1
00:00:02,560 --> 00:00:05,400
Speaker 1: This is Bloomberg day Break Asia for this Tuesday, April

2
00:00:05,480 --> 00:00:08,560
Speaker 1: fourth in Hong Kong, Monday April third in New York.

3
00:00:08,880 --> 00:00:12,039
Speaker 1: Coming up today, The surprise cut in oil production from

4
00:00:12,039 --> 00:00:15,360
Speaker 1: OPEC Plus could be another headache for central bankers. The

5
00:00:15,440 --> 00:00:19,080
Speaker 1: Reserve Bank of Australia may stand pat on infrast rate hikes,

6
00:00:19,320 --> 00:00:22,200
Speaker 1: and China is warning its top bankers that a crackdown

7
00:00:22,239 --> 00:00:25,479
Speaker 1: on corruption is far from over. Donald Trump in New

8
00:00:25,560 --> 00:00:29,720
Speaker 1: York to face arrangement tomorrow. Meeting between PRESIDENTSI and Speaker

9
00:00:29,760 --> 00:00:33,920
Speaker 1: McCarthy is on for Wednesday. Pentagon says China spy balloon

10
00:00:34,040 --> 00:00:37,640
Speaker 1: did get some intelligence. I'm at Baxter with Global News.

11
00:00:40,520 --> 00:00:44,239
Speaker 1: That's all straight ahead on Bloomberg Daybreak Asia. The business

12
00:00:44,240 --> 00:00:46,760
Speaker 1: news you need to start your day in just one

13
00:00:46,880 --> 00:00:51,440
Speaker 1: fifteen minute podcast available on Apple, Spotify, the Bloomberg Business

14
00:00:51,440 --> 00:00:57,360
Speaker 1: App and everywhere you get your podcasts. Good morning, I'm

15
00:00:57,400 --> 00:01:00,279
Speaker 1: Bonnie Quinn and I'm Dog Prisoner. Here are the as

16
00:01:00,280 --> 00:01:04,839
Speaker 1: we're following today, some oil analysts saying crude prices could

17
00:01:04,840 --> 00:01:07,520
Speaker 1: reach one hundred dollars a barrel this after OPEC plus

18
00:01:07,600 --> 00:01:11,880
Speaker 1: unexpectedly cut production. On that list is Goldman Sachs Bank

19
00:01:11,880 --> 00:01:15,120
Speaker 1: of America also said the unexpected supply cut could add

20
00:01:15,120 --> 00:01:17,959
Speaker 1: as much as twenty five dollars a barrel to the

21
00:01:18,000 --> 00:01:21,880
Speaker 1: price of Brent crude. However, Morgan Stanley broke away from

22
00:01:21,880 --> 00:01:25,640
Speaker 1: other major banks. Morgan lowered its forecast from ninety five

23
00:01:25,680 --> 00:01:28,080
Speaker 1: dollars a barrel to eighty seven fifty by the fourth

24
00:01:28,160 --> 00:01:30,320
Speaker 1: quarter of this year, and City Groups said the oil

25
00:01:30,360 --> 00:01:32,960
Speaker 1: market is nowhere near a rally that could produce a

26
00:01:33,080 --> 00:01:36,199
Speaker 1: hundred dollars a barrel oil Here's City Groups, ed Morris,

27
00:01:36,240 --> 00:01:39,280
Speaker 1: the global head of Commodities Research. To get to one

28
00:01:39,360 --> 00:01:42,199
Speaker 1: hundred dollars oil, we'd have to have significantly more oil

29
00:01:42,240 --> 00:01:44,480
Speaker 1: taken out of the market and have a lot of

30
00:01:44,560 --> 00:01:47,240
Speaker 1: uncertainty based on that oil taken out of the market.

