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Russia's invasion of Ukraine enters a dangerous new chapter as both sides opt to escalate.
plus one million missing jobs. A new report says Britain has massively underestimated the number of people in employment. Let's start with the round-up of our top stories. Kerstammer has used his biggest international summit since becoming Prime Minister to make the case that Britain is back and looking outward to the world again. However, Starmer's appearance at the G20 meeting in Rio de Janeiro also highlighted the many challenges facing British foreign policy.
We can only make lives better for working people if we're prepared to shape the global problems that are reaching into our lives more and more. The G20 represents 85% of global GDP. So we have a shared interest here in driving up growth and investment and a profound responsibility to find solutions for the problems facing the world today.
But despite the soaring rhetoric, Starmer has found himself attending a G20 summit beset by tensions as leaders failed to present a united front on issues including Ukraine and the Middle East. Questions repeatedly bubbled up about what kind of role the United States would continue to play in world affairs under President-elect Trump, with diplomats politely avoiding the term isolationist.
The G20 meeting has most notably been overshadowed by the latest escalatory actions from Moscow and Kyiv. On Tuesday, Ukraine launched its first attack on Russian soil with U.S. missiles. The strike came as Vladimir Putin approved broadened guidelines on the potential use of nuclear weapons.
The twin developments early on Tuesday rattled investors and once again focused attention on the growing security threat facing nations across Europe. The NATO Secretary-General Mark Rutter says defence spending must be bolstered.
Clearly the two percent great that we have achieved it on the European side of NATO overall, but it is not enough. It is clearly not enough. So we have to also make sure that we spend more on defense to make sure that the deterrence and defense is not only there today, but also for the longer term to make sure that we can defend ourselves.
NATO's Marco Rotta speaking there, adding to the sense of unease to undersea data cables connecting Finland and Germany were damaged earlier this week. Governments in the region have repeatedly reported cyber attacks, disinformation and incursions by Russian jets and have warned that they will be under threat if Putin secures victory in Ukraine.
Former Hong Kong newspaper Titan Jimmy Lee is testified in court for the first time on his trial on national security charges. The 76-year-old dismissed the idea of advocating for the city's independence from China as crazy, and Dan played his foreign ties. He's been detained on these charges for almost four years. Our China correspondent Min Min-lo is at the court.
He mentioned that he started Apple Daily that proved democracy newspaper that was forced to shut down in 2021. He started it because it reflects the core values of Hong Kong, which he said are freedom, freedom of assembly, freedom of speech, freedom of religion, the rule of law and the pursuit of democracy. And that's interesting, given that we know the national security law imposed by Beijing is a very broadly worded legislation.
That's our China correspondent, Min Min Lo. Beijing has accused live providing funding to pro-independence forces, a cause he previously told Bloomberg television that he's never supported. A guilty verdict would likely further inflame Hong Kong's political relationships. Donald Trump has vowed to ask China Xi Jinping to free lie, and the UK Prime Minister, Keir Starmer, voiced concerns about his case at this week's G20 summit.
Now to US politics, Donald Trump has appointed Howard Lutnik to head the US Commerce Department in an administration that will likely be shaped by sweeping tariff hike proposals. The counterfeits Gerald CEO is one of Trump's most prominent Wall Street backers and his co-chair of his transition team. The decision comes as the president elect continues to weigh his choices for the position of Treasury Secretary Bloomberg's Nancy Cook says Lutnik had previously wanted that role.
There was a ton of inviting over the position last week. We reported that Howard Lutnik was really going for it and lobbying and asking allies to call Trump and make the case for him. Scott Besant was doing the same. Trump became very irritated with this and basically now is widening the search and looking for a third party to fill that job.
our senior national political correspondent, Anansi Cook, speaking there. A Treasury Secretary announcement may come soon, sources tell Bloomberg Trump's team has discussed placing former Fed Governor Kevin Walsh in the role with hedge fund manager Scott Bessent and leading the National Economic Council. Bloomberg senior Washington correspondent, Salaha Maseen, says it's a complicated decision.
We still don't know who is going to be Treasury Secretary and I don't see how Trump can decide what the rest of the team can look like until he's filled and decided on a candidate for that very key post. We know what his economic agenda is. We know that he wants to go very strong on tariffs and he wants a Treasury Secretary with Wall Street pedigree who will carry forth an implement and agenda that is heavy on protectionism.
