Good morning.
I'm Brian Curtis and I'm Doug Chrisner. Here are the stories we're following today.
The Securities and Exchange Commission approved exchange traded funds that invest directly in bitcoin. The agency authorized eleven funds to begin trading on Thursday now. The approvals also mark a rare capitulation by the SEC following opposition that lasted for more than a decade.
We've got reaction from RC CEO Kathy Wood.
We think that longer term, which is our focus of course, you know, with institutions really getting the green light now with an SEC approval, we think that even going to zero point one or zero point five percent of a portfolio for institutions is going to be a price moving event.
And that's CEO Kathy Wood. The decision today comes one day after a false post on the SEC's X account claimed that the agency had already approved the ETFs. The regulators subsequently said the account had been compromised, causing the price of bitcoin too fluctuate wildly, and the SEC said the FBI is investigating that breach. At the moment, bitcoin is trading up over forty seven thousand, so a three percent move here in the wake of the approval, forty seven thousand, three hundred and sixteen.
Well Alaska Air Group is grounding all flights of its Boeing seven thirty seven Max nine aircraft over the next three days, and this decision means between one hundred and ten to one hundred and fifty daily flights will be canceled. You'll remember last Friday that an Alaskan air seven thirty seven Max nine lost part of its fuselage shortly after takeoff. Now that move to suspend the flights will now give USAFE to regulators time to inspect all aircraft and prepare
them for a return to service once standards have been issued. Meantime, today the head of Boeing, that is CEO David Calhoun. He was on CNBC saying the company is worked looking to prevent future accidents.
Now we're in a moment where we have nobody at risk, and our job is to understand literally everything that has happened, everything that surrounds that particular fuselage, plug and fix it and make sure it can never happen again.
David Calhoun, the CEO of Boeing. Boeing shares finished up nearly one percent in New York Trading meantime shares in Alaska Air We're down nearly one percent today, right, you.
Know, Doug, This story has case study all over at a place like Harvard Business School. It'll be really interesting to see how that works out. Well.
Amazon is laying off hundreds of workers at its Prime Video and Studios business. Bloombergs Matt Day says he's not surprised given the state of the industry.
Just a ton of pain right now in the streaming services, and folks kind of reassessing, you know, how many bodies are going to need for the demand for just the ton of streamingable content out there. Amazon's studio's boss, Mike Hopkins mentioned they like discontinue some things over the course these if they didn't specify what exactly those were, but really just the latest in what looks like cuts you know, all over the place at Amazon that they petered out.
It's not, you know, tens of thousands of people the way it was a year ago, but it seems to be ongoing.
That's Bloomberg's Matt Day reporting. We also reported on Tuesday that the company's Twitch live streaming service was preparing to announce cuts to about thirty five percent of its staff. That equates to about five hundred workers. Shares of Amazon closed up one point six percent.
New York Fed President John Williams was saying today monetary policy is now tight enough to guide inflation back to the Fed's target, that being two percent. Even so, mister Williams suggested the Fed does need to see a little bit more in the way of evidence of cooling inflation before cutting infrast rates.
I'll expect that we will need to maintain a restricted stance of policy for some time to folly achieve our goals, and it will only be appropriate to dial back the degree of policy restraint when we're confident that inflation is moving towards toward two percent on a sustained base.
See is John Williams the head of the New York Fed now Tomorrow A key piece of economic news eight thirty am. Wall Street time is when we get the December reading on consumer prices. Brian Well.
The Bank of Korea is likely to stand pad on interest rates today. Bloomberg's Bonnie Au has more.
The BOK will probably push back against any expectations that might join the FED in signaling a pivot Governor Chiang Yong has won against prematurely relaxing the fight against inflation. All twelve economists surveyed by Bloomberg expect the Biok to keep its benchmark rate at three point five percent. If the Bok holds, it will mark a full year that authorities have kept the RDS steady. Economists expect only about
two cuts by the end of twenty twenty four. In Hong Kong, I'm Bonnie al Bloomberg Radio.
Quawai Technologies has wound down its in house lobbying operations in the US. That story from Bloomberg's Joan Wong in Hong Kong.
