Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg day Break, your podcast, available every morning on Apple, Spotify or wherever you listen. It's Monday, the sixth of January here in London. I'm Caroline Hepki and.
I'm Stephen Carroll. Coming up today, the world's richest man, Elon Musk takes aim as Reform UK leader Nigel Farage in an abrupt u turn.
Sam Altman in the Spotlight, the Open AI founder, talks to Bloomberg about chat GPT's first two years and AI under Trump.
Plus, in a world that's rife with conflict, the market for insuring ships against acts of war is thriving.
Let's start with a roundup of our top stories.
After months of attacks on the British government, Elon Musk now says Reform UK's Nigel Farage doesn't have what it takes and should be replaced. It's a sudden new turn for the world's richest man, who previously heaped praise on Farage,
saying only his populist party can save Britain. In an interview before Musk's change of heart, Nigel Farrag was asked about the recent explosive comments from the Tesla CEO in which he said the Prime Minister Kerstarmer was quote complicit in the rape of Britain over his handling of child sex abuse scandal while he was Director of Public Prosecutions. Here is Farag speaking to the BBC.
I think I made it perfectly clear, but I don't agree with everything he stands for, but I do believe in free speech.
I think he's a hero and I said that well before any potential money was offered. Faraj has talked up the possibility of a multi million pound donation from Elon Musk in response to Musk's social media post criticizing him. The Reform UK leader described Musk as a remarkable individual, but repeated his position that far right activist Tommy Robinson should not join Reform UK.
Now.
UK business confidence has dropped to its lowest level since Liz Trust is disastrous many budget Just under half of companies surveyed by the British Chambers of Commerce expect revenues to increase in the coming year. The BCC also says that a majority of firms expect to increase prices over the next three months as companies pass on higher taxes
and the minimum wage increase. The findings will make uncomfortable reading for Charles of Rachel Reeves, who has said that businesses stepping up investment is key to UK economic growth.
Open AI's co founder Sam Altman has told Bloomberg he doesn't believe Elon Musk will use his political influence and the Trump administration to damage his business competitors. He was speaking as part of a wide ranging interview in the latest edition of BusinessWeek. Bloomberg's team out of Bio has more real deception.
That's how the man at the helm of one of the fastest growing companies in history described the circumstances surrounding his firing in twenty twenty three. Since then, Sam Altman has led open AI's chat GPT to more than three hundred million users. Speaking to bloom the tech ceo says safety is a priority at the firm, which he believes is continuing to make technical progress. Asked about the prospect of working with Donald Trump, Oltman made clear he'd work
with any president for the good of the country. He expects artificial general intelligence AI, which matches or surpasses human capabilities, to be developed under the President elect underscoring the importance of the relationship in London, Tewa, added Bayo Bloomberg Radio.
Austria's far right leader, Herbert Kickel is set to become the country's first Freedom Party chancellor. The Conservative People's Party is now willing to form a coalition with the pro Russian, anti immigrant and climate skeptic group after reversing its previous stance. Kikel is due to meet with Austria's president this morning in Vienna to discuss forming a government. It would be the first far right led Austrian government since World War II.
Canada's Prime Minister Justin Trudeau is reportedly expected to announce his resignation. That's according to The Globe and Mail newspaper. The Canadian publication says the announcement could possibly come as early as today. This would trigger a race for the party leadership, with the leader becoming Prime Minister. Trude has been under pressure from lawmakers in his party to quit for months. Scrutiny grew last month aster his Finance minister, Christia Freeland quis.
Today marks four years since the assault on the US capital, with Donald Trump downplaying its severity and denouncing prosecutions more on that story now from Bloomberg's Doug Chrisner.
The president elect has downplayed the severity of the attack and denounced its prosecutions, and he's expected to fulfill his promises of swift clemency for the one thousand plus people convicted and the hundreds more with pending cases. The question is how such a move would impact democracy and the rule of law. Mass pardons would also set the tone for how Trump might wield the presidency to reward loyalist
and ridick sphere punished opponents. This year's January sixth election certification has for the first time been designated a National Special Security Event in New York. I'm Doug Prisner, Bloomberg Radio.
Those are your top stories on the markets. On Friday, we saw Wall Street climbing to finish higher. Late in the session. We had the Nasdaq closing up one point seven percent. Treasuries climbed three basis points as well after stronger than expected ism manufacturing data. In Asian trading today at Japanese shares are in the red, the Nikes down
by one point four percent. The en is three times weaker against the dollar this morning at one hundred and fifty seven seventy four PBOC maintaining support for the yuan with a stronger fix than seven point two against the dollar. That comes after the sudden move weaker in the one on Friday. Eurostock fifty features half a percent higher this morning.
