# Daybreak Weekend: New Home Sales, UK Prime Minister, Japan Marine Day

An episode of [Bloomberg Daybreak: Asia Edition](https://invisiblenetwork.ai/podcast/1663863437), 17 Jul 2026, 38 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/d15648c4-cee0-4e99-a5ca-af80014d921d/4502d148-1512-473f-bfce-b48a013b32f8/audio.mp3?utm_source=Podcast&in_playlist=27143354-63aa-4ac5-965d-af80014dc0d3

Bloomberg Daybreak Weekend with Host Nathan Hager take a look at some of the stories we'll be tracking in the coming week. • In the US – a look ahead to new home sales data with a focus on three stocks for the week ahead. • In the UK – a look ahead to the UK preparing to usher in its 7th Prime Minister in 10 years. • In Asia – a look ahead to Japan Marine Day. See omnystudio.com/listener for privacy information.

## Transcript

[0:00] Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
[0:10] Speaker 2: This is Bloomberg Daybreak Weekend, our global look at the
[0:13] Speaker 2: top stories in the coming week from our Daybreak anchors
[0:15] Speaker 2: all around the world. Straight Ahead on the program, we'll
[0:18] Speaker 2: look ahead to some key housing data, along with earnings
[0:20] Speaker 2: from some of tech's biggest companies. I'm Nathan Hager in
[0:24] Speaker 2: New York.
[0:24] Speaker 3: I'm Caroline Hepco in London, where we're looking ahead to
[0:27] Speaker 3: Andy Burnham's first few weeks as UK Prime Minister.
[0:30] Speaker 4: I'm Doug Prisner, looking at how the people of Japan
[0:33] Speaker 4: will reflect this week on the ocean's vital role in
[0:36] Speaker 4: life and culture.
[0:38] Speaker 1: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg
[0:42] Speaker 1: eleven three YEO New York, Bloomberg ninety nine to one, Washington, DC,
[0:46] Speaker 1: Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Syrias,
[0:51] Speaker 1: XM one twenty one, and around the world on Bloomberg Radio,
[0:55] Speaker 1: dot Com and the Bloomberg Business App.
[1:02] Speaker 2: Good day, do you. I'm Nathan Hager. We begin today's
[1:05] Speaker 2: program with some key housing data. I mean, in the
[1:07] Speaker 2: US we get new home sales figures for the month
[1:09] Speaker 2: of June. This Friday at ten am Wall Street Time
[1:13] Speaker 2: and for more and what to expect with the real
[1:14] Speaker 2: estate market moving forward. We are joined by Drew Reading,
[1:18] Speaker 2: us home building analysts for Bloomberg Intelligence. Great to speak
[1:21] Speaker 2: with you, Drew. After we kind of saw a surprise
[1:24] Speaker 2: drop in new home sales last month, what's the risk
[1:27] Speaker 2: we see in another surprise this time around?
[1:29] Speaker 5: The June data will really mark the end of the
[1:33] Speaker 5: new home spring selling season, and you know, it's been
[1:35] Speaker 5: lackluster to say the least. You know, if we zoom
[1:39] Speaker 5: out a little bit on a year to date basis,
[1:41] Speaker 5: we're up just about two percent. And the most recent
[1:44] Speaker 5: data we got, which is the highest frequency data we
[1:47] Speaker 5: have on mortgage applications, shows that applications to purchase new
[1:51] Speaker 5: homes were up about two percent. You know, the census
[1:55] Speaker 5: data can continues to be extremely volatile, but I think
[1:59] Speaker 5: you know, the the bigger picture story here is that
[2:02] Speaker 5: the market continues to be pressured by affordability challenges and
[2:06] Speaker 5: consumer uncertainty remains elevated. There's more concerns about the outlook
[2:11] Speaker 5: for the economy, the outlook for employment. So you have
[2:14] Speaker 5: people on the sidelines who are saying, maybe now is
[2:17] Speaker 5: not the right time to make such a big purchasing decision.
[2:20] Speaker 2: Yeah, it seems like there have been so many headwinds
[2:22] Speaker 2: over the last few months. Like what you said, the
[2:24] Speaker 2: prices are elevated to home, mortgage rates continue to be
[2:28] Speaker 2: elevated as well. I mean, is there anything that you
[2:31] Speaker 2: can see down the pipeline that can sort of reach
[2:34] Speaker 2: an inflection point potentially for this market?
[2:37] Speaker 5: Well, I think a couple of things. As it pertains
[2:38] Speaker 5: to mortgage rates, you know, I think one of the
[2:41] Speaker 5: important points there is that they've just been so volatile,
[2:44] Speaker 5: so it's difficult for consumers out there in the market
[2:47] Speaker 5: to kind of get a grasp on what their monthly
[2:49] Speaker 5: payment is going to be. And when you think about
[2:51] Speaker 5: the low end consumer and particularly you know, those swings
[2:54] Speaker 5: and mortgage rates can have a meaningful impact on their
[2:57] Speaker 5: monthly payment. So number one, I think we need to
[2:59] Speaker 5: see just a little bit stability in borrowing costs would
[3:03] Speaker 5: certainly help. And then on the consumer side, I think,
[3:07] Speaker 5: you know, we need to see a little bit more
[3:09] Speaker 5: clarity on what direction the economy is ultimately going to take.
[3:12] Speaker 5: I mean, things are pretty good now, but again there's
[3:16] Speaker 5: more concerns about the economy and now we have these
[3:18] Speaker 5: geopolitical tensions that have kind of elevated uncertainty. So I
[3:21] Speaker 5: think you need to get those factors under control. You know,
[3:24] Speaker 5: when we look out a little further, we have new
[3:27] Speaker 5: home sales, single family starts download single digits in twenty
[3:30] Speaker 5: twenty six. We think that could ultimately be the trough
[3:34] Speaker 5: because what the industry really needs to do is get
[3:36] Speaker 5: supply and demand and better balance. So builders have been
[3:39] Speaker 5: pulling back on housing starts in an effort to work
[3:42] Speaker 5: down elevated speck home inventory, and we think that'll continue
[3:46] Speaker 5: through this year, which should demand pick up modestly, we
[3:49] Speaker 5: think we could see a rebound in sales and starts
[3:52] Speaker 5: into next year.
[3:53] Speaker 2: So if we do start to see that rebound, what
[3:55] Speaker 2: could that potentially mean for multifamily starts? When you're talking
[3:59] Speaker 2: about it a consumer that's still feeling pressured right now,
[4:02] Speaker 2: you'd have to think that multifamily would would be facing
[4:06] Speaker 2: some pretty difficult headwinds as well.
