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Speaker 1: Good morning. I'm Richard Salamat.

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Speaker 2: And I'm Doug Prisner. Here are the stories we're following today.

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Speaker 1: All right, Well, we are really looking at Beijing, which

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Speaker 1: is focusing in on the markets and trying to really

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Speaker 1: perhaps solidify or try to make these markets less fragile,

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Speaker 1: at least with authorities asking some mutual funds that avoid

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Speaker 1: selling equities in order to boost confidence and indeed markets overall.

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Speaker 1: Juan One has.

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Speaker 3: More sources, says Stock exchanges issue to the so called

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Speaker 3: window guidance to several large mutual fundhouses, and these mutual

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Speaker 3: fundhouses were told to refrain for a day from selling

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Speaker 3: more on shore shares than they purchased. This comes just

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Speaker 3: today after financial regulators announced a slew of measures to

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Speaker 3: invigorate capital markets. But China's CSI three hundred index has

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Speaker 3: shown on lack of conviction even as authorities boosted efforts

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Speaker 3: to woop back investors in Hong Kong. I'm joined Wan

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Speaker 3: Bloomberg day Brigaisia well.

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Speaker 2: US Commerce Secretary Gina Romundo is in China this week.

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Speaker 2: She was speaking earlier in saying the trade and transparency

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Speaker 2: can serve as the foundation for better ties between these

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Speaker 2: two trading partners. Here's Ramundo speaking in Beijing.

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Speaker 4: We agree to establish a new Commercial Issues working group,

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Speaker 4: a formal working group which will involve US in Chinese

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Speaker 4: government officials and very importantly US and Chinese commercial private

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Speaker 4: sector representatives as we seek solutions on trade and investment

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Speaker 4: issues and to advance US commercial.

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Speaker 3: Interests in China.

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Speaker 2: That is Commerce Secretary Gina Ramundo. She went on to

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Speaker 2: say that she told her Chinese counterpart, Wang went Tao,

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Speaker 2: that the US has no intention to hinder China's economic progress.

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Speaker 2: And these two, that would be Ramundo and Wang agreed

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Speaker 2: to speak on a regular basis and at least meet

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Speaker 2: once a year now. Wang said that China was ready

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Speaker 2: to work with the US to boost trade and to

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Speaker 2: foster a mal favorable environment for businesses, not just in

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Speaker 2: the US, but in China as well.

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Speaker 1: Rashad right, Well, we got President Biden be traveling to

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Speaker 1: Vietnam in September, he said, to meet with the General

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Speaker 1: Secretary there Nu and Vutrong and other leaders. That's get

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Speaker 1: details now from Bloomberg's Charlie Pennett.

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Speaker 5: Biden plans to head to Hanoi on September tenth, where

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Speaker 5: the leaders will discuss ways to deepen cooperation between the

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Speaker 5: two countries. Out a Democratic fundraiser earlier this month, Biden

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Speaker 5: said he planned to visit Vietnam soon as the US

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Speaker 5: looks to strengthen ties with Asia nations and reduce Chinese

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Speaker 5: influence in the region. In New York, Charlie Pellett Bloomberg

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Speaker 5: Daybreak Asia.

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Speaker 2: Well in China BYD has reported its weakest revenue growth

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Speaker 2: in more than a year. We have that story from

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Speaker 2: Bloomberg's Baniao.

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Speaker 6: Revenue rose just sixty seven percent are around seventeen point

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Speaker 6: eight billion dollars in the second quarter. China's auto market

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Speaker 6: has been embroiled in a fierce price war this year.

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Speaker 6: Still not income more than doubled after the company sold

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Speaker 6: a record number of pluck in hybrid and fully electric

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Speaker 6: vehicles BYDS. Still robust financial performance will help it as

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Speaker 6: it navigates another period of market discounting, and its strong

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Speaker 6: sales volume performance in recent months has enabled it to

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Speaker 6: maintain its lead over Folkswagen as China's best selling car

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Speaker 6: brand this year. In Hong Kong, I'm Bonnie ol Bloomberg Daybreak.