31
00:01:47,280 --> 00:01:49,480
Speaker 1: That is to say, it would come from a destruction

32
00:01:49,520 --> 00:01:52,280
Speaker 1: to supply in countries such as it Ran, A rat

33
00:01:52,400 --> 00:01:55,320
Speaker 1: would be in Nigeria altogether at the same time, and

34
00:01:55,400 --> 00:01:58,640
Speaker 1: we would have no sense because of the domestic situation

35
00:01:58,680 --> 00:02:01,160
Speaker 1: in those countries of and that oil could come back

36
00:02:01,160 --> 00:02:04,960
Speaker 1: into the market. Meantime, Saint Louis FED President Jim Bullard

37
00:02:05,040 --> 00:02:07,960
Speaker 1: says it's not yet clear what higher oil prices could

38
00:02:08,000 --> 00:02:11,880
Speaker 1: mean for monetary policy. Here is Bullard speaking exclusively with Bloomberg.

39
00:02:12,080 --> 00:02:15,799
Speaker 1: This was a surprise that OPEC decision, But whether we'll

40
00:02:15,840 --> 00:02:17,960
Speaker 1: have a lasting impact, I think is an open question.

41
00:02:18,080 --> 00:02:22,040
Speaker 1: Oil prices fluctuated around. It's hard to track exactly. Some

42
00:02:22,120 --> 00:02:24,200
Speaker 1: of that might feed into inflation and make our job

43
00:02:24,240 --> 00:02:27,000
Speaker 1: a little bit more difficult. Bullets said that even without

44
00:02:27,040 --> 00:02:30,519
Speaker 1: OPEC pluses production cuts, oil prices were still likely to rise.

45
00:02:31,080 --> 00:02:34,200
Speaker 1: The FED chief said he expected higher prices with China

46
00:02:34,240 --> 00:02:38,639
Speaker 1: reopening sooner than expected, Europe skirting recession, and strong economic

47
00:02:38,720 --> 00:02:40,880
Speaker 1: data in the United States well. The Reserve Bank of

48
00:02:40,919 --> 00:02:44,440
Speaker 1: Australia will meet later today after the FED and the

49
00:02:44,520 --> 00:02:50,320
Speaker 1: ECB pushed ahead with tighter restrictions on monetary policy. Question

50
00:02:50,400 --> 00:02:53,040
Speaker 1: now is what will the RBA do? We have Paul

51
00:02:53,080 --> 00:02:56,800
Speaker 1: Allen with a preview. Economists divided over whether the RBA

52
00:02:56,880 --> 00:03:00,840
Speaker 1: will hike interest rates for an eleventh consecutive or pause

53
00:03:00,960 --> 00:03:04,720
Speaker 1: its most aggressive tightening cycles since nineteen eighty nine. Nineteen

54
00:03:04,760 --> 00:03:08,359
Speaker 1: economists survey by Bloomberg forecast the RBA will stand pad

55
00:03:08,400 --> 00:03:12,200
Speaker 1: at three point six percent, as do money markets. Eleven economists,

56
00:03:12,200 --> 00:03:14,600
Speaker 1: though see a quarter point hike to three point eight

57
00:03:14,680 --> 00:03:18,720
Speaker 1: five percent. Economists favoring in RBA pause site. The faster

58
00:03:18,840 --> 00:03:23,320
Speaker 1: than expected easing of inflation in February more subdued consumer spending,

59
00:03:23,520 --> 00:03:27,480
Speaker 1: as well as wiries about bank stresses becoming systemic. Economists

60
00:03:27,520 --> 00:03:30,040
Speaker 1: calling for a rate high can argue that inflation at

61
00:03:30,080 --> 00:03:32,880
Speaker 1: six point eight percent in February is still well above

62
00:03:32,919 --> 00:03:35,800
Speaker 1: the RBA's two to three percent target and the job

63
00:03:35,840 --> 00:03:38,920
Speaker 1: market is very tight. We'll get a monetary policy decision

64
00:03:39,000 --> 00:03:41,720
Speaker 1: from the Reserve Bank of Australia at two thirty pm

65
00:03:41,880 --> 00:03:45,880
Speaker 1: Sydney time. I'm Paul Allen Bloomberg Day Breacasia and Chinese

66
00:03:45,960 --> 00:03:48,680
Speaker 1: authorities have warned a crackdown on corruption in the finance

67
00:03:48,720 --> 00:03:51,600
Speaker 1: industry is far from over. Let's get more from Bloomberg's

