1
00:00:02,520 --> 00:00:12,000
Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. Welcome to the Bloomberg

2
00:00:12,080 --> 00:00:16,079
Speaker 1: Daybreak Asia podcast time Doug Chrisner. Following today's print on

3
00:00:16,160 --> 00:00:19,400
Speaker 1: producer prices here in the US, markets in Asia are

4
00:00:19,480 --> 00:00:24,040
Speaker 1: bracing for tomorrow's report on US consumer inflation. We'll be

5
00:00:24,079 --> 00:00:28,040
Speaker 1: hearing from Rob Hayworth. He is with US Bank Wealth Management.

6
00:00:28,040 --> 00:00:30,319
Speaker 1: We'll do that in a bit, but let's begin in

7
00:00:30,400 --> 00:00:33,559
Speaker 1: Hong Kong. That's where we find Raoul Chatta, founder and

8
00:00:33,640 --> 00:00:38,280
Speaker 1: CIO of Shikarra Investment Management. I think we can agree

9
00:00:38,320 --> 00:00:41,360
Speaker 1: you and I that twenty twenty four was especially challenging

10
00:00:41,920 --> 00:00:45,519
Speaker 1: for many em markets across the Asia Pacific. We know

11
00:00:45,600 --> 00:00:47,280
Speaker 1: that China was very much a big part of that

12
00:00:47,360 --> 00:00:50,839
Speaker 1: story as it continued to struggle, and whether or not

13
00:00:50,920 --> 00:00:54,600
Speaker 1: the theme of US exceptionalism was a factor, we can

14
00:00:54,640 --> 00:00:57,000
Speaker 1: debate that. But I'm wondering, if you look out this

15
00:00:57,080 --> 00:01:00,480
Speaker 1: year twenty twenty five, how does the APAC and look

16
00:01:00,520 --> 00:01:00,800
Speaker 1: to you?

17
00:01:01,760 --> 00:01:04,880
Speaker 2: So, Doug, I'm more hopeful than what the markets are

18
00:01:05,000 --> 00:01:07,800
Speaker 2: baking in today for the Asian region. And the reason

19
00:01:07,920 --> 00:01:10,120
Speaker 2: for being more hopeful is I don't think the worst

20
00:01:10,120 --> 00:01:14,039
Speaker 2: case scenario for tariffs plays out for Asia because look,

21
00:01:14,280 --> 00:01:18,720
Speaker 2: the inflation is going to impact US those tariffs. Eventually

22
00:01:18,720 --> 00:01:20,240
Speaker 2: the price is going to be worn by the US

23
00:01:20,280 --> 00:01:22,720
Speaker 2: Conjua and I live in New York and trust me,

24
00:01:22,880 --> 00:01:26,240
Speaker 2: it's the inflation is literally killing us. Over there, things

25
00:01:26,240 --> 00:01:28,480
Speaker 2: are super super expensive, and when you travel around the

26
00:01:28,480 --> 00:01:32,800
Speaker 2: world you realize how outrageously priced things in the US are.

27
00:01:33,160 --> 00:01:35,960
Speaker 2: So clearly the worst case Ontaris doesn't play out. What

28
00:01:36,000 --> 00:01:39,800
Speaker 2: we're seeing is x US. Some of this disinflation coming

29
00:01:39,800 --> 00:01:43,160
Speaker 2: through that was coming in product prices until Q three

30
00:01:43,160 --> 00:01:45,800
Speaker 2: of last year, is coming in services also, so somewhere

31
00:01:45,840 --> 00:01:49,760
Speaker 2: that kind of comes through. Dollar strength is a form

32
00:01:49,960 --> 00:01:53,200
Speaker 2: of tightening. Raids have moved up to nearly four point

33
00:01:53,200 --> 00:01:55,560
Speaker 2: eight percent, so that slows down the economy. So I

34
00:01:55,560 --> 00:01:59,560
Speaker 2: think clearly we've seen the worst for Asian markets.

35
00:01:59,760 --> 00:02:02,800
Speaker 1: I'm wondering what you're hearing about this situation in China.

