Good morning.
I'm Brian Curtis and I'm Doug Krisner. Here are the stories we're following today.
Congressional leaders have agreed on a spending deal. We get more from Bloomberg's Dan Schwartzman. Dan, that is correct, Brian.
A deal has been announced on a top line spending level for the current fiscal year. The agreement lessening the likelihood of a partial government shutdown, which would occur on January twentieth. Republican House Speaker Mike Johnson and Democratic Senate Majority Leader Chuck Schumer negotiated the package, which now heads to the appropriations committees in both chambers to negotiate detailed
spending bills that now have an overall spending limit. The cap for the twelve annual appropriations bills is one point five to nine trillion dollars. The country is facing two government shutdown deadlines. One is January nineteenth and the other February second. President Biden welcoming the news of a deal being agreed to, saying it provides a pathway to full
year funding bills. Snowstorms hit the northeast portion of the country, leaving more than a foot of snow in New York' Hudson Valley, while Blank getting Boston and New England with heavy snow. Areas west of New York City in New Jersey got strong accumulation as well. City mostly just got hit by some rain. A second storm is now moving across the Western States, winter storm warnings and advisories being issued from Arizona all the way to Illinois their blizzard
warnings in Colorado and New Mexico. That storm is expected to dump nine inches of snow west of Chicago starting Monday night, with parts of New York and New Jersey getting in an additional one to three inches on top of what came down today. The winter storms, also, by the way, have just retavock on the transportation industry, six hundred and ninety two flights being canceled across the country. Boston, Newark, Chicago, and Seattle were hit particularly hard. That was according to
airline tracking company flight Aware. Amtrak also having to cancel some trains to Boston as well as across the Midwest. Secretary of State Anthony Blinken continuing his World Win tour of the Middle East with a stop off in Doha Cutter on Sunday, Blinken warning that the Israel Hamas conflict could easily spiral into a regional conflict.
This is not just a regional issue, it's a matter of global concern, and that's certainly the case when it comes to the Hoofi attacks on freedom of navigation in one of the world's busiest trade corridors, the Red Sea.
Blanken, speaking from Cutter, which maintains ties with Hamas and has been key and hostage negotiations which have freed more than one hundred Israeli so far. Blinken earlier in the day meeting with Jordan's King Abdullah the Second, as well as the Foreign Minister I'man Safadi. The Secretary of State has already made stopovers in Turkey and Greece, and he is planning to visit the UAE, Saudi Arabia, Israel, the
West Bank and Egypt. Some good news in London, Mayor Sadik Khan announcing earlier this afternoon that a planned strike in the subway system had been called off. The London Tube, as it's known, has more than two hundred and seventy stations covering around two hundred and fifty miles and accommodates around four million rides per day. The National Union of Rail, Maritime and Transport Workers were planning to strike over dispute over working conditions and pay right was called off due
to positive discussions on both sides. Global News twenty four hours a day and whenever you want it with Bloomberg News.
Now.
I'm Dan Schwartzman, and this is Bloomberg.
Dan, Thanks very much. Five and a half minutes here past the hour. I'm Brian Curtis, along with Doug Krisner and Paul Allen will join us a little bit later. Let's take a look at some of the top business stories of the hour.
Now.
Airlines around the globe are pulling there Boeing seven thirty seven Max nines from service. It follows the Federal Aviation Administration's call to temporarily ground all one hundred and seventy one planes. The FAA order comes after a section of the main body on a brand new Alaska Airlines jet blew out mid flight. Bloomberg's Mary Schwangenstein says that Boeing is pushing to get these planes inspected and back in operations soon.
They want the operators of certain of these Max nine to take them out of service. Do the inspections, which don't take all that long. They take a number of hours to do them, and to do those inspections before they fly them again if they fall within certain inspection timeframes, and so Alaska said they've already done quite a few of their aircraft. You know, it's not a good look
for any aircraft operator or manufacturer. Rather, when you have to stop and take the planes out of service to look for some particular defect that could, you know, be a major problem of this aircraft had been higher.
