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Speaker 1: Good morning. I'm Brian Curtis and I'm Doug Krisner. Here

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Speaker 1: are the stories we're following today.

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Speaker 2: US companies added the fewest number of jobs since the

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Speaker 2: start of twenty twenty one in September, and paid growth slowed.

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Speaker 2: ADP data showed private payrolls rose just eighty nine thousand

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Speaker 2: last month after climbing one hundred eighty thousand in August.

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Speaker 2: Bloomberg's Michael McKee tells us what this means for Friday's

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Speaker 2: jobs number.

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Speaker 3: Over the past year, ADP has overstated the private sector

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Speaker 3: job creation seven out of the twelve months, so if

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Speaker 3: that follows, then we will have an unusually weak payrolls

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Speaker 3: report on Friday, but hard to square with what we

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Speaker 3: saw from the ISM manufacturing numbers because ISM went positive

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Speaker 3: and the ADP says we lost twelve thousand jobs.

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Speaker 2: Not only did ADP say that jobs were lost in manufacturing,

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Speaker 2: it also said thirteen thousand jobs were lost in trade

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Speaker 2: and transportation and another thirty two thousand were lost in

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Speaker 2: professional and business services.

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Speaker 1: Let's get to the politics now. Some Republican leaders are

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Speaker 1: throwing their names into the hat to become House speaker.

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Speaker 1: This is after Kevin McCarthy was ousted yesterday. Second ranking

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Speaker 1: House Republican Steve Scalise is officially running, making him the

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Speaker 1: leading contender. Hardline Republican Representative Jim Jordan also saying today

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Speaker 1: he will run.

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Speaker 4: Now.

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Speaker 1: The ouster of McCarthy is raising a lot of question

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Speaker 1: about everything from a to Ukraine to averting a government

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Speaker 1: shutdown in a little more than six weeks. Here's Bloomberg's

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Speaker 1: Jonathan Tamari.

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Speaker 5: Congress can't do anything, or the House at least can't

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Speaker 5: do anything until they elect a speaker. So we're going

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Speaker 5: to face some uncertain period of time here where they're

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Speaker 5: basically doing no work other than trying to find the leader.

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Speaker 5: And then once they do elect a leader, the Republican

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Speaker 5: Conference has made clear they don't want to compromise with

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Speaker 5: Democrats by just kicking out their own speaker. The next

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Speaker 5: person who takes the job is going to face a

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Speaker 5: lot of pressure not to compromise, especially so soon after

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Speaker 5: they assume the speakership. Will they really want their first

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Speaker 5: big act as the leader to be a deal with

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Speaker 5: Democrats after seeing the reaction from their own party just now.

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Speaker 1: That is Bloomberg's Jonathan Tomorrow. Now the House is aiming

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Speaker 1: to vote on a news speaker. October eleventh, bran.

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Speaker 2: Well, the trial of FTX co founder Sam Bankman Freed

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Speaker 2: moved into day two, and Bloomberg Shanali Bossek says the

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Speaker 2: prosecution's case, no matter how strong, is far from a

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Speaker 2: slam dunk.

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Speaker 6: Part of the defense, as we have learned today, includes

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Speaker 6: this idea that a lot of what was happening between

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Speaker 6: FTX and the lending of funds to Alameda was not

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Speaker 6: only known, but known between company insiders as well as

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Speaker 6: people who had lent money to the firm, as well

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Speaker 6: as people who had known that the relationships and good times.

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Speaker 6: I didn't mind that the two companies had this kind

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Speaker 6: of a relationship, and then over time it deteriorated as

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Speaker 6: the crypto industry got very volatile and money was lost.

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Speaker 2: As Bloomberg Shanali Bassak, Bankman Fred faces up to one

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Speaker 2: hundred ten years in prison if he's convicted on all counts.

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Speaker 1: US Commerce Secretary Gina Romundo is saying today the report

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Speaker 1: of a chip breakthrough by China's Huawei is disturbing. Here's

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Speaker 1: Bloomberg's David in Glace even stronger.

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Speaker 7: Ramondo said it was incredibly disturbing. Huawei's reported new chip

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Speaker 7: has set up a debate on whether the US is

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Speaker 7: effective in curbing China's technological advancement. That said, Ramondo maintains

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Speaker 7: there is no evidence China can develop advanced chips at scale,

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Speaker 7: but she is facing intense pressure from Republicans to titan controls.

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Speaker 7: Ramondo emphasized different tools are needed to enforce the US regime.