36
00:02:02,840 --> 00:02:04,560
Speaker 1: We had credit data the other day that was a

37
00:02:04,600 --> 00:02:08,760
Speaker 1: little disappointing. New loans in China for twenty twenty four

38
00:02:08,960 --> 00:02:12,040
Speaker 1: declined for the first time in thirteen years. Now, we

39
00:02:12,200 --> 00:02:14,760
Speaker 1: know that the government is taking steps. We can talk

40
00:02:14,800 --> 00:02:17,680
Speaker 1: more about that in a moment, but I'm curious as

41
00:02:17,720 --> 00:02:20,280
Speaker 1: to what you're hearing from people in Hong Kong about

42
00:02:20,280 --> 00:02:22,200
Speaker 1: the situation on the mainland.

43
00:02:22,440 --> 00:02:25,080
Speaker 2: So clearly what's going to get used to China growing

44
00:02:25,080 --> 00:02:26,880
Speaker 2: at about slower levels. The numbers are going to be

45
00:02:26,919 --> 00:02:29,560
Speaker 2: somewhere around three percent, and that's how we build our portfolio.

46
00:02:29,960 --> 00:02:33,480
Speaker 2: Our portfolio for China is Chinese companies in the custotic

47
00:02:33,520 --> 00:02:37,240
Speaker 2: sectors like Proya gaining share from the multinational corporations. Our

48
00:02:37,320 --> 00:02:41,280
Speaker 2: portfolio China is Chinese companies who are extending their global footprints. So,

49
00:02:41,320 --> 00:02:44,760
Speaker 2: whether it's Evy or the other parts of the change,

50
00:02:44,880 --> 00:02:48,320
Speaker 2: I think that's the interesting proposition as investors. We've going

51
00:02:48,360 --> 00:02:50,720
Speaker 2: to get used to this new world, which is China's slowing.

52
00:02:51,120 --> 00:02:54,079
Speaker 2: What has changed at the margin is over the last

53
00:02:54,080 --> 00:02:57,080
Speaker 2: twelve months, the Chinese governments become a lot more positive

54
00:02:57,080 --> 00:02:59,839
Speaker 2: towards businesses. They want to get the animal spirits back

55
00:03:00,120 --> 00:03:04,600
Speaker 2: from a business investment perspective, from a consumer confidence perspective.

56
00:03:04,639 --> 00:03:07,079
Speaker 2: But all these things are going to take time. I mean,

57
00:03:07,360 --> 00:03:09,560
Speaker 2: for those of us who've been in markets long enough

58
00:03:09,800 --> 00:03:12,440
Speaker 2: know that exorcist take their own time to clear up,

59
00:03:12,480 --> 00:03:14,680
Speaker 2: and we're going through one of those processes in China.

60
00:03:14,760 --> 00:03:17,799
Speaker 1: Yeah, So the consumer confidence perspective I think is key

61
00:03:17,919 --> 00:03:20,520
Speaker 1: where sentiment is concerned. Obviously, that's been one of the

62
00:03:20,560 --> 00:03:24,280
Speaker 1: missing pieces, right And yesterday we had one of the

63
00:03:24,400 --> 00:03:28,519
Speaker 1: security regulators in China pledging more support for the equity market,

64
00:03:28,600 --> 00:03:32,000
Speaker 1: and we know that officials also reiterated support for both

65
00:03:32,520 --> 00:03:36,160
Speaker 1: the currency and the Chinese bond markets as well. It

66
00:03:36,240 --> 00:03:40,440
Speaker 1: seems like there have been very conscious steps taken to

67
00:03:40,520 --> 00:03:44,280
Speaker 1: try to address this issue of sentiment weak sentiment at

68
00:03:44,280 --> 00:03:46,240
Speaker 1: the retail level. Do you think it's been enough.

69
00:03:46,800 --> 00:03:50,160
Speaker 2: See again, idly one would have wanted ten percent of

70
00:03:50,240 --> 00:03:52,800
Speaker 2: GDP as a stimulus to take care of all these things.