68
00:03:51,600 --> 00:03:55,320
Speaker 1: at Joanne Won. Regulators and inspectors called in top executives

69
00:03:55,320 --> 00:03:58,320
Speaker 1: from at least six large state owned banks. The meeting

70
00:03:58,360 --> 00:04:01,040
Speaker 1: took place just as the investigation of the Bank of

71
00:04:01,160 --> 00:04:05,120
Speaker 1: China's former chairman Liu Niango was announced. This came just

72
00:04:05,240 --> 00:04:08,000
Speaker 1: about a month after he was abruptly removed as the

73
00:04:08,040 --> 00:04:11,560
Speaker 1: party chief of the nation's fourth biggest bank. Liu was

74
00:04:11,600 --> 00:04:15,400
Speaker 1: said to be suspected of quote serious voulations of discipline

75
00:04:15,400 --> 00:04:18,119
Speaker 1: and law. We hear. Chinese officials said the bankers should

76
00:04:18,160 --> 00:04:21,200
Speaker 1: draw lessons from Liu and that staff must comply with

77
00:04:21,360 --> 00:04:25,080
Speaker 1: laws and regulations and strength and self discipline. The latest

78
00:04:25,120 --> 00:04:28,080
Speaker 1: warning asked to evidence the Chinese president in Chijing. Ping's

79
00:04:28,080 --> 00:04:31,680
Speaker 1: antigraphic campaign continues to pick up steam in Hong Kong.

80
00:04:31,680 --> 00:04:35,800
Speaker 1: I'm join Wang Bloomberg Day Brigasia Well. HSBC senior executives

81
00:04:35,839 --> 00:04:38,960
Speaker 1: faced off with the bank's largest investor base in Hong

82
00:04:39,080 --> 00:04:42,440
Speaker 1: Kong at a shareholder meeting. Chairman Mark Tucker said he

83
00:04:42,520 --> 00:04:45,880
Speaker 1: regrets cutting a dividend payments during the height of the pandemic,

84
00:04:45,920 --> 00:04:50,400
Speaker 1: calling it a highly unusual event. Tucker told investors HSBC

85
00:04:50,720 --> 00:04:56,120
Speaker 1: has now substantial dividend distribution capacity. Also said the bank

86
00:04:56,200 --> 00:04:59,760
Speaker 1: is set for the best returns in a decade this year.

87
00:05:00,160 --> 00:05:03,279
Speaker 1: Executives at the bank also repeated their opposition to a

88
00:05:03,360 --> 00:05:08,520
Speaker 1: push by HSBC's top shareholders to spin off the company's

89
00:05:08,600 --> 00:05:12,560
Speaker 1: Asian operations. Ping On Insurance Group has been waging a

90
00:05:12,600 --> 00:05:17,560
Speaker 1: battle largely behind the scenes, asking HSBC to deepen cost

91
00:05:17,600 --> 00:05:21,200
Speaker 1: cuts and be open to some other suggestions. However, Tucker

92
00:05:21,240 --> 00:05:24,520
Speaker 1: told those investors in Hong Kong restructuring the bank would

93
00:05:24,560 --> 00:05:29,200
Speaker 1: create uncertainty and it would also destroy value. So the

94
00:05:29,200 --> 00:05:31,359
Speaker 1: big story, obviously is the rally that we had in

95
00:05:31,440 --> 00:05:34,200
Speaker 1: crude oil today and the question mark it puts over

96
00:05:34,320 --> 00:05:39,159
Speaker 1: FED policy. Bloomberg Economics today currently with a baseline for

97
00:05:39,240 --> 00:05:41,760
Speaker 1: the FED to hike another twenty five basis points at

98
00:05:41,760 --> 00:05:45,039
Speaker 1: the main meeting to bring the FED funds target to

99
00:05:45,080 --> 00:05:47,640
Speaker 1: around five and a quarter percent and then hold it

100
00:05:47,680 --> 00:05:50,719
Speaker 1: there for the remainder of the year. But now Bloomberg

101
00:05:50,760 --> 00:05:55,200
Speaker 1: Economics is saying, with a banking turmoil somewhat subsiding the