In the air Bloomberg's Mary Schwoangenstein. The grounding is a major setback for Boeing. The company has grappled with manufacturing defects and costly repairs in recent years. Most recently, the FAA said that it is monitoring some inspections of Boeing airplanes to look for a possible loose bolt in the rudder control system. And coming up in a few moments, we'll be chatting with Julie Johnson, who is Bloomberg Senior aerospace reporter on the latest from Boeing.
Doug Elon Musk's drug use is reportedly causing worry among executives and board members at the company's led by Musk. The story from Bloomberg's Denise Pellegrini.
Wall Street Journal reporting Musk has used LSD, cocaine, ecstasy, and psychedelic mushrooms, often at private parties, and people close to the Tesla and SpaceX ceo tell the journal his
drug use is ongoing. In particular, he's consuming ketamine. Musk said in August he had a prescription to use a drug as an antidepressant, and after Musk puffed on a blunt containing marijuana on Joe Rogan's podcast in twenty eighteen, the Pentagon reviewed the federal security clearance tied to Musk's roll, a CEO of Space Exploration Technologies, which is certified to
launch military spy satellites. Musk didn't respond to a request for comment from Bloomberg News to this story, but Alex Spiro, an attorney for the billionaire, told the journal his client is regularly and randomly drug tested at SpaceX. It has never failed a test. Denise Pellegrini Bloomberg Radio.
In the latest US jobs report, we saw gains in jobs and wage increases, and both exceeded expectations, But as Doug pointed out early, a number of caveats. We'll get to that a bit later. US payrolls rose by two hundred and sixteen thousand. Randy Krasner is professor of economics at the University of Chicago Booth School of Business. He tells us what these numbers might mean to FED policymakers.
I think the FED focuses a lot on wage growth, and we've seen wage growth above expectations. I think it's really clear that the FED is going to be waiting a while before it starts cutting rates because the labor market is still quite strong, the wage growth is still quite strong, and just the key thing that then feed into services as well as manufacturing inflation.
Randy Krasner is there.
In the coming week, the FED will have some key economic data to analyze, be getting a big report on consumer prices on Thursday and then producer prices on Friday.
China has sanctioned five US defense firms in response to deals for arm sales to Taiwan. We have more from Bloomberg sivon Men in Hong Kong.
Orn Ministries says the sanctions are a result of what it calls gravely wrong actions taken by the US. The companies affected include BAE Systems, Land and Armament Alliance Tech Systems, Operation Aero Vironment via SAT and data link solutions. The decision is seen as the latest retaliation to US military sales to Taiwan. The latest arms deal amounted to about three hundred million dollars. China responded immediately by intensifying military
training around the Taiwan Strait. These new sanctions freeze the five companies. Properties in China and entities there are banned from any transactions with those firms. In Hong Kong, I'm von Mann Bloomberg Radio.
Saudi Arabia will cut crude prices in all regions, including its main Asia market. Bloomberg's Juan Wong has more on that.
The cuts will begin next ones amit persistent weakness in the market cuts and supply by Opec Plus are another part of the story. The cuts were aimed at prevent hending a build up of oil and storage. Saudi Arabia is taking on the bulk of the burden. It has set voluntary cuts of two million barrels a day through the first quarters, hoped that that will offset otherwise strong global supply that is hurting prices that may push the OPEC Plus group to extend output cuts into this year
in Hong Kong. Joined Wong Bloomberg Radio.
This is Bloomberg Daybreak Asia. I'm Brian Curtis along with Paul Allen in Sydney. Well.
Our top story.
Boeing this morning, the FAA ordering the grounding of some one hundred and seventy one planes in the States, and global airlines have taken many of the seven thirty seven Max nine.
Jets out of service as well.
Joining us now is Julie Johnson, Bloomberg Senior Aerospace reporter with more on this. So I guess the basic question is, Julie, what does this say about Boeing's manufacturing standards and controls?