Bloomberg, Selaha Mosinda. Trump also picks celebrity Dr. Mehmet Oz to lead the Centers for Medicare and Medicaid Services, and Linda McMahon, the one-time CEO of World Wrestling Entertainment, as his nominee for Education Secretary.
The UK has underestimated the number of people in work by almost 1 million according to new research. The report by the Resolution Foundation Think Tank suggests that the employment rate has bounced back to pre-pandemic levels and that worker inactivity is lower than thought. The calculations could have significant implications for the Bank of England. Speaking yesterday, Governor Andrew Bailey again highlighted the importance of the labour market to its decision-making.
One of the important elements of the budget for us is how this increase in the cost of employment then plays through. This is really possibly the most important part of it, I would say. Bailey and other Bank of England policymakers have warned that problems with the official employment data, the ONS Labor Force survey have made their calculations harder. He added that the government's tax rises support the Bank of England's gradual approach to easing interest rates.
The world's most valuable company reports earnings later today. Options trading suggest that Nvidia's quarterly results are now the most important market catalyst left this year. Research from Barclays says that it will be more important even than the Fed's December rate decision. Advisors capital management partner and portfolio manager Joanne Feeney explains why traders are looking to Nvidia.
We do see that company as having the potential to continue abnormally high growth rates for several years to come, given the demand that we're seeing for AI application capabilities and the uptake that we're seeing in companies really across the spectrum from healthcare to industrials to software. So there's always room for hiccups, but we do see the long-term prospects of NVIDIA to be really robust.
Feeney's mention of quarterly hiccups comes as Wall Street revenue estimates spared an $8 billion range that reflects the uncertainty even if the chip giant can meet what its CEO has called quote, insane demand. So that's from NVIDIA.
Those are your top stories on the markets. U.S. equity markets yesterday recovered from the risk off move, reversing earlier losses driven by that escalation in Russia's war against Ukraine. The S&P 500 finished up by 0.4%. The Nasdaq rising 0.7% in video shares actually soaring close to 5% ahead of their earnings report. Later, the euro recovering after falling by as much as 0.7% over those geopolitical tensions. It's slightly weaker today at 1.0584 against the Dollar Gold.
rose by 0.8% yesterday. Bitcoin also hit fresh, all-time highs above 0.94,000 before easing to around 0.92,000 today. Asian stocks in trading today are mixed. The MSCI, a specific index, is 0.6 of 1% lower.
Well, in a moment, we'll have more on the G20 gathering in Rio, and also how events in Ukraine dominated that event with our EMEA News Director, Rosalind Matheson. Plus, Hong Kong's former newspaper Titan Jimmy Lai has been testifying in court against national security charges. Bloomberg's Jenny Marsh will bring us details on his testimony after he has reportedly spent four years in solitary confinement.
But first another story that caught a ride this morning, the prospect of fast food at 35,000 feet. I don't know if you've ever been mid-flight and craved a burger. It's not really something that I have to say has come up in my travels, but it is something now that first-class customers on Delta will have the option of getting a Shake Shack burger in flight.
I like that. Luke is very common in the U.S. where people go, you know, east to west, coast, west to east, et cetera, and they take their favorite snack on board usually. I must admit, I'm probably one of those people on the plane that doesn't like the smell of fast food, but hey. I did think about that.
I mean, I actually thought that all food on planes was calculated to not disturb fellow passengers. Anyway, this is something that is being tried out by Delta and something that I didn't know is that apparently it has been done before United Airlines previously partnered with McDonald's in the 1990s travel burgers on your flight.
Well, let's bring you more now on the end of the G20 summit, which seems to show the West is no longer running the show. Every summit statement since Russia's war against Ukraine has been weaker than the previous version. Let's bring in our EMEA News Director, Rosalind Matheson, for more on this. So the end of summit press conference never happened, cancelled by the host, Brazilian President Lula. Why was this G20 summit apparently so chaotic?
Well, it did come across as quite chaotic, didn't it? And Lula, as you say, didn't have his closing press. I mean, it's standard, not only for the host to do that, and also the US president to do that. In this case, it seems neither did, although it's not presidented. They usually like to tout the achievements of the communique, even if the communique is kind of wafer thin.