[4:09] Speaker 5: The multi family segment has had its own challenges, but
[4:11] Speaker 5: by and large, if you I mean, if you were
[4:12] Speaker 5: to look at you know, the for sale market, verst
[4:15] Speaker 5: the for rent market, I mean, just look at the
[4:17] Speaker 5: affordability challenges, and you know, we've done survey work on
[4:20] Speaker 5: this and most of the industry data speaks to this
[4:22] Speaker 5: as well. Is that the value proposition for renting over
[4:26] Speaker 5: owning is firmly in favor of renting, and that's particularly
[4:31] Speaker 5: true with the lower end of the market. So, you know,
[4:33] Speaker 5: we expect that to be the case in the near term,
[4:35] Speaker 5: with home prices continuing to rise and mortgage rates really
[4:39] Speaker 5: not making, you know, gaining any meaningful ground.
[4:41] Speaker 2: Well, now that we're nearing the end of the spring
[4:44] Speaker 2: home buying season, do you see anything in the forecast
[4:48] Speaker 2: that could point to potential price moderation in the new
[4:51] Speaker 2: home market or is it just too soon to say?
[4:53] Speaker 5: Yeah, that's a good question. I mean, prices in the
[4:55] Speaker 5: new home market have been moderating, and the primary reason
[4:58] Speaker 5: for that is because I think, as we're all aware
[5:01] Speaker 5: by now, builders have been very aggressive in their use
[5:04] Speaker 5: of financing incentives. So you've been buying down the mortgage
[5:07] Speaker 5: rates for the buyers come into their markets, and that's
[5:09] Speaker 5: accounted for as a reduction in the average selling price.
[5:13] Speaker 5: So the fact that rates are still elevated, we think
[5:15] Speaker 5: they're going to continue to keep their foot on the
[5:17] Speaker 5: gas pedal in terms of their use of incentives, which
[5:19] Speaker 5: will which will continue to put pressure on prices. At
[5:22] Speaker 5: the same time, what we've started to see a little
[5:25] Speaker 5: more broadly is outright base price reductions. Now it's not
[5:30] Speaker 5: something that all the builders are doing, but you know,
[5:32] Speaker 5: in a number of instances they're finding that in order
[5:35] Speaker 5: to clear that specumentory that we talked about earlier, they're
[5:38] Speaker 5: having the lower prices of the homes in their community.
[5:40] Speaker 5: So it's a combination of the two, you know. I
[5:43] Speaker 5: think builders are also of looking for ways to simplify
[5:46] Speaker 5: their products in order to meet affordability, so smaller square
[5:50] Speaker 5: footage floor plans, maybe more townhouses, which tend to be
[5:54] Speaker 5: lower asp So you know, it's it's not just outright
[5:57] Speaker 5: price pressure, but there's also some mix that will be
[5:59] Speaker 5: impacting prices well.
[6:00] Speaker 2: And of course you got that new housing bill that
[6:03] Speaker 2: just passed Congress in recent days. How could that potentially
[6:07] Speaker 2: affect the.
[6:07] Speaker 5: Outlook a big picture. It's important that the administration in
[6:11] Speaker 5: Washington as a whole have focused some attention on housing.
[6:15] Speaker 5: It's been long overdue, and I think that's a positive
[6:18] Speaker 5: that the new legislation is focused on the supply side
[6:21] Speaker 5: and trying to you know, remove or reduce some of
[6:24] Speaker 5: the friction in new home construction. You know, the emphasis
[6:27] Speaker 5: on zoning, permitting regulation is definitely a long term positive,
[6:31] Speaker 5: but don't really see as a needle mover in the
[6:33] Speaker 5: near term. You know, one of the things you have
[6:35] Speaker 5: to consider is that a lot of the things in
[6:38] Speaker 5: the bill really function as a framework for reform rather
[6:42] Speaker 5: than you know, being a direct mandate or a federal override,
[6:46] Speaker 5: which means that implementation still depends on local municipalities adopting
[6:52] Speaker 5: policies and processes. You know, these are things that will
[6:55] Speaker 5: take a long time to work through the system, and
[6:57] Speaker 5: you know, I think ultimately the impact is going to
[6:59] Speaker 5: be hard to quantify it. I certainly think, as I said,
[7:02] Speaker 5: it's a step in the right direction, But is it
[7:05] Speaker 5: a needle mover immediately for affordability and construction. Probably not.
[7:09] Speaker 2: It gives us something to think about as we get
[7:11] Speaker 2: closer to those new home sales figures for June later
[7:14] Speaker 2: on this week. Thank you for this, Drew, Really good
[7:16] Speaker 2: to have you with us. That's Drew reading us, home
[7:18] Speaker 2: building analyst for Bloomberg Intelligence. Let's take a look now
[7:21] Speaker 2: at some stocks making news in the week ahead. I'm
[7:24] Speaker 2: Nathan Hager, joined by Bloomberg News senior equities reporter Bailey Lipschultz,
[7:28] Speaker 2: and another really big week for earnings. We are right
[7:30] Speaker 2: in the thick of it, Bailey, and we're gonna be
[7:33] Speaker 2: hearing a lot from big tech names as well, starting
[7:38] Speaker 2: this Wednesday with Tesla. I guess Elon Musks wants us
[7:41] Speaker 2: to think about Tesla as a tech company more than
[7:43] Speaker 2: a car company, right.
[7:44] Speaker 6: No, exactly when you talk to Elan or even just
[7:47] Speaker 6: look at what he posts on social media conversations around
[7:50] Speaker 6: the company, Tesla is no longer just a car company.
[7:53] Speaker 6: It's the future of taxis, it's a robot company. It's
[7:57] Speaker 6: increasingly in terms of capital expenditure, a AI company and
[8:02] Speaker 6: a chip making company. So that's been kind of the
[8:04] Speaker 6: big push to no longer think about Tesla just as
[8:07] Speaker 6: the company that makes electric vehicles.
[8:08] Speaker 2: But going into these earnings, of course, we did get
[8:12] Speaker 2: some delivery numbers on the core business from Tesla, kind
[8:16] Speaker 2: of a beat when it comes to their second quarter
[8:19] Speaker 2: vehicle deliveries. I mean, how does that set the bar
[8:22] Speaker 2: in terms of what we could hear on some of
[8:23] Speaker 2: those other aspects of the business you were just talking about.
[8:25] Speaker 6: Yeah, No, I think that set's kind of a clear
[8:28] Speaker 6: expectation for what the core business will deliver. The big
[8:31] Speaker 6: question from that is, Okay, what are the financial implications
[8:34] Speaker 6: from strong deliveries? How does that ultimately impact the business
[8:37] Speaker 6: on the top and bottom line. Again, this is a
[8:40] Speaker 6: company that hasn't grown car sales as quickly as many
[8:43] Speaker 6: on Wall Street would have anticipated, But the big question
[8:45] Speaker 6: now shifts towards Okay, how much is the company spending
[8:48] Speaker 6: on things like tara fab, the partnership to build out
[8:50] Speaker 6: chips alongside SpaceX, how is the company thinking about spending
[8:54] Speaker 6: for optimists, this robot that they've long been talking about
[8:58] Speaker 6: but haven't really delivered kind of a key update on
[9:00] Speaker 6: the humanoid robot project in recent months, in recent quarters,
[9:04] Speaker 6: and really the big key topic of discussion on the
[9:07] Speaker 6: earnings call expected to be around robotaxi.
