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Speaker 1: Good morning.

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Speaker 2: I'm Nathan Hager and I'm Karen Moscow. Here are the

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Speaker 2: stories we're following today.

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Speaker 3: We begin overseas in China, Concerns continue over a slowdown

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Speaker 3: in the world's second largest economy. This morning, James McCormick,

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Speaker 3: global Head of Sovereigns at Fitch Ratings, tells us his

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Speaker 3: agency may reconsider China's A plus credit score.

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Speaker 4: Factors that we've moved are if there is some kind

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Speaker 4: of increase of some of these contingent liabilities in other

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Speaker 4: sectors and non financial corporate sector, and the banks themselves

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Speaker 4: become real liabilities for the government. So if it really

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Speaker 4: does extend its balance sheet to support the economy, and

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Speaker 4: I wouldn't say we're expecting that, certainly recent evidence doesn't

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Speaker 4: suggest that would be the case, then.

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Speaker 5: We might think again.

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Speaker 3: James McCormick with Fitch Rating says China's debt to GDP

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Speaker 3: ratio is a bit high for a single A credit rating.

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Speaker 2: Well, Nathan. Among the concerns Fitch is watching new home prices,

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Speaker 2: which slip for a second straight month, offering no relief

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Speaker 2: to developers like Country Garden, but he faces a potential

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Speaker 2: default after missing bond payments this month. Risks are also

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Speaker 2: spreading to the financial sector, with global investors like black

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Speaker 2: Rock and Alliance in focus due to their exposure to

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Speaker 2: Country Garden.

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Speaker 3: And another concerned for investors care in. One of China's

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Speaker 3: private financial services companies at risk of default, jong Rong

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Speaker 3: International Trust, says its missed payments on dozens of products.

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Speaker 3: Bloomberg's Brian Curtis has more from Hong Kong.

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Speaker 6: The board secretary of jong Rong says the firm missed

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Speaker 6: payments on a batch of products on August eighth, and

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Speaker 6: that the firm has no immediate plan to make clients hole.

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Speaker 6: That would suggest that issues at the firm are deeper

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Speaker 6: than previously known. Jong Rong International is owned by Jongjur

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Speaker 6: Enterprise Group. At least thirty products are now overdue in

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Speaker 6: Hong Kong. Brian Curtis, Bloomberg Daybreak.

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Speaker 2: Cory Brian thanks well. All these concerns over China weigh

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Speaker 2: on stocks in Asia. Today, Hong Kong's main index following

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Speaker 2: one point three percent, Stocks in China slump seven tens

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Speaker 2: of percent, and then Ek in Japan dropped one point

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Speaker 2: four percent.

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Speaker 3: Across the Pacific, Karen, Let's get you caught up on

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Speaker 3: the latest grim news out of Hawaii. The wildfires there

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Speaker 3: already the deadliest to hit the US in more than

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Speaker 3: a century. The death toll now stands at one hundred

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Speaker 3: and six As authorities try to identify victims and shelter

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Speaker 3: those displaced. Now, President Biden and First Lady Jill Biden

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Speaker 3: are preparing to visit the island of Maui. Bloomberg's Ed

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Speaker 3: Baxter has those details.

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Speaker 7: Risk modeling firm Karen Clark and Company, after using satellite

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Speaker 7: and aerial imagery of the Lehinotown area burn zone, says

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Speaker 7: it is three point two billion dollars. Says more than

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Speaker 7: twenty two hundred structures fell, with an additional three thousand

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Speaker 7: structures impacted. President Joe Biden, who has been criticized for

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Speaker 7: not being very visible, says work though, is getting done.

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Speaker 5: Almost five hundred federal personnelement deployed de Maui town, communities

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Speaker 5: and survivors get back on their feet.

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Speaker 7: The authorities are asking relatives of missing people to give

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Speaker 7: DNA samples and hopes of matching them up in San Francisco.