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Speaker 1: Asia Well Back in the US and Goblin Sachs striking

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Speaker 1: a neal to sell an investment advisory unit. Let's get

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Speaker 1: details now from Bloomberg's and Kates.

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Speaker 7: For an undisclosed price, wealth management firm Creative Planning will

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Speaker 7: acquire the business, aimed at the mass affluent market, with

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Speaker 7: twenty nine billion dollars in assets. It grew out of

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Speaker 7: United Capital, which Goldman purchased for seven hundred and fifty

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Speaker 7: million dollars in twenty nineteen. The offloading of the company

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Speaker 7: just four years later signals Goldman's plans to refocus its

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Speaker 7: attention on the ultra riche, where it has a dominant

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Speaker 7: presence in Washington and Kate's Bloomberg Daybreak Asian.

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Speaker 2: We go to San Francisco next, where the fed's head

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Speaker 2: of Bank Supervision at the San Francisco FED will depart

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Speaker 2: at the end of October. He is Azer Abasi. He

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Speaker 2: will retire October thirty first as Executive VP of the

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Speaker 2: Supervision and Credit Group at the San Francisco FED. Now,

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Speaker 2: Abbassi's office had oversight of both Silicon Valley Bank and

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Speaker 2: First Republic Bank, and he, along with a president of

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Speaker 2: the San Francisco FED, Mary Daily, came under scrutiny back

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Speaker 2: in March when SVB and First Republic suddenly collapsed. Now,

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Speaker 2: those episodes revealed management shortcomings at the San Francisco FED

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Speaker 2: in it's on the ground supervision of small and medium

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Speaker 2: sized banks. Before we get to Global News, I want

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Speaker 2: to point out that chart watchers who have been looking

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Speaker 2: for clues on the next move in the equity market

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Speaker 2: have some crucial data to deal with. First, is the

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Speaker 2: forty four hundred level for the S and P five hundred.

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Speaker 2: Many technical analysts consider it to be key, and it's

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Speaker 2: holding above that level, so it's a positive sign. However,

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Speaker 2: if you look at the companies in the S and

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Speaker 2: P five five hundred where their stocks are trading relative

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Speaker 2: to their two hundred day moving averages, this is now

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Speaker 2: evenly divided, half trading above half below. That's a pretty

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Speaker 2: distinct departure from late July when two thirds of the

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Speaker 2: members in the S and P five hundred were above

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Speaker 2: their two hundred day moving averages. Now some analysts regard

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Speaker 2: this as a bearish indicator. Global News is next. Former

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Speaker 2: President Trump learns another lesson when it comes to his

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Speaker 2: trial dates. Stan Schwartzman has more from the Bloomberg newsroom

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Speaker 2: in New York.

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Speaker 8: Danny doug It's getting hard to keep track of all

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Speaker 8: these trial dates and things on Donald Trump's calendar, but

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Speaker 8: as of now it's March fourth. This is for attempting

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Speaker 8: to overturn the twenty twenty election. That date falls one

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Speaker 8: day before Super Tuesday, when fourteen states, including Texas and California,

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Speaker 8: hold their primaries. Trump is facing up to six criminal

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Speaker 8: and civil cases, including lawsuits personally against him, his family,

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Speaker 8: and his companies. Four of the cases are criminal, with

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Speaker 8: all carrying potential prison sentences. Trump will first being caught

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Speaker 8: on October second in New York to face charges he,

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Speaker 8: along with his sons, lied to lenders and insurers about

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Speaker 8: the value of his assets to get better loan rates

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Speaker 8: and insurance premiums. Tropical store my Dahlia is strengthening near

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Speaker 8: Cube as it heads toward Florida. Wins have now risen