[9:11] Speaker 2: And also on Wednesday, we're going to hear from another
[9:13] Speaker 2: company that we think of more traditionally I think as
[9:16] Speaker 2: a tech company, one of those big mag seven players
[9:19] Speaker 2: in Google parent alphabet of course, one of the big
[9:21] Speaker 2: spenders in this big wave of AI Capex that it
[9:25] Speaker 2: seems like we've been talking about all year long.
[9:27] Speaker 6: Yeah, Now, I think when you look at analyst expectations, Yes,
[9:31] Speaker 6: we will in the wake of earnings talk about software. Yes,
[9:34] Speaker 6: in the wake of that, we'll be talking about cloud growth.
[9:36] Speaker 6: But it does come back to that CAPEX number. And
[9:39] Speaker 6: we saw analysts coming out from City saying they continue
[9:43] Speaker 6: to expect all of these hyperscalers to not only deliver
[9:46] Speaker 6: greater revenues but also to spend more. And this has
[9:49] Speaker 6: been a market that has been so heavily driven by
[9:52] Speaker 6: these mag seven names, these big spenders continuing to spend
[9:55] Speaker 6: and spend on AI infrastructure. So the big question will
[9:58] Speaker 6: be are they able to build out their TPUs. They're
[10:01] Speaker 6: kind of chipping that opportunity again. This is a company
[10:04] Speaker 6: that plays across the entire suite of technology and can
[10:09] Speaker 6: they deliver on the upside, because over the last two
[10:11] Speaker 6: weeks they're up about three percent, which stands out in
[10:13] Speaker 6: a market that's been up one day and down the next.
[10:16] Speaker 2: And certainly when you think about those TPUs, you think
[10:19] Speaker 2: as well about the competition with Nvidia and the GPUs.
[10:22] Speaker 2: There where is alphabet in terms of that aspect of
[10:26] Speaker 2: the business.
[10:27] Speaker 6: They're working to build it out it's obviously very early days.
[10:30] Speaker 6: These are two technologies that are somewhat complimentary. They do
[10:33] Speaker 6: kind of compete, but I don't think many people would
[10:35] Speaker 6: say the core business from the TPUs, the core business
[10:38] Speaker 6: from Google and Alphabet is going after Jensen Wong's lunch,
[10:42] Speaker 6: if you will. So the big question is can they
[10:45] Speaker 6: find kind of a niche opportunity within the TPUs, and again,
[10:48] Speaker 6: can they use that to really bolster and fill out
[10:52] Speaker 6: a suite of offerings, because when you think about the
[10:55] Speaker 6: debate we've been having for even just large language models
[10:58] Speaker 6: in some of those frontier labs. Anthropics obviously well ahead
[11:02] Speaker 6: of Opening Eye these days. But Google has its own offering,
[11:04] Speaker 6: Microsoft has its own offering. That's another corner of the
[11:07] Speaker 6: market that I think people will be interested in what
[11:09] Speaker 6: management says on the call.
[11:10] Speaker 2: All right, and after those two major companies report Wednesday,
[11:13] Speaker 2: we're going to hear from Intel on Thursday. How are
[11:17] Speaker 2: we thinking the chip maker is going to fare after
[11:19] Speaker 2: what we heard last week from IBM about missing out
[11:23] Speaker 2: on the spending shift.
[11:25] Speaker 6: Not great. I think es vibes are off, vibes are off.
[11:28] Speaker 6: The one thing I want to call out is that
[11:31] Speaker 6: Taiwan Semi reported earnings that if you talk to most investors,
[11:36] Speaker 6: looked pretty darn good, and the stock traded down. So
[11:39] Speaker 6: how high are expectations for the entire semiconductor ecosystem. You
[11:44] Speaker 6: have to keep in mind last twelve months, Intel's up
[11:47] Speaker 6: three hundred and forty three hundred and fifty percent. There's
[11:49] Speaker 6: a high bar to clear. Yes, there's the partnerships and
[11:52] Speaker 6: kind of the optimism around its relationship with the US government,
[11:55] Speaker 6: but we are hitting a point where we've seen so
[11:57] Speaker 6: much volatility in these semiconductor names that I don't think
[12:00] Speaker 6: a beaten raise is enough to drive the stock hire.
[12:04] Speaker 6: And the big question will be a what does the
[12:06] Speaker 6: buyside really want to see and be will they look
[12:09] Speaker 6: at it and say, all right, great, maybe I want
[12:11] Speaker 6: to take some chips off the table, just because if
[12:14] Speaker 6: you use Taiwan Semi as an example to look at,
[12:16] Speaker 6: you can have a pretty darn good quarter, but you
[12:18] Speaker 6: might be priced to professor.
[12:19] Speaker 2: So are you thinking that that it's almost a foregone
[12:21] Speaker 2: conclusion that we could see some profit taking following these
[12:25] Speaker 2: earnings given what you've just been talking about, or is
[12:27] Speaker 2: there a chance that we could see a little bit
[12:28] Speaker 2: of a pop to the upside.
[12:29] Speaker 6: You would have to see a pretty dark good quarter.
[12:31] Speaker 6: They've been up the last three times after earnings beat expectations,
[12:35] Speaker 6: but again that was before a lot of this latest
[12:38] Speaker 6: rally has taken place, and before the company as it
[12:42] Speaker 6: is now is a half a trillion dollar semiconductor maker.
[12:45] Speaker 2: Big week in big Tech. That's Bloomberg News senior equities
[12:49] Speaker 2: reporter Bailey Lipschultz, And coming up on Bloomberg day Break weekend,
[12:53] Speaker 2: we'll look ahead to Andy Burnham's likely debut as the
[12:56] Speaker 2: next Prime Minister of the UK. I'm Nathan Hager, and
[13:00] Speaker 2: this is Bloomberg. This is Bloomberg day Break Weekend, our
[13:14] Speaker 2: global look ahead at the top stories for investors in
[13:16] Speaker 2: the coming week. I'm Nathan Hager in New York. Up
[13:19] Speaker 2: later in our program, we look to the unofficial start
[13:21] Speaker 2: of beach and island hopping season in Japan. But first,
[13:25] Speaker 2: the UK is preparing to usher in its seventh prime
[13:28] Speaker 2: minister in ten years. Andy Burnham, the former mayor of
[13:31] Speaker 2: Greater Manchester who's little known in the US, will have
[13:34] Speaker 2: his work cut out for him. Britain's been grappling with
[13:37] Speaker 2: decades long low investment record, high taxation, and government debt
[13:41] Speaker 2: heading toward one hundred percent of GDP. So how does
[13:45] Speaker 2: Andy Burnham plan to turn things around? From more Let's
[13:48] Speaker 2: go to London and bring in Bloomberg daybreak. You're a banker,
[13:50] Speaker 2: Caroline Hepger.