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Speaker 7: I'm at Baxter Bloomberg Daybreak.

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Speaker 2: All right, Ed, thank you well, let's turn to the

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Speaker 2: US economy now. In two reports on today's agenda, the

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Speaker 2: Fed issues minutes from last month's policy meeting, and we

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Speaker 2: also get data on industrial production. Meantime, FED officials are

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Speaker 2: making comments on future policy. Minneapolis Fed President Neil cash

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Speaker 2: Cary says the central bank is not done fighting inflation.

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Speaker 8: It's still too high. The good news is the labor

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Speaker 8: market has remained very strong. But it's a little bit

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Speaker 8: of a double edged sword, because the question in my

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Speaker 8: mind is have we done enough to actually get inflation

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Speaker 8: all the way back down to our two percent mark,

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Speaker 8: or do we have to do more.

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Speaker 2: Minneapolis Fed President Neil cash Carr said the US economy

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Speaker 2: has been surprisingly resilient in the face of rising rates.

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Speaker 3: And investors are also following a slew of retail news

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Speaker 3: this week, Karen, After retail sales beat estimates yesterday, we

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Speaker 3: get more consumer spending hints today from Target. Bloomberg's Charlie

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Speaker 3: Pellett reports.

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Speaker 5: Target is expected to report its first sales decline in

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Speaker 5: four years. The retailer is dealing with inventory missteps and

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Speaker 5: a consumer pull back from discretionary items such as home

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Speaker 5: goods and clothes. The bread and butter of targets. Cheap

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Speaker 5: chic merchandising analysts are looking for adjusted earnings per share

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Speaker 5: of a dollar thirty nine on revenue of twenty four

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Speaker 5: point nine billion dollars in New York. Charlie Pellett, Bloomberg Daybreak.

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Speaker 2: All right, Charlie, thank you will be having some other

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Speaker 2: company news to tell you about two. Tesla slashing prices

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Speaker 2: again in China, the second round of price cuts just

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Speaker 2: this week. This time it's reducing prices on the Model

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Speaker 2: S and Model X. That's feeling concerns that the car

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Speaker 2: makers reigniting our price war with evy makers in China.

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Speaker 3: Speaking of China and Karen, Apple's diversifying its supply chain

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Speaker 3: away from the country. Sources tell us the company's beginning

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Speaker 3: production of the iPhone fifteen in India as Apple increases

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Speaker 3: iPhone production there. It's aiming to narrow the gap between

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Speaker 3: facilities in India and China. New iPhones currently set to

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Speaker 3: ship from China will do so several weeks before they

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Speaker 3: do from India.

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Speaker 2: On the Chipspace, Nathan Intel walking away from a major

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Speaker 2: M and A deal, the company mutually agreed to abandon

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Speaker 2: plans to acquire Tower Semiconductor. That's after the five point

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Speaker 2: four billion dollar deal failed to win regulatory approval.

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Speaker 3: In time, we have another inflation note, Karen, this time overseas.

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Speaker 3: Inflation in the UK remained higher than expected last month

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Speaker 3: as the cost of travel and holidays climbed. UK's consumer

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Speaker 3: price index rows six point eight percent in July. That

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Speaker 3: exceeded expectations and continues to make the case for the

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Speaker 3: Bank of England raising interest rates again.

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Speaker 2: And finally, a sad note from the world of finance.

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Speaker 2: Nathan Mark Becker of Apollo Global Management has died a

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Speaker 2: pancreatic cancer. He was fifty one. In a message to

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Speaker 2: employee C R. Mark Rowan called Becker a larger than

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Speaker 2: life presence who made an indelible mark on Apollo. And

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Speaker 2: this is Bloomberg, This five zero seven on Wall Street.

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Speaker 2: Time Now for a look at some of the other

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Speaker 2: stories making news around the world. For that, we're joined

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Speaker 2: by Bloomberg's Amy Morris. Amy, Good morning, Karen.