71
00:03:53,000 --> 00:03:57,000
Speaker 2: I think the number which one is hitting from China

72
00:03:57,160 --> 00:03:59,680
Speaker 2: is somewhere around three to four percent, so that's much lower.

73
00:04:00,040 --> 00:04:01,920
Speaker 2: That's their different style. They don't want to do what

74
00:04:02,160 --> 00:04:04,600
Speaker 2: was done in two thousand and eight and a repeat

75
00:04:04,640 --> 00:04:07,160
Speaker 2: of that. Their mindful of the dead GDPI ratios, which

76
00:04:07,200 --> 00:04:10,640
Speaker 2: I hear. But clearly, if you put all these events

77
00:04:10,640 --> 00:04:14,440
Speaker 2: over last twelve bunths, whether it's asking the local governments

78
00:04:14,480 --> 00:04:18,839
Speaker 2: not to change the entrepreneurs for unnecessary tax liabilities, et cetera,

79
00:04:19,320 --> 00:04:22,120
Speaker 2: whether it is kind of an trying to have an

80
00:04:22,120 --> 00:04:25,920
Speaker 2: amakable relationship with the US, So yesterday they were news

81
00:04:25,960 --> 00:04:29,279
Speaker 2: of China looking to say the TikTok us business. To

82
00:04:29,320 --> 00:04:31,720
Speaker 2: Elon muss, I think that should be positive. Earlier China

83
00:04:31,800 --> 00:04:33,960
Speaker 2: was like that business cannot be sold. So I think

84
00:04:34,000 --> 00:04:36,520
Speaker 2: a lot of these positive ref sprints are coming through.

85
00:04:36,560 --> 00:04:39,640
Speaker 2: You see a lot of countries getting visa free access

86
00:04:39,680 --> 00:04:43,520
Speaker 2: to China. So what happened around COVID was China's contact

87
00:04:43,560 --> 00:04:45,880
Speaker 2: for the rest of the world almost went to negligible.

88
00:04:45,880 --> 00:04:48,560
Speaker 2: So I think that is now getting resumed. So all

89
00:04:48,600 --> 00:04:51,160
Speaker 2: these are little positives to to add up. I mean funding,

90
00:04:51,200 --> 00:04:54,719
Speaker 2: the funding the local governments so that they can pay

91
00:04:54,720 --> 00:04:57,120
Speaker 2: their employees and so that they do not kind of

92
00:04:58,000 --> 00:05:00,600
Speaker 2: miss on the salary payments is clearly big postive.

93
00:05:01,080 --> 00:05:03,840
Speaker 1: What other markets right now look attractive to you? In

94
00:05:03,880 --> 00:05:07,080
Speaker 1: the Asia Pacific, I'm curious about Indonesia. I'm also curious

95
00:05:07,160 --> 00:05:08,600
Speaker 1: about your take on Vietnam.

96
00:05:09,279 --> 00:05:12,000
Speaker 2: So I think Azen is clearly attractive. Though Azen gets

97
00:05:12,080 --> 00:05:15,080
Speaker 2: impacted all the more Vietnam from these tariffs coming through,

98
00:05:15,120 --> 00:05:17,440
Speaker 2: which is why if you see Vietnam's not gone anywhere.

99
00:05:17,720 --> 00:05:21,559
Speaker 2: But look that market has been littlely flatlined for last

100
00:05:21,560 --> 00:05:25,240
Speaker 2: five years. Valuations are super attractive, so once some of

101
00:05:25,279 --> 00:05:28,400
Speaker 2: these tariffs are biked in two. In terms of the

102
00:05:28,440 --> 00:05:31,039
Speaker 2: market participlaate, s centible, et cetera, that is a market

103
00:05:31,080 --> 00:05:33,960
Speaker 2: one would like to add. India is a market we've

104
00:05:34,120 --> 00:05:36,760
Speaker 2: liked for a while. It's structurally a strong story in

105
00:05:36,800 --> 00:05:39,599
Speaker 2: this world of slow growth. India will continue to show

106
00:05:39,600 --> 00:05:42,680
Speaker 2: five to six percent growth and last three four months

107
00:05:42,720 --> 00:05:45,160
Speaker 2: because of the cyclical downtown we are having in India

108
00:05:45,320 --> 00:05:49,440
Speaker 2: is providing a good entry opportunity, particularly for small medcaps

109
00:05:49,480 --> 00:05:51,679
Speaker 2: et cetera. So right now, what we're doing in India

110
00:05:51,760 --> 00:05:54,080
Speaker 2: is adding to our large caps. But I think another

111
00:05:54,200 --> 00:05:57,320
Speaker 2: fifteen percent down for small medcaps they become attractive again.

