Good morning. I'm Brian Curtiz and I'm Doug Krisner. Here are the stories we're following today.
The White House meeting between the President and congressional leaders has ended without a major agreement on funding Ukraine. Let's get Ed Baxter in San Francisco, who has the story.
Ed, Yeah, probably no surprise, how Brian. The issue going in was a US southern border, and obviously for House Majority Leader Mike Johnson, it was a chance to well explain GOP grievances.
We documented sixty four instances where the President took executive action or his agencies took action to create the current catastrophe that we have at the border. It is a national security and a humanitarian catastrophe, and I articulated that to the President in the meeting. Now, we understand that there's concern about the safety, security, sovereignty of Ukraine, but the American people have those same concerns about our own domestic sovereignty.
Now Johnson does say slight progress, but Senate Majority Leader Chuck Schumer, well a difference. Ben.
These attacks are a clear example of terrorism violation of international law.
Excuse me, that is not mister Schumer. He says. He says, basically, there was just very little progress.
There was democratic and Republican agreement that was essential we help Ukraine.
Yeah, so a little bit different there. And a meeting at the White House Friday has been scheduled with Biden administration cabinet officials and counterparts from Mexico focus on reducing in migration. Meanwhile, the other congressional issue was funding for the government, with another deadline this weekend. Schumer says, yeah, some progress there.
If both sides continue to work in good faith, I'm hopeful we can pass the seer by tomorrow and avoid an unnecessary and costly shut down.
And that, of course, it needs the House and the President. The Biden administration has put the Huthi militant group back on Global Terrorism List. It's a turnaround for the administration to remove the Houthis as a US ought to East tensions during the Umanity Civil War, and the NSC official John Kirby underscores the intent here.
Today's designation targets the Houthis, not the many people. The United States remains the world's leading donor of humanitarian assistance for Yemen. We recognize that more than fifteen million people in Yemen are still in desperate need of food.
So what does it do well, State Department spokes to Matthew Miller.
The effect that we think it will have will be to allow us to deny the Houthi's access to the US financial system.
Yeah, and Miller emphasizes the US could rescind to the destination if the Houthi stopped their red Sea attacks. Meanwhile, Secretary of State Anthony Blincoln is making his way back to the US from Davos, where he says there's a definite vision for the future.
Much of what we're trying to do we can't effectively get done alone.
We have to have partners.
We have to reimagine it as we've been doing our partnerships. Yes, plane had some mechanical issues, but another will ferry him home. Philippines says it is planning a more robust, in its words, military activity with the US and its allies. Says it is facing more and more aggressive activity from China. Says it wants to build up capabilities to be more effective contributor to regional stability. Global News twenty four hours a day and whatever you want it with Bloomberg News Now
in San Francisco. I'm Had Baxter and this is Bloomberg GARB Bliant.
All right, thanks very much, said well. The FED says strong consumer spending has helped lift the US economy in recent weeks. That's according to the Beige Book survey. The report said that consumer has delivered some seasonal relief over the holidays and that generally helped meet spending expectations. Nearly all the FED districts reported one or more signs of a cooling labor market. And today we also got US retail data that showed sales rising by the most in three months.
Well, JP Moore, Caan Chase CEO Jamie diamond was saying today it's a fine line to walk for investors, but China is open for American business. Diamonds sat down with CNBC on the sidelines of the World Economic Forum in Davos.
They've been very consistent in opening up. Took a long time, so we have full license there now. But I think, you know, anyone who is looking to invest in there has to be a little worried. So and you know, the riginal ward has changed dramatically, you know, and of course you know it's coming. Like JP Morgan I always so when it comes to foreign policy, Blincoln decides and the president. You know, I salute. I'm an American patriot,
but they want us there. They're not asking America companies to leave.
Jamie Diamond there, the CEO of JP Morgan Chase. You know, he is the longest serving CEO of a major US bank, and he has long pointed to geopolitical tensions as a major challenge for the global economy.
Ryan and the Treasury Secretary Janet Yellen is calling on the US Congress to pass a temporary spending bill this week and avert a partial US government shutdown. He's Yellen speaking before Washington lawmakers.
Failing to fund the government by this Friday's deadline with harm American families and small businesses across the country. I'm heartened there's bipartisan agreement and urge members of Congress to meet the deadline to prevent an unnecessary shutdown and protect the critical domestic and national priorities we've advanced over the past three years.
Jennie Yellen, A short term spending measure would fund some US agencies that were set to run out of money at the end of the week. Well, it would fund them through March first.
Shares and Charles Schwab were down about one point three percent in the regular session. This is after the company reported a drop in profit for the fourth quarter. Here's Bloomberg's and Kate's new.
Assets, said Charles schwabbalt forty eight percent in the fourth quarter, Bank deposits declined twenty one percent, and Schwab's total retail brokerage accounts missed analyst expectations. Schwab had navigated tumultuous year of interest rate hikes that doned its balance sheet and eroded the value of its investments. Consumers also pulled their deposits in search of higher yielding alternatives. Schwab calls it the most challenging time since the bursting of the Internet
bubble in two thousand. Washer and Kate's Bloomberg Radio.
Meantime, Apple has to stop selling its Series nine and Ultra two smart watches with a blood oxygen feature in the United States. It's another legal setback in a patent dispute with Massimo. Bloomberg's Ed Ludlow says this is far from the end of the story.
What the US Court of Appeals for the Federal Circus is saying is they are rejecting Apple's requests for a longer pause on what was the intentional Trade Commission ban that was put in place. The mechanics of that are that they will have to stop selling the Series nine in Ultra two, but a much longer appeals process will play out, and Apple has said that that appeals process can last for about a year.
That's Bloomberg's Ed Ludlow. Apple says the appeals process could last a year or more. And we did see Apple trade lower today, down about a half a percent. That was more or less in line with the market.