[13:52] Speaker 3: Nathan third time lucky. Andy Burnham is on course to
[13:56] Speaker 3: take over from kir Salma as the new UK Prime
[13:58] Speaker 3: Minister in the coming day. He has made two previous
[14:02] Speaker 3: attempts at leading the Labour Party. He has recently built
[14:06] Speaker 3: his reputation as mayor of Greater Manchester, before that an
[14:09] Speaker 3: MP and minister, but his policy proposals now for national
[14:14] Speaker 3: government are little known and untested. Burnham and his key
[14:19] Speaker 3: advisors have talked about devolving power and creating economic growth
[14:24] Speaker 3: across the whole of the UK. The fifty six year
[14:27] Speaker 3: old has promised to make Britain resilient, confident and principled,
[14:32] Speaker 3: with a number ten in the North, growth in every
[14:34] Speaker 3: postcode and room for maneuver on tax and spending. But
[14:38] Speaker 3: it looks at daunting task. Bank of England Governor Andrew
[14:41] Speaker 3: Bailey issued a veiled warning and a speech to the
[14:44] Speaker 3: City of London at Mansion House that Britain's long term
[14:47] Speaker 3: growth rate has more than half since the two thousand
[14:50] Speaker 3: and eight financial crisis. And what's more, Burnham's advisors are
[14:55] Speaker 3: reported to be divided over his choice for chancellor. The
[14:59] Speaker 3: likely outgoing Finance Minister Rachel Reeves says that the next
[15:03] Speaker 3: government must combine ambitious reform with economic credibility.
[15:08] Speaker 7: This government has shown that change, indeed, radical change is possible.
[15:12] Speaker 7: Governments can achieve that change only when they combine radicalism
[15:17] Speaker 7: with credibility. That hard won credibility must be sustained if
[15:21] Speaker 7: this work of radical change is to continue.
[15:23] Speaker 3: That was Rachel Reeves making what may be her last
[15:26] Speaker 3: major speech as chancellor to business and finance leaders in
[15:30] Speaker 3: the City of London. So with more on what we
[15:32] Speaker 3: can expect from Burnham's first few weeks in power, We're
[15:36] Speaker 3: joined by Bloomberg's UK politics reporter Chloe Chaplin and Bloomberg
[15:40] Speaker 3: Economics's UK economist Matt Bonny. Matt, can I start with
[15:44] Speaker 3: you in terms of the policy platform? I mean Burnham
[15:48] Speaker 3: talked about a ten year plan reminiscent in many ways
[15:52] Speaker 3: of Keir Starmer's decade of renewal, and even actually of
[15:56] Speaker 3: previous past Conservative leaders like Boris Johnson and Theresa May.
[16:00] Speaker 3: Does Burnham really have that time? What do we think
[16:03] Speaker 3: are the pillars of his policy outline in as far
[16:07] Speaker 3: as we know what they are.
[16:08] Speaker 8: Right now, So the policy platform is still very much evolving.
[16:12] Speaker 8: I think that's reflected in the fact that who will
[16:14] Speaker 8: be Chancellor is up in the air, and that will
[16:15] Speaker 8: be an important signal of the direction that policy is heading.
[16:18] Speaker 8: We can get a sense of the broad contours of
[16:22] Speaker 8: Burnham's policy platform based on his track Rocket a Manchester
[16:26] Speaker 8: based on his recent speech, So some of the key
[16:29] Speaker 8: things he's highlighted is greater devolution, so this means moving
[16:32] Speaker 8: power out of Westminster to the regions. There's also increasing
[16:37] Speaker 8: public control of essential services and finally, more home building.
[16:42] Speaker 8: So Burnham has committed to embarking on the largest council
[16:46] Speaker 8: house building drive since the post war period. So whether
[16:50] Speaker 8: or not he can deliver on these packages is another
[16:54] Speaker 8: kind of question. The other thing to flag is that
[16:56] Speaker 8: these are all long term ambitions. Will be acutely aware
[17:01] Speaker 8: there is a general election due by twenty twenty nine
[17:04] Speaker 8: and those kinds of long term growth initiatives do little
[17:08] Speaker 8: for short term political capital, so we think it's quite
[17:11] Speaker 8: likely he'll be looking to institute some kind of cost
[17:14] Speaker 8: of living relief in his first budget. This will be
[17:18] Speaker 8: to help directly bring down inflation. How that will be
[17:21] Speaker 8: funded is another question. I mean, we know that perse
[17:25] Speaker 8: strings are tight, so to speak, and bond markets will
[17:28] Speaker 8: be watching closely, so it's likely they'll seek to raise
[17:31] Speaker 8: taxes of some description in order to fund that.
[17:34] Speaker 3: Chloe is also expected to be warned by senior civil
[17:37] Speaker 3: servants from day one of just how difficult the outlook
[17:40] Speaker 3: for the UK economy is. This probably won't be news
[17:43] Speaker 3: to anybody in the country about how difficult this outlook is.
[17:48] Speaker 3: What does growth and inflation look like? What might burn
[17:51] Speaker 3: them and his team be warned of.
[17:53] Speaker 9: Yeah, so this feeds into the cost of living issue.
[17:56] Speaker 9: We've written a story saying that Treasury officials will be
[17:59] Speaker 9: warning Burner that actually inflation is likely to tick up
[18:03] Speaker 9: to three point two percent. There is still a great
[18:06] Speaker 9: deal of uncertainty about oil prices. Obviously, the conflict in
[18:10] Speaker 9: the Middle East is very much a live issue. We
[18:13] Speaker 9: don't know what's going to happen with that in the
[18:14] Speaker 9: coming weeks. But that pressure of inflation only exacerbates the
[18:20] Speaker 9: existing cost of living challenges that many families, households and
[18:24] Speaker 9: businesses are dealing with. Burnham has been explicit that he
[18:28] Speaker 9: wants to reduce the cost of energy for households and
[18:30] Speaker 9: small businesses. That is only going to become more expensive
[18:33] Speaker 9: if energy prices are going up at the same time,
[18:37] Speaker 9: economic growth has been a key pillar of Rachel Reeves's
[18:41] Speaker 9: kind of priorities as Chancellor, and the little we do
[18:45] Speaker 9: understand about Burnham's policy platform, you know, he's really relied
[18:49] Speaker 9: on private investment and economic growth in his success in Manchester,
[18:53] Speaker 9: so there has been talk of things like capital gains
[18:55] Speaker 9: tax to range money. These kind of policies will have
[18:58] Speaker 9: a really detrimental impact on economic growth, so he has
[19:00] Speaker 9: to be very careful. He's operating within very slim margins,
[19:04] Speaker 9: much like his predecessor Kirstarma has been.