112
00:05:57,600 --> 00:06:00,720
Speaker 1: So Rao, Well, you're having meetings with clients Nasia right now.

113
00:06:00,760 --> 00:06:03,560
Speaker 1: I'm curious about the one question that you're being asked

114
00:06:03,720 --> 00:06:05,080
Speaker 1: most frequently. What is it?

115
00:06:05,720 --> 00:06:10,200
Speaker 2: So I think the tariffs are on minds of everybody.

116
00:06:11,040 --> 00:06:16,039
Speaker 2: What happens in terms of rates is the question commonly asked,

117
00:06:16,080 --> 00:06:20,240
Speaker 2: and which is which is where our point is? Incoming months,

118
00:06:20,240 --> 00:06:23,440
Speaker 2: we'll get clarity on both and we are lot most sanguine.

119
00:06:23,480 --> 00:06:25,560
Speaker 2: Then the markets on this and a view is a

120
00:06:25,600 --> 00:06:28,640
Speaker 2: lot of negatives up priced in them, so almost everybody

121
00:06:29,000 --> 00:06:32,240
Speaker 2: is positioned in US, whereas what we believe is things

122
00:06:32,240 --> 00:06:35,960
Speaker 2: should improve, particularly in the Asian part of EAMs, and

123
00:06:36,080 --> 00:06:38,400
Speaker 2: that should be positive for investors who are positioned for that.

124
00:06:39,040 --> 00:06:41,160
Speaker 1: Raoul, We'll leave it there, thank you so much? Or

125
00:06:41,240 --> 00:06:44,800
Speaker 1: who will chat? A founder and CIO of Chikara Investment

126
00:06:44,839 --> 00:06:48,200
Speaker 1: Management joining us from Hong Kong here on the Daybreak

127
00:06:48,240 --> 00:06:58,960
Speaker 1: Asia podcast. Welcome back to the Daybreak Asia Podcast. I'm

128
00:06:59,000 --> 00:07:02,320
Speaker 1: Doug Prisoner. State side markets seem to be unwilling to

129
00:07:02,360 --> 00:07:04,919
Speaker 1: make any big bets in front of tomorrow's report on

130
00:07:05,120 --> 00:07:09,080
Speaker 1: US retail inflation. Today's report on wholesale inflation was a

131
00:07:09,080 --> 00:07:12,600
Speaker 1: bit cooler than forecast. The Producer Price Index up two

132
00:07:12,640 --> 00:07:15,480
Speaker 1: tents of one percent from the month before. That was

133
00:07:15,600 --> 00:07:20,720
Speaker 1: half expectations. Perhaps more importantly, the core PPI was unchanged.

134
00:07:20,840 --> 00:07:24,280
Speaker 1: Big question now, how will these data play into the

135
00:07:24,320 --> 00:07:28,040
Speaker 1: FED and it's thinking on the path forward with radcuts.

136
00:07:28,320 --> 00:07:31,240
Speaker 1: To answer that question, I'm joined by Rob Hayworth. He

137
00:07:31,320 --> 00:07:35,280
Speaker 1: is senior investment strategist at US Bank Wealth Management. Rob

138
00:07:35,360 --> 00:07:38,200
Speaker 1: joins us from Seattle. Thanks for making time to chat

139
00:07:38,200 --> 00:07:40,600
Speaker 1: with us. What's your sense of where we stand right

140
00:07:40,640 --> 00:07:42,760
Speaker 1: now in the fight against inflation? Here in the US.

141
00:07:43,240 --> 00:07:46,040
Speaker 3: Yeah, Doug, great to be with you. The fighting against

142
00:07:46,040 --> 00:07:49,640
Speaker 3: inflation is going okay, but it certainly could be better.

