Trump administration, there's
been a real push for wind, for solar, for alternative energies.
(37:54):
China is also building lots and lots of nuclear power plants,
and so that of energy is moving very quickly towards
cleaner sources, but still the vast majority today is created
by burning coal and oil and fossil fuels.
Speaker 4 (38:12):
John will leave it there. Thank you so much for
helping us understand what's happening these days in the Chinese
economy as we look ahead to the official PMI figures
in the week ahead. John lou is our Greater China
correspondent based in Beijing. I'm Doug Prisner. You can catch
us weekdays for the Daybreak Asia podcast. It's available wherever
you get your podcast. Tom.
Speaker 2 (38:33):
Thanks Doug, and that does it for this edition of
Bloomberg day Break Weekend. Join us again Monday morning at
five am Wall Street Time for the latest on markets
overseas and the news you need to start your day.
I'm Tom Buzby. Stay with us. Top stories and global
business headlines are coming up right now.
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