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• 00:00MANUS: GOOD MORNING FROM OUR GLOBAL NEWS HEADQUARTERS IN NEW YORK. LET ‘ S SET THE AGENDA. DANI: TRUMP ‘ S FRIEND TARIFF AMBITIONS. FLOATING 10% FOR CHINA AND ORDERS EUROPE. DOUBLING THE BASE WITH A BOOST FROM THE NFL, NETFLIX URGES ON AND RECORD QUARTER. IT IS DAY TWO IN DAVOS WITH THOUSANDS OF INTERVIEWS YOU DON ‘ T WANT TO MISS FROM THE PRESIDENT OF FINLAND. > > GOOD MORNING. WE MAY BE IN A STATE OF WEAPONIZED UNCERTAINTY ON POLICY BUT THE STOCK ‘ S ARE FLYING HIGHER AS WE HAVE THE BIRTH OF STARGATE. AND THERE IS RELIEF WE WILL CARMAX TARIFFS ON DAY TO PRAY 10% IS FLOATED. RUSSELL UP FOR SIX DAYS IN A ROW GOING INTO THE SEVENTH DAY UP HERE. UP NEARLY 6%. 4.56 IS WHERE YOU ARE IN THE BOND MARKETS. MAYBE IT IS AN APPEASEMENT TO THE VIGILANTES, LISTENING TO SCOTT BESSENT. BANK OF AMERICA SAYING WE ARE NET 20% UNDERWEIGHT THE MOST SINCE OCTOBER OF 2022. DANI: HUGE MOVES INDIVIDUAL STOCKS, SPECIFICALLY NETFLIX TAKING OFF MORE THAN 14% IN THE PREMARKET. THEY REPORTED A RECORD SUBSCRIBER GROWTH 18.9 MILLION NEW CUSTOMERS, THAT IS IN LARGE PART THINGS TO LIVE SPORTS EVENTS AND THE RETURN OF SQUID GAME. MANUS: ORACLE SURGING OF THE COMPANY FORMS THE AI PACK WITH SOFTBANK AND OPENAI. THE SCALE UP IS TO 500. DANI: THE NEWS OF SOFTBANK ‘ S JOINT VENTURE ALONG WITH NVIDIA AND MICROSOFT IN THE BIG AI SPEND. MANUS: WE WILL SPEAK TO THE FINLAND PRESIDENT IN THE STATE BANK OF INDIA CHAIRMAN. IN A FEW MOMENTS, SEEMA SHAH JOINS US FROM PRINCIPAL ASSET MANAGEMENT. IT IS LIKE A FLAMETHROWER OF RISK. I LOVE THIS AI STORY. I HAVE NOT WATCHED SQUID GAME YET. I DID WATCH SOME FOOTBALL ON CHRISTMAS DAY TO BE FAIR. DANI: YOU HAVEN ‘ T WATCHED FOOTBALL — SQUID GAME BUT YOU HAVE WATCH FOOTBALL? WHAT HAVE YOU DONE WITH MANUS CRANNY. MANUS: A FLAMETHROWER ACROSS THE STEC MARKET. DANI: IT IS IN LARGE PART TECH BUT IT IS A BROAD RALLY NOT JUST IN THE U.S., BUT EUROPE. THE STOXX 600 REACHING A NEW RECORD. THERE IS MAY BE RELIEF THAT ON WEEK ONE SO FAR WE HAVEN ‘ T GOTTEN THESE BOND TARIFFS YET. HOW LONG DOES THAT LAST? MANUS: IT GOES BACK TO SCOTT BESSENT POTENTIALLY BEING IN ONE EAR VERSUS ANOTHER PRETTY RIGHT NOW THIS IS THE POLICY OF APPEASEMENT TO THE BOND MARKET. YOU LISTEN TO THE CONVERSATIONS, THE HEAD THERE SAYING HE IS STILL WORRIED ABOUT A PEAK IN THESE RATES IN THE UNITED STATES. DANI: IT ‘ S CLEAR WHERE THE CENTER OF POWER HAS SHIFTED. IT ‘ S NOT SWITZERLAND, IT IS D.C.. MANUS: ORACLE, MICROSOFT AND NVIDIA, NVIDIA WILL PLAY INTO THIS IN TERMS OF SUPPLY PART OF THE GEAR. STARGATE WILL NEED. THIS IS THE NEW AI DEAL WHICH IN MANY WAYS AS I SAY IS A FLAMETHROWER OVER TECH RISK. 10% TARIFFS IS LESS THAN WE THOUGHT. LET ‘ S GET TO SEEMA SHAH. THIS AI PODIUM DEAL ANNOUNCED YESTERDAY REALLY FOR ME SETS THE STAGE OF FURTHER OPENING UP THE GAP OF U.S. EXCEPTIONALISM WHEN IT COMES TO TECH TRIUMPH. SEEMA: YES, I WOULD AGREE. I THINK WHAT WE ARE HEARING AT THE MOMENT IS IT IS REINFORCING SOME OF THE NARRATIVES THAT WERE ALREADY IN PLAY. ONE BEING U.S. EXCEPTIONALISM AND THE SECOND IS THIS CONTINUED ADVANCE FOR THE TECHNOLOGY SECTOR. WHEN WE LOOK AT AI, THERE MAY WELL BE FLUCTUATIONS IN UPS AND DOWNS ALONG THE WAY BUT THIS IS A LONG-TERM MOVE AND WE ARE SEEING MORE GOVERNMENTS TALKING ABOUT THE POTENTIAL GAIN FROM INVESTING IN AI. THIS IS A NARRATIVE WHICH WILL GO ON IN ANY COUNTRIES THAT HAVE SIGNIFICANT EXPOSURE TO AI, SPECIFICALLY THE U.S. FOR EXAMPLE WILL BE KEY GAINERS NOT JUST IN THE SHORT-TERM BUT WE THINK IN THE LONG TERM AS WELL. DANI: AT THE MOMENT IS THE RISING TIDE LIFTING ALL BOATS? FOR THE PAST SIX SESSIONS, TWO OUT OF EVERY THREE STOCKS IN THE S & P 500 HAS RISEN HIGHER. THAT IS A NEW RECORD IN THIS MARKET, IT ‘ S THE BROADENING SONY PEOPLE HAD CALLED FOR. DO YOU THINK IT IS ENDURING? SEEMA: IT IS A GOOD POINT BECAUSE THE AI STORY IS MORE OF SOMETHING THAT ‘ S A BIT MORE STREET T.J.: ON ALLOCATION PERSPECTIVES CONTRIBUTING TO THE RUNNING AI. WHAT IS LIFTING UP SMALL-CAP AND SOME OF THE OTHER SECTORS IS QUITE TACTICAL. IT ‘ S BASED IN THE MOMENT ON OPTIMISM THAT MAY BE TRUMP ISN ‘ T IN A MOVE FORWARD WITH THE FULL LENGTH OF TARIFFS THAT HE HAD ALMOST THREATENED A FEW WEEKS AGO BUT THIS IS REALLY EARLY DAYS. IF YOU ARE IN THE NEXT FEW DAYS, WE KNOW FROM TRUMP 1.0 THAT THE ANNOUNCEMENT CAN COME AT ANY POINT. IF YOU WERE TO WAKE UP TO HEADLINE SUGGESTING THAT IS MOVING FORWARD WITH THE UNIVERSAL TARIFF OR REALLY MOVING FORWARD WITH 20 TO 30% TARIFF WITH CHINA THAT WILL SET MARKETS BACK AGAIN SO I THINK FOR INVESTORS IT IS IMPORTANT TO KEEP IN MIND THAT ONE DAY ‘ S MOVE IS NOT GOING TO BE REFLECTIVE OF WHAT WE CAN EXPECT TO SEE OVER THE NEXT YEAR OR SO. SO IT ‘ S IMPORTANT TO