Good morning. I'm Brian Curtis and I'm Doug Prisner. Here are the stories we're following today.
Congress has averted a partial government shut down, sent for this weekend, and back to with that story and more from San Francisco ed.
If you want to be a Senate here, Brian, the threat of snow tomorrow motivated congress shut down averted in any case, as you say, Bloomberg's Laura Davison says, the can kick down the road, which presents a whole list of problems.
Congress has been able to keep the government open only by kind of kicking the can down the road. The one mild success, if your Mike Johnson, is that you kept your job at least for now in this But looking into March, there's a bunch of different things that get a bit more complicated. As you said, they're about halfway the fiscal year without actually, you know, doing anything beyond just extending last year's budget, and by the time you get to the end of April, that's when mandatory
cuts start kicking into effects. So Congress has a more of a real deadline there that they need to act, and you decide on something that they want to do, and of course you know things that got left on the side of the here a tax deal with business tax credits, child tax credits, as well as border Ukraine and other foreign eight.
Yeah, so a lot to be done, but done for now. Meanwhile, Donald Trump is in the Ukraine funding phray. He's posted that any deal on Ukraine and border contain every Conservative demand for border and immigration changes. The House planned on working on this next week, but this may force GOP
leaders to reject any moves toward compromise. President Joe Biden, en route to Joint Base Andrews this morning, is vowed to continue attacks on Houthy targets until they dismantle the operations that make the attacks on ships in the Red Sea possible.
Another stopping the huthis so are they going.
To continue yet?
Yes, and the Pentagon is clarifying what the operations is about. Spokes when Sabrina Singh says the US is not at war.
What we took, the actions that Central Command took last night was to destroy missiles that could be launched and that we're preparing to launch either towards US Navy ships that are in the region that are in that waterway. Or other commercial vessels.
Badhuthi chief Abdul Malik al Huthi says it's not direct confrontation. Says the militants are taking concrete steps to improve their military capabilities. He says the US UK strikes will not change his stance, and as Pakistan fires missiles into Iran this morning, US is concerned about potential regional spread there. NSC official John Kirby, these are two.
Well armed nations, and again we don't want to see an escalation of any armed conflict in the region, certainly between those two countries.
And the spokesman for Pakistan's Ministry of Foreign Affairs Moments Balak, says these were very targeted.
Pakistan undertook a series of highly coordinated and specifically targeted, precision military strikes against terrorist hideouts in Sistano Belushistan province of Hiddan.
She says, a first strike to halt further violence. NATO military leaders announcing that the Alliance will launch its biggest military exercise in decades next week. NATO military leaders announcing that the Alliance will launch it's the biggest exercise. NATO Supreme Allied Commander US General Christopher Cavolle introduced in the exercise, He's just marvelous at the scale.
Steadfast Defender twenty four will be the largest NATO exercise in decades, with participation from approximately ninety thousand forces from all thirty one allies plus our good partner Sweden.
Yeah, adding Sweden. The mix global news twenty four hours a day and whenever you want it with Bloomberg News now in San Francisco. I'm at Baxter. This is Bloomberg Brian all.
Right, time now for the top business stories of the hour. Well, Spirit Airlines says it has no plans for a bankruptcy driven restructuring. The airline is now taking a hard look at his balance sheet. We heard from Bloomberg's George Ferguson.
Profitability hasn't been good. I'm sure management's lost its focus as it's gone through this potential acquisition by Jet Blue, and now the difficulty will be, yeah, get getting the ship right and getting employees. Management focused on getting this airline back to profitability.
Bloomberg's George Ferguson. Spirit shares have been in a tailspin since its merger with Jet Blue was blocked in court. Shares have plunged more than sixty percent over the past three days. Today they closed down seven percent. Jet Blue fared a little bit better. It was up seven point eight percent.
Well, US banking regulators are planning to require banks to tap the Fed's discount window at least once a year.
Now.