But it seems like this meeting was particularly chaotic as well. We had that weirdness over the family photo where three of the leaders missed it. It had to be redone in a different setting a day later, which was all a bit awkward. And it just seems to reflect the fact there was a lot going on behind the scenes in terms of disagreements and arguments over the war in Ukraine, but also
the conflict in the Middle East and more than anything hanging over it, the sense of the fact that Donald Trump's returning to the White House and what that means for these leaders and for the rest of the world. There's a lot of frantic chats going on about that. I guess people got pulled into those conversations and missed their cues for things like family photos. And then you had a bunch of domestic pressures going on for leaders, including
the German leader Olaf Scholz. So you put all that together with a bit of seeming like disorganization from the host in the minute on some of the logistics and you ended up with a bit of chaos and a sense of frustration, I guess, from Lüller as the host of the things he wanted the meeting to achieve or to talk about those things didn't seem to surface.
Yeah, absolutely. Neither Putin nor Zelensky were actually at the G20, but obviously Ukraine using attackums and Putin signing off on a revised nuclear doctrine was very key yesterday. Look, Xi was also at the summit. He wanted assurances on fewer trade barriers, so trade another issue. Meanwhile, the Taiwanese foreign minister is now in Europe, another key issue. What does the Taiwanese foreign minister hope to get from the
This is interesting because, as you say, it comes against that backdrop of Xi Jinping in his comments at the G20. It's interesting because China in a way wants to bifurcate these things. They want to increase trade and investment with countries, including the US.
but keep other things separate, including tensions around Taiwan or criticism on human rights. A bit like the UK Prime Minister, in a way, Keir Starmer, he wants to improve trade and investment with China, but also be able to criticize them on human rights. And all of that, Taiwan is a key issue, especially again, for the incoming US administration, how they will view Taiwan. And against that backdrop, we've got the Foreign Minister visiting Europe, first of all, Brussels,
and then going on to Lithuania and visits by foreign ministers from Taiwan are not that unusual but they do tend to touch off criticism from China because Taiwan of course is a self-governing island that China claims as its own and China views these diplomatic missions as seeking to undermine it and we know of course there's been
a long history of tension between China and Lithuania. Lithuania has been sort of at the forefront at times criticizing China for some of its economic behaviour and by doing this no doubt sticking its neck out again. And you can see that China may respond economically particularly to Lithuania, but certainly for Taiwan it's about
getting the message heard and building diplomatic ties because they don't have that many countries that recognise Taiwan or have diplomatic ties with Taiwan. But equally, it's likely to bring some criticism from China.
Join Capital Group CEO Mike Gitlin on the Capital Ideas Podcast. Investment professionals reveal how they find their next great idea, what gives them their investment edge, and a few personal stories. Subscribe wherever you get your podcasts. Capital Client Group Inc.
Wings, nuggets, eggs, no matter the form, Americans love their chicken. The chicken industry is one of the largest and most complex supply chains that America has. These birds are big business, and we wanted to get to the bottom of it. Welcome to Beat Capitalism, brought to you by AWPOCS. In this special three-part series from Bloomberg Podcasts, we are going to examine some of the thorniest issues facing the US economy through the medium of this humble bird.
So there's going to be chicken puns. There are definitely going to be chicken puns. We're going to be asking why the chicken industry has evolved the way that it has. And what does it say about the American economy that so many consumers are flocking to poultry? There's another one for you. Listen to beat capitalism from odd lots out now on Apple podcasts, Spotify, or wherever you get your podcasts.
Now let's focus on Hong Kong. Jimmy Lai, the former newspaper titan, has testified in court in the past few hours. He denies allegations of advocating for Hong Kong's independence and downplayed his foreign ties. He fates as a maximum penalty of life in prison under the China National Security Law. Journey us now for Hong Kong is Jenny Marsh, who heads up our China economic and government coverage.
Good morning. Thank you for being with us. lies been in jail awaiting char for some four years. According to his lawyers held in solitary confinement. What did he say?
