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Speaker 1: This is Bloomberg day Break Asia for this Thursday, June

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Speaker 1: first in Hong Kong, Wednesday May thirty first in New York,

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Speaker 1: and coming up today, some FED officials are signaling a

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Speaker 1: potential pause in interest rate hikes at the next meeting.

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Speaker 1: Nvidia CEO Jensen Huang plans to meet with tech executives

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Speaker 1: in China despite rising US China tensions, and Dali and

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Speaker 1: Wanda is said to be in talks with potential buyers

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Speaker 1: for its Chinese payments unit.

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Speaker 2: Both sides of the Dutch seiling legislation say they have

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Speaker 2: enough votes for it to pass tonight. US Secretary of

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Speaker 2: State Anthony Blincoln says lines of communication need to be

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Speaker 2: opened with China to talk about flybys. I'm at Baxter

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Speaker 2: with Global News.

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Speaker 3: That's all straight ahead on Bloomberg Daybreak Asia, the business

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Speaker 3: news you need to start your day, and just one

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Speaker 3: fifteen minute podcast available on Apple, Spotify, the Bloomberg Business App,

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Speaker 3: and everywhere you get your podcasts.

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Speaker 4: Good morning, I'm Richard Solana and I'm Brian Curtiz.

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

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Speaker 4: Let's time look at what's going on in the Federal Reserve.

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Speaker 4: Of course, attention really certainly on their next meeting coming up,

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Speaker 4: with some officials signaling that a potential pools and interest

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Speaker 4: rate hikes could occur as early as June. Governor Philip

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Speaker 4: Jefferson saying he's inclined to keep interest rates steady at

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Speaker 4: the Fed's next meeting.

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Speaker 5: A decision to hold our policy rate constant at a

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Speaker 5: coming meeting should not be interpreted to me that we

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Speaker 5: have reached the peak rate for this cycle. Indeed, skipping

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Speaker 5: a rate hike at a coming meeting would allow the

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Speaker 5: committee to see more data before making decisions about the

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Speaker 5: extent of additional policy firming.

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Speaker 4: Jefferson's comments were echoed really by others out there as well,

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Speaker 4: including Philadelphia FED President Patrick Harker. He said to the

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Speaker 4: Federal we should probably skip a rate hike at its

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Speaker 4: upcoming policy meeting. Now, policymakers are carefully assessing how their

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Speaker 4: tightening came vane is impacting the American economy, and the

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Speaker 4: FED said in its latest beij Book survey today that

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Speaker 4: the US economy showed signs of cooling in recent weeks,

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Speaker 4: as hiring and inflation eased slightly. FED officials are meeting

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Speaker 4: next on monetary policy on the thirteenth and fourteenth of June.

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Speaker 1: And I mentioned that in Vidia stock draw the leader

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Speaker 1: of Nvidia, Jensen Wong, heading to China to meet with

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Speaker 1: other tech executives there. It comes despite rising tensions between

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Speaker 1: Washington and Beijing. Bloomberg's and Kate's has the.

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Speaker 6: Story Navidia CEO Jensen Wong will travel to China in June.

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Speaker 6: Sources tell Bloomberg that companies on his itinerary include video

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Speaker 6: game giant ten Set and TikTok owner byte Dance. Navidia

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Speaker 6: is emerging as a critical player and artificial intelligence, but

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Speaker 6: Biden administration sanctions prevent the semiconductor maker from selling its

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Speaker 6: most advanced AI chipsets to Chinese customers. Apples, Tim Cook

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Speaker 6: and billionaire Elon Musk are also courting China in Washington,

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Speaker 6: and Kates Bloomberg day Break Asia.

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Speaker 4: All right, well, let's have a look now at Daly

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Speaker 4: and Wanda the Chinese congloment. It's set to be in

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Speaker 4: tools with byte Dance and others for a potential sale

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Speaker 4: of its payments division. Bloomberg Joan Wong has more from

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Speaker 4: Hong Kong.

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Speaker 7: Wanda is looking to sell it digital payments license for

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Speaker 7: about one billion yuan or one hundred and forty one

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Speaker 7: million dollars. The payment license could provide data and access

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Speaker 7: to a large number of users, but some prospective buyers

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Speaker 7: set the price could be lower by the Dance Dolian

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Speaker 7: groups set it a preliminary talks about the deal. Wanda

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Speaker 7: has been trying to raise cash and shore up its liquidity.