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Speaker 8: to seventy miles per hour, with forecasts saying they could

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Speaker 8: reach one hundred and fifteen miles per hour, which would

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Speaker 8: be a Category three hurricane when it does reach Florida

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Speaker 8: on Wednesday. According to disaster modeling from Enkey Research, Idalia

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Speaker 8: could cause up to ten billion dollars worth of damages

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Speaker 8: and in losses depending on how it tracks. Governor Ron

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Speaker 8: De Santis has also now declared a state of emergency

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Speaker 8: in thirteen more counties, raising the tally to now cover

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Speaker 8: forty six total counties. DeSantis says Florida is preparing with

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Speaker 8: the federal government.

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Speaker 9: I have spoken with the President, I've spoken with FEMA

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Speaker 9: Director Chris Well, and then I've spoken with a number

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Speaker 9: of local officials throughout Florida's Gulf Coast, and everyone understands

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Speaker 9: the significance of this event, and everybody is willing to

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Speaker 9: work together to achieve the best possible outcome for the

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Speaker 9: residents of Florida.

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Speaker 10: Tampa International Airport also will be closed on Tuesday. In

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Speaker 10: a major milestone, starting Wednesday, China is going to stop

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Speaker 10: requiring incoming travelers to have a negative COVID test before

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Speaker 10: entering the country. Starting back in January, China had ended

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Speaker 10: quarantine requirements for citizens traveling abroad, while gradually increasing the

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Speaker 10: number of countries Chinese citizens could travel to, as well

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Speaker 10: as increasing the number of international flights. For three years,

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Speaker 10: China had locked down the country in that failed COVID

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Speaker 10: zero policy, which included full city lockdowns and long quarantine

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Speaker 10: periods for those infected. A school wide alert was issued

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Speaker 10: at the University of North Carolina's main campus at Chapel

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Speaker 10: Hill of an armed and dangerous person on or near campus.

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Speaker 10: Details have not been really made public yet. They're saying

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Speaker 10: maybe one person was shot and they were looking for

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Speaker 10: one suspect at the time, but the campus was locked

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Speaker 10: down for a period of time. North Carolina Governor Roy

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Speaker 10: Cooper posting on x pledge state resources to capture the

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Speaker 10: alleged shooter as well as to protect the campus now.

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Speaker 10: The first alert was issued around one in the afternoon,

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Speaker 10: with armed officers and helicopters arriving on the scene for

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Speaker 10: at least two hours past that, the police giving an

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Speaker 10: all cleared around four to fourteen local time, which ended

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Speaker 10: the lockdown. Chapel Hill campus approximately has twenty thousand undergraduate

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Speaker 10: students in additional twelve thousand grad students. Global News twenty

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Speaker 10: four hours a day, powered by more than twenty seven

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Speaker 10: hundred journalists and analysts in more than one hundred and

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Speaker 10: twenty countries. I'm Dan Schwartzman. This is Bloomberg.

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Speaker 2: Let's get to our guest. George Sippoloni is with us.

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Speaker 2: He is portfolio manager at Penn Mutual Asset Management. He's

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Speaker 2: on the line from Philadelphia. George, let's begin with a

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Speaker 2: bond market. We had to move lower and yield today,

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Speaker 2: which was somewhat of a reversal from the Friday session

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Speaker 2: with what many regarded to be a hawkish commentary from

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Speaker 2: the FED chairman. How do you view the bond market

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Speaker 2: right now?

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Speaker 11: Hey, Doug, thanks for having me again. I really appreciate it. Yeah,

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Speaker 11: the bond market's in a really interesting spot because it

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Speaker 11: seems to be fighting some of the conversation that has

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Speaker 11: been had I think from.

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Speaker 5: The the Fed.