Well, you know, this just has to be very dismaying for people at Boeing. The company. You know, the company once again is under immense scrutiny and and you know, just just a blizzard of really bad headlines and just a you know a lot of reputational damage to them from this incident. In fact, that's probably going to be what lingers more so than the grounding, But we'll see on that. But anyway, Boeing's put it just put a
huge effort into improving quality and safety. They they had definitely seemed to be making progress, and that was one reason why you know, their shares shot up more than forty percent through Friday from the end of October. You know, Wall Street was starting to buy the story. And then and then you have another very scary incident involving a Max that points to a manufacturing flaw most likely, and it's it's just deja vu all over again.
Yeah, you say most likely a manufacturing floor. I mean, the investigation is still under way, but why is it that we seem to be leaning that way at the moment.
Well, this design has been used by Boeing across the previous generation or I guess more selectively, but it was in a previous generation of Max. The design's been in place since around two thousand and six without any incident, and it was so so this you know, analysts are thinking this is probably a one off incident, and it's interesting.
I don't know if we want to get into an explanation of the door plug feature on the Max nine, which is now being scrutinized by the FAA, and you know, it's at the brunt of these inspections but the Alaska Airline jet had two of these. They're cutouts for emergency exits if airlines want to put them in there. Alaska used what's called a plug in the fuselage to cover the exits that didn't need them for the configuration that it flies. So anyway, there are two of these behind
the wing. One blew out, the other was fine and Friday night, and so it's more than likely you know, a bolt failure or or you know, who knows, but it's looking like a manufacturing issue.
Only two US airlines operate this seven thirty seven model. I mean, it's still said to be a popular plane, and we mentioned that other global airlines are affected. You wonder if it's only two US airlines, and since it was only this one incident, whether there is the strong possibility that this passes quickly, that they.
Get a handle on this. Are you are you seeing and hearing much about that?
Well, you know, again it's early days and and so you know, we'll see what the NTSB and the FAA find and Boeing's part of this as well as they do as they do their inspection.
I mean, it's probably not a fair comparison, but we see we see car recalls all the time, Yet the standards for air flight and for driving need to be very different.
Maybe you can just flesh that out a little bit.
Well, yeah, I mean, if you're at altitude, you know, if you're climbing in an airplane, it's just a very unforgiving environment if something fails. And so I think the standards for safety are just so much higher for you know,
for aircraft than automobiles for example, just for that very reason. Well, just back to your earlier you know, this is the Max nine is the lowest selling of the family, so from that perspective, and it's January when US airlines have generally fairly light flying schedules, So this is I think those are the two reasons why people are thinking this probably is going to be relatively minor in terms of impact to the industry and financial impact, but the reputational
hit for Boeing just really is bad.
Yeah, And there have been a number of other smaller manufacturing issues as well that we've heard about. Nothing as dramatic as a door plug blowing out in mid air, but misaligned hals, a loose rud a bolt. What is going on at Boeing? Is there an underlying calls to what's to the sorts of manufacturing defics.
Oh yeah, absolutely, you know, and we could I could spend the next hour talking about this because it's fascinating and it's really complicated, and both Boeing and Airbus have really struggled to recover from from COVID and when they had Boeing stopped work on it seven thirty seven for a few months, and while Airbus slowed its rate down, Boeing was also dealing with the max grounding at the
same time. But I'm recovering has just been incredibly difficult, and a lot of it has to do with for Boeing, especially really skilled people who just you know, when the buyouts came in twenty twenty, they just said I've had enough, no more, no no more, you know, turbulence and job and security. I'm I'm going to retire, and I'm so Replacing that generation of workers, especially in aerospace, has been a problem.
Julie, thanks so much for joining us.
We know that Chinese regulators are taking a close look at this too. We had an emergency meeting that was called that sources are telling us about no direct action yet, but we'll be watching that Julie Johnson has been with us. Bloomberg Senior Aerospace Report. This is Bloomberg Deabreak Gasia, your morning brief on the stories making news from Hong Kong to Singapore and Wall Street.
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I'm Brian Curtis.
And I'm Doug Chrisner. Join us again tomorrow for all the news you need to start your day right here on Bloomberg day Break Asia