102
00:05:55,320 --> 00:05:59,919
Speaker 1: tight US labor market, China reopening, adding to global demand,

103
00:06:00,080 --> 00:06:02,560
Speaker 1: and the risk of higher inflation as a result of

104
00:06:02,600 --> 00:06:06,120
Speaker 1: the elevated oil prices, the prospect for a pause on

105
00:06:06,160 --> 00:06:08,719
Speaker 1: the part of a FED on the FED, I should say,

106
00:06:08,800 --> 00:06:12,679
Speaker 1: looks less certain. Vonnie, all right, well, it is also

107
00:06:12,760 --> 00:06:15,239
Speaker 1: a big story here in New York. Donald Trump arriving

108
00:06:15,320 --> 00:06:18,320
Speaker 1: in New York to face being processed under reigned tomorrow.

109
00:06:18,400 --> 00:06:21,440
Speaker 1: Let's get a Baxter. He's got global news for US. Yea,

110
00:06:21,560 --> 00:06:24,680
Speaker 1: it is definitely history, Vonnie. You're right, it's called from

111
00:06:24,680 --> 00:06:29,520
Speaker 1: major demonstrations which have not yet materialized. Bloomberg Xamer Hordern

112
00:06:29,720 --> 00:06:32,280
Speaker 1: was at Trump Tower a bit earlier today. On the

113
00:06:32,360 --> 00:06:35,279
Speaker 1: west side of the street. It is a long lane

114
00:06:35,440 --> 00:06:39,720
Speaker 1: of reporters, camera crews, lenses everywhere you look. It was

115
00:06:39,839 --> 00:06:41,560
Speaker 1: very confusing, Joe, I have to say, for some of

116
00:06:41,560 --> 00:06:44,160
Speaker 1: the tourists that just wanted to see Fifth Avenue. Then

117
00:06:44,200 --> 00:06:47,279
Speaker 1: the other side there were Trump supporters, but definitely the

118
00:06:47,360 --> 00:06:51,240
Speaker 1: journalists outnumbered them. Yeah. Police Chief Keachan Sewell says very

119
00:06:51,320 --> 00:06:54,080
Speaker 1: large police force will keep the peace as well. Violence

120
00:06:54,120 --> 00:06:58,599
Speaker 1: and destruction are not part of legitimate lawful expression and

121
00:06:58,640 --> 00:07:01,640
Speaker 1: it will never be tolerated in our city. Meanwhile, the

122
00:07:01,760 --> 00:07:06,360
Speaker 1: MAGA campaign says the indictment has been very good fundraising.

123
00:07:06,760 --> 00:07:11,000
Speaker 1: It says seven million dollars since the indictment not verified yet.

124
00:07:11,040 --> 00:07:14,360
Speaker 1: The meeting between Taiwan President Sion When and Kevin McCarthy

125
00:07:14,480 --> 00:07:17,920
Speaker 1: is on for Wednesday in Los Angeles. Bloomberg's Dan Flatley

126
00:07:18,000 --> 00:07:20,400
Speaker 1: says both sides are defending the meeting in the wake

127
00:07:20,440 --> 00:07:24,080
Speaker 1: of China protests, with some statements from the President of

128
00:07:24,080 --> 00:07:29,320
Speaker 1: Taiwan and the White House sort of talking about the

129
00:07:29,400 --> 00:07:33,760
Speaker 1: right of the President of Taiwan, Kingwen to meet with

130
00:07:34,040 --> 00:07:36,680
Speaker 1: whoever she chooses to meet with here in the US

131
00:07:36,720 --> 00:07:40,080
Speaker 1: a free country. Taiwan says no room for China comment,

132
00:07:40,240 --> 00:07:43,640
Speaker 1: but of course China will fire. Foreign Ministry says China

133
00:07:43,640 --> 00:07:47,560
Speaker 1: will take resolute measures to safeguard the sovereignty and the

134
00:07:47,720 --> 00:07:52,000
Speaker 1: territorial integrity. Meanwhile, the Pentagon is saying that that China

135
00:07:52,200 --> 00:07:55,760
Speaker 1: spy balloon was able to get some intelligence this while