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Speaker 11: Overall, obviously, the front end is super high and that's

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Speaker 11: being pushed up by the Fed. It's causing some consternation

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Speaker 11: at banks and some deposit flight, and overall the long

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Speaker 11: end again it's you know, it's certainly a more flatish

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Speaker 11: to invert a type YEO curve at the moment. And again,

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Speaker 11: I think the market keeps waiting for the next signs

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Speaker 11: of lower inflation, potential for a soft landing, and that's

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Speaker 11: really what they want, because no matter what Pal seems

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Speaker 11: to say, they don't seem to believe him yet that

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Speaker 11: he's going to stay really really tough on rate.

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Speaker 2: Yeah, it's kind of interesting you make that point. Bloomberg's

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Speaker 2: Liz McCormick, who covers the treasury market for US, was

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Speaker 2: saying over the weekend that Powell has the bond market

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Speaker 2: exactly where he wants it, lacking conviction is to the

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Speaker 2: next steps that the Fed may take. But if you

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Speaker 2: take a look at this idea, which I think has

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Speaker 2: been taking hold to some extent, maybe a little less

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Speaker 2: so these days, that we're going to be looking at

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Speaker 2: rate cuts after the first of the year, is that

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Speaker 2: something you're expecting.

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Speaker 11: So I think there's a pretty interesting in Carlarry. If

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Speaker 11: you go back, there have been eleven periods of policy tightening,

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Speaker 11: and roughly half of them have been hard landings, roughly

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Speaker 11: half of them have been soft landing. So you really

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Speaker 11: don't get too much guidance there. I think one of

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Speaker 11: the things, as long as he keeps rates as high

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Speaker 11: as he's kept them, which nobody's believed him. We can

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Speaker 11: go back to March of twenty two when he gave

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Speaker 11: testimony to Senate Senator Shelby didn't believe him that he

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Speaker 11: was going to keep rates that high and stay tough

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Speaker 11: on inflation. Even from last year at Jackson Hole, the

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Speaker 11: market has not believed him. The stock market's up a

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Speaker 11: lot since then, and even now with this most recent statement.

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Speaker 11: So I think overall, you know, if you look at

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Speaker 11: what the economy's doing, I think he's kind of banking

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Speaker 11: on inflation coming off and giving him room to eventually

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Speaker 11: cut in the future.

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Speaker 1: George, I mean, it does seem that inflation and the

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Speaker 1: target for two percent may be a little bit ambitious

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Speaker 1: in the medium term because the nature and structure of

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Speaker 1: inflation may well have changed, and maybe we have to

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Speaker 1: get used to inflation's side being elevated because of various

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Speaker 1: changes in the global economic environment.

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Speaker 11: I think you're right, Rashad, and I think that that's

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Speaker 11: that's a big that should be at least a big fear.

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Speaker 11: So if you want to take a lesson from history

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Speaker 11: from the vulgar days, obviously inflation did pull back and

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Speaker 11: then we had a resurgence, And I really think, how

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Speaker 11: does not want that? Obviously nobody wants that. But just

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Speaker 11: take you know, one little small data point, and again

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Speaker 11: it's not all of inflation, but it's an important one

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Speaker 11: for consumers. Gas prices are adder near their peaks in

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Speaker 11: the US, and that's not a great sign for either

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Speaker 11: any type of inflation input or if you think of

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Speaker 11: consumer confidence, how important gasoline is and how visible that

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Speaker 11: price is. So yeah, I do think the FED does

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Speaker 11: not want to have that replay of inflation like we

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Speaker 11: had in past in past episodes.

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Speaker 2: So let's pivot to the equity market. Georgia, Are you

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Speaker 2: constructive right now? Do you think that the S and

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Speaker 2: P five hundred overall can continue on March higher?