LOOK FOR SOME FUNDAMENTAL THEMES. THEY WILL DRIVE MARKETS CAN MEAN YOU CAN HAVE GAINS FOR MORE JUST 24 TO 48 HOURS. > > ONE OF THE REPRICING ‘ S HAS BEEN IN THE BOND MARKET AND THE NARRATIVE IS THAT DEREGULATION AND ENERGY INDEPENDENCE, THE TRIFECTA THAT IS SET BY SCOTT BESSENT WILL BE THE DOMINANT DUTCH DOMINOES OVER THE POTENTIAL FOR INFLATION FROM TARIFFS. IS THAT A SUFFICIENT NARRATIVE TO BE LONG OF DURATION RIGHT NOW. DO YOU ON THAT RELATIVE TO THE INFLATION RISK? > > I THINK IT IS A BRAVE ONE SO I THINK WHEN WE ARE LOOKING AT A FISCAL STORY WE KNOW THERE IS A DESIRE TO CUT TAXES. I THINK THERE IS A CORRECT REASSURANCE THAT SCOTT BESSENT WILL BE A MODERATING VOICE. SOMEONE WHO UNDERSTANDS THAT THERE ARE MAJOR RISKS INVOLVED WITH SOMEWHAT RISKY POLICY ON THE FISCAL SIDE. SO THAT IS REASSURING. THE INFLATION STORY FOR US IS A LITTLE BIT MORE IMPORTANT IN TERMS OF THE UPSIDE RISKS OR THE LOW BELOW ECONOMY IS MORE THE INFLATION SIDE AS WE ARE MOST WORRIED ABOUT. FROM A DURATION PERSPECTIVE, 4.5% WHERE IT IS TODAY AROUND THAT LEVEL IS SOMEWHERE IN THAT RANGE. I DON ‘ T FEEL STRONG ENOUGH TO START GOING OVERWEIGHT DURATION AND IF ANYTHING I THINK IT ‘ S MORE PARTICULAR ON THE SHORT END OF THE YIELD CURVE. DANI: IN TERMS OF HOW YOU OPERATE IN AN ENVIRONMENT WHERE IT SEEMS LIKE THERE GAINS TO BE HAD IN 24 TO 48 HOURS. A LOT OF THE INFLATION STORY DOES MATTER ON FISCAL POLICY ON TARIFF POLICY AND WE GET THESE MARKET WRINKLES DEPENDING ON WHAT HEADLINES COME OUT. THAT SEEMS TO BE THE UNFORESEEABLE FUTURE CONSIDERING THIS UNCERTAINTY IS MORE OF A FEATURE OF TRUMP POLICY NOT NECESSARILY A BUG. SO WHAT DO YOU DO WHEN THERE IS THAT KIND OF HEADLINE VOLATILITY, DO YOU NEED TO STAY CLOSE TO THE GROUND, DO TRY TO CHASE IT? DO YOU HAVE CERTAIN CONVICTIONS YOU TIE YOURSELF DOWN TO? SEEMA: THIS WILL BE A CHOPPY TRADING ENVIRONMENT. IN WHATEVER MARKET YOU ‘ RE LOOKING AT, OVER TRYING TO LINE OURSELVES TO THE MOMENT. THE CANNOT LAST THROUGH THE VOLATILITY WE MAY SEE. THE TRUMP ADMINISTRATION, THEY ARE VERY KEEN ON IMPROVING GROWTH IN THE U.S.. SO WE ARE NOT SO WORRIED ABOUT OPPOSITION RISK. WE ARE STILL RISK ON WHICH MEANS BEING OVERWEIGHT EQUITIES AND CREDIT. AND ON THE INFLATION SIDE BECAUSE INFLATION WE BELIEVE IS THE KEY THREAT THAT THE MARKET WILL BE TORMENTED BY ALMOST FOR THE DURATION OF 2025 IT MEANS YOU STILL HAVE TO HAVE SOME EXPOSURE TO INFLATION ASSETS, THAT WILL BE CONSIDERABLE GAINS TO BE HAD THERE. AND ON THE OTHERS AS WE WERE SEEN JUST TODAY THAT TARIFFS MAY NOT COME TO THE EXTENT PEOPLE HAVE BEEN WORRIED ABOUT. IT MEANS YOU NEED TO HAVE GLOBAL DIVERSIFICATION. WE BELIEVE IN USE EXCEPTIONALISM BUT OUR OPPORTUNITIES AROUND THE REST OF THE WORLD AND THE KEY ONES WE ARE LOOKING AT, ONE OF THOSE REASONS IS BECAUSE THEY ARE LESS VULNERABLE TO THE TERROR THREAT FROM THE U.S. AND WE BELIEVE THEY HAVE NOT STRONG FUNDAMENTALS FROM AN ECONOMIC PERSPECTIVE. > > ONE MARKET THIS TRADING HIGHER IS EUROPE AT A RECORD HIGH. WE LOOK AT SOME OF THE BANK OF AMERICA POSITIONING AND WE FLIP FROM BEING UNDERWEIGHT BEFORE CHRISTMAS TO A NET OVERWEIGHT OF 26%. WE HAVEN ‘ T SEEN THAT KIND OF A PIVOT FOR A WHILE. THEY SAY CHINA COULD GET IT RIGHT IN EUROPE COULD BE REHABILITATED. THAT IS A BOOST TO THE NARRATIVE FOR BEING LONG OVER TAIL RISK OF EUROPE. > > I THINK WHAT INVESTORS ARE LOOKING OUT WHICH IS CORRECT IS BECAUSE VALUATIONS IN EUROPE ARE SO CHEAP YOU DON ‘ T NEED TO HAVE A MAJOR POSITIVE SURPRISE YOU JUST NEED A BIT OF A POSITIVE SURPRISE AND YOU CAN GET SOME SIGNIFICANT UPSIDE TO EUROPEAN EQUITIES. HOW LONG CAN THAT BE MAINTAINED? TO US THE FUNDAMENTAL STORY FIGURE IS STILL QUITE WORRISOME. WE ‘ RE WORRIED ABOUT THE GROWTH PROSPECT, THE INFLATION, WHETHER OR NOT THE ECB WILL REALLY BE ABLE TO AVOID RECESSION FOR THE BLOCK THIS YEAR. FROM OUR PERSPECTIVE THERE COULD BE SOME OFF — UPSIDE DAYS, A WEEK OR EVEN A MONTH OR TWO. BUT IT ‘ S NOT GOING TO LAST OVER A FULL NINE MONTH PERIODS IS STILL A LITTLE QUESTIONABLE. > > THANK YOU SO MUCH FOR JOINING US THIS MORNING. SEEMA SHAH PRINCIPAL ASSET MANAGEMENT. COMING UP WE WILL TAKE YOU BACK TO DAVOS FOR THE INTERVIEW WITH THE PRESIDENT OF FINLAND. STAY WITH US HERE ON YOUR BRIEF. ♪ > > DANI BURGER AND MANUS CRANNY IN NEW YORK. A FLAMETHROWER ACROSS RISK YOU ‘ VE A COUPLE THINGS HAPPENING, AI, THE DOMINANCE OF WHICH COMING INTO THE U.S.. NETFLIX EARNING AND A REALLY BROAD EQUITY MARKET RALLY. IT ‘ S NOT JUST THE U.S. WITH A BREATH IS LOOKING POSITIVE IT ‘ S EUROPE AS WELL AS AN ALL-TIME RECORD. MANUS: SEEMA SHAH SAID YOU MIGHT GET A COUPLE OF WEEKS OR A MONTH IN EUROPE BUT SHE DOUBTS THE CAPACITY TO SUSTAIN RECESSION IS HIM RISK AND THE ECB WILL HAVE TO DO MORE. DANI: LET ‘ S HEAD OVER TO