While is last two registered lobbyists left in recent months. The lobbyist's recent departures follow an exodus of staff from Huawei's US operations that marks a quiet and to Huawei's costly decade long effort to maintain a presence in the North American market. Federal filing showed the company had spent more than thirteen million dollars lobbying in the past ten years. The firm reached its peak by supplying small mobile forms across the US even as major carriers shun did but
rising tensions with Beijing. Eventually all but banded in Hong Kong joined Wang Bloomberg Radio.
Meantime, China's credit market looks to be improving. We had a couple of property developers yesterday and also a large car dealer announced that they would make payments on maturing debt. One was China Wang Ka, the other one was long Fore Group, and they said that they would they would make these payments in the course of the next month or so. And also China Grand Automotive pledged to pay a dollar note that matures sometime this month. So that scene is good news and we'll offer a bit of
relief to investors. Now it's time for global news. Well, another candidate buying for the Republican nomination for president has dropped out.
Dan Schwarzman with that story in New York.
Dan Hey, Brian As, Nikki Heley, and Rod DeSantis gets set to debate tonight in des Moines, Iowa. Former New Jersey Governor Chris Christy announces he is dropping out of the Republican presidential primary race. Christy had faced increased pressure in recent days to drop out to help boost Haley in New Hampshire, where she has focused her campaign resources. The former governor was a long shot to win, leaving the race with under four percent.
Of support in the polls.
Christy had at one time been a Trump ally, leading the former president's transition team, but he had fallen out with Trump. Back in twenty twenty, Christy had strong words regarding Trump.
No one would tell the truth about his divisiveness. Is stoking of anger for his own benefit in putting himself before the people of this country.
Christy was speaking at a town hall in New Hampshire. Donald Trump has been blocked for making a statement during closing arguments in his three hundred and seventy million dollars A civil trial judge overseeing the case, Arthur Angerin, told Trump's legal team he won't be allowed to speak, citing the former president's refusal to agree to standard court rules
about what he can say. Trump is accused of inflating the value of his assets on financial documents for more than a decade in an effort to get better loan terms. Trump's lawyers and the judge have repeatedly clashed during the almost eleven week trial, as Trump's team has frequently accused the judge of bias against their clients. The USN allies weighing options to retaliate against Iranian back the m Andy based Hoothy rebels, who continue to attack commercial vessels transitting
through the Red Sea. The militants launched their largest drone and missile attacks on ships earlier today, with US and British warships and planes shooting down eighteen drones in three anti ship missiles. So far, the US and its coaliship partners have failed to slow the attacks, leading to shipping
companies refusing to send vessels through the area. California Governor Gavin Newsom has proposed spending cuts during the next fiscal year to tackle a thirty seven point nine billion dollar deficit due to inflation and lower tax revenue from wealthy earners. The gap is actually much smaller than was originally projected by the state's nonpartisan Legislative Analyst's Office, which back in
December peg the deficit at around sixty eight billion. Newsom's plan to close the deficit include drawing thirteen point one billion dollars from the state's reserves, as well as cutting eight point five billion from areas such as climate change initiatives, housing, and scholarship programs while also freeze in spending across government agencies.
Jaw dropping news coming out of sports album Ahead. Football coach Nick Saban will be retiring seventeen years, six national titles and after that first year, sixteen straight seasons of ten or more wins per season, Considered by many the greatest coach in the history of college football. Global news twenty four hours a day and whenever you want it with Bloomberg News.
Now.
I'm Dan Schwartzman, and this is Bloomberg.
Well, this is Bloomberg day Break.
Asian Paul Allen joins us now from Sydney, and our guest is Douglas Borthwick, CEO at Blue Canary Capital, to take a closer.
Look at these Bitcoin ETF approvals.
So, Douglas, you've probably heard me say this, but I want to get your view on it. Do you actually see this as capitulation by the SEC or is it just the result of a lengthy regulatory process?
Well, I think it's a bit of both. I mean, let's be honest, Gary Gensler had to be pulled over this finish line. And he didn't get pulled over by the market. He got pulled over, really by a lawsuit that was filed by Greyscale, but they didn't want to do it. They was very much against it, but finally capitulated today and actually voted for it along with Hester Pierce.
So I think that it's something that they were kicking and screaming, but they ran out of excuses for why they couldn't do it, because the SEC's job isn't to decide what people can invest in, rather is to make sure people invest in something that they're protected, and I think that they ran out of excuses.