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Speaker 7: That's because it may have to repay investors about thirty

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Speaker 7: billion yuan if it fails to list as small operations

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Speaker 7: this year in Hong Kong. Join one Bloomberg Day Brigasia Well.

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Speaker 1: Toyota is looking to make a big splash with its

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Speaker 1: first all electric vehicle made in the United States. Bloomberg's

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Speaker 1: Bonnie Ao has that story from Hong Kong.

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Speaker 8: Toyota has announced plans to build a three row sports

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Speaker 8: utility vehicle. The electric suv will use batteries from a

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Speaker 8: new factory in North Carolina. Toyota is also investing an

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Speaker 8: additional two point one billion into the battery factory that

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Speaker 8: will bring the company's total investment in the battery factory

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Speaker 8: to five point nine billion dollars. The all electric suv

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Speaker 8: will compete against similar vehicles from other leading companies. They

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Speaker 8: include Tesla's Model X and Y and Vivian's R one S.

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Speaker 8: Production at the new Toyota EV was dot in twenty

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Speaker 8: twenty five in Kentucky. In Hong Kong. I'm Bonni Al

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Speaker 8: Bloomberg day Break Asia.

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Speaker 4: Right, Let's get the application specialist Salesforce providing a disappoint

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Speaker 4: and disappointing outlook for future sales. The story coming from

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Speaker 4: Bloomberg's Charlie Petett.

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Speaker 9: It raises concerns that its newfound focus on profit may

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Speaker 9: hinder revenue growth. The software company projected ten percent growth

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Speaker 9: in contracted sales for the current quarter ending in July,

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Speaker 9: falling short of analysts average estimate of more than eleven percent.

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Speaker 9: Salesforce also affirmed its fiscal year forecast that revenue will

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Speaker 9: increase ten percent to about thirty four point six billion dollars.

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Speaker 9: Salesforce has had a tumultuous six months that included job cuts,

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Speaker 9: executive departures, board director changes, and public pressure from multiple

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Speaker 9: activist investors in New York. Charlie Pellett, Bloomberg Daybreak Asia, All.

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Speaker 1: Right, Coming up on the program a little bit later

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Speaker 1: this all I wanted to mention Salesforce is trading down

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Speaker 1: pretty sharply in after hours, down about six point six percent.

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Speaker 1: Here took a while for that to happen, sort of

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Speaker 1: fluctuated between positive and negative gains. Right after that report,

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Speaker 1: we'll take a closer look at Marcus with our guest

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Speaker 1: this morning, a variety on tap for you, not least

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Speaker 1: among them, William Kurtain, portfolio manager at Milford Asset Management,

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Speaker 1: Carol Pepper. Always enjoy talking to her, and David Chow

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Speaker 1: from Investio. That's coming up. In the first couple of

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Speaker 1: hours of the show, it was a little bit of

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Speaker 1: a tough day on Wall Street, and now with salesforce

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Speaker 1: trading down in after hours, coupled with what we saw

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Speaker 1: from Nvidia, maybe putting a little bit more pressure on

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Speaker 1: one of the parts of the market that has really

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Speaker 1: juiced up the animal spirits this year Tech. So that's

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Speaker 1: something that we'll get to coming up. Now it's time

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Speaker 1: for Global News, and there's this the one US House

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Speaker 1: leaders on both sides expressing some optimism that the debt

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Speaker 1: ceiling bill will pass and it will happen tonight at

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Speaker 1: Baxter has Global News from the nine and sixty newsroom

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Speaker 1: in San Francisco.

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Speaker 2: Yeah, Brian, You're right. It's more than some optimism. It

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Speaker 2: is just flat out optimism. The House has passed the

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Speaker 2: procedural bill to allow debate, which is the next step.

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Speaker 2: It's going on now and Bloomberg Zach Cohen says Democrats

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Speaker 2: stepped in to help Kevin McCarthy, which is a very

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Speaker 2: interesting signal because.

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Speaker 10: These are usually