[19:07] Speaker 3: Yeah.
[19:07] Speaker 5: No.
[19:07] Speaker 3: The last time I was up in Manchester meeting Andy Burnham,
[19:11] Speaker 3: he was surrounded by all the business leaders and made
[19:14] Speaker 3: a real point of that of bringing local business leaders
[19:17] Speaker 3: to the fore. You know, that was the time of
[19:20] Speaker 3: HS two. Of course, thinking about Manchesterism, Matt, you've done
[19:25] Speaker 3: quite an excellent deep dive into whether Manchesterism can actually
[19:30] Speaker 3: be morphed onto the whole nationwide picture here in the UK,
[19:34] Speaker 3: whether it can be used as a tool really to
[19:38] Speaker 3: deliver growth across the UK.
[19:40] Speaker 8: Yes, So we know that during Andy Burnham's tenure as
[19:44] Speaker 8: Mayor of Greater Manchester, the region has gone through a
[19:47] Speaker 8: period of extraordinary economic growth and there's a question as
[19:52] Speaker 8: to how much of that is a result of transformative
[19:56] Speaker 8: leadership or pre existing momentum. So Burnham really benefited from
[20:02] Speaker 8: decades of regeneration of the city center before he came
[20:05] Speaker 8: into power. There was an existing arrangement of devolution that
[20:08] Speaker 8: was put into place shortly before he came in. So
[20:11] Speaker 8: there's a number of factors there that gave him some
[20:13] Speaker 8: tailwinds as he stepped into power, and that's going to
[20:16] Speaker 8: be a very different situation than what he steps into
[20:19] Speaker 8: as Prime minister with a kind of economy that is
[20:23] Speaker 8: struggling along, grappling with a number of headwinds, not the
[20:26] Speaker 8: least obviously the US around war and the cost of
[20:28] Speaker 8: living challenges that we've been speaking about. The other challenge
[20:32] Speaker 8: to consider is often we see prime ministers come in
[20:36] Speaker 8: with big ambitions about how they will transform policy and
[20:40] Speaker 8: they are quite rapidly tempered by the realities of office,
[20:43] Speaker 8: the realities of the constraints of fiscal policy. They are
[20:47] Speaker 8: obviously very conscious of bond markets and how much they're
[20:51] Speaker 8: willing to test bond markets will probably be an important
[20:56] Speaker 8: important consideration in how far they can really push policy.
[20:59] Speaker 3: Yeah, certainly thinking about the forty nine days that Pro
[21:02] Speaker 3: Minister Liz Truss lasted because of that very issue. Just
[21:06] Speaker 3: give me a few pointers though on the thing that
[21:08] Speaker 3: has got so much attention and you know is always
[21:12] Speaker 3: hotly debated, and this is taxes. Which taxes might go up,
[21:16] Speaker 3: how much they might go up by Again, Matt, you've
[21:19] Speaker 3: been looking at this in detail and some of them
[21:21] Speaker 3: are more novel and quite radical.
[21:24] Speaker 8: So it's important to say up top that Burnham has
[21:28] Speaker 8: committed to Labour's Manifesto commitments on tax so that rules
[21:32] Speaker 8: out any of the big leavers so income tax, national
[21:36] Speaker 8: insurance VAT, corporation tax, so that does leave him with
[21:41] Speaker 8: a narrower set of options. We think, as was mentioned earlier,
[21:45] Speaker 8: capital gain tax is one quite likely candidate. The challenge
[21:49] Speaker 8: with this kind of tax is that it applies to
[21:51] Speaker 8: a narrower base and it is also more susceptible to
[21:55] Speaker 8: behavioral responses. So if people know capital gains tax is
[21:57] Speaker 8: going up, maybe going to rush to sell their house
[21:59] Speaker 8: before that. Are they going to delay selling their house
[22:01] Speaker 8: once it comes into place. So essentially what this means
[22:04] Speaker 8: is that there's a greater uncertainty about what revenues you
[22:07] Speaker 8: will yield from this kind of metric. So there's a
[22:10] Speaker 8: bit of a risk that they raise this tax not
[22:13] Speaker 8: to fund more spending and then fail to receive the
[22:16] Speaker 8: revenues they expect and then are left scrambling to try
[22:18] Speaker 8: and find the money.
[22:19] Speaker 3: Yeah, Chloe, what's your view on this? I mean, we
[22:22] Speaker 3: know obviously some of Burnham's key advisors, like the former
[22:25] Speaker 3: Gold and Sax chief economist Jim O'Neil, advising on tax policy,
[22:29] Speaker 3: and again it's this idea about how radical it is
[22:33] Speaker 3: going to be, how fast.
[22:35] Speaker 9: Yeah, Jim O'Neil was one of the authors of a
[22:37] Speaker 9: report recently looking into really quite a radical overhaul of
[22:41] Speaker 9: the tax system. These are proposals along the lines of
[22:45] Speaker 9: scrapping and replacing income tax and national insurance. We also
[22:49] Speaker 9: know that another policy area that Burnham has been advised
[22:54] Speaker 9: on by some on the more kind of I suppose
[22:56] Speaker 9: you would call them progressive side, is a replacement of
[22:59] Speaker 9: cancl tax. People have talked for a long time about
[23:02] Speaker 9: simplifying it, but this would be totally replacing it with
[23:04] Speaker 9: a form of landtax. Now, these are the kind of
[23:07] Speaker 9: radical policies that Burnham's supporters in the Labor Party really
[23:11] Speaker 9: like him for, because he has seen as someone with
[23:13] Speaker 9: ambition and vision. The reality is he is talking to
[23:17] Speaker 9: as many people as possible about long term ideas. I
[23:21] Speaker 9: don't think many of these are going to be translating
[23:23] Speaker 9: into the next two to three years of his policy plan.
[23:27] Speaker 9: I think we're looking more at tweaks to the existing
[23:30] Speaker 9: tax system. He said he wants to offer some relief
[23:32] Speaker 9: on business rates for kind of high street businesses. And
[23:35] Speaker 9: another thing that I think we should be looking closely
[23:38] Speaker 9: at is this idea of fiscal devolution, which does fit
[23:42] Speaker 9: into his pro devolution agenda, to give local leaders more
[23:46] Speaker 9: power about generating and spending their own income. This is
[23:50] Speaker 9: something that's already been worked on under Rachel Reeves. So
[23:54] Speaker 9: the policy is kind of halfway there and I can't
[23:57] Speaker 9: see it being anything Burnham would want to row back
[23:59] Speaker 9: on give and he's explicitly said multiple times that local
[24:02] Speaker 9: leaders should have more power over how they make money
[24:06] Speaker 9: and what that money is spent on, and that's the
[24:08] Speaker 9: kind of thing I think we should be looking close
[24:10] Speaker 9: toly at the near term changes, if you like.