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Speaker 11: So I'm very much a stock by stock selector versus

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Speaker 11: you know, a broad index. If you look at the

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Speaker 11: broad index, you know we are back at valuation levels

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Speaker 11: if you exclude that COVID period explosion and valuation, we're

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Speaker 11: back at former highs in terms of valuation. If you

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Speaker 11: look at the earnings that have come in, what was

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Speaker 11: really interesting this quarter, Doug, is that even beats really

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Speaker 11: did not appreciate after earnings reports, and that was really

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Speaker 11: different than past quarters. So what I think happened was

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Speaker 11: expectations were pretty low. Earnings have been down from a

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Speaker 11: growth standpoint the past three quarters, and so estimates kept

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Speaker 11: coming down, and then companies were beating these easier estimates.

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Speaker 11: I think next quarter is important. The next few quarters

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Speaker 11: are important because the market is expecting margins to come

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Speaker 11: back and start to go up again, So again there's

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Speaker 11: a higher expectation there. So I think the easiest place

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Speaker 11: to invest right now, quite frankly, is in a higher

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Speaker 11: interest rate environment. Companies with good balance sheets, net debt

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Speaker 11: free balance sheets, a lot of cash are earning more

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Speaker 11: interest income and they aren't getting credit for it, certainly

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Speaker 11: not in the credit market, and I don't think in

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Speaker 11: the stock market either, So I think that's a nice

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Speaker 11: safe place to go.

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Speaker 1: George, I mean, you know, you look at corporate America

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Speaker 1: and you've got to have some companies which are going

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Speaker 1: to be really feeling it because they perhaps could cover

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Speaker 1: over a multitude of sins by having free money. And

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Speaker 1: are we seeing stresses and strains and if soware and

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Speaker 1: do you think that this may be a good thing

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Speaker 1: ultimately to perhaps see some defaults or indeed some company failures,

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Speaker 1: because you need to see so the weet out from

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Speaker 1: the chaff orshat.

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Speaker 11: You are absolutely right, you hit the nail on the head.

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Speaker 11: And so where we see it is obviously on income statements.

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Speaker 11: We are seeing companies that are debt laid and are

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Speaker 11: seeing explosions in their interest expense line. Now on the

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Speaker 11: flip side, like I said, and companies to focus on

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Speaker 11: companies that have a lot of cash or seeing explosion

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Speaker 11: of interest income. But to your point, yes, bankruptcies are

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Speaker 11: starting to go up. One of the fears, you know,

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Speaker 11: if you extrapolate that out, you'll start to fear, you know,

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Speaker 11: for a credit event potentially occurring. At this point, I

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Speaker 11: think the maturity schedule is such where these companies kind

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Speaker 11: of ju But no, to your point, zup allowed companies

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Speaker 11: like Ratid for example, to hang on way longer than

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Speaker 11: they ever should have. Interest rates go up, righty, it's

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Speaker 11: going to go bankrupt. You know, if you think about

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Speaker 11: a few names at a few high profile names, bed

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Speaker 11: Bath and Beyond for example, goes away. The reason is

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Speaker 11: because interest rates are high and they can't they can't

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Speaker 11: satisfy that debt.

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Speaker 2: So, George, as you know, on this program, we talk

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Speaker 2: a lot about what's happening in the Asia Pacific region.

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Speaker 2: Are there any opportunities offshore very quickly that you're seeing

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Speaker 2: right now?

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Speaker 11: It's funny Japan has been extremely popular as we know.

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Speaker 11: Obviously Buffett got involved a lot of value investors got involved,

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Speaker 11: but gosh, their balance sheets are so good, and it

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Speaker 11: is one of the reasons why we have a few

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Speaker 11: Japanese ADRs in the fund. And again, a lot of

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Speaker 11: those companies have been around for decades and their balance

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Speaker 11: sheets are just great and that helps it in a

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Speaker 11: high rate environment for sure.

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Speaker 2: George, thank you so much for making time to chat

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Speaker 2: with us here on for Asia the second day in

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Speaker 2: the trading week. George Sippaloni is portfolio manager at Pen

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Speaker 2: Mutual Asset Management. On the line from Philadelphia here on DBA,

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