DAVOS. STEPHANIE FLANDERS IS SITTING DOWN WITH THE PRESIDENT OF FINLAND. STEPHANIE: THANK YOU SO MUCH MR. PRESIDENT FOR JOINING US. LET ME GET TO THE QUESTION OF THE UNDERGROUND CABLES BUT UP AND RIPPED UP BY SHIP ANCHORS SEVERAL TIMES IN THE LAST 15 MONTHS. YOU THINK THAT IS SABOTAGE? > > WE ATTRIBUTE WHEN WE KNOW WHAT ‘ S HAPPEN SO WE HAD FREE OF THESE CASES IN THE PAST YEAR. FIRST TIME WE LET THE SHIP GO I THINK THAT WAS A MISTAKE. SECOND TIME IT WAS AN SWEDISH GERMAN WATERS. THEY BOARDED A THIRD TIME AND WE CONFISCATED AND INVESTIGATIONS ARE STILL ONGOING AND THERE ALWAYS A COUPLE OF OPTIONS. ONE IS SABOTAGE, OF OTHER IS MISTAKEN THE THIRD IS INCOMPETENCE PRINT OWN IS STILL ONGOING SO WE CAN REALLY TAKE A STAND ON THAT. IT DOESN ‘ T REALLY MATTER WHO DOES IT. THE MOST IMPORTANT THING IS WE ARE ABLE TO PREVENT IT AND IF WE ARE NOT ABLE TO THEN WE CAN ACTUALLY CORRECTED VERY QUICKLY. NOW WE HAVE A BALTIC CENTRIC OPERATION SO I THINK HER SITUATION PICTURE IS BETTER THAN WHAT IT USED TO BE AND WE ARE ABLE TO DEAL WITH IT. YOU ‘ VE SAID WHEN YOU FIND THE CULPRIT YOU WILL ATTRIBUTE IT. BUT THAT HASN ‘ T HAPPENED. PRES. STUBB: WE ARE VERY MUCH A RULE OF LAW BASED SOCIETY SO WE HAVE A CRIMINAL INVESTIGATION AND ONCE THAT IS FINISHED THEN WE CAN DRAW OUR CONCLUSIONS. > > YOU ARE CONFIDENT THAT THE NAVAL DRONES BUT YOU ‘ VE NOW AGREED WOULD PATROL THE BALTIC WILL BE ENOUGH TO PREVENT IT. PRES. STUBB: YOU CAN NEVER PREVENT TO BE 100% SURE. IT WAS A PRIVATE SECTOR THAT WAS TOLD AFTER AN HOUR THE CABLE HAD BEEN CUT. OUR AUTHORITIES IDENTIFIED ONE OF TWO SHIPS IT COULD HAVE BEEN, AND MOVED TO OUR WATERS AND THE REST FOLLOWED SO YOU CAN PREVENT EVERY CASE BUT BECAUSE WE ARE NOW CONTROLLING THE SHADOW FLEE BETTER BECAUSE WE HAD BETTER UNDERWATER INFRASTRUCTURE BECAUSE WE CAN DEAL WITH DIFFERENT OPERATIONS. > > IF YOU DO FIND EVIDENCE OF SABOTAGE AND YOU NAME THE CULPRIT WHAT WOULD YOU EXPECT TO BE THE FURTHER RAMIFICATIONS OF THAT. YOU CONSIDER IT AN AGGRESSIVE ACT. > > IT ‘ S NOT IN THE INTEREST OF ANYONE PRINT THE BALTIC SEA IS A SMALL SEA IT TAKES ABOUT 30 YEARS FOR IT TO COME IN AND OUT. THE OTHER ONE IS AN ENVIRONMENTAL CATASTROPHE AND IT ‘ S NOT IN THE INTEREST OF RUSSIA ANYONE ELSE TO HAVE AN ENVIRONMENTAL CATASTROPHE. THE BIG PROBLEM IS WHERE TRENT ACCORDING TO SANCTION OIL ON SHIPS THAT ARE NOT GOOD. SO THIS RISKS THE ENVIRONMENTAL CATASTROPHE MORE SO WE HAVE TO DEAL WITH IT. > > PRESIDENT TRUMP IS BACK IN OFFICE AND IN RECENT WEEKS HAS MADE COMMENTS ABOUT NOT RULING OUT MILITARY ACTION TO TAKE CONTROL OF GREENLAND AND OTHER AREAS. WHAT IS YOUR RESPONSE TO THAT. PRES. STUBB: IN FOREIGN POLICY YOU HAVE TO DEAL WITH THINGS CASE-BY-CASE. WE ALL UNDERSTAND THAT TRUMP HAS CHANGED AMERICAN FOREIGN POLICY AND IT IS MORE TRANSACTIONAL. WE LOOK AT IT FROM TWO TRACKS. ONE IS OUR OWN, WHAT IS IN FINLAND ‘ S INTEREST. FINLAND PRODUCES 60% OF THE WORLD ‘ S ICEBREAKERS. THE ALLIANCE NEEDS 70 TO 90 ICEBREAKERS. IS THERE A DEAL TO BE MADE THERE. IT WAS ASHLEY DONALD TRUMP ‘ S IDEA ORIGINALLY TO DO SOMETHING ON ICEBREAKERS. WE ALSO LOOK THE NORDICTRACK AND EU TRACK. I COME FROM A SMALL COUNTRY. FOR ME IT ‘ S IMPORTANT THREE PRINCIPLES ARE MET. INDEPENDENCE OF A NATIONSTATE, SOVEREIGNTY OF A NATION AND TERRITORIAL INTEGRITY OF A NATIONSTATE. STEPHANIE: DO YOU THINK DONALD TRUMP IS GIVEN HIS PAST RECORD YOU SAID IT ‘ S CASE-BY-CASE BUT LOOKING AT HIS PAST RECORD IS SOMEONE WHO IN ANY NUMBER OF REALMS HAS IGNORED VERY LONG-ESTABLISHED NORMS. YOU EXPECT THEM TO RESPECT THOSE PRINCIPLES OF THE INTEGRITY OF NATIONAL BORDERS AND SOVEREIGNTY. PRES. STUBB: I HOPE IT IS IN THE INTEREST AND VALUE BASE OF THE UNITED STATES TO DO THAT. THERE ARE TWO THINGS IN MIND FROM EUROPEAN SECURITY PERSPECTIVE THAT DRIVES DONALD TRUMP AND HIS ADMINISTRATION. ONE IS PEACE. HE WANTS TO MAKE PEACE. HE DID IT IN THE MIDDLE EAST AND WANTS TO DO IN UKRAINE. IN ORDER TO DO THAT YOU NEED ALLIANCES, SOME KIND OF RULES. THE OTHER IS THE U.S. WANTS TO RETAIN ITS POSITION AS A SUPERPOWER. IF YOU WANT TO BE A SUPERPOWER YOU HAVE TO HAVE ALLIES PRINT IN THE CLOSEST ALLIES ABOUT 25% OF THE WORLD COUNTRIES, FROM EUROPE AND I ‘ M SURE THERE TRANSATLANTIC PARTNERSHIP WILL BE STRONG EVEN AFTER THESE FOUR YEARS. > > YOU THOUGHT VERY DEEPLY ABOUT NATO, ABOUT EUROPEAN DEFENSE. MANY PEOPLE WOULD SAY THAT THE FIRST TRUMP ADMINISTRATION HAD A CONSTRUCTIVE IMPACT ON NATO AND I JUST WONDERED HOW YOU THINK HOW SHOULD NATO EUROPEAN MEMBERS OF NATO, RESPOND AND MAKE THE MOST OUT OF THE SECOND TRUMP ADMINISTRATION QUESTION MARK PRES. STUBB: LISTEN TO WHAT HE HAD TO SAY PRETTY WAS RIGHT TO SAY EUROPEANS WERE NOT TAKING CARE OF DEFENSE ENOUGH. THAT WE WEREN ‘ T USING ENOUGH FOR DEFENSE