[24:12] Speaker 3: Okay, something then for us to think about the next
[24:15] Speaker 3: few days and weeks as we see a new labor
[24:18] Speaker 3: team coming into number ten and number eleven Downing Street,
[24:23] Speaker 3: and of course we'll expect an autumn budget. There's also
[24:25] Speaker 3: the Labor Party conference that takes place in September, so
[24:29] Speaker 3: we're in another period of big changes. Chloe, thank you
[24:32] Speaker 3: so much for being with us. Chloe Chaplain and Matt
[24:35] Speaker 3: Bonny really appreciate your thoughts. With Andreie Bernham expected to
[24:39] Speaker 3: enter Downing Street on the twentieth of July, we will
[24:42] Speaker 3: have full coverage on what to expect for his first
[24:45] Speaker 3: few weeks and months in power across all Bloomberg platforms.
[24:48] Speaker 3: I'm Caroline Hepge here in London and you can catch
[24:50] Speaker 3: us every weekday morning for Bloomberg Daybreak. Youre at beginning
[24:53] Speaker 3: at six am in London. That's one am or Wall Street.
[24:56] Speaker 2: Nathan, Thanks Caroline. Man coming up on Bloomberg day Break weekend,
[25:00] Speaker 2: we look ahead to Marine Week in Japan. I'm Nathan
[25:04] Speaker 2: Hager And this is Bloomberg. This is Bloomberg day Break weekend,
[25:18] Speaker 2: our global look ahead at the top stories for investors
[25:20] Speaker 2: in the coming week. I'm Nathan Hager in New York.
[25:23] Speaker 2: Japan celebrates Marine Day in the coming week. It will
[25:26] Speaker 2: mark the unofficial start of beach and island hopping season.
[25:30] Speaker 2: For a closer look, let's hop over to Doug Krisner,
[25:33] Speaker 2: host of the Bloomberg Daybreak Asia podcast.
[25:35] Speaker 4: Thanks Nathan. This holiday is also known as Ocean Day
[25:39] Speaker 4: or Sea Day. Think of it as a day of appreciation,
[25:43] Speaker 4: a day when Japanese citizens are encouraged to reflect on
[25:46] Speaker 4: the seas vital role in both life and culture. Now,
[25:51] Speaker 4: beyond the trips to the beach, there will also be
[25:53] Speaker 4: visits to aquariums and marine parks, and there will be
[25:57] Speaker 4: events focused on education and concert Now, Marine Day doesn't
[26:01] Speaker 4: typically feature widespread commercial sales. Nonetheless, it probably will have
[26:07] Speaker 4: an impact on Japan's economy. For some insights, let's bring
[26:10] Speaker 4: in Bloomberg's Alice French, who joins us from our studio
[26:13] Speaker 4: in Tokyo. Thank you for being here, Alice. Can you
[26:16] Speaker 4: help me understand the popularity of Marine Day and the
[26:19] Speaker 4: level of participation. I'm curious about any sense of nationalism
[26:23] Speaker 4: that may exist.
[26:25] Speaker 10: Hi.
[26:25] Speaker 11: Yeah, so, I mean, c day is very much welcomed,
[26:28] Speaker 11: just because of the sheer temperature that we're feeling in
[26:31] Speaker 11: Tokyo right now. It's very humid. We're sort of around
[26:35] Speaker 11: the mid to high thirty degree celsius every day. I
[26:38] Speaker 11: know that everyone around the world is experiencing this heat,
[26:40] Speaker 11: but that just makes a trip to the beach look
[26:43] Speaker 11: even more attractive. So, yeah, we'll see family is going
[26:47] Speaker 11: to the beaches if you're living in Tokyo. Areas like
[26:49] Speaker 11: Zushi or kama Kuda particularly popular. Of course, that always
[26:53] Speaker 11: brings a bit of a burst of activity to those
[26:55] Speaker 11: more sort of rural areas outside of the big cities,
[26:58] Speaker 11: which I think is welcomed. Having said that, you know,
[27:02] Speaker 11: of course, we do have inflation continuing here in Japan,
[27:05] Speaker 11: as in a lot of the rest of the world.
[27:07] Speaker 11: A lot of people are tackling rising food costs, rising
[27:10] Speaker 11: energy costs, and so we may see more people, i suppose,
[27:13] Speaker 11: being a little bit more restrained with their holiday spending
[27:16] Speaker 11: this year. Of course, tourists as well have a part
[27:19] Speaker 11: to play.
[27:19] Speaker 5: Now.
[27:19] Speaker 11: I know that a lot of people try to avoid
[27:21] Speaker 11: Japan in July, August, September because of the mugginess, the humidity,
[27:26] Speaker 11: But Ceday is a good excuse to kind of get
[27:29] Speaker 11: out to those those coastal areas. A lot of places
[27:33] Speaker 11: have kind of special festivals and things like that. Now,
[27:36] Speaker 11: of course, recent months we have seen a bit of
[27:38] Speaker 11: a pullback in tourists from China because we do have
[27:41] Speaker 11: an ongoing diplomatic spat, and recent monthly figures have shown
[27:45] Speaker 11: that those Chinese numbers continuing to fall. But the weekgend
[27:49] Speaker 11: still drawing a lot of people from Europe and the US,
[27:52] Speaker 11: and I think we'll probably see a lot of tourists
[27:54] Speaker 11: enjoying the sea on Monday.
[27:57] Speaker 4: So you mentioned the inflationary pressures, the weakness in the current,
[28:00] Speaker 4: and I'm curious about the current mood among Japanese consumers.
[28:04] Speaker 4: Would you describe it as a little pessimistic right now?
[28:07] Speaker 11: Yeah, I think it very much depends, and we're definitely
[28:10] Speaker 11: seeing sort of a widening gap between those sort of
[28:12] Speaker 11: haves and the have nots. I would say sort of
[28:15] Speaker 11: the average person, the average worker in Tokyo, for example,
[28:18] Speaker 11: is definitely feeling the bite of inflation. When you go
[28:21] Speaker 11: to the supermarket, you can see basic items like vegetables,
[28:25] Speaker 11: eggs really rising, and it's not just the sort of
[28:27] Speaker 11: items themselves, it's the packaging to write the plastic. Of course,
[28:31] Speaker 11: we've seen rise and costs of things like naptha, that
[28:34] Speaker 11: oil feedstock as a result of the Iran conflict. Even
[28:37] Speaker 11: if that does sort of calm down a little bit
[28:40] Speaker 11: geopolitically wise, you know, we're still seeing supply chains affected
[28:43] Speaker 11: by that, I think for months to come, and people
[28:45] Speaker 11: are certainly feeling that. On the other end of the spectrum, though,
[28:48] Speaker 11: you do have those sort of more asset rich consumers,
[28:52] Speaker 11: so people for example, who manage to get into the
[28:54] Speaker 11: equity market at the right moment, we're able to sort
[28:57] Speaker 11: of ride that AI boom. And we're actually interestedly seeing
[29:00] Speaker 11: a pickup in luxury consumption among young investors, so people
[29:05] Speaker 11: in their twenties and early thirties kind of starting to
[29:08] Speaker 11: I suppose, splash their cash that they've enjoyed from those
[29:11] Speaker 11: equity gains on things like jewelry, sports cars, et cetera.