136
00:07:55,840 --> 00:08:00,640
Speaker 1: investigation continues. Pentagon Deputy Press Secretary Sabrina saying, we do

137
00:08:00,760 --> 00:08:03,560
Speaker 1: know that the balloon was able to be maneuvered and

138
00:08:03,680 --> 00:08:06,720
Speaker 1: purposely driven along its track, but not going to get

139
00:08:06,720 --> 00:08:09,400
Speaker 1: into specific sights it was able to hover over. She

140
00:08:09,480 --> 00:08:12,200
Speaker 1: does say the US was able to take mitigation operations

141
00:08:12,240 --> 00:08:15,680
Speaker 1: once it did reach the US though. Finland becomes a

142
00:08:15,720 --> 00:08:20,200
Speaker 1: full fledged member of NATO tomorrow, and Secretary General Yan

143
00:08:20,280 --> 00:08:24,000
Speaker 1: Stoltenberg says the process is moving forward for Sweden as well.

144
00:08:24,080 --> 00:08:29,880
Speaker 1: We agreed on that he could move forward on finalizing

145
00:08:29,880 --> 00:08:34,600
Speaker 1: the Swedish accession, and the president on the Turkish Parliament

146
00:08:34,960 --> 00:08:38,240
Speaker 1: National gun Desamblas delivered on that. So that's the reason

147
00:08:38,240 --> 00:08:42,800
Speaker 1: why we are we are now with Finland full members

148
00:08:42,840 --> 00:08:46,800
Speaker 1: from tomorrow. Stoltenberg says both have followed through on their commitments.

149
00:08:46,800 --> 00:08:50,320
Speaker 1: And just of note, Russia today started its monthly turn

150
00:08:50,400 --> 00:08:53,920
Speaker 1: as head of the UN Security Council. Global News powered

151
00:08:53,960 --> 00:08:56,480
Speaker 1: by more than twenty seven hundred journalists and analysts and

152
00:08:56,520 --> 00:08:59,880
Speaker 1: over one hundred twenty countries. In San Francisco, I'm at Baxter.

153
00:09:00,160 --> 00:09:03,920
Speaker 1: This is Bloomberg. Let's get to our guest. David Waldell

154
00:09:04,080 --> 00:09:06,120
Speaker 1: is with us. He as the CEO also the chief

155
00:09:06,160 --> 00:09:09,880
Speaker 1: investment strategist at Waddell and Associates. He's on the line

156
00:09:10,000 --> 00:09:13,079
Speaker 1: from Nashville. David, thanks for being with us. I'm curious

157
00:09:13,120 --> 00:09:15,400
Speaker 1: what did you make of today's price action in the

158
00:09:15,400 --> 00:09:19,000
Speaker 1: face of the spike and crude oil. Well, it was

159
00:09:19,040 --> 00:09:22,480
Speaker 1: good for beating up energy names, so that was helpful.

160
00:09:22,520 --> 00:09:25,280
Speaker 1: I just think we're in a noisy market right here.

161
00:09:25,320 --> 00:09:29,000
Speaker 1: The deck is being reshuffled, so you see. You know,

162
00:09:29,080 --> 00:09:34,320
Speaker 1: once the banking panic took hold, that sort of knocked

163
00:09:34,360 --> 00:09:37,520
Speaker 1: off the MidCap trade and the small cap trade, it

164
00:09:37,640 --> 00:09:40,600
Speaker 1: knocked off the value trade, and so the markets in

165
00:09:40,720 --> 00:09:43,240
Speaker 1: sort of chern mode, just trying to hold on to

166
00:09:43,840 --> 00:09:46,280
Speaker 1: any short term trend line it can, and so you

167
00:09:46,360 --> 00:09:49,400
Speaker 1: got that in energy today. But it was certainly a

168
00:09:50,120 --> 00:09:54,600
Speaker 1: lukewarm response. You know, two of the indussees worked, one didn't,

169
00:09:54,640 --> 00:09:58,320
Speaker 1: and really the participation was pretty lame, so it was

170
00:09:58,320 --> 00:10:00,400
Speaker 1: just kind of an ugly tape. Today, in my opinion,

171
00:10:01,240 --> 00:10:04,920
Speaker 1: the market is so strange these days. There are so

172
00:10:04,960 --> 00:10:07,640
Speaker 1: many coals that are bearish, and the latest being James

173
00:10:07,720 --> 00:10:10,720
Speaker 1: Morgan's Marko kolonoish warning that stocks are in a calm

174
00:10:10,760 --> 00:10:13,200
Speaker 1: before the storm type mode. Is that how you see it.