EXPENDITURE. I ‘ M NOT SPEAKING FOR FINLAND BECAUSE WE ARE UP 2.5%, WE HAVE ONE OF THE LARGEST MILITARIES IN EUROPE AND WE BUY AMERICAN MILITARY GRADE STEPHANIE: BUT YOU ‘ RE NOT AT 5%. PRES. STUBB: THE U.S. IS NOT AT 5% EITHER. THE FACT HE IS PUSHING US TO DO MORE ON OUR OWN IS I THINK A GOOD THING. WHAT I WANT TO SAY IS LISTEN TO WHAT HE HAS TO SAY AND ACT ACCORDINGLY. STEPHANIE: DO YOU THINK PEOPLE TALK ABOUT STRETCH TARGETS, DO YOU THINK 5% IS A USEFUL STRETCH TARGET? > > INSTEAD OF LOOKING AT THE PERCENTAGES, A LOOK AT WHAT YOU HAVE. YOU ‘ VE A STRONG AIR FORCE, A STRONG NAVY AND LAND FORCES. IN THE MILITARY CAPACITY, LONG-RANGE MISSILES, F-18 ‘ S, F-35 ‘ S AND THE REST OF IT SO YOU HAVE TO PUT YOUR MONEY WHERE YOUR MOUTH IS IN A SENSE THAT IT ‘ S NOT THE PERCENTAGE THAT COUNTS IT ‘ S THE STUFF YOU HAVE PRINT THE U.S. HAS SOMETHING LIKE 34 DIFFERENT MILITARY SYSTEMS. EUROPE HAS OVER 170. THERE IS A LOT OF RATIONING TO BE DONE THERE. > > COMING UP TO THREE YEARS ON THE WAR IN UKRAINE. HOW DO YOU THINK IT SHOULD END PRINT WHAT WOULD YOU EXPECT OVER THE NEXT FEW MONTHS? PRES. STUBB: I THINK IT SHOULD OBVIOUSLY END AND A CEASE-FIRE AND PEACE AGREEMENT. I THINK THAT NEEDS TO RESPECT AT LEAST THREE PRINCIPLES. THE INDEPENDENCE OF UKRAINE, THE SOVEREIGNTY OF UKRAINE. IN OTHER WORDS IT ‘ S TIME TO DECIDE WHETHER IT WANTS TO BE IN THE EU OR NATO AND THIRDLY IT NEEDS TO RESPECT THE TERRITORIAL INTEGRITY OF UKRAINE. I THINK TRUMP HAS A HUGE ROLE TO PLAY HERE. IN MANY WAYS A UKRAINIAN VICTORY IS AN AMERICAN AND TRUMP VICTORY PRINT > > YOU ‘ VE TALKED ABOUT CHINA ACTUALLY POTENTIALLY PLAYING A KEY ROLE IN ENDING THE DISPUTE. SOME PEOPLE THINK THAT WILL BE TRUMP ‘ S ROLE IS TO PICK UP THE PHONE TO PRESIDENT XI JINPING. > > WE ALREADY SAW THAT I THINK PRESIDENT TRUMP SPOKE WITH PRESENT XI JINPING ON SATURDAY AND I SPENT 3.5 HOURS WITH PRESENT XI JINPING IN OCTOBER AT A STATE VISIT AND MY MESSAGE IS CHINA HAS INFLUENCE ON RUSSIA SO IF THERE IS A CONNECTION BETWEEN PRESIDENT XI JINPING AND PRESIDENT TRUMP ON YES WE NEED TO MUSTER A PEACE DEAL I THINK IT IS PRE-MUCH THE JOB OF PRESIDENT XI JINPING TO CONVINCE PUTIN IT ‘ S TIME TO DO A DEAL AND THEN IT ‘ S THE JOB OF DONALD TRUMP TO FIND A DEAL WHICH IS FAIR AND JUST AND WHERE THERE ‘ S NO PEACE WITHOUT UKRAINE OR EUROPE. STEPHANIE: THANK YOU VERY MUCH FOR JOINING US BACK TO YOU. > > STEPHANIE FLANDERS BLOOMBERG HEAD OF ECONOMIC — ECONOMICS AND GOVERNMENT PRINT MORE TO COME FROM DAVOS. DON ‘ T MISS OUR EXCLUSIVE INTERVIEW WITH THE UKRAINIAN PRESIDENT VOLODYMYR ZELENSKYY. THAT IS AT 10:00 A.M. EASTERN. OTHER STORIES TRENDING UNDER BLOOMBERG TERMINAL. PRESIDENT XI JINPING AND PRESIDENT PUTIN HAD A VIDEO CALL THE DAY AFTER PRESIDENT TRUMP ‘ S INAUGURATION. TO DISCUSS BILATERAL RELATIONS RESPONDING TO EXTERNAL UNCERTAINTIES PRINT IT WAS REPORTED THAT BOTH CHINA AND RUSSIA ARE ALSO OPEN TO DIALOGUE WITH TRUMP ON THE WAR IN UKRAINE WITH APPROPRIATE SIGNALS COMING FROM WASHINGTON. > > BACKING AI DEVELOPER PHILANTHROPIC WITH ANOTHER $1 BILLION IT BECOMES ONE OF THE MOST PROMISING RIVALS TO OPENAI. THE SAN FRANCISCO BASED COMPANY IS PERHAPS BEST KNOWN FOR ITS FAMILY OF LARGE LANGUAGE MODELS WHICH COMPETE WITH CHATGPT. THEY DECLINED TO COMMENT AND THE GLOW — GOOGLE SPOKESPERSON DID NOT IMMEDIATELY RESPOND TO A REQUEST FOR COMMENT. MANUS: NETFLIX ENDED THE YEAR WITH A BANG, THE BIGGEST QUARTERLY SUBSCRIBER GAIN IN HISTORY BOOSTING ITS FIRST MAJOR LIVE SPORTING EVENTS AND THE RETURN OF SQUID GAME. THE STREAMER ADDED 19 MILLION CUSTOMERS WHICH WAS MORE THAN DOUBLE WALL STREET EXPECTED AND BROUGHT THE GLOBAL SUBSCRIBERS AT NETFLIX TO MORE THAN 300 MILLION. LET ‘ S TALK A LITTLE BIT MORE ABOUT THAT. IT WAS A BLOWOUT QUARTER. JOHNNY WELLS HAS BEEN TRACKING THESE. THIS WAS BLOWOUT AND THEY MANAGE TO RAISE PRICES. GOOD MORNING. > > THE QUESTION IS HOW DID THEY KEEP IT GOING. THIS WAS SUCH A BLOWOUT. I THINK THE MOMENTUM IS A REAL QUESTION HERE AND WHEN YOU LOOK AT THE SHAREHOLDER LEVEL FROM YESTERDAY THE SHAREHOLDER LEATHER FROM YESTERDAY YOU WILL SEE A TERM HERE THAT SPEAKS TO THE FORWARD PLAN AND IT IS NOT A WORD BUT IT IS EVENT TIES. I LOOKED UP THE WEBSTER ‘ S DICTIONARY AND IT IS NOT THERE. IF IT ‘ S NOT A WORD IT CERTAINLY IS A BUSINESS PLAN AND WHAT WE ARE SEEING IS THESE MARQUEE EVENTS. THESE EVENTS LIKE A BOXING MATCH BACK IN NOVEMBER WITH MIKE TYSON, THEY DRIVE SUBSCRIBERS AND THAT IS SOMETHING THE BUSINESS WILL WANT TO FOCUS ON. BUT THEY ALSO PROVIDE THAT CAPTIVE AUDIENCE THAT ADVERTISERS LOVE AND NETFLIX IS PLUNGING HEADLONG INTO ADVERTISING TRYING TO BUILD UP THAT BUSINESS. THEY WANT TO GET AN SCALE TO PLEASE ADVERTISERS BY THE END OF THIS YEAR PRETTY IT ‘ S THESE EVENTS THAT PROVIDE