[29:14] Speaker 11: So I think we're definitely sort of seeing that inequality
[29:17] Speaker 11: broadened out, but sort of the average mood is certainly
[29:20] Speaker 11: things are getting more expensive and people are trying to
[29:23] Speaker 11: find more sort of budget friendly ways to enjoy holidays
[29:26] Speaker 11: like this.
[29:27] Speaker 4: So I mentioned a moment ago that Marine Day doesn't
[29:29] Speaker 4: typically feature widespread commercial sales, But I'm curious does it
[29:34] Speaker 4: represent a branding opportunity for domestic companies in Japan? Did
[29:39] Speaker 4: they want to be associated with this day in particular
[29:42] Speaker 4: and what it represents?
[29:43] Speaker 11: I think so. I mean, look, Japan is very good
[29:45] Speaker 11: at running with a theme, right, and certainly we might
[29:49] Speaker 11: see some of those aquariums or sort of coastal related
[29:52] Speaker 11: businesses capitalizing on this, I would say, particularly for those
[29:55] Speaker 11: local areas. So for example, I've spent many a Marine
[29:59] Speaker 11: Day up in the tour Hawker region. I love it
[30:01] Speaker 11: up there. It's a lot cooler up there, and so
[30:04] Speaker 11: a lot of those sort of local areas will will
[30:06] Speaker 11: be looking to sell some of their local souvenirs, whether
[30:09] Speaker 11: those be suites or sort of local crafts and things
[30:12] Speaker 11: like that. So I would imagine there'll be a lot
[30:14] Speaker 11: of promotions linked to that, for sure, especially centered around
[30:18] Speaker 11: families and potentially taurists too.
[30:20] Speaker 4: So what is the national conversation like in Japan when
[30:23] Speaker 4: it comes to something like ocean health or even sustainability.
[30:27] Speaker 4: I know that in some countries, for example, the topic
[30:30] Speaker 4: of man made climate change is a little controversial. I mean,
[30:33] Speaker 4: what's the national feeling around the issue of ocean health.
[30:37] Speaker 11: Yeah, this is a really good question, and we recently
[30:40] Speaker 11: did a story actually about sort of Japan's attitude to plastic.
[30:43] Speaker 11: Of course, we know plastic pollution in the ocean is
[30:46] Speaker 11: a problem the world over, but Japan does have a
[30:48] Speaker 11: particular affinity I would say for single use plastic. If
[30:52] Speaker 11: you go to any of the convenience stores, of course,
[30:54] Speaker 11: everything even single bananas, you can find wrapped in in
[30:57] Speaker 11: plastic packaging. I think among sort of the younger generations,
[31:02] Speaker 11: we're seeing more and more kind of social media campaigns
[31:05] Speaker 11: centered around things like ocean pollution, climate change in general,
[31:11] Speaker 11: and the government, you know, has been saying they've got
[31:13] Speaker 11: several targets to sort of bring down plastic use and
[31:16] Speaker 11: reduce pollution. Whether they will actually be met, I'm not sure.
[31:20] Speaker 11: Of course, cost comes into it a lot. Plastic is
[31:23] Speaker 11: very cheap. Japan is very keen on things like food hygiene,
[31:28] Speaker 11: so I think it's quite it's quite a high hurdle
[31:30] Speaker 11: to to bring down that usage, but it's certainly something
[31:33] Speaker 11: that has sort of come more into the popular discourse
[31:36] Speaker 11: as a result of the around conflict and these rising
[31:39] Speaker 11: costs for plastic and other oil products.
[31:41] Speaker 4: Talk to me a little bit about some of the
[31:44] Speaker 4: traditional practices that may be associated with this day, whether
[31:48] Speaker 4: we're talking about fishing or seafood recipes. Is that very
[31:52] Speaker 4: much a part of the consciousness here.
[31:54] Speaker 11: One hundred percent. I mean, a trip to the beach
[31:56] Speaker 11: is the typical one. You know, take the kids to
[31:58] Speaker 11: the beach, splash in the sea, I will say, I've found.
[32:01] Speaker 11: I mean, I'm from the UK and swimming in the
[32:03] Speaker 11: sea is somewhat of a kind of British tradition. Even
[32:06] Speaker 11: when it's freezing, people will go in the sea. I
[32:09] Speaker 11: think Japanese people perhaps slightly less willing to get into
[32:13] Speaker 11: freezing cold waters, but when it's warm, you will definitely
[32:15] Speaker 11: see people swimming, fishing, of course, and yes, eating seafood.
[32:19] Speaker 11: I mean Japan has, in my opinions, some of the
[32:21] Speaker 11: best seafood in the world. Of course, you can find
[32:23] Speaker 11: fantastic sashimi kai send on. These kind of raw seafood
[32:26] Speaker 11: bowls are going to be definitely consumed on Monday. I
[32:29] Speaker 11: would imagine and anything to do with water really is
[32:32] Speaker 11: definitely a big part of this day.
[32:34] Speaker 4: So as I'm listening to you talking about being along
[32:37] Speaker 4: the seaside and encountering very warm weather, I'm wondering about
[32:41] Speaker 4: the prevalence air conditioning and the extent to which there
[32:45] Speaker 4: is adequate power right now. For some reason, I just
[32:48] Speaker 4: kind of thought of Fukushima and what that really kind
[32:52] Speaker 4: of brought to the forefront in terms of the awareness
[32:55] Speaker 4: about you know, kind of harming the environment and basically
[32:59] Speaker 4: the role that the sea place in the life of
[33:00] Speaker 4: people in Japan one percent.
[33:02] Speaker 11: I mean with the air con. Look, I just spent
[33:04] Speaker 11: two weeks back at home in the UK with no
[33:06] Speaker 11: air con and it was very tough. So I'm very
[33:09] Speaker 11: happy to be back in Japan where we do have
[33:11] Speaker 11: plentiful air con and Japan make some of the best
[33:14] Speaker 11: air con units in the world. But of course, yes,
[33:16] Speaker 11: that does mean there's huge need for power, and especially
[33:20] Speaker 11: as we've seen oil prices energy prices rising in recent months,
[33:23] Speaker 11: that has sort of come into focus a lot more.
[33:26] Speaker 11: I mean you bring up for Kushima there, of course,
[33:28] Speaker 11: it really highlighted the risks of nuclear power. Of course,
[33:32] Speaker 11: a lot of nuclear power plants are located in coastal areas,
[33:36] Speaker 11: and like you say that, you know, there was a
[33:38] Speaker 11: huge impact on on the environment, not only sort of
[33:40] Speaker 11: wild sea life, but also farmers in the region that
[33:43] Speaker 11: I think many are still kind of putting their businesses
[33:46] Speaker 11: and their lives back together, even more than ten years on.