175
00:10:14,559 --> 00:10:18,400
Speaker 1: I love bearish sentiment, right because that's what's required to

176
00:10:18,440 --> 00:10:21,200
Speaker 1: provide the fuel for rallies to go up. I mean,

177
00:10:21,679 --> 00:10:24,960
Speaker 1: people have been bearish all year long for a variety

178
00:10:25,000 --> 00:10:28,000
Speaker 1: of reasons, and yet here we are up seven percent

179
00:10:28,080 --> 00:10:32,480
Speaker 1: on the SMP and actually the international stocks are outperforming

180
00:10:32,520 --> 00:10:35,839
Speaker 1: the domestic stocks. So you know, bearish sentiment is a

181
00:10:35,880 --> 00:10:39,080
Speaker 1: good thing because it's the conversion of the skeptics which

182
00:10:39,120 --> 00:10:43,120
Speaker 1: provides the fuel for rallies. In terms of a really

183
00:10:44,120 --> 00:10:49,280
Speaker 1: determinant catalyst, I believe people are looking past twenty twenty three,

184
00:10:49,320 --> 00:10:53,040
Speaker 1: they're looking into twenty twenty four, and they're seeing all

185
00:10:53,080 --> 00:10:56,040
Speaker 1: of these cloth cutting efforts that we read about every

186
00:10:56,120 --> 00:10:58,719
Speaker 1: day that seemed depressing in the now, are going to

187
00:10:58,800 --> 00:11:02,160
Speaker 1: be really great relief in the future. And then you

188
00:11:02,160 --> 00:11:05,440
Speaker 1: add you know, some technology advances into that and you

189
00:11:05,440 --> 00:11:08,760
Speaker 1: could have serious margin expansion in twenty twenty four. So

190
00:11:09,559 --> 00:11:11,000
Speaker 1: if you think we're going to be in a garden

191
00:11:11,080 --> 00:11:14,080
Speaker 1: variety recession, I do. Even if you think there's going

192
00:11:14,080 --> 00:11:16,439
Speaker 1: to be a crisis, POWE will put is back in

193
00:11:17,120 --> 00:11:21,960
Speaker 1: play and so that neutralizes. So the sentiment can be barished.

194
00:11:21,960 --> 00:11:24,959
Speaker 1: But if you walk forward, you know, just a series

195
00:11:24,960 --> 00:11:27,840
Speaker 1: of months from now, you're back into sort of, you know,

196
00:11:28,240 --> 00:11:32,560
Speaker 1: a nice earnings environment. Why not participate in advance of that. Well,

197
00:11:32,840 --> 00:11:35,080
Speaker 1: that's a very interesting point, and it runs counter to

198
00:11:35,120 --> 00:11:37,120
Speaker 1: what we heard today from Chris Harvey over at where

199
00:11:37,160 --> 00:11:40,160
Speaker 1: Else Fargo. Given the possibility of a recession that seems

200
00:11:40,160 --> 00:11:43,400
Speaker 1: to look a little more certain these days. Harvey was

201
00:11:43,400 --> 00:11:47,000
Speaker 1: saying the upcoming earning season maybe the first of several

202
00:11:47,160 --> 00:11:50,320
Speaker 1: difficult quarters, and he puts his finger as you did,

203
00:11:50,800 --> 00:11:53,920
Speaker 1: on margins being compressed. So it's kind of the opposite

204
00:11:53,920 --> 00:11:56,960
Speaker 1: of what you're saying. Aren't you not at all concerned

205
00:11:57,000 --> 00:12:00,199
Speaker 1: about the possibility of recession and what that made due

206
00:12:00,280 --> 00:12:04,080
Speaker 1: to the bottom line for US corporates. I just think