CONTENT, SUBSCRIBERS AND RECORD NUMBERS OF SUBSCRIBER GROWTH BUT THEY ALSO HELP THE ADVERTISING BUSINESS. DANI: ELSEWHERE, DAN IVES IS TALKING ABOUT THIS AI ANNOUNCEMENT BETWEEN SOFTBANK, OPENAI AND ORACLE IN CONJUNCTION WITH PRESIDENT TRUMP SAYING IT HERALDS A NEW ERA OF AI SPEND IN AMERICA. THERE HAS ALREADY BEEN A LOT OF IT. HOW DOES THIS STARGATE CHANGE THINGS UP. CHARLIE: AIN TRUMP HAVE A LOT IN COMMON IN THAT THERE ‘ S A LOT OF WORDS BUT INVESTORS REALLY NEED TO PARSE INTO WHAT ‘ S ACTUALLY CHANGING HERE AND WHEN YOU LOOK AT THE STARGATE ANNOUNCEMENT. IT ‘ S 100 BILLION DOLLAR INVESTMENT BRINGING TOGETHER OPENAI, ORACLE AND SOFTBANK. THEY ARE GOING TO INVEST IN CRITICAL AI INFRASTRUCTURE. WE HAVE HEARD A LOT ABOUT THIS. WHAT ACTUALLY CHANGES OR TWO THINGS. ON ONE FRONT YOU HAVE TRUMP TALKING ABOUT THE REGULATION ON THE AI SIDE. HE ‘ S ROLLING BACK SOME OF THESE BIDEN ERA SAFETY REGULATIONS ON AI. HE ‘ S GOING TO USE EXECUTIVE ACTIONS AND SOME PRESIDENTIAL POWERS TO SPEED UP SOME OF THESE CONSTRUCTION PROJECTS AND BRING IN ENERGY AS WELL. BUT YOU ALSO GET THE COORDINATION HERE. THAT IS CRUCIAL FOR AI. WHAT AI COMPANIES SAY THAT THEY NEED, THEY NEED CHIPS, ENERGY AND DATA CENTERS. THOSE DATA CENTERS USE AS MUCH ENERGY AS SOME CITIES SO THAT COORDINATION PIECE IS REALLY IMPORTANT. WHAT YOU ARE SEEING FROM THAT ANNOUNCEMENT IS THE REGULATION AND COORDINATION. > > A LOT OF SPEND GOING TO BE NECESSARY ON ENERGY. THANK YOU SO MUCH CHARLIE. COMING UP PRESIDENT TRUMP WIDENS HIS TARIFF THREAT BEYOND THE AMERICAS. MORE ON THAT NEXT IN YOUR BLOOMBERG BRIEF. ♪ DANI: WELCOME TO BLOOMBERG BRIEF. DANI BURGER AND MANUS CRANNY HERE AND LET ‘ S SET YOUR AGENDA. MANUS: THE PRESIDENT FLOATS 10% FOR CHINA AND WARNS EUROPE ON TREATING THE U.S. BADLY. DOUBLING THE BASE WITH A BOOST FROM NFL AND SQUID GAME. NETFLIX SURGES ON A RECORD QUARTER. DAVOS IS IN FULL SWING. DON ‘ T MISS OUR LIVE INTERVIEW WITH THE STATE BANK OF INDIA ‘ S CHAIR COMING UP IN JUST A MOMENT. THE FLAMETHROWER FOR RISK. DANI: I LOVE IT PREYED IT IS VERY EVOCATIVE. BUT IT ‘ S ALSO ADDING NOT JUST TECH BUT MAY BE A LITTLE BUT OF CONCRETE TARIFF SPRAYED ADDING IN THE COUNTRY ‘ S DAY BY TO ADD TARIFFS TO. S & P 500 CLOSES ABOVE 6000 FOR THE FIRST TIME THIS YEAR YESTERDAY. IT IS THE NASDAQ 100 LEADING US HIGHER THANKS IN PART TO INSANE NUMBERS FOR NETFLIX. HARD TO UNDERSCORE HOW GOOD THEY LOOK. RUSSELL 2000 AFTER SIX DAYS OF ADVANCING BRAIN YOUR 10 YEAR YIELD CLOSED BELOW 4.6%. EVERY BENIGN ENVIRONMENT DESPITE ALL THE CONCERNS ABOUT INFLATION BECOME. WE WERE JUST SPEAKING THIS IS INFLATION ON ITS WAY. BUT IT HAS BEEN RELIEF IN THESE BOND MARKETS PREYED MAY BE THAT COMES BACK TO THE FACT WE EXPECTED REALLY AGGRESSIVE DAY ONE ACTION FOR TRUMP. > > JUST ONE EXAMPLE OF NOT CONVINCED THAT YOU CAN ASSESS THE FIRST 100 DAYS. SAYING IT ‘ S GRADUALISM A 10% ON CHINA, EUROPE IS IN MY SIGHT LINE BECAUSE THE RISK IS THIS. IT COULD BE DEATH OF A THOUSAND CUTS. YOU START SAYING YES IT IS GRADUALISM BUT WHERE IS THE END OF THAT JOURNEY AND WHAT HAVE YOU GOT TO DO TO GET OFF THE RUNWAY WHICH PRESIDENT TRUMP IS FIRMLY AT THE BOTTOM OF THE RUNWAY WITH A HAND ON THAT THROTTLE. DANI: THE METAPHORS ARE REALLY GOOD THIS MORNING. I THOUGHT SEEMA SHAH WAS BRILLIANT ON EUROPE RATED EVERYONE SANG THE BAR IS SO LOW. WE ‘ VE GOTTEN A RALLY IN EUROPE THAT ‘ S TAKEN US TO NEW RECORD IN THE EUROPE STOXX 600. THE BAR IS LOW FOR A REASON. AGAIN TRUMP YESTERDAY SAYING EUROPE TREATS US VERY BADLY. THEY ‘ RE IN MY SIGHT FOR TARIFF SPRAYED — TARIFFS. MANUS: VERY FEW PEOPLE HAVE GOT THAT TAILWIND. IN TERMS OF EUROPE THEY FLIP SHORT OVER THE LONG PRINT BUT FOR HOW LONG WILL THAT ENDURE. THAT ‘ S A MINUSCULE MOVE. > > WHAT COMES FROM THE WHITE HOUSE MIGHT BE THE THING THAT DETERMINES THIS. IT IS DAY TWO OF PRESIDENT TRUMP SECOND TERM IN OFFICE. HE HAS CONTINUED TO ISSUE TARIFF THREATS, NOTHING CONCRETE YET BUT SPEAKING AT A WHITE HOUSE EVENT THE PRESIDENT PUT CHINA AND EUROPE IN HIS CROSSHAIRS. > > TALKING ABOUT A TARIFF OF 10% ON CHINA BASED ON THE FACT THEY ARE SENDING FENTANYL TO MEXICO AND CANADA. DANI: JOINING US IS MEGAN CRANE IN WASHINGTON DC. GREAT TO SEE YOU. 10% TARIFFS ON CHINA. WE HAD HEARD A CAMPAIGNING PRESIDENT-ELECT TRUMP TALKED ABOUT AS MUCH AS 60% PREYED WHAT WE MAKE OF THE NEW NUMBERS BEING THROWN AROUND. > > GOOD MORNING. THE NUMBERS ARE UNCLEAR. A LOT OF WHAT DONALD TRUMP SAYS IT SORT OF PUTTING IDEAS OUT THERE AND FLOATING BALLOONS AS TO WHAT WILL GET THE MOMENTUM IN THE WAY HE WANTS IT TO BE. NONE OF HIS EXECUTIVE ORDERS YET HAVE ACTUALLY IMPOSED ANY TARIFF SPRAYED HE STATED — REQUESTED A REVIEW THAT IS NOT DUE UNTIL APRIL 1 SO IT IS QUITE A LOT OF TIME FOR HIM TO THROW DIFFERENT