143
00:07:49,720 --> 00:07:54,120
Speaker 3: We were certainly seeing that inflation probably remains elevated somewhat

144
00:07:54,120 --> 00:07:58,240
Speaker 3: this year, even though we don't foresee an acceleration. We

145
00:07:58,280 --> 00:08:00,000
Speaker 3: think it's going to be hard to get that last

146
00:08:00,040 --> 00:08:02,840
Speaker 3: smile down to the federal reserve. But certainly what we're

147
00:08:02,840 --> 00:08:06,200
Speaker 3: seeing in the short term is higher fuel costs, higher

148
00:08:06,320 --> 00:08:11,200
Speaker 3: energy costs, higher food costs because we're seeing shortages right

149
00:08:11,400 --> 00:08:15,200
Speaker 3: We're seeing some supply challenges when it comes to eggs,

150
00:08:15,240 --> 00:08:18,000
Speaker 3: for example, due to the ABM flu. We're seeing low

151
00:08:18,040 --> 00:08:21,120
Speaker 3: inventories in the US for energy, so we're seeing some

152
00:08:21,200 --> 00:08:23,800
Speaker 3: pressure there. And then we'll have to see if the

153
00:08:23,880 --> 00:08:26,720
Speaker 3: labor market can loosen up and let wages keep creeping

154
00:08:26,760 --> 00:08:29,800
Speaker 3: lower to help push down on those core inflation prints

155
00:08:29,880 --> 00:08:32,160
Speaker 3: later in the year. But for now, it looks like

156
00:08:32,200 --> 00:08:34,440
Speaker 3: it's going to be kind of stubbornly elevated.

157
00:08:35,040 --> 00:08:38,560
Speaker 1: How big unknown is whether some of those economic policies

158
00:08:38,559 --> 00:08:42,400
Speaker 1: from the incoming Trump administration will be inflation arey. And

159
00:08:42,440 --> 00:08:45,080
Speaker 1: I'm thinking primarily of the tariff story. What's your sense

160
00:08:45,120 --> 00:08:45,480
Speaker 1: of that.

161
00:08:46,080 --> 00:08:48,200
Speaker 3: Well, we're certainly seeing the market react a bit to

162
00:08:48,240 --> 00:08:51,160
Speaker 3: that every day as news comes out. First and foremost,

163
00:08:51,440 --> 00:08:54,760
Speaker 3: it's coming down to tariffs and how much, how quickly,

164
00:08:54,840 --> 00:08:58,240
Speaker 3: how soon. The good news it seemed like this morning

165
00:08:58,600 --> 00:09:04,320
Speaker 3: was that it's going to be a more extended implementation

166
00:09:04,600 --> 00:09:07,240
Speaker 3: rather than a rapid implementation of tariffs, which I think

167
00:09:07,280 --> 00:09:10,600
Speaker 3: would be helpful to the market so that they're not

168
00:09:10,679 --> 00:09:14,520
Speaker 3: seeing that inflationary pressure right away. It's just hard for

169
00:09:14,600 --> 00:09:17,360
Speaker 3: us to handicap what the policies are going to be

170
00:09:18,080 --> 00:09:20,400
Speaker 3: as they come out fairly quickly, but that's certainly a

171
00:09:20,480 --> 00:09:23,120
Speaker 3: risk to the market that could push prices higher if

172
00:09:23,160 --> 00:09:27,480
Speaker 3: we see significant tariffs, especially early on. I think the

173
00:09:27,559 --> 00:09:30,079
Speaker 3: other challenge remains the labor market. If we see a

174
00:09:30,120 --> 00:09:34,480
Speaker 3: significant trinkage in the labor market because of deportations, that's

175
00:09:34,520 --> 00:09:38,560
Speaker 3: also inflationary from a wage perspective, that could be a

176
00:09:38,640 --> 00:09:41,160
Speaker 3: challenge too, And I think we're all just kind of

177
00:09:41,160 --> 00:09:44,360
Speaker 3: waiting to see what's really enacted. As we get into

178
00:09:44,720 --> 00:09:48,440
Speaker 3: the first couple of weeks of President Electrump's new term.