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Speaker 7: She pointed to the restrict Act that would expand American

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Speaker 7: authority to review and prevent certain transactions that pose a

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Speaker 7: risk to national security. In Hong Kong, I'm daviding gless

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Speaker 7: Bloomberg Radio.

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Speaker 2: Barclays is dismissing roughly fifty of its senior deal makers.

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Speaker 2: Get the story from Bloomberg's and Kates.

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Speaker 8: The cuts are part of a plan to trim the

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Speaker 8: headcount of Barclay's across the Corporate and Investment Bank, amounting

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Speaker 8: to three percent of the workforce in the unit. Barclays

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Speaker 8: and its rivals have been contending with a prolonged slump

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Speaker 8: and deal making and capital markets activity. Barclay's investment banking

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Speaker 8: fees dropped fifteen percent in the second quarter. Goldman Sachs

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Speaker 8: has been planning to begin its annual reduction of underperforming workers,

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Speaker 8: and City Group has also laid off hundreds of employees

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Speaker 8: in Washington and Kate's Bloomberg Radio, Well.

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Speaker 2: Doug, we had a little respite from the selling in

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Speaker 2: both the bond and stock markets. In terms of the

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Speaker 2: stock market, it doesn't seem like there's a whole lot

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Speaker 2: of conviction there. One view is that the selling won't

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Speaker 2: really abate until you get a meaningful sell off in.

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Speaker 8: The magnificent seven.

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Speaker 2: Does that happen? We have to wait and see.

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Speaker 1: That's a great question. And if you talk to the technicians,

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Speaker 1: the guys thenngals that watch the charts, they are saying

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Speaker 1: that the S and P five hundred needs to stay

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Speaker 1: above its two hundred day moving average, which is currently

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Speaker 1: around forty two four. We have been able to do that.

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Speaker 1: Some serious pain, though, these technicians say, could be in

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Speaker 1: store for the market. We're that level to be violated.

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Speaker 2: It's fair to point out that actually, you know, there

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Speaker 2: has been a selloff in stocks, and it's actually greater

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Speaker 2: than what it appears on the surface. It's fair to

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Speaker 2: point out that the equal weight S and P five

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Speaker 2: hundred is down year to date and that's with the

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Speaker 2: Super seven in there. If you actually strip them out,

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Speaker 2: the equal weight would be down much more significantly. So

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Speaker 2: it's becoming harder and harder to make the point that

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Speaker 2: Bill Gross made today, which is that stocks are overvalued.

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Speaker 2: He also said that bond yields must fall significantly to

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Speaker 2: justify current valuations. So this is playing out before our

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Speaker 2: very eyes.

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Speaker 1: Keep your eye on some of the big energy names

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Speaker 1: in the Asia session. After we had that pulled back

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Speaker 1: in WTI crewed here in New York today we were

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Speaker 1: down more than five and a half percent. A lot

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Speaker 1: of the government data pointing to extremely weak demand, whether

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Speaker 1: you're looking at gasoline or other distillates. And at the

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Speaker 1: same time, crude oil inventories are rising slightly at Cushing, Oklahoma,

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Speaker 1: And as you know, that's the delivery point for WTI.

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Speaker 2: Yeah, WTI what eighty four fifty two, So big drop today. Yeah,

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Speaker 2: you're right, It'll be really interesting to see the impact

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Speaker 2: on Asian market. Looks mixed now, but may improve a

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Speaker 2: little as the day wears on. Now it's time for

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Speaker 2: global news. President Biden is front and center today, saying

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Speaker 2: that Congress needs to get to work on Ukraine funding

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Speaker 2: at Baxter has Global News from the nine sixty News

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Speaker 2: from at San Francisco. Ahead.

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Speaker 9: Yeah, exactly right, Brian. While House Republicans pick a new speaker,

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Speaker 9: President Biden is urgent Congress in the interim to take

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Speaker 9: up Ukraine.

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Speaker 10: The majority of the American people still supporting Ukraine, and

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Speaker 10: the majority of the members of the Congress, both Democrat

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Speaker 10: and Republican, are supported. So I don't think we should

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Speaker 10: let them games and ship getting away blocking.

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Speaker 9: It and sent up. Minority Leader Mitch McConnell agrees, but

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Speaker 9: asks for some guidance from the world use.

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Speaker 4: It's still a major priority. I think the majority of

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Speaker 4: the members of both bodies still support it. We need

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Speaker 4: some direction from the administration as to how they intend.

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Speaker 11: To go forward.

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Speaker 4: Yeah.