NUMBERS AND TO SEE HOW PEOPLE REACT, HOW COUNTRIES REACT AND MARKETS REACT. > > THE OTHER BIG ISSUE IS IMMIGRATION. IMMIGRATION RATES ALREADY HAVING SOME CONSEQUENCES IN NEW YORK, L.A. AND CHICAGO PRINT WHAT WE SEEING ON THE GROUND. > > THERE HAS NOT BEEN A LOT OF RAIDS THAT WE HAVE SEEN GREAT ARE IMMIGRATION REPORTER TELLS US WE WOULD EXPECT TO SEE THEM IN THE MORNING THAT ‘ S THE PRACTICE. WE DO NOT HAVE FOOTAGE OF THAT FROM YESTERDAY SO IT COULD HAPPEN AGAIN TODAY. IT SEEMS LIKE ONE OF THOSE THINGS OF THE TRUMP ADMINISTRATION IS FOCUSED ON THREATS AND THAT IS WORKING. PEOPLE ARE STAYING HOME AND NOT WORKING AND NOT GOING INTO IMMIGRANT HEAVY NEIGHBORHOODS IN CHICAGO, LOS ANGELES. WE DO HAVE REPORTING THAT SHOWS PEOPLE ARE AFRAID. DANI: THIS IS ONE OF THE BIG MACRO RISKS OF DO YOU ACTUALLY HAVE PEOPLE MASS DEPORTATIONS OF THE COUNTRY AND WHAT DOES THAT DO TO THE LABOR MARKET. ELSEWHERE, TIKTOK EVER PRESENT IN THE PRESIDENT ‘ S TALK. THESE CONTINUE TALKING ABOUT THIS IF YOU WANT TO LEAST 50% OWNED BY THE U.S.. ELON MUSK, LARRY ELLISON, MR. BEAST, PAM BONDI ‘ S BROTHER. I DON ‘ T KNOW WHAT TO MAKE OF IT. HOW IS THIS EVOLVING AND IS CHINA REALLY OK WITH THESE TYPES OF GROUPS BE THE ONE TO BUY OPERATIONS FROM BYTEDANCE. > > THAT ‘ S A REALLY GREAT QUESTION. AS FAR AS I UNDERSTAND THEY ARE STILL SEEING THE TIKTOK IS NOT FOR SALE. HOW THAT IS GOING TO PLAY OUT AND WHO ENDS UP WINNING THAT BATTLE IT LOOKS LIKE IN ORDER TO OPERATE IN THE STATES THEY WILL HAVE TO FIND SOME NEW MANAGEMENT AND WHETHER IT ‘ S MR. BEAST OR A DIFFERENT TECH ENTREPRENEUR, ELON MUSK WOULD FACE MONOPOLY PROBLEMS HAVING ALREADY OWNING TWITTER SO THAT — IT IS ONE OF THOSE MANY THINGS IN THE TRUMP ADMINISTRATION IT ‘ S UNCLEAR HOW IT WILL MOVE GOING FORWARD. MANUS: THANK YOU VERY MUCH. IT IS DAVOS, LET ‘ S GET BACK TO BLOOMBERG FRANCINE LACQUA SPEAKING NOW ABOUT WHETHER FINANCIAL SYSTEMS CAN WITHSTAND THE NEXT CRISIS PRINT LET ‘ S LISTEN IN. > > THE FINANCIAL SYSTEM HAS BEEN FAIRLY RESILIENT, IT HAS PROVEN TO BE FAIRLY RESILIENT. A LITTLE BUT OF UNFINISHED BUSINESS IN THE NONBANKS FEAR — NON-BANK SPHERE. BUT THEY HAVE WEATHERED THE RECENT TURMOIL QUITE WELL. AND I MENTIONED THAT POINT BECAUSE ALSO IN TERMS OF THINKING ABOUT FUTURE SHOCKS I WOULD EMPHASIZE MORE THE RESILIENCE PART THEN TRYING TO PREDICT WHERE THE SHOCK IS GOING TO COME FROM. WE LIVE IN A WORLD OF FUNDAMENTAL UNCERTAINTY. BUT THAT MEANS WE FINANCIAL REGULATORS AND BANK RISK MANAGERS THEY LIKE MORE QUANTITATIVE RISK DISTRIBUTION OF SHOCKS. UNFORTUNATELY THAT IS NOT WHAT HAS CREATED MOST HAVOC IN THE FINANCIAL SYSTEM. THESE WERE BOTH FORMS OF UNPREDICTABLE UNCERTAINTIES. UNKNOWN UNKNOWNS AND GIVEN THAT THAT IS SO DIFFICULT I THINK OUR EMPHASIS SHOULD BE AND CONTINUES TO BE BUILDING RESILIENCE WITHIN THE SYSTEM EVEN IF YOU DON ‘ T KNOW WHERE EXACTLY THE SHOCK WILL BE COMING FROM. THERE ARE ENOUGH THINGS TO WORRY ABOUT. SHE ‘ LL ECONOMIC FRAGMENTATION IN AND OF ITSELF MAY HAVE DISRUPTIVE CONSEQUENCES ON FINANCIAL MARKETS. IT MAY HAVE SOME IMPACT ON OUR CAPACITY TO WORK TOGETHER INTERNATIONALLY IF THERE IS A PROBLEM. POPPING UP IN THE FINANCIAL SYSTEM. NEW TECHNOLOGIES OF WHICH ARE VERY PROMISING I THINK IN TERMS OF THEIR BUSINESS OPPORTUNITIES BUT WHICH MAY ALSO CONTAIN ADDITIONAL FORMS OF INTERCONNECTEDNESS IN THE FINANCIAL SYSTEM OVER AND ABOVE THE TRADITIONAL FORMS OF INTERCONNECTEDNESS. > > A LITTLE BIT OF THAT. > > THERE ‘ S A LOT OF UNCERTAINTY OUT THERE. AT A TAKE YOUR POINT THAT ACTUALLY WE BEEN VERY BAD UP OR TAKING FINANCIAL CRISIS. IF WE TRY AND SEE WHAT THE HOT SPOTS TOMORROW COULD BE, WHERE IS THE UNCERTAINTY. > > I THINK I AGREE ENTIRELY. BUT WE CAN TRY TO MAKE SURE THE SYSTEM IS RESOLUTE. SO YOU LOOK AT THE SYSTEM AND SEE WHETHER WEAK SPOTS MIGHT BE BUILDING UP. I THINK WHENEVER YOU LOOK AT A FINANCIAL SYSTEM YOU TALK ABOUT TWO THINGS WITH GREAT IMPORTANCE. ONE IS SOLVENCY WHICH ALSO MEANS LEVERAGE. AND THE SAME IS LIQUIDITY. WE UNDERSTAND SOLVENCY REASONABLY WELL. THE LIQUIDITY PART IS SOMETHING WHICH IS BEHIND THE SCENES THAT IS PART OF THE PLUMBING. WHAT WE ARE SEEING INCREASINGLY WITH WHAT ‘ S HAPPENING AT THE RATE OF FOCUS ON U.S. MARKETS NOW SIX TO 5% OF GLOBAL EQUITY MARKETS. MAYBE WITH THE DEREGULATION EVEN MORE GOING INTO THE U.S.. THE CENTER OF LIQUIDITY IS THE FEDERAL RESERVE. AND YOU HAVE TO ASK IS THE FEDERAL RESERVE GOING TO STEP UP EVERY TIME THERE IS A PROBLEM. WE SAW IN THE GLOBAL FINANCIAL CRISIS THE FEDERAL RESERVE BALANCE SHEET WENT FROM 50 BILLION TO 2.8 TRILLION. THEY CAME DOWN BUT IT COULD NOT COME DOWN ALL THE WAY AT 1.5 TRILLION BACKED UP AGAIN. THE FED CAME BACK IN. AGAIN IT STARTED TRYING TO REDUCE ITS BALANCE SHEET. IT BACKED UP THIS TIME IN MARCH