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Speaker 9: Legal experts are now offering their predictions for former President

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Speaker 9: Donald Trump's latest criminal case concerning George's election in twenty twenty.

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Speaker 9: Bloomberg's Nancy Lyons reports Ty.

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Speaker 10: Cobb served as White House counsel during the Trump years.

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Speaker 10: He tells Bloomberg, this is a complex case.

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Speaker 3: There's a real possibility it never gets tried, or it

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Speaker 3: doesn't get tried for five years.

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Speaker 10: Former Assistant US Attorney for the Southern District of New York,

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Speaker 10: Jim Zion believes Fulton County DA Fannie Willis is up

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Speaker 10: to the task.

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Speaker 11: It might take some time before they can pick a jury.

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Speaker 11: It might take some time for her to get all

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Speaker 11: the sevenence in, but I think she'll try to prosecute

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Speaker 11: the case expeditiously in Washington.

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Speaker 10: I'm Nancy lyons Bloomberg Daybreak.

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Speaker 9: The slow process of rebuilding Malli is getting underway bit

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Speaker 9: by bit. The road leading to West Maui is now reopened,

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Speaker 9: but downtown Lahina is still off limits. Malli County Mayor

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Speaker 9: Richard Bisson says there's a process for reopening the town,

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Speaker 9: and it'll have to happen in phases.

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Speaker 12: Once we've determined that to be a safe zone and

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Speaker 12: the EPA has gone through there and they have removed

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Speaker 12: all the hazardous and toxic material out of Hawaii, then

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Speaker 12: we can begin the debris cleanup, which is a different phase.

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Speaker 12: And then at some point allow landowners and homeowners and

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Speaker 12: business owners to return to that location.

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Speaker 9: The death toll in Mali is now at least one

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Speaker 9: hundred and six as the search and recovery process continues.

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Speaker 9: The Pacific Northwest, meanwhile, is in for potentially record breaking

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Speaker 9: temperatures this week, as a dangerous heat wave is blanketing

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Speaker 9: that region. Forecasters urged people in Washington, Idaho, Oregon, Montana,

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Speaker 9: and California to prepare for triple digit temperatures through today

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Speaker 9: and into tomorrow. High winds, low humidity, and intense heat

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Speaker 9: also mean a greater risk of wildfires in some areas.

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Speaker 9: North Korea is confirming publicly for the first time that

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Speaker 9: American soldier Travis King did cross into that country. State

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Speaker 9: run media claimed that King admitted to entering North Korea illegally,

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Speaker 9: expressing a willingness to seek refuge either there or in

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Speaker 9: a third country. The report also says King confessed to

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Speaker 9: harboring ill feeling against quote in humane maltreatment and racial

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Speaker 9: discrimination within the US Army. US officials say those alleged

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Speaker 9: comments cannot be verified. Global News twenty four hours a day,

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Speaker 9: powered by more than twenty seven hundred journalists and analysts,

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Speaker 9: in more than one hundred twenty countries. I'm Amy Morris

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Speaker 9: and this is Bloomberg.

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Speaker 2: Karen all right, Amy, thank you. It is five h

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Speaker 2: nine on Wall Street as I'm now for the Bloomberg

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Speaker 2: Sports Update with John stashaur John.

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Speaker 13: Down The Inannapolis Colts drafted Anthony Richardson fourth overall and

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Speaker 13: they will start the rookie in week one. He says

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Speaker 13: he's shocked by the news. He only played thirteen games

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Speaker 13: in college at Florida, but Colts owner Jim Mersey had

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Speaker 13: already said that he has to play in order to

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Speaker 13: get better. So it looks like there'll be three rookie

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Speaker 13: quarterbacks starting Week one, with Bryce Young at Carolina c

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Speaker 13: J Stroud with Houston. Those two went one to two

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Speaker 13: in the draft. The mid season MLS tournament, the League Cup,

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Speaker 13: continuing with the semifinals victory by Nashville, who will host

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Speaker 13: Saturday's final against Leonel Messi and Inter Miami, a team

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Speaker 13: that wasn't very good until Messi arrived. He scored another goal.