Well, in a moment, we're going to bring you more on Elon Musk's latest comments on UK politics, plus why the niche market for ensuring ships against acts of war is thriving. It's something that London specializes in. But first, markets are buckling up for a month that has in the past traditionally been positive for US stocks.
Try to positive to say about January. Basically, we're all back at work. Good morning everyone.
This is the January effect. I mean, there've been quite a lot of bits of research into this, but the January effect has actually faded over time. It's sort of less dominant now. But there's a great quick take explainer on the origins and history of the trend, why it matters, and why it might affect things this January.
Yeah.
Indeed, the latest Hamlife Pull survey, though, stead of finding plenty of bulls out there in the stock market, sixty one percent of the investors taking part in the survey, saying they expect the S and P five hundred to rise this year, boosted by Donald Trump's policies, but also the FED continuing to cut interest rates, but a warning from the Oxford based investor Steve Jegler says we should
be bracing for flatility as well now. He became famous for making billions during the global financial crisis, and he says threats to market stability are at a level not seen since two thousand and eight. He's setting up a hedge fund to bet on this as well. He's saying there are a number of fault lines out there today are even greater than during the financial crisis, and the
chances of going wrong. Talking about this being a sort of analogous situation to where we were in two thousand and five to two thousand and seven.
I'm not sure I can remember that far back. Is only the first day back in It's a good period, absolutely right. Let's send our attention then to our top story this morning. Elon Musk has been a fierce critic of Kirs Starmer and the Labor Party since it came to power in July, but on Sunday he turned on a supposed ally Nigel Farage, the leader of Reform UK, and yet another barrage of social media commentary on British political affairs joining us now is Blomberg's UK correspondent Lizzie Burden.
Good morning, Lizzie and happy new year to you.
Thank you.
Why the pivot or Nigel Pharage saying that he doesn't have what it takes, But.
Indeed it does seem that Musk's becoming a headache not just to keirse Armer, but to the right wing in British politics as well. Just a few days ago he said that only Farage's reform in UK could save Britain. This is when he was calling for fresh elections in the UK, and he had Musk and Farage recently going to Mary Lago and Farage touting this big fat check that Musk was going to write to Reform. So, as you say, it is a big u turn. But look, far be it from me to attempt to read the
mind of Elon Musk. This is the topsy turvy world of Trump politics and he hasn't given an explanation so far. Farage has only said that Musk's entitled to his own opinion. So I think the big question is whether the Musk's going to back far right activist Tommy Robinson to become the reform leader. He's already called for Robinson to be released from prison. Musk seems to be kind of toying
with Farage here. Faraj has distant from Robinson repeatedly, and we've been reporting that several senior politicians on the right wing in UK politics with links to Donald Trump have been warning their Republican counterparts against endorsing Robinson. But it's still a big question because at the moment Musk has only suggested that Rupert Low, the reform MP, should succeed Fararar. So definitely one we're going to watch this.
Week of Corzeland. Musk not limiting his commentary to reform UK. He the government has spent the weekend trying to respond to other comments made by the world's righteous man about prosecutions in child sex abuse cases.
Here, yeah, Musk accusing Starmer of being complicit in the rape of Britain because Labour's rejected calls for a public inquiry into the child's sex abuse scandal, even though Starmer was as head of the Crown Prosecution Service part of the team that began the prosecution into grooming gangs in
British towns, so this is hugely controversial. Doesn't want to get dragged into a soap opera with Elon Musk, though, so he's brushed off Musk's attacks, like when Musk said that civil war is inevitable during the Summer Riots.
But this raises another question.
How does the so called special relationship between the US and the UK play out under Trump and Starmer? And it's an interesting question for the newly appointed UK ambassador to Washington, Lord Mandelson.
Peter Mandelson, of course a key blair Wite.
He'd suggested previously that Farah should be used as a bridgehead between Labor and Trump. The kind of bottom line I think is Musk is one of the most powerful people in the world right now. And you could ask, is it any surprise that Musk's attacking Starmer when you know, somehow the Trump Starmer call gets leaked and Trump's apparently deranged and going off peace talking about windmills, and Sekire
is trying to keep him on track. Think about all the Foreign Secretary David Lammy and the Deputy Prime Minister and Angela Rayner have had to say about Trump recently, and then you've got the Chancellor Rachel Reeves and the Governor of the Bank of England Andrew Bailey, off to Beijing this week to court Trump's nemesis. So is this just Musk being Trump's attack dog?