179
00:09:48,600 --> 00:09:51,120
Speaker 1: Very little movement in the bond market today. We've got

180
00:09:51,120 --> 00:09:53,520
Speaker 1: a tenure with a yield that is sub for eighty.

181
00:09:54,040 --> 00:09:56,240
Speaker 1: Do you think it's likely that we could test five

182
00:09:56,320 --> 00:09:58,520
Speaker 1: percent this year in twenty twenty five.

183
00:09:59,640 --> 00:10:01,720
Speaker 3: I think that's absolutely a risk, and that's a risk

184
00:10:01,720 --> 00:10:04,040
Speaker 3: that would be concerning to the equity market from a

185
00:10:04,120 --> 00:10:09,800
Speaker 3: valuation perspective. We saw this earlier last year when we

186
00:10:09,880 --> 00:10:12,280
Speaker 3: tested five percent on the tenure and we had a

187
00:10:12,320 --> 00:10:15,200
Speaker 3: pretty decent decline in the equity market. I think it's

188
00:10:15,600 --> 00:10:19,040
Speaker 3: a concern when it comes to borrowing costs and the

189
00:10:19,080 --> 00:10:23,640
Speaker 3: ability of especially smaller companies to refinance. And I think

190
00:10:23,679 --> 00:10:26,760
Speaker 3: it's a concern for valuation multiples as you're really getting

191
00:10:26,800 --> 00:10:30,440
Speaker 3: into some attractive levels where investors may start to think

192
00:10:30,840 --> 00:10:33,280
Speaker 3: they're better off in bonds than stocks at that point.

193
00:10:33,360 --> 00:10:38,000
Speaker 3: So that's certainly an area we're watching closely. We think

194
00:10:38,040 --> 00:10:39,880
Speaker 3: it remains a risk to the equity market if we

195
00:10:39,920 --> 00:10:41,640
Speaker 3: start to see those levels.

196
00:10:41,559 --> 00:10:44,040
Speaker 1: And I'm wondering about whether any shift in the yield

197
00:10:44,040 --> 00:10:47,079
Speaker 1: curve could either help or hurt some of the big banks.

198
00:10:47,360 --> 00:10:49,880
Speaker 1: We're going to hear tomorrow from a City Group along

199
00:10:49,880 --> 00:10:53,240
Speaker 1: with Goldman, Wells, Fargo and JP Morgan in terms of

200
00:10:53,280 --> 00:10:55,280
Speaker 1: their latest earnings. Do you have a sense of what

201
00:10:55,360 --> 00:10:57,720
Speaker 1: we're going to get in terms of guidance going forward.

202
00:10:58,640 --> 00:11:00,000
Speaker 3: We don't have a great sense of what we're going

203
00:11:00,160 --> 00:11:02,120
Speaker 3: to get in terms of guidance, but what we're certainly

204
00:11:02,200 --> 00:11:06,160
Speaker 3: looking for, Doug is what's going on with the consumer

205
00:11:07,080 --> 00:11:10,760
Speaker 3: and business spending and loan trends. Our banks still easing

206
00:11:10,840 --> 00:11:13,240
Speaker 3: up on lending terms. That's something we heard from the

207
00:11:13,240 --> 00:11:16,120
Speaker 3: Senior Loan Officer survey that that would be helpful for

208
00:11:16,160 --> 00:11:18,960
Speaker 3: the economy and what's happening with net interest income, and

209
00:11:19,000 --> 00:11:22,440
Speaker 3: certainly a steeper yield curve is often helpful when it

210
00:11:22,480 --> 00:11:26,960
Speaker 3: comes to these companies. So that's certainly something we're looking

211
00:11:27,840 --> 00:11:30,440
Speaker 3: very closely at over the next couple of days as

212
00:11:30,480 --> 00:11:34,040
Speaker 3: we get an awful lot of financial firms reporting very quickly.

213
00:11:33,760 --> 00:11:36,960
Speaker 1: Here, what about fewer regulations? Would that be helpful as well?