207
00:12:04,080 --> 00:12:06,840
Speaker 1: we're out of sequence, right, So we're gonna have a

208
00:12:06,840 --> 00:12:10,560
Speaker 1: recession this year and we priced that in last year

209
00:12:11,200 --> 00:12:14,280
Speaker 1: because earnings were good last year, up four percent overall,

210
00:12:14,280 --> 00:12:18,200
Speaker 1: and you know, the economy was a nimic, but it grew. Typically,

211
00:12:18,240 --> 00:12:20,720
Speaker 1: that's not an environment where you see a big negative

212
00:12:20,800 --> 00:12:25,040
Speaker 1: year in the talk market. So we get recession returns

213
00:12:25,080 --> 00:12:27,400
Speaker 1: for this year last year, and we're going to get

214
00:12:27,480 --> 00:12:30,360
Speaker 1: recovery returns for next year this year. So I really

215
00:12:30,400 --> 00:12:32,959
Speaker 1: think it's a sequencing issue. I agree with him. By

216
00:12:33,000 --> 00:12:36,280
Speaker 1: the way, earnings are projected to be down from the

217
00:12:36,360 --> 00:12:41,079
Speaker 1: high ten percent already, so they topped out in June

218
00:12:41,240 --> 00:12:44,640
Speaker 1: of twenty twenty two, and you know for this quarter,

219
00:12:45,080 --> 00:12:48,280
Speaker 1: based upon today's estimates, they'll be down eleven percent from

220
00:12:48,280 --> 00:12:51,640
Speaker 1: that point. So maybe they go down fifteen percent, which

221
00:12:51,679 --> 00:12:54,840
Speaker 1: wouldn't be out of the range of a normal recessionary environment.

222
00:12:54,920 --> 00:12:57,720
Speaker 1: My point is we've already baked it in. Everybody knows this,

223
00:12:57,800 --> 00:13:01,120
Speaker 1: so everybody knows we're going into recession. Everybody knows earnings

224
00:13:01,120 --> 00:13:03,680
Speaker 1: are going down ten to fifteen percent, and yet here

225
00:13:03,679 --> 00:13:06,600
Speaker 1: we are up seven percent. So the market's looking past it,

226
00:13:06,640 --> 00:13:09,200
Speaker 1: and I think correctly so so are you in the

227
00:13:09,240 --> 00:13:11,760
Speaker 1: Compson that sees rate cuts before the end of the year.

228
00:13:13,280 --> 00:13:15,560
Speaker 1: I mean, if I was running the FED, you'd see

229
00:13:15,640 --> 00:13:17,760
Speaker 1: rate cuts before the end of the year. I do

230
00:13:17,880 --> 00:13:22,480
Speaker 1: think disinflation has taken hold. You know. I talked to

231
00:13:22,920 --> 00:13:25,720
Speaker 1: bankers just like everybody else, and I don't know anybody

232
00:13:25,760 --> 00:13:29,000
Speaker 1: out there who's really aggressively making loans right now because

233
00:13:29,480 --> 00:13:34,000
Speaker 1: the small banks are seeing outflows, which isn't encouraging, and

234
00:13:34,040 --> 00:13:36,600
Speaker 1: the large banks are seeing cash sorting, which is the

235
00:13:36,679 --> 00:13:40,720
Speaker 1: same thing. So nobody's really interested, I think, in extending

236
00:13:40,720 --> 00:13:43,600
Speaker 1: a bunch of loans right now. So finally, the yield

237
00:13:43,600 --> 00:13:48,600
Speaker 1: curve that's been dramatically inverted is starting to bite. So

238
00:13:48,720 --> 00:13:50,960
Speaker 1: if it were me running the FED, I'd let that

239
00:13:51,040 --> 00:13:54,040
Speaker 1: play out because they may have raised twenty five basis

240
00:13:54,080 --> 00:13:57,079
Speaker 1: points last month, but the tightness and the credit market

241
00:13:57,160 --> 00:13:59,920
Speaker 1: might have added another fifty to seventy five basis point.