Yeah, the SEC was pretty clear though that, you know, while it's okay with these ETFs, it doesn't endorse bitcoin. We're in a situation now, we've got an ETA of trading what is an unpredictable ethereal acid are. There's still some risks hooked up to this. Does the SEC right to be cautious?
Well, there's risks associated with absolutely every security that exists. Right There's there's no company that goes out there. The SEC says there's no risk here. There's absolutely two way risk. But what this means is is that there's risk, but it's well documented in the prospectuses, so people understand what they're getting into But now this goes mainstream, and you know,
you had a quote from Kathy Wood earlier. The reality is that as people start adding this as a diversification to their portfolio, and who wouldn't given you've seen the returns that have happened in bitcoin over the past what fifteen years, people are going to get involved and they're going to put you a little bit of this in
their portfolio. And whether it's er point one percent, five percent, ten percent, all of this is going to start adding up considerably and banks are going to turn around and say, you know what, crypto isn't bad, Bitcoin is good because banks have now figured out how to make money on this asset with their customer base.
Well, and apparently it wasn't all discounted this approval, because you have seen a bounce this morning. Now it's three and a quarter percenters so to forty seven four fifty. Do you think that this approval process, that this will serve as a major milestone for bitcoin and for other cryptos as well.
Well.
It's a major milestone for bitcoin. I mean, there's a lot of crypto out there that's garbage. A theorum I think is probably going to be the next etf that we're all going to start focusing on. But for bitcoin,
this is absolutely a milestone. I think it's it's I hesitate to say, but a floor in that now you've got the ability for people to be able to buy bitcoin without all of the hassle of a wallets or trying to understand what self custody is and all of these different technology terms that no one understands except for folks within the crypto industry, and so being able to just buy it simply going onto a website, being able to buy in your four oh one K in your IRA,
having your financial advisor being able to allocate this to your portfolio changes the game in such a large way. And it is a limited asset. There are not that
many coins left out there. The majority of people that hold bitcoin want to hold it for a very long time, and so I think that it has a great opportunity here for it to really get a lot more well, not just a verification of portfolios, but also for people to actually start thinking about bitcoin is something that they can associate themselves with.
So when trading gets going, what sort of interest are you anticipating from buyers, particularly some of these retail buyers that you're talking.
About, Well, I think the retail buyers, the retail folks have already been buying it themselves on a coinbase or something like that. It's the institutions that haven't been buying it. And I think it's the institutional interest that's going to be very, very interesting. And so, you know, you can get lots of you know, young guys buying two hundred dollars worth, but that doesn't really move the needle.
Moves the needle is.
When you buy two billion dollars worth and black Rocks been you know, there's been reports that black Rocks as are two billion dollars of interest already in their ETF. That's a tremendous amount of interest. And that's only one of the eleven ETFs that are that are out there, and this is only day one. We've got years and years of interest of buying interest coming into this.
So if eleven funds approved, how do they differentiate themselves from others?
Well, I think it's very hard, and I think that a lot of them right now are differentiating themselves based upon fees. Right, So one's at point four to nine, ones at point five percent. Gray scale continues spirit, you know, above one percent. I think that so feed differentiation is important, but I think a lot of folks generally will just deal with what they can deal with or what their
financial advisor allocates them towards. And so while fees are important, there's still these fees are still a lot less than if they were buying bitcoin on an exchange or if they were buying bitcoin through Great Scale as it was previously when it was a trust company.
So presumably this is bad for Coinbase, right.
Well, you've got to wonder, you know, I think that there if Coinbase has diehard crypt bitcoin fans that want to self custody, well that's one thing. But certainly there's going to be a lot of retail that maybe wanted access to bitcoin on Coinbase and now decide, you know what, I'll just do it through an ETF. But that's also good news for Coinbase because Coinbase is involved in many of the ETFs that are right there.
Yeah, yeah, it could be that on one side, but very good on the other side.
Douglas, thanks very much for joining us.
Douglas Borthwick, CEO at Luke Canary Capital. This is Bloomberg Daybreak Asia. Your morning brief on this story is making news from Hong Kong to Singapore and Wall Street.
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