214
00:11:37,760 --> 00:11:40,079
Speaker 3: Generally it would be well, I know, there's a lot

215
00:11:40,080 --> 00:11:43,720
Speaker 3: of talk about easing regulations across a number of industries,

216
00:11:43,760 --> 00:11:48,360
Speaker 3: including the financial services industry. That could certainly be helpful

217
00:11:48,400 --> 00:11:50,240
Speaker 3: to companies as we move forward, but that's probably a

218
00:11:50,280 --> 00:11:54,120
Speaker 3: longer term issue compared to what we're seeing. What we'd

219
00:11:54,200 --> 00:11:56,720
Speaker 3: like to see right now in terms of loan growth

220
00:11:57,320 --> 00:12:00,920
Speaker 3: and how is the consumer progressing after such a such

221
00:12:00,920 --> 00:12:02,840
Speaker 3: a strong expansion Already, we've.

222
00:12:02,640 --> 00:12:05,239
Speaker 1: Got crude oil and this is New York Crew WTI

223
00:12:05,520 --> 00:12:08,600
Speaker 1: just under eighty dollars a barrel. We know that the

224
00:12:08,600 --> 00:12:12,760
Speaker 1: president elect is committed to increasing domestic production. Is the

225
00:12:12,880 --> 00:12:16,120
Speaker 1: energy space something that you want to be exposed to

226
00:12:16,200 --> 00:12:17,920
Speaker 1: this year in a major way?

227
00:12:18,120 --> 00:12:21,160
Speaker 3: No, we're probably We're probably a little mixed on that

228
00:12:20,880 --> 00:12:23,439
Speaker 3: in that one. Yes, we may be able to get

229
00:12:23,480 --> 00:12:27,800
Speaker 3: more output, but these companies have been very adept at

230
00:12:27,920 --> 00:12:30,600
Speaker 3: managing their balance sheet over the past year and figuring

231
00:12:30,640 --> 00:12:35,000
Speaker 3: out how to return capital to shareholders without overinvesting, and

232
00:12:35,040 --> 00:12:37,920
Speaker 3: so we haven't had the boom bust cycles of oil

233
00:12:37,960 --> 00:12:41,160
Speaker 3: output that we've had in the past. And I think

234
00:12:41,200 --> 00:12:46,559
Speaker 3: that companies are still on that path of strong financial management,

235
00:12:47,000 --> 00:12:50,520
Speaker 3: which we as shareholders certainly applaud. But I think it's

236
00:12:50,640 --> 00:12:53,200
Speaker 3: tough to say that oil prices are going to break

237
00:12:53,200 --> 00:12:56,680
Speaker 3: out and really cause a big run here in oil prices,

238
00:12:56,720 --> 00:12:59,920
Speaker 3: and I think it's tough to see them fall apart here.

239
00:13:00,080 --> 00:13:00,400
Speaker 2: One.

240
00:13:00,960 --> 00:13:04,240
Speaker 3: US inventories are quite low too. OPEC still has a

241
00:13:04,280 --> 00:13:05,920
Speaker 3: couple of million barrels a day it would like to

242
00:13:05,960 --> 00:13:07,720
Speaker 3: add to the global market, so that kind of puts

243
00:13:07,760 --> 00:13:11,800
Speaker 3: aus ceiling on prices, and then from a floor perspective,

244
00:13:11,840 --> 00:13:15,600
Speaker 3: we're still refilling the strategic petroleum reserve, so this is

245
00:13:15,720 --> 00:13:18,120
Speaker 3: probably more of a range bound price market as we

246
00:13:18,160 --> 00:13:19,320
Speaker 3: look into the rest of the year.

247
00:13:19,440 --> 00:13:22,840
Speaker 1: So you're talking about returning capital to shareholders, I'm wondering

248
00:13:22,840 --> 00:13:25,880
Speaker 1: about dividend plays. Is there a lot of attraction right

249
00:13:25,920 --> 00:13:27,240
Speaker 1: now in the dividend space for you?