242
00:14:00,520 --> 00:14:04,480
Speaker 1: So if you factor in and do dynamic modeling, how

243
00:14:04,600 --> 00:14:07,280
Speaker 1: much further do you really need to go? It's already

244
00:14:07,400 --> 00:14:10,640
Speaker 1: one of the fastest rate hike regimes in history. Why

245
00:14:10,679 --> 00:14:12,520
Speaker 1: not let it just play out for a little bit.

246
00:14:12,720 --> 00:14:15,480
Speaker 1: So are you seeing opportunities then? Given what you just said,

247
00:14:15,520 --> 00:14:20,080
Speaker 1: are you seeing opportunities in fixed income at all? You know,

248
00:14:20,160 --> 00:14:22,600
Speaker 1: I mean the yields are nice, and so you can

249
00:14:22,640 --> 00:14:25,320
Speaker 1: buy short term paper and get big yields and then

250
00:14:25,360 --> 00:14:27,920
Speaker 1: if you think their rate cuts coming in the future.

251
00:14:28,320 --> 00:14:30,360
Speaker 1: You know, the spreads haven't really blown out, so the

252
00:14:30,400 --> 00:14:35,960
Speaker 1: credit spreads are not indicating distress the way you know

253
00:14:36,040 --> 00:14:39,640
Speaker 1: the stock market gyrating round might indicate. So even with

254
00:14:39,720 --> 00:14:42,560
Speaker 1: the move index high and things kind of nutty, the

255
00:14:42,600 --> 00:14:45,600
Speaker 1: credit spreads will still remain tight. So I don't know

256
00:14:45,640 --> 00:14:48,200
Speaker 1: if if those will blow out a little bit. I

257
00:14:48,520 --> 00:14:51,880
Speaker 1: think you can just be in duration sort of yield

258
00:14:52,600 --> 00:14:56,400
Speaker 1: positions and be fine because you'll probably see a drift lower.

259
00:14:56,880 --> 00:14:58,960
Speaker 1: You know. I look at like the five year break

260
00:14:59,000 --> 00:15:02,840
Speaker 1: even year five year forwards, those are all benign at

261
00:15:02,880 --> 00:15:06,600
Speaker 1: two point three percent, etc. So the bondom market actually

262
00:15:06,680 --> 00:15:09,960
Speaker 1: is a lot calmer than the short term paper makes

263
00:15:10,040 --> 00:15:14,080
Speaker 1: it appear. This is Bloomberg Daybreak Asia, your morning brief

264
00:15:14,080 --> 00:15:16,840
Speaker 1: on the stories making news from Hong Kong to Singapore

265
00:15:16,880 --> 00:15:19,720
Speaker 1: and wool Street. Look for us on your podcast feed

266
00:15:19,800 --> 00:15:23,520
Speaker 1: every day on Apple, Spotify and anywhere else you get

267
00:15:23,520 --> 00:15:26,320
Speaker 1: your podcast. You could also listen live each day on

268
00:15:26,360 --> 00:15:29,000
Speaker 1: Bloomberg eleven three zero in New York, Bloomberg ninety nine

269
00:15:29,080 --> 00:15:31,720
Speaker 1: one in Washington, Bloomberg one oh six one in Boston,

270
00:15:31,800 --> 00:15:35,240
Speaker 1: and Bloomberg nine to sixty in San Francisco. Our flagship

271
00:15:35,280 --> 00:15:39,040
Speaker 1: New York station is also available on your Amazon Alexa devices.

272
00:15:39,480 --> 00:15:43,720
Speaker 1: Just say Alexa Play Bloomberg eleven thirty plus. Listen coast

273
00:15:43,760 --> 00:15:46,680
Speaker 1: to coast on the Bloomberg Business app, Sirius XM Channel

274
00:15:46,720 --> 00:15:50,600
Speaker 1: one nineteen, the iHeartRadio app, and on Bloomberg dot Com.

275
00:15:50,680 --> 00:15:53,440
Speaker 1: I'm Bonnie Quinn and I'm Doug Prisoner. Join us again

276
00:15:53,480 --> 00:15:56,040
Speaker 1: tomorrow for all the news unique to start your day

277
00:15:56,280 --> 00:15:58,200
Speaker 1: right here on Bloomberg Daybreak Asia