Yeah, and certainly with inflammatory language. I mean, what hope then? Does the government have to try to focus on its priorities? Was meant to be talking about NHS policy today for the National Health Service?
Yeah, He's set to give a speech chet on the NHS today.
Whatever that means, I think it's.
Trying to avoid the confusion that surrounded all the missions and priorities and foundations and first steps and milestones that we've had in twenty twenty four. There definitely seems to be a deliberate focus in twenty twenty five on the domestic agenda because, as we have reported, Starmer traveled a lot last year. We've crunched the numbers and he was abroad more than any of his immediate predecessors in their first six months in office.
So you kind of had to.
Wonder at times why he was bothering going to some of these events when there are hardly any other high profile leaders like at koppin Azerbaijan, and many of the leaders that he's met on the international circuit have waning influenced Joe Biden, just In Trudeau in the news this morning, and being absent when the economy is in the doldrooms is hardly a look that you want to bed in.
So instead, as I say, it's Rachel Reeves going to China this week, and it hasn't been interestingly decided who's going to represent the UK at Trump's inauguration.
Okay, busy burden are UK correspondent, Thank you very much.
Now, in a world that is rife with conflict in Ukraine and the Middle East, the market for ensuring ships against acts of war is thriving, with London specializing in maritime insurance. Joining us now is Bloomberg's oil and derivative supporter Alex Longley, who has a long piece on this out this morning. Alex, thanks for your time. How important is this war insurance market for global trade?
Well, in the world we're in at the moment, it's become ever more important. I think perhaps the most recent although its a little while ago now, but the diversions that we've seen in the Red Sea that have continued even in their kind of twelve month anniversary, to hugely disrupt world trade. You need this backstop of insurance to ensure that goods are getting from A to B. Now, insurance in London has existed for hundreds and hundreds of years.
War risk insurance is nothing new, but the scale of some of the conflicts we're seeing and the risk of products getting trapped in different ports across the world or different regions has meant that this market has sort begun to thrive and entered a kind of new level over the last couple of years, particularly following the invasion of Ukraine in twenty twenty two and then, as I said before, the disruption in the Red Sea last year.
So what sort of growth are we talking about? How big is the market now?
Well, it's one of those markets where, much like much like many things with Lloyds of London and the insurance insurance industry, it's hard to pin an exact number that some of the people we spoke to say that the global market for marine hull war is insurance. So that's that the risk of your ship being hit in an act of war is reaching up to a billion dollars at the moment, and that'll be up from just a few hundred million dollars a couple of years ago, the
low sort of hundreds. So we're seeing a significant number, significant volume of growth there, and that's just in the premiums that are earned. Now, the risk that comes with that is exactly how many ships don't get hit, right, because the risk of conflict is that you're in an
extremely dangerous global maritime environment. So although the total premium written has been very, very large, and certainly in the last couple of years we've seen some good returns, I think you're seeing insurance starting to worry given that kind of exponential level of growth that we've seen over the last couple of years.
And surely insurance is a long game. I mean, what are the risks? Presumably there must be some dangers in offering cover against acts of war and we started talking about, you know how life conflict.
Is, Yeah, exactly. I mean there's a couple of dangers here. I think the first one is, as we've already seen. Last year, we've had some of those incidents in the Red Sea that have led to not only vessels sinking, but also crew deaths and also pollution events around them. That's obviously the biggest risk for the insurers, and we've seen a few of them, and I think some of those companies that are expecting to see sort of the effects of those ripple through to their results coming into twenty
twenty five. The other effect is that, frankly, this market has been doing so well, it's attracted a whole host of new entrants, different types of players that weren't previously
there but that can now provide cover. And many insurance officials say that the big risk there is that they take on more sort of cover than they perhaps should be, or slightly less worried about the cover that they're taking on because of the money they're making, and that that has a ripple through effect as well and leads to some more losses within the market. Insurance is a very
cyclical business. When times are good, lots of people tend to flood into the market and provide a new cover, and then that kind of tends to naturally dampen it back down again, and some worry that we're kind of at the start of were reaching the peak, and are at the start of a possible downturn in the next eight twelve to eighteen months, but that will all depend on how risky the world remains and whether we remain kind of ripe with conflict.
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