The aim here is to reduce the stigma and ensure that these banks are ready for troubled times. Bloomberg's Katanka Johnson tells us how this might play out.
It's very clear if FED regulators, including the OCC, the FED and the FCIIC really want to make the discover into more attractive by requiring them not just to tap the window once a year to make it easier somewhat of a fire drill who told me, but also to focus on what plans or preparation for accessing it could be or could mean. Regulars really want to see a number of changes to how banks think about the disco window but liquidity.
In general, that is Bloomberg's Catanka Johnson. Now, it was last year the regional banking crisis somewhat revealed that a number of banks were not even set up to quickly borrow from the Fed's discount window in a pinch Brian Well.
Blackstone CEO Steve Schwartzman is expecting the FED to cut interest rates, and they said those cuts are going to have an impact on Wall Street.
The economy is slowing a bit.
That's normal with high interest rates. On the other side of the latcher, the expectation that interest rates are going down is creating animal spirits.
Again, as Blackstone CEO Steve Schwartzman. As anticipation builds around the impending rate cuts, not everyone is ready to go all in. Today. Atlanta FED President Raphael Bostik said the worst outcome would be for policymakers to act and to cut rates and then have to raise them again later. That's if inflation were to move higher. Bostik says he sees the Fed's first rate cut coming sometime in the third quarter.
Apple was smart watches without that blood oxygen feature are being sold today at Apple's US retail outlets. Now this comes following a legal setback in Apple's patent dispute with the tech startup Massimo. That company makes the blood oxygen sensors. Now, Apple itself cannot sell the watches with this feature. While an appeal of a US band plays out. The CEO of Massimo is Joe Keani. He told us the outcome is best for consumers.
The consumers are better off without it. Apple knew their product wasn't good enough to be relied on medically, but literally they said, and this is in twenty twenty and the chaos of COVID. This is quotation in their document. If we launch pulsock symmetry with our we'll gain market share from Fitbit.
That is Joe Keane. He is the chief executive officer at Massimo. By the way, Apple believes the appeal process on this particular case will take a year or more.
Brian Well, TSMC is expecting a return to solid growth this quarter. It gave itself some room to raise capital spending in twenty twenty four. It suggests that TSMC anticipates a recovery in smartphone and computing demand. Bloomberg's Ian King says industry shifts toward AI could be fueling the confidence.
Roll back two years ago, and the chip industry executive was saying, this time it's different. We're on a path. Oh you look at last year and that really wasn't the case. Again, we were down. What is different though? This time is how some of the end markets are behaving.
And that's i in king TSMC shares, the eight rs in New York were up nine point eight percent, their biggest intra day jump since May. And it's quite a change from the way it's doc traded in in Taipei yesterday, where it was only up a little more than one percent. This is Bloomberg Daybreak Asia and right now I'm joined by Paul Allen in Sydney, and our guest is joining us here live on the program, Chester Dawson, Bloomberg's North American Transportation editor, to take a closer look here at
Spirit Air. So it's one thing for the stock to struggle as much as it has, you know, it might make it more difficult to raise money. It's a slightly soate topic to be talking about bankruptcy, but it's clear that that the board now has an issue at hand. And what are we learning about how close Spirit could get to bankruptcy?
Well, that is the question de jour, and as you noted earlier, the stock has been paying a heavy price for it. The company, however, did say in a statement that came out late today that it is not pursuing or involved in a statuary with structuring, which is a kind of a jargonistic and legalists way of saying that they're not planning for bankruptcy. It has been a matter of a lot of speculation. A number of analysts on Wall Street have openly said that that is a very
real possibility. But the company says it's taking measures to shore up its balance sheet and is hoping to you know, right the ship.
All right, taking measures? What does that mean?
Are we talking about job cuts, slashing roots?
What's the plan?
Well, that is also a very good question. They have not said much more beyond what they had kind of previously outlined in terms of efforts to for example, ground parts of its fleet, delay the ontake of some airplanes, and other measures, you know, perhaps involving it's stet load. So it's a little vague exactly what that means, but you're you're right, Typically when you hear that language, you
do think about drastic cost cuts, including job reductions. If they're thinking that, they're not saying so publicly.