[33:49] Speaker 11: Having said that, the Takaichi government is focusing on nuclear
[33:53] Speaker 11: energy as one of one of their policies. They want
[33:55] Speaker 11: to kind of get more power plants back up and running.
[33:58] Speaker 11: We've seen nuclear power related stocks, for example, in the
[34:01] Speaker 11: market really benefiting in recent months since She's come to power.
[34:05] Speaker 11: I think there's definitely this sense that Japan wants to
[34:07] Speaker 11: sort of become more self reliant when it comes to energy,
[34:11] Speaker 11: and so they are trying to bring more of those
[34:13] Speaker 11: power plants back online in a safe way that sort
[34:17] Speaker 11: of you know, that works for the national feeling around
[34:21] Speaker 11: nuclear power, which of course there is still a little
[34:23] Speaker 11: bit anxiety after what happened in Fukshima, no.
[34:26] Speaker 4: Doubt about that. Alice, thank you so very much. We'll
[34:29] Speaker 4: leave it there. Bloomberg's Alice French in Tokyo. So the
[34:33] Speaker 4: World Cup final is Sunday, and this year the tournament
[34:36] Speaker 4: gave an economic boost to host countries in North America.
[34:39] Speaker 4: The APEX Sports Business Group leader for Deloitte is James Walton,
[34:44] Speaker 4: and he spoke with Bloomberg's Heidi Stroud Watts.
[34:46] Speaker 12: James, I was just seeing a little bit earlier. There
[34:49] Speaker 12: was a real interviewing people that made a trip and
[34:53] Speaker 12: an adventure out of going to the World Cup. And
[34:55] Speaker 12: it feels like money is no object for some of
[34:58] Speaker 12: these people that have got along for the ride. Right.
[35:01] Speaker 12: What is it about this event in particular that drives
[35:05] Speaker 12: this revenue, because I do want to know why it's
[35:08] Speaker 12: become even more lucrative than before.
[35:11] Speaker 10: So I think there's a couple of things. One is,
[35:13] Speaker 10: from a fan point of view, most of us grew
[35:15] Speaker 10: up watching a World Cup when we were younger, and
[35:17] Speaker 10: the opportunity to actually attend, you know, whether it's on
[35:19] Speaker 10: your own doorstep or whether it's in an exotic location somewhere.
[35:23] Speaker 10: The opportunity to actually attend a World Cup, say I
[35:26] Speaker 10: was there, see all the action in the flesh, really
[35:29] Speaker 10: as a bucket list for many football fans. That's from
[35:32] Speaker 10: the fans point of view, but from the overall point
[35:34] Speaker 10: of view, you know, having a World Cup in a
[35:37] Speaker 10: country like the US, which is clearly one of the
[35:39] Speaker 10: best countries when it comes to activating sponsorships from a
[35:43] Speaker 10: sporting point of view and from a financial point of view,
[35:46] Speaker 10: this has undoubtedly been a success as you just set out.
[35:49] Speaker 12: Do you think then in that respect this is going
[35:51] Speaker 12: to weigh into how future host countries are chosen.
[35:55] Speaker 5: Well.
[35:56] Speaker 10: I think FIFA has been having a few issues with
[35:58] Speaker 10: that over the last couple of years because there's been
[36:00] Speaker 10: some locations and we look at the recent World Cup
[36:03] Speaker 10: in Qatar, the upcoming World Cup in Saudi in a
[36:06] Speaker 10: few years time, where it's pretty clear that money is
[36:08] Speaker 10: in the basis of why that opportunity is taking part.
[36:12] Speaker 10: At the same time, you have some perhaps established nations
[36:15] Speaker 10: that have been bailing for World Cups on the basis of,
[36:18] Speaker 10: you know, we are an established football nation that have
[36:20] Speaker 10: not had the opportunity to do so. And it's pretty
[36:23] Speaker 10: clear that FIFA's message now is that every World Cup
[36:26] Speaker 10: needs to be bigger and better than the last, and
[36:28] Speaker 10: what they're looking for from host nations is how are
[36:31] Speaker 10: you going to help them to commercialize and help them
[36:34] Speaker 10: to expand the appeal of the game.
[36:36] Speaker 12: Myriad grievances and controversies when it comes to FIFA, not
[36:40] Speaker 12: just with this World Cup but previous iterations as well. Right,
[36:43] Speaker 12: does that have an impact on sponsorship that doesn't seem
[36:45] Speaker 12: to damage the broader brand of the sport at all.
[36:48] Speaker 10: I think over the last couple of years, and this
[36:50] Speaker 10: goes back even before Infantino's time, even back to set
[36:53] Speaker 10: Bladders time, there was various accusations level at FIFA, particularly
[36:57] Speaker 10: around the process of how the World Cup was awarded.
[37:00] Speaker 10: The Russia edition in twenty eighteen the Quitar edition in
[37:03] Speaker 10: twenty twenty two were particularly under the spotlight and at
[37:06] Speaker 10: various times there have been sponsors that have said that
[37:09] Speaker 10: they will be reducing their sponsorship or withdrawing from sponsorship.
[37:13] Speaker 10: But at the end of the day, there is no
[37:14] Speaker 10: other event that compares to the World Cup in terms
[37:18] Speaker 10: of the opportunity that sponsorship presents. The Olympics is not
[37:21] Speaker 10: at the same table. The super Bowl is there, but
[37:23] Speaker 10: the super Bowl is primarily obviously a US focused event,
[37:27] Speaker 10: So it is such an opportunity for sponsors that are
[37:30] Speaker 10: willing to put their money there, and we have seen
[37:32] Speaker 10: that sometimes money talks and those decisions around whether or
[37:35] Speaker 10: not to continue with sponsorship have been very much based
[37:38] Speaker 10: on the ROI and the KPIs being met, perhaps sometimes
[37:42] Speaker 10: rather than whether or not they truly felt ethically that
[37:45] Speaker 10: this was the right direction.
[37:46] Speaker 4: That's Deloitte's Apax Sports Business Group leader James Walton speaking
[37:50] Speaker 4: with Bloomberg's Heidi Stroud Watts. I'm Doug Prisner. You can
[37:53] Speaker 4: catch us weekdays for the Daybreak Asia podcast. It's available
[37:57] Speaker 4: wherever you get your podcast.
[37:59] Speaker 2: Nathan, Thanks Doug, and that does it for this edition
[38:02] Speaker 2: of Bloomberg Daybreak Weekend. Join us again Monday morning at
[38:05] Speaker 2: five am Wall Street Time for the latest don markets,
[38:08] Speaker 2: overseas and the news you need to start your day.
[38:11] Speaker 2: I'm Nathan Hager. Stay with us. Top stories and global
[38:13] Speaker 2: business headlines are coming up right now.

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