From Apple, We go to its South Korean rivals. Samsung is turning to artificial intelligence to revamp its flagship Galaxy smartphones. We have more from Bloomberg Yvon Man.
In Hong Kong, Samsung unveiled it's Galaxy S twenty four phones that it's unpacked conference. All the phones have AI tools based on Gemini technology from Google. The devices can translate phone calls live and transcribe voice recordings. They can also summarize web articles, fixed handwriting, and fill in parts of photos. The launch is one of the most ambitious attempts to weave AI into smartphones interface and features. Previously AI software will be mostly in the cloud. Now it's
on the phones. Samsung is targeting double digit growth for its latest smartphone series.
In Hong Kong. I'm von Mann Bloomberg Radio.
I'm Brian Curtis, along with Vonnie Quinn, and our guest is Michael McKee, Bloomberg International Economics and Policy Correspondent, to take a closer look here at the base book and the US economy. Mike, thanks very much for joining us on balance, because there's always conflicting signals, but on balance from all these districts, is the US economy tilting a little hot, or tilting a little cool, or somewhere more neutral.
It's I guess you'd call it somewhat neutral compared to where we've been in the sense that the economy has been very strong. People were expecting it to slow down and cool off quite a bit, But the latest data show the slow down is happening, but not as much as people thought might. The retail sales numbers today very strong, and in general the economy is continuing to perform at a very good level. There is no sign of recession there, so overall kind of status quo to where we have been.
Michael, How on earth is the consumer this resilient? Are these all the stock market gains from last year?
Well, really, it's funny because you've been out shopping a lot that's on. We don't really know. The stock market gains may fuel a little bit of it, but it's not keeping people. It's not keeping the numbers all the way up because the people who are making big gains in the stock market, they've already been spending and it's not really going to make a change in their day
to day lifestyle. It just seems that people have I would say it seems that people have jobs now, more people are working than ever, and each month we get another two hundred thousand or so on pay rolls, and that money is going into their pockets and then going back out again. Is less being spent on gasoline, so there can be more spent on other things. And overall it's just a sign of a reasonably healthy economy that unemployment's low and people are able to keep spending.
Yeah, you would think that from the FED standpoint, The fact that firms noted some easing and inflationary pressures that that coupled with pretty healthy spending is a pretty good combination.
Yeah, that's the good news for the fat When they look at this, they see the economy is in pretty good shape. It's hard to know exactly if they feel. The retail sales numbers suggest that maybe things are overheating. We'll have to see how January goes, but for right now, it looks like the economy is chugging along at a level it can be sustained because inflation continues to go down. There seem to be lower and lower inflation pressures. We
see it reflected in the basebook. And then next week we're going to get the PCEE inflation numbers and there's some forecasts from economists that they will be below three percent.
Yeah, Michael, can I ask you about industrial production because the overall rate went up, it's an expansion even though economists were expecting a contraction of December, but the Empire state fell into a trough in the last month's stay. How do we account for both of those?
Well, the Empire numbers reflect only manufacturing in New York State and it is a very volatile number. It tends to go up and down a lot. Now, this was an extreme variation on that. But what mostly commis do is looked at the various regional manufacturing indexes from around the country and then we'll get Philadelphia tomorrow and see if they all match up or if somebody is an outlier. And the general feeling is that this was an outlier.
Overall manufacturing production rose in December, so the idea of a big drop off in early January doesn't seem correct. So we'll see when we get Philadelphia and we start to get the others coming in. The feeling is maybe it's just kind of a noise from this indicator.
Mike. You know, we cover markets aggressively. I mean all throughout the day on Bloomberg. We're doing updates about every fifteen minutes. So I have to ask you this kind of question. You've got inflation coming down, You've got consumers still spending in a reasonably robust fashion, and earnings are up this year. There's not really all that much at the moment to knock the bulls off their purchase.
There nothing other than psychology, and of course that plays a big role in the markets. And it's been a feeling that we were due for some sort of correction, which seems to be what's happening. It doesn't seem to be a reason for any kind of gloom on the part of equity investors, except for whatever their view of valuations is. And maybe they felt things ran up too high, But it doesn't look like there is an economic problem, an economic aspect to the down tread that we've seen.
Can I ask about Chris Waller, Michael, Is he the only person we should be listening to right now? I like Neil Dotta's comment that he opened the doors to a March coton. Perhaps he's the only one who can close it, and maybe he did that yesterday.
Maybe it does seem that the markets have started to reprice after his speech. There's still a majority of view that we could get a rate cut in March, but that is gradually slowing down, and Chris S. Waller does seem to be the new intellectual center of the FED.
Now.
What we don't know is how Jay powelfields. Because he only speaks once or twice a quarter, we don't hear very much from him. But in terms of those who do speak regularly, Waller's been the one that's been out front. He was the first one to suggest rapecuts could be coming in twenty twenty four before the FED changed its views, and now he's talking about definitely rake cuts, but let's be careful about when and how much.
Yeah, he made those comments in November that the chair have sort of had to walk back a little bit. Was there anything he said yesterday that the chair might need to walk back on.
I don't think so. I mean, I think what he said made a lot of sense. The FED is very good at saying something that sounds like it's new and it's not my idea of we're probably going to cut rigs. Okay, we knew that and we should do it carefully and not coming too fast. Well, that makes a lot of sense as well. For years on the FED beat, I used to laugh when FED officials would come out and
say we're going to be vigilant on inflation. People ran that as a headline and it's sort of like, well, that's your job, that's what you're supposed to be doing. So a lot of times people feel like there's something new there and it really isn't.
This is Bloomberg Daybreak Asia, your morning brief on the stories making news from Hong Kong to Singapore and Wall Street.
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