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Speaker 13: He has nine in six games Miami. With a four

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Speaker 13: to one victory. In Chester, Pennsylvania baseball Red Sox got

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Speaker 13: a lead off home run from alex Verdugo and won

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Speaker 13: five to four at Washington. The Orioles lost in San

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Speaker 13: Diego ten to three.

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Speaker 5: The Giants held Tampa.

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Speaker 13: Bay the three hits and won seven and nothing. The

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Speaker 13: A's lost in Saint Louis six to two. Big series

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Speaker 13: in the ALS. The big win for Texas as Corey

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Speaker 13: Singer hit two home runs drove in five. The Rangers

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Speaker 13: beat the Angels seven to three. Big game of the WNBA.

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Speaker 13: They're having a midseason tournament as well, and the Liberty

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Speaker 13: won the championship by beating the Las Vegas Ations eighty

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Speaker 13: two to sixty three. They had Beaten Vegas by thirty

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Speaker 13: eight in the earlier meeting in New York. John Stashawer

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Speaker 13: Bloomberg Sports.

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Speaker 14: From coast to coast, from New York to San Francisco,

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Speaker 14: Boston to Washington, d C. Nationwide on Syrias Exam the

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Speaker 14: Bloomberg Business app in Bloomberg dot Com. This is Bloomberg Daybreak.

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Speaker 3: Good morning, I'm Nathan Hager, and the warning signs for

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Speaker 3: China's economy just seemed to keep on coming.

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Speaker 5: This morning.

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Speaker 3: Bloomberg News is reporting one of the country's largest trust

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Speaker 3: banks has missed payments on a lot more products than

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Speaker 3: had previously been reported, adding to ongoing concern about the

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Speaker 3: debt crisis in China's property sector that's been rattling investors

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Speaker 3: and has now led China Central Bank to take some action.

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Speaker 3: For more on this, we're joined by Bloomberg News China

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Speaker 3: Economy and Government editor Jill Desis with us this morning

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Speaker 3: from Hong Kong. Jill, good morning. What more do we

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Speaker 3: know about these misspayments at the Shadow Bank? How deep

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Speaker 3: do these problems go?

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Speaker 2: Yes?

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Speaker 15: So, ultimately, I think part of the issue here is

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Speaker 15: what we're hearing is that this trust companies on growing

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Speaker 15: payments on dozens of products and that they have no

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Speaker 15: immediate plan to make clients whole. The issues here that

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Speaker 15: we're exploring essentially ignite this idea that there could be

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Speaker 15: some contagion risk from these ongoing issues that we've seen

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Speaker 15: within China's property sector that have lasted for years at

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Speaker 15: this point. A big reason why is because within the

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Speaker 15: country's three trillion dollar trust industry, a lot of these

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Speaker 15: trust products are backed by real estate projects, and so

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Speaker 15: those projects are run by the troubled developers that sort

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Speaker 15: of has a lot of fears about, you know how

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Speaker 15: much that is actually spilling over into the financial sector.

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Speaker 15: Of course, these issues that we're hearing about from this

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Speaker 15: trust farm are now coming just days after you've been

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Speaker 15: reporting about one of the largest developers real estate developers

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Speaker 15: in China, a company called Country Garden, has had difficulty

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Speaker 15: making some of their payment that's led to fears that

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Speaker 15: we could see a liquidity crisis on the scale of

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Speaker 15: what we saw with Evergrand a couple of years ago.

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Speaker 15: And so really it just kind of shows that a

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Speaker 15: lot of these fears that we have about what's happening

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Speaker 15: in China right now are all interconnected and could ultimately

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Speaker 15: lead to some more widespread financial risks. And so that's

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Speaker 15: what we're ultimately looking for.