So Jimmy Lai, he took the stand today. It was the first time anyone's heard from him other than saying not guilty in four years. And he really sort of tried to paint himself as a moderate figure and to sort of recast the relationships that he had with foreign governments is innocuous. And those relationships are really at the heart of the charges against him. So, you know, he dismissed the idea that he was part of
a campaign to lobby for Hong Kong's independence as a conspiracy. He said it was crazy to even think about Hong Kong being independent from China and that he had never allowed his staff and his newspaper the Apple Daily, which is now closed, but when it was running he'd never allowed it to advocate for that.
And that is an iteration of, I think he's previously said, but you know, it's something which Beijing has accused him of doing. And then he also sort of laid out the relationship he had with Vice President Mike Pence, for example, talking about a meeting in July 2019, where Li said that yes, he had asked the Republican to voice his support for Hong Kong, but he basically said, you know, I'm not important enough to control the American Vice President, I'm just making a request.
And that's important because really what lies charges of colluding with foreign forces boiled down to is the government says that he had this campaign to convince Western governments to sanction Hong Kong and China over its human rights record. And that makes him a traitor in their eyes. And it's a crime under the National Security Law, which actually means that lies facing life in prison if he is convicted.
And, Jenny, this is the latest in the string of cases we've had just this week. Some 40 people convicted in sentences that were handed down yesterday. What does it mean for the question of the one country, two systems? And what about the external pressure on China over these issues? We know it's something that the British Prime Minister, Kerstheimer, among others, has raised.
That's right. Well leaders are bringing it up and Donald Trump on the campaign trail said that he would get Jimmy Lai free if he was elected and that he would bring it up with Xi Jinping so it remains to be seen how much pressure Trump is going to put on when he does take office. But certainly like Jimmy Lai and the case yesterday involving Joshua Wong, these are some of the most high profile cases that really do rally foreign governments to criticize Hong Kong and put pressure on China. As for what it means for the one country to systems, I mean
These court cases are symbols of the erosion of that system or the narrowing of it. For sure, Hong Kong is still a different place to China. It does have its own judicial system. It has the free internet here. There's many things we should differentiate.
Hong Kong from China, but not as many as I were before, and the space here now for political opposition, and to criticise the Communist Party has essentially been closed down. That's what the security door did. It made it illegal to try to have political opposition that would criticise the ruling Communist Party in any sort of serious way. In that sense, these cases are the culmination of that sort of campaign. Yeah, absolutely.
In terms of a lie though, he is considered the biggest target in the crackdown that you've described from Beijing and I suppose what might happen next in this case.
Well, this is it. So he's testifying now. And then in the coming weeks, we haven't got a date yet. We'll obviously expect a verdict. And then some time after that, you would get a sentence. He is widely expected to be convicted, only a tiny handful of people under the NSL have had their charges have been acquitted. And as you say, lie is the top target.
almost suddenly looking at a guilty conviction. Then does he appeal and does the government allow that appeal? I mean, his international legal team was sort of floating the idea that they could strike some sort of prisoner swap after the release of Evan Gershovich. But who China was swapping for and whether they would even entertain such a swap? There's a lot to be answered around that still. So it's not over until he actually has that verdict.
But for now, I think it's just interesting to hear what he has to say. This could be one of the last times that we ever hear from Jimmy Lifey has convicted. He's 76 years old, so if he gets life in jail, it's unlikely to walk free again.
This is Bloomberg Daybreak Europe. Your morning brief on the stories making news from London to Wall Street and beyond. Look for us on your podcast feed every morning on Apple, Spotify and anywhere else you get your podcast. You can also listen live each morning on London DAB radio, the Bloomberg Business App and Bloomberg.com.
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Wings, nuggets, eggs, no matter the form, Americans love their chicken. The chicken industry is one of the largest and most complex supply chains that America has. These birds are big business, and we wanted to get to the bottom of it.
Welcome to Beat Capitalism, brought to you by AWPLOS. In this special three-part series from Bloomberg Podcasts, we are going to examine some of the thorniest issues facing the US economy through the medium of this humble bird.
So there's going to be chicken puns. There are definitely going to be chicken puns. We're going to be asking why the chicken industry has evolved the way that it has. And what does it say about the American economy that so many consumers are flocking to poultry? There's another one for you. Listen to beat capitalism from odd lots out now on Apple podcasts, Spotify, or wherever you get your podcasts.