250
00:13:28,080 --> 00:13:30,600
Speaker 3: We really probably have a two pronged approach to this,

251
00:13:30,840 --> 00:13:34,559
Speaker 3: where where one we'd say for the longer term, technology

252
00:13:34,760 --> 00:13:38,199
Speaker 3: is vital to own from the growth perspective and the

253
00:13:38,200 --> 00:13:41,000
Speaker 3: portfolio and the revenue growth perspective. It is garnering a

254
00:13:41,040 --> 00:13:45,160
Speaker 3: lot of investment by companies and that should continue and too,

255
00:13:45,160 --> 00:13:48,720
Speaker 3: You're right we are looking at income plays. Energy would

256
00:13:48,720 --> 00:13:50,800
Speaker 3: be a part of that, but utilities really as well,

257
00:13:50,800 --> 00:13:56,439
Speaker 3: particularly because we're seeing utilities needing to invest more money

258
00:13:56,480 --> 00:14:01,280
Speaker 3: to develop facilities, to create more electricity to support this

259
00:14:01,400 --> 00:14:05,240
Speaker 3: artificial intelligence investment boom. So we think there's room for

260
00:14:05,280 --> 00:14:06,640
Speaker 3: both those in your portfolio.

261
00:14:06,840 --> 00:14:08,400
Speaker 1: Before I let you go, Rob, I got to get

262
00:14:08,440 --> 00:14:11,079
Speaker 1: your take as to whether or not you're seeing opportunities

263
00:14:11,120 --> 00:14:15,200
Speaker 1: offshore right now, particularly in emerging markets. Is there value

264
00:14:15,240 --> 00:14:16,080
Speaker 1: there still.

265
00:14:16,800 --> 00:14:19,640
Speaker 3: Yeah, We certainly think there is value in global markets,

266
00:14:19,680 --> 00:14:22,720
Speaker 3: and part of that is driven by the elevated valuations

267
00:14:22,760 --> 00:14:26,560
Speaker 3: we have here in the US. Really US growth, the

268
00:14:26,960 --> 00:14:28,960
Speaker 3: US performance over the rest of this year we think

269
00:14:29,040 --> 00:14:33,360
Speaker 3: requires significant earnings growth rather than multiple expansion again this year,

270
00:14:33,360 --> 00:14:37,040
Speaker 3: and that means we're seeing that it's somewhat attractive to

271
00:14:37,120 --> 00:14:40,160
Speaker 3: look offshore, particularly given the recent strength in the US

272
00:14:40,200 --> 00:14:44,480
Speaker 3: dollar that may not be replicated. So you know, it's

273
00:14:44,520 --> 00:14:47,080
Speaker 3: not the same growth story outside the US that it

274
00:14:47,120 --> 00:14:50,800
Speaker 3: is inside the US, but we think there is reason

275
00:14:50,880 --> 00:14:54,680
Speaker 3: to consider some of those value plays outside the US.

276
00:14:55,040 --> 00:14:57,280
Speaker 1: Rob, thanks for being with us. Great insights from Rob

277
00:14:57,320 --> 00:15:00,800
Speaker 1: Hayworth there. He is the senior investment strategist at US

278
00:15:00,840 --> 00:15:04,320
Speaker 1: Bank Wealth Management. Joining us here on the Daybreak Asia Podcast.

279
00:15:07,000 --> 00:15:10,400
Speaker 1: Thanks for listening to today's episode of the Bloomberg Daybreak

280
00:15:10,560 --> 00:15:13,920
Speaker 1: Asia Edition podcast. Each weekday, we look at the story

281
00:15:14,000 --> 00:15:18,320
Speaker 1: shaping markets, finance, and geopolitics in the Asia Pacific. You

282
00:15:18,360 --> 00:15:22,480
Speaker 1: can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel,

283
00:15:22,600 --> 00:15:25,600
Speaker 1: or anywhere else you listen. Join us again tomorrow for

284
00:15:25,720 --> 00:15:29,240
Speaker 1: insight on the market moves from Hong Kong to Singapore

285
00:15:29,640 --> 00:15:33,400
Speaker 1: and Australia. I'm Doug Prisner, and this is Bloomberg.