OF 2023 AT 3 TRILLION. THE QUESTION IS THE FED IS SUPPORTING THE U.S. SYSTEM BUT NOW INCREASINGLY WILL SUPPORT A GLOBAL SYSTEM AND THE QUESTION IS WHAT OTHER GAPS CAN BRIDGE THE GAP SPRING FOR EXAMPLE IN MARCH OF 2023. IT COULD NOT SUPPORT THE SYSTEM ITSELF COULD NOT SUPPORT THE SMALL AND MEDIUM BANKS. THE FED HAD TO COME INTO SUPPORT THEM DIRECTLY. WHAT ABOUT INTERNATIONALLY PAID WHAT ABOUT STABLECOINS. WILL THEY BE IN THE SYSTEM OR OUT OF THE SYSTEM. WHO WILL SUPPORT THEM. THESE ARE THE THINGS WE NEED TO EXAMINE GOING FORWARD BECAUSE THIS IS WHERE THE PROBLEMS MIGHT ARISE. SUSAN: I WANT TO BRING TWO ADDITIONAL PERSPECTIVES TO THE DISCUSSION. THE FIRST IS GOING BACK TO YOUR POINT ON THE EVENTS OF MARCH 2023, ONE OF THE UNINTENDED CONSEQUENCES OF THOSE EVENTS WAS SMALL BUSINESSES. BECAUSE TWO THINGS WERE TRUE ABOUT SMALL BUSINESSES. ONE WAS LIQUIDITY WAS CONCENTRATED IN THE BIG BANKS AND THE SECOND WAS THAT AS A RESULT OF THAT CONCENTRATION MANY OF THOSE SMALL BUSINESSES WERE SINGLE THREADED. THEY EACH COULDN ‘ T MAKE PAYROLL, THEY COULD NOT GET SUPPLY CHAIN TO SUPPLY CHAIN PAYMENTS AND THEY COULD NOT GET TO CONSUMERS. AS WE THINK MORE ABOUT WHAT HAPPENS TO BUILD RESILIENCE, THAT CONSTITUENT NEEDS TO BE THOUGHT OF IN THE SAME WAY WE THINK ABOUT MANY OF THE UNDERSERVED COMMUNITIES. THE SECOND POINT ON RESILIENCE IS FOR ME WHERE I REMAIN OPTIMISTIC ABOUT AND I AGREE PREDICTING THE NEXT SHOCK IS FINE. HERE ‘ S WHAT WE HAVE SEEN IF YOU GO BACK IN TIME. WE HAVE SEEN ANY TIME THERE IS FRICTION, FRICTION IS THE PATH TO INNOVATION. AND IF YOU LOOK AT THE INNOVATIONS THAT HAVE COME FROM FINANCIAL CONSTRAINTS, OPEN BANKING IS A GREAT EXAMPLE. THE FACT THAT HALF THE WORLD NOW MOVES DIGITAL MONEY IN A WALLET OF SOME SORT AGAIN BROUGHT BY FINANCIAL CONSTRAINTS BECAUSE SO MANY DIGITAL WALLETS, FROM LOCAL PAYMENT SYSTEMS. THEY ARE NOT INTEROPERABLE GLOBALLY BUT THAT ALLOWS PEOPLE TO TRANSACT DIGITALLY. IF YOU BUILD ONTO THAT WHERE WE ARE WITH GENAI AND THE THINGS THAT HAVE ADVANCED VERY IMPORTANT THINGS TO FINANCIAL SYSTEMS ESPECIALLY IN COMMERCE WHICH IS UNDERSTANDING THE IDENTITY OF THE SELLER AND THE BUYER. THERE IS SO MUCH INNOVATION THAT IS, FROM CONSTRAINT. IS THAT ENOUGH? NO. BUT IT CERTAINLY FOR BODES THAT IS THE WORLD GETS MORE UNSTABLE WE ARE LIKELY TO SEE MORE INNOVATION. MANUS: DO YOU — FRANCINE: DO YOU WORRY IN THIS AMERICA FIRST POLICY THAT THE REST OF THE WORLD WILL HAVE TO FIGURE OUT BY THEMSELVES FINANCIAL STABILITY AND HOW TO SUPPORT MARKETS AND LIQUIDITY. > > MAYBE I COULD JUST OFFERED TWO ANGLES. FIRST LOOK AT WHAT HAPPENED OVER THE LAST FEW YEARS. WHICH WE HAVE EXPERIENCED VERY STABLE FINANCIAL SYSTEMS. IT ‘ S LARGELY DUE TO THE STARTING CONDITIONS THE CREDIT CYCLE WAS BENIGN AS WE ENTER LET ‘ S SAY FIVE YEARS AGO EVEN WITH COVID YOU A LOT OF FISCAL SUPPORT THROUGH THAT PERIOD. AND IT WOULD ALSO GIVE CREDIT TO CENTRAL BANKS FOR ARRESTING THE SPIKING INFLATION. AND THEN GOING FORWARD THE WAY WE LOOKED AT IT, THE ANGLE THERE WERE THREE THINGS YOU WANT TO BE CAREFUL ABOUT. FIRST IS TO BE CLEAR ABOUT THE FRAGILITY ‘ S IN THE SYSTEM. THESE ARE THINGS LIKE ILLIQUIDITY, LEVERAGE AND CONCENTRATION. THAT ‘ S THE FIRST THING. THE SECOND OF COURSE IS NEGATIVE SHOCK. HARD TO PREDICT. BUT YOU COULD IMAGINE THINGS LIKE CREDIT CYCLE, THERE ‘ S A LITTLE BIT OF SOCIETY OF THAT NOW WITH THE FISCAL MONEY RUNNING OUT. YOU COULD IMAGINE A RECESSION DOWN THE ROAD. DANI: HEARING THERE FROM THE GS CEO, ONE OF MANY PANELISTS ON BLOOMBERG FRANCINE LACQUA PANEL SPEAKING ABOUT THE POTENTIAL FOR ANOTHER FINANCIAL CRISIS. IF YOU WANT TO CATCH THE REST OF THE PANEL, ALIVE GO ON YOUR TERMINAL IS WHERE YOU WANT TO HEAD. WE HEAD BACK TO THE SWISS ALPS. OUR LIVE INTERVIEW WITH THE CHAIR OF THE STATE BANK OF INDIA COMING UP NEXT ON BLOOMBERG BRIEF. ♪ > > YOU ARE LOOKING LIVE AT THE PRINCIPAL ROOM. AN EXCLUSIVE INTERVIEW WITH JPMORGAN CHASE PRESIDENT DANIEL PINTO AT 6:00 EASTERN BIRD ON BLOOMBERG. GOOD MORNING, YOU ARE WATCHING BLOOMBERG BRIEF. LET ‘ S HEAD BACK TO THE WORLD ECONOMIC FORUM WHERE BLOOMBERG ‘ S HASLINDA AMIN IS SITTING DOWN WITH THE CHAIRMAN OF THE STATE BANK OF INDIA. OVER TO YOU. HASLINDA: IT ‘ S RESULTS ARE A BELLWETHER FOR INDIA ‘ S ECONOMY. THANK YOU FOR JOINING US. WE ARE TALKING ABOUT THE ECONOMY THAT SLUMPED DOWN TO ABOUT SIX AND CHANGE. IS THAT A BLIP OR IS THE ECONOMY ABOUT TO UP AGAIN? > > THANK YOU FOR HAVING ME ON THE SHOW. AMONG THE MAJOR ECONOMISTS, MY PERSONAL VIEW IS THAT WHAT WE WITNESSED IN THE LAST TWO QUARTERS WOULD BE A BLIP. THE LONG-TERM STORY OF THE INDIAN ECONOMY AND I THINK THE CURRENT FINANCIALS THE GROWTH RATE ADVANCED AROUND 6.4 TO 6.5%. IT IS OBVIOUSLY THE COUNTRY IS LOOKING FOR HIGHER GROWTH