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Speaker 3: Yeah, and we've seen the People's Bank of China start

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Speaker 3: to step in here with some relief adding liquidity a

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Speaker 3: couple of days after cutting the rate on one of

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Speaker 3: their key interest rates. Is there more in the toolbox

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Speaker 3: that the People's Bank of China can do to try

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Speaker 3: to boost investor confidence here?

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Speaker 15: Yeah, So that's ultimately what we're looking out for. So

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Speaker 15: just yesterday what we saw was the People's Bank of

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Speaker 15: China lowering the rate on its one year policy loans

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Speaker 15: what they called medium term lending facility, that's a pretty

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Speaker 15: key interest rate within China, might lead to the lowering

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Speaker 15: of some other benchmark lending rates a little bit later

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Speaker 15: this month. We were expecting the PBOC to cut that

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Speaker 15: rate at some point within this quarter or next quarter.

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Speaker 15: But the fact that but this rate actually came, this

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Speaker 15: rate cut came a lot earlier than we respected, was

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Speaker 15: quite a surprise. And so what we've been talking to

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Speaker 15: economists about is the idea that could actually mean that,

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Speaker 15: you know, maybe there's additional rate cuts that we see

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Speaker 15: from the central Bank in the coming months. Maybe they

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Speaker 15: also do things like adjust the reserve requirement ratio, the

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Speaker 15: amount of cash that banks have to keep in reserve,

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Speaker 15: in order to free up some more liquidity. So there

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Speaker 15: are some additional options within their toolbox that they can

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Speaker 15: deploy in the coming weeks and months. The question, though,

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Speaker 15: is how much can they actually do. We've been talking

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Speaker 15: for months at this point about the fact that the

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Speaker 15: policy within China is somewhat strained to somewhat limited. I

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Speaker 15: think the government is wary about, you know, the fiscal

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Speaker 15: side taking on too much debt. There are some other

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Speaker 15: constraints that the PBOC is operating operating under They obviously

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Speaker 15: want to be careful about the currency weakening too much,

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Speaker 15: and so there are some constraints there, but ultimately it

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Speaker 15: does seem like maybe there's at least some room for

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Speaker 15: some additional using.

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Speaker 3: Of course, we've spoken as well with the global head

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Speaker 3: of Sovereigns at Fitch Ratings and joined us on Bloomberg

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Speaker 3: Television saying that Fitch may have to reconsider China's A

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Speaker 3: plus credit score. When you hear that kind of rhetoric,

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Speaker 3: is that the kind of thing that gets the People's

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Speaker 3: Bank of China's notice?

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Speaker 15: I mean, I think certainly. And he's not the only

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Speaker 15: one that's been saying comments in recent days. I mean,

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Speaker 15: you know, look at what other global policy makers and

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Speaker 15: leaders have been saying. You had, you know, Joe Biden

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Speaker 15: call the China a ticking time bomb. Late last week,

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Speaker 15: we heard from Janet Yellen just a couple of days

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Speaker 15: ago sort of assessing risks within the Chinese economy. And

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Speaker 15: then today the Central Bank of New Zealand actually came

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Speaker 15: out and said, you know, they were worried about some

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Speaker 15: global risks from what's happening with the Chinese economy and

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Speaker 15: some concerns that they have about you know what that

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Speaker 15: means for export garth for example. So yes, I think

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Speaker 15: that certainly the fact that you're seeing you know, global

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Speaker 15: ratings agencies, you know politicians, you know other policy makers

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Speaker 15: kind of come together and say, you know, they're keeping

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Speaker 15: an eye on what's happening in China is going to

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Speaker 15: get the attention it just but again, I do think

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Speaker 15: that you have to keep in mind that the Chinese

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Speaker 15: government thinks that there's some constraints to what they can

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Speaker 15: ultimately do with policy, and that they're not likely to

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Speaker 15: repeat something on the scale of the massive amount of

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Speaker 15: simulas you saw them deployed during the global financial crisis.

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