Yes, so they're not even talking about bankruptcy protection, much less liquidation, but certainly people in the market have been at least thinking about that. The possibility of liquidation. And it's ironic because you know what that would do for you know, for prices. One only knows, but it probably wouldn't be what the judge was expecting. I'm just musing aloud a little bit here. I mean, is there any chance that to raise funds, that Spirit could raise prices?
You know it's a low cost carrier, but could he raise prices?
Well, you put your finger on it. The whole point of Spirit is to be an ultra low cost carrier, so in theory it might be able to try. But you know, the whole reason you go to Spirit is to get a super cheap fare and kind of a no frills flight experience. Now you know the But he hasn't said whether it plans to appeal the court ruling
that broke up plans for the takeover by Jet Blue. However, it's very unclear, you know, if it can survive as an independent entity, not just because of it kind of planned to be taken over by Jet Blue, but because the environment has deteriorated so much since that deal was announced. You know, it's been very bad for all low cost carriers, including Jet Blue, which isn't quite an ultra low cost carrier like Spirit, but is still you know, kind of a more of a discount carrier than say, Delta is.
But but those companies, you know, being very domestic and very fair focused, have not been doing well. The environment has deteriorated a lot. So if it's left to stand on its own two legs, so to speak, Spirit faces a very difficult future. So it's kind of unclear, you know, what comes next. Everybody's kind of waiting for the next shooter drop. Clearly the company has got to do more, you know, but investors aren't waiting, as you noted, they're bailing.
Yeah, they sure.
Uh the ship Rice down sixty two percent and three days. Is there any feeling that we're at the bottom yet or is there the potential for further losses here?
Well, it's a little hard to say, but it is interesting that when the company finally came out with its statement after the close of trading in New York, the shares you know, basically traded unchanged in the post market. Obviously, they were down during the day, kind of in a
free fall. But I guess there's some hope that maybe this you know, this kind of very late in the day statement by the company that it's not preparing for bankruptcy at least not immediately, will be some solace to investors, But we really won't know, I guess until the market opens in New York tomorrow. But it does feel like the company is in kind of a desperate struggle to survive.
You wonder what's a message that would send to the Justice Department and to the FTC and just generally too. And I trust, you know, the antitrust regulators that they're concerned about people. They don't care about the shareholders. I mean, that's for other people to worry about. But if the result of this is that the airline goes busted, I wonder what sort of message it would send to to the anti trust people.
Well, it would be an incredible irony, wouldn't it if you know, by by saving or trying to save spirit uh spirits independence, that actually was a death sentence. You know, I think you're right. I think basically, you know, the legal eagles and the court you know, uh clearly was thinking about you know, the spirit of your not maybe so much about what would happen if if the deal was unraveled. And of course, you know, we want to be careful. The company has not declared bankruptcy and it's
still flying. And you know, even if it were to do something like that, and I'm just speculating now, chances are they would continue operations. But you know, obviously, whenever the B word has floated, it scares investors quite a bit, and you know, the bad news keeps coming. We just got word late of some action by the rating agencies which are also sitting up and taking notice, and that doesn't bode too well for Spirit either. Just quickly, just
what's the legacy of Spirits management going to be? Well, that's a good question too, because when you know they were initially approached by jet Blue, they were buff the offer. In fact, they were in favor of a rival takeover bid from Frontier, which is another ultra low cost carrier, and effectively there was something of a shareholder revolt and the board had to backtrack and did accept a sweetened
bid from Jet Blue. But now you've got to look back and wonder about culpability because there is some question whether the board made the right call there on the way the events have played out.
And all right, Leicester Wels Yeah, yeah, absolutely, a very good point. This is Bloomberg Daybreak Asia Your morning brief on the story's making news from Hong Kong to Singapore and Wall Street.
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