RATES. WHEN YOU JUXTAPOSE IT IN THE GLOBAL ECONOMIC BACKDROP OF 3.2% GROWTH RATE IT STILL IS A SIGNIFICANT GROWTH RATE IN OUR VIEW. > > CONSUMPTION REMAINS LOST AT BOTH URBAN AND RURAL. HOW DOES THAT IMPACT THE NEW STRATEGY IN THE PORTFOLIO. > > IS STILL DOING WELL. IN THE BANKING INDUSTRY IN INDIA , ONE THING THE RURAL URBAN CONSUMPTION IS THE DIVISION BETWEEN RURAL AND HERBAL CONSTRUCTION — CONSUMPTION. THE RURAL CONSUMPTION IS INCREASING WITH GROWTH RATES THAT COULD BE TEMPORARILY SLOW DOWN. THE IMPORTANT ELEMENT IS CANVASSING IN TERMS OF DELIVERIES OF CONSUMPTION. IT ‘ S A GOOD STORY. AS FAR AS RETAIL IS CONCERNED, THERE WAS SOME CONCERN ABOUT SLOWING DOWN. BUT THE HOME LOANS IS A GOOD STORY IN INDIA AND WE SEE THAT AMONG THE PERSONAL LOANS, THE HOME LOAN HAVING A ROBUST GROWTH RATE AND THE CREDIT GROWTH BROADLY WILL BE STABILIZING. HASLINDA: DO YOU SEE RISK COMING FROM THE SECOND TRUMP ADMINISTRATION? WE KNOW THEIR ISSUES WHEN IT COMES TO TECH. INDIA ‘ S ECONOMY MIGHT THAT JUST MIGHT BE AFFECTED. ADD TO THAT OF COURSE WE HAVE THE INDIAN RUPEE TRADING AT CLOSE TO RECORD LOWS. C.S.: OBVIOUSLY THE MOMENT TO THE DEVELOPED ECONOMIES HAS RESULTED IN OUTWARD FLOWS WHICH IS DEFINITELY PUTTING PRESSURE ON THE CENTRAL BANK OF INDIA TO REALLY LOOK AT WHAT SHOULD BE THE RATE CUT IN THE MONETARY POLICY. TAKING A RATE CUT, THIS WOULD STEM THE FLOWS OF — AND HOPEFULLY HELP THE MARKET TO IF YOU HAVE NOTICED IN SPITE OF THE STRONG OUTFLOWS, THE DOMESTIC INFLOWS ARE SIGNIFICANTLY IN INDIA. WHERE THE MARKET IS IMPACTED BY DECISIONS WITH A CHANGE OF PRESIDENCY IN THE U.S., THERE IS SOME OPPORTUNITY IN TERMS OF HOW THAT WILL IMPACT INDIA. OUR ASSESSMENT IS A LOT OF THINGS INDIA IS GETTING IT RIGHT IN THE SENSE WE HAVE DIVERSIFIED IN TERMS OF THE MARKETS WHICH MEANS EVEN IF THERE IS UNLIKELY EVENT OF TARIFF ACTION AGAINST INDIA I DON ‘ T THINK INDIA WILL BE IMPACTED BADLY. BUT WE NEED TO BE WATCHFUL WHAT WILL HAPPEN IN CASE OF ANY TARIFF ON CHINA IS IMPOSED ON WHAT HAPPENS TO THE CHINESE PRODUCTION GETTING DIVERTED TO OTHER COUNTRIES. > > THANK YOU SO MUCH FOR YOUR TIME. JOINING US HERE IN DAVOS. HE IS CHAIR OF THE STATE BANK OF INDIA. > > THANK YOU VERY MUCH GREAT TO SEE YOU. COMING UP, EARNINGS THE TREASURY AUCTION FOR YOU CONTEXT MATTERS ON BLOOMBERG. ♪ > > IT ‘ S YOUR BLOOMBERG BRIEF WITH DANI BURGER AND MANUS CRANNY IN NEW YORK. THE SCHEDULE SET UP FOR THE TRADING DAY. EARNINGS INCLUDE JOHNSON & JOHNSON AND PROCTER & GAMBLE. OF THOSE WILL TAKE BEFORE THE BELL. ECB PRESIDENT LAGARDE WILL BE SPEAKING AT DAVOS. PLUS WE ARE TO GET A TREASURY AUCTION $13 BILLION A KIND OF UNLOVED TWENTY-YEAR BILLS. THAT AUCTION WILL COME AT 1:00 P.M.. > > LET ‘ S KICK IT OFF WITH NETFLIX. THEY ARE EXTENDING THEIR RALLY AFTER POSING A RECORD IN THE FOURTH QUARTER AND RAISING PRICES. UNITED AIRLINES UP 3.64% AND A COMFORTABLE BE ON THE EARNINGS PAID PROFIT REBOUND AS THE AIRLINES BUCK THOSE WINTER DOLDRUMS. WHAT AN AMAZING PERFORMANCE. LARRY ELLISON TALKING ABOUT CONNECTION TO POWER. SOFTBANK AND OPENAI PAID IN A PACT TO DELIVER AI FOR THE FUTURE FOR AMERICA AND SCALES OF POTENTIALLY TO $500 BILLION. > > LET US NOT FORGET LARRY ELLISON IS ALSO ONE OF THE NAMES BEING FLOATED AS SOMEONE WHO MIGHT BE A PERSON THAT BUYS A STAKE IN TIKTOK. IT GOES TO THIS STORY AND PROXIMITY TO POWER. WHAT IS MEANT FOR SOME OF THESE TECH NAMES AND WE ‘ VE CHOKED ON THE SHOW BEFORE TALKING TO DIFFERENT INVESTORS SAYING DO YOU WANT TO LOOK AT THE DAIS BUYING TRUMP AND SEE WHERE EXECUTIVES ARE IN BY THEIR STOCK. IT KIND OF HAS BEEN > > . THIS NEW AI MISSION CALLED STARGATE AND THE QUESTION IS WHAT IS IT DUE TO U.S. EXCEPTIONALISM IN THE AI SPACE OR IS THAT ANOTHER MAJOR BALLOON OF POLICY THAT MAY BE DOESN ‘ T FULLY MANIFESTED. THIS SOUNDS PRETTY REAL WITH SERIOUS INTENT AND SERIOUS MONEY IN TERMS OF BEING RESPONSIBLE AND THEN YOU HAVE ALL THE CHIPMAKERS AS WELL ARM AND MICROSOFT AND NVIDIA ALL TRADING HIGHER THIS MORNING. > > IT ALSO GOES BACK TO WHAT WE ‘ VE BEEN HEARING IN DAVOS THAT ENTHUSIASM FROM ALL OF THESE DIFFERENT BANKS SAYING WE WILL GET BIGGER, THAT THE ENVIRONMENT IS REALLY GOOD. IT IS JUST THE ANIMAL SPIRITS AT THIS MOMENT. IT IS JUST ANNOUNCEMENTS. WE NEED TO SEE WHAT THE FOLLOW-THROUGH IS AND MAKE SURE THAT THAT FOLLOW-THROUGH IS NOT ALSO MET BY TARIFFS AND INFLATION. IT IS TWO DIFFERENT SIDES OF THE SAME COIN. MANUS: AT THE MOMENT IT IS INCREMENTAL AND GRADUAL TARIFFS. EUROPE LOOKING BAD. WE DON ‘ T KNOW WHAT WE WILL GET. IS IT A DEATH OF A THOUSAND CUTS THE FED HAS TO CONSIDER OR SOMETHING MUCH MORE SIGNIFICANT AND THAT ‘ S THE CONVERSATION IN DAVOS. THEY ‘ RE WORRIED ABOUT THE BOND MARKET. DANI: SURVEILLANCE IS LIVE IN DAVOS PER THEY WILL TAKE IT FROM HERE. ♪