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Speaker 9: McConnell also says the House needs to get on the

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Speaker 9: process of finding a new speaker and says a turmoil

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Speaker 9: needs to be halted immediately.

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Speaker 4: To do that job for anyone, you have to get

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Speaker 4: rid of the motion to vacate because it puts whoever

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Speaker 4: the speaker is in a hammer lock of dysfunction. So

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Speaker 4: potential dysfunction.

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Speaker 9: Yeah. So, as we mentioned so far, Steve Scalise and

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Speaker 9: Jim Jordan have said they're interested in the speaker job,

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Speaker 9: and it may be an easier process this time around,

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Speaker 9: he said, hopefully if you listen to Congressman Matt Gates

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Speaker 9: on Bloomberg exclusively.

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Speaker 12: Well, I'm for both of them right now. I'm eager

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Speaker 12: to hear their plans and their vision. But if the

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Speaker 12: House of Representatives goes from the steward of Kevin McCarthy

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Speaker 12: to either the stewardship of Jim Jordan or Steve Scalise,

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Speaker 12: that's going to come to the delight of many Conservatives.

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Speaker 9: He says. The overriding issue is gaining control of spending

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Speaker 9: and moving it back to at least pre COVID levels.

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Speaker 9: China says it has warned a Philippines supply boat and

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Speaker 9: two Coastguard vessels to leave the sea near the Nansha

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Speaker 9: Islands and follow the ships throughout. China claims the islands

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Speaker 9: are sovereign. Day three of the Trump civil trial, and

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Speaker 9: after lunch break, he wasn't in the courtroom. His departure

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Speaker 9: comes after he was slapped with a gag order by

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Speaker 9: the judge for posts and comments about the law clerk

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Speaker 9: and about Attorney General Letitia James, who responded today calling

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Speaker 9: comments racist among other things.

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Speaker 13: And I will not sit idly by and allow anyone

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Speaker 13: to subvert the law. And lastly, I will not be bullied.

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Speaker 13: So mister Trump is no longer here. That Donald Trump

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Speaker 13: Show is over. This was nothing more than a political stunt.

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Speaker 9: Now, before leaving New York, Trump tried to explain how

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Speaker 9: he got the loans.

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Speaker 10: I borrow money on very underleveraged borrow money on.

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Speaker 2: A building or something, many.

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Speaker 9: Different things or something. And Trump is complaining about the

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Speaker 9: fact he doesn't have a jury trial. The fact is

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Speaker 9: neither side asked for a jury, but we're entitled to

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Speaker 9: do so. Global News powered by more than twenty seven

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Speaker 9: hundred journalists and analysts in over one hundred and twenty countries.

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Speaker 9: In San Francisco, I'm at Baxter and this is Bloomberg.

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Speaker 2: This is Bloomberg Daybreak Asia. I'm Brian Curtis in Hong

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Speaker 2: Kong alongside Grishad Salamat, and our guest is Margy Patel,

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Speaker 2: senior portfolio manager at all Spring Global Investments. Got to

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Speaker 2: put this disclaimer in. It's a daily news show, so

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Speaker 2: we have to talk about the day's events. Margie, I

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Speaker 2: know you look longer term. But do you see the

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Speaker 2: gains today as just a blip or something of a signal.

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Speaker 11: Well, I think it says it's really really hard to

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Speaker 11: keep this market down and get the big correction. A

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Speaker 11: lot of people would like to see just one starts

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Speaker 11: to say the man comes in and takes the market higher.

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Speaker 11: And really, if you look at the estimates for the

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Speaker 11: latest quarter, looks like we're going to have growth around

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Speaker 11: three percent with unemployment well under four percent, it's really

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Speaker 11: hard to build a case for a big correction or

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Speaker 11: recession anytime on the horizon.

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Speaker 14: Well, you know, the thing is what we're seeing in

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Speaker 14: the market. So I just want to get your take

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Speaker 14: on what's been going on with the bond route and

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Speaker 14: what's been going on with the equities as well, And

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Speaker 14: just ask you whether an economy which is over fifteen

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Speaker 14: years suddenly become predicated on the zero interest rates. Now

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Speaker 14: you've got the cost of capital going up, and essentially

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Speaker 14: what you've got is getting back to a typical rate structure.

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Speaker 14: It doesn't sound like a terrible thing, but it's really

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Speaker 14: taking people kicking, screaming, and they seem to be in denial.

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Speaker 11: Well that's true, but actually for the average person. They

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Speaker 11: probably are benefiting because risk free assets that they had

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Speaker 11: in a bank somewhere or in a money market fund,

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Speaker 11: we're getting zero now they're getting five percent. So I

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Speaker 11: think those people are very happy. And really, if you

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Speaker 11: think about it, most companies and even individuals use those

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Speaker 11: years of zero interest rates to lengthen out the data

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Speaker 11: obligations to lower them over a long period of time.

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Speaker 11: Corporations issued data one or two percent for ten years,

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Speaker 11: and so they are really immune to the rise we've

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Speaker 11: had in rates. And the same thing with a lot

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Speaker 11: of consumers who extended the mortgages fix their mortgage rates

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Speaker 11: while they were very low. So I think it's more

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Speaker 11: where you really see the excesses are in the financial sector,

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Speaker 11: where we have a lot of money going into m

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Speaker 11: and A, where you have a lot of speculat teams.

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Speaker 11: You have the crypto disaster, you had the SPACs come along,

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Speaker 11: but all of that hasn't really mounted to much, and

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Speaker 11: so it's not going to damage the whole economy as

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Speaker 11: you correct now those low interest rate vehicles.

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Speaker 2: So Margaret, it sounds like you're reasonably positive. I'd imagine,

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Speaker 2: like many money managers, you like the idea of being diversified,

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Speaker 2: but people who listen to this show obviously are doing

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Speaker 2: so because they're looking for an advantage, They're looking for

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Speaker 2: some alpha. Are there some opportunities that really stand out

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Speaker 2: for you?

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Speaker 11: Well, I think the opportunities are where they've been for

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Speaker 11: the last few years. Is number one. The technology sector. Yes,

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Speaker 11: here and there. You have names that are maybe very

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Speaker 11: pricey for the growth rates, but there are plenty of

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Speaker 11: names that will benefit from the high growth of sector

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Speaker 11: is going to have and using more and more technology

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Speaker 11: and alliers of the economy. And I think some areas

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Speaker 11: of the industrial sector where they're tied to incorporating technology

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Speaker 11: in their products, you know, differentiated products, and they're benefiting

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Speaker 11: from the infrastructure build that we should have and some

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Speaker 11: of the restoring, particularly say in building semiconductor factories here

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Speaker 11: in the US. So I think there are some attractive areas,

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Speaker 11: but those areas have been attractive all year, been good performers.

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Speaker 14: How has your strategy really changed over the course of

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Speaker 14: the year there, Margie.

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Speaker 11: Well, it hasn't because I was always a little skeptical

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Speaker 11: about last year at the fetis raising rates. There's going

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Speaker 11: to be a recession. We have to get really conservative

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Speaker 11: and I just couldn't see it because unlike previous cycles,

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Speaker 11: we don't have any sector of the economy, big sectors

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Speaker 11: of the economy that's way out of balance, way over leverage,

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Speaker 11: and about the sit of wall on liquidity and take

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Speaker 11: the whole economy down into recession, think of the housing crisis,

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Speaker 11: think of the Internet bubble. Previous cycles we've had with

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Speaker 11: energy being way overblown, and so I thought it was

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Speaker 11: better to be fully invested. And ironically, the so called

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Speaker 11: riskier sectors have done a lot better than the so

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Speaker 11: called conservative sectors.

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Speaker 2: Yeah, one of the things you said right at the

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Speaker 2: outset would definitely be a parent if you think that

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Speaker 2: there's a lot of money on the sidelines, you can

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Speaker 2: see that on a daylight today, you can get a

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Speaker 2: pop pretty quickly. Do you think, though, that we might

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Speaker 2: get so clearing in tech before you know, you really

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Speaker 2: get that encouragement for money to flood back in.

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Speaker 11: Well, you know, you always can have a correction for

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Speaker 11: some reason. Certainly we did last year, and that was

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Speaker 11: a great buying offer.

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Speaker 2: That was more than a correction. Last year twenty seven

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Speaker 2: percent down, that was a little bit more than a correction.

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Speaker 11: Well, yes, that's true. But what a great opportunity to

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Speaker 11: lock in some very attractive return sort of investments. But

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Speaker 11: I just I don't really see it, because I don't

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Speaker 11: see anything that's big enough to really derail the whole sector.

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Speaker 11: Growth may slow down, you may have one name or

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Speaker 11: another name blow up because they can't live up to

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Speaker 11: their growth rates. But the whole sector, I think should

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Speaker 11: still be the best performing part of the market. And

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Speaker 11: when you look at this so called safe defensive sectors

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Speaker 11: that you thought should have worked last year and this year, utilities, staple,

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Speaker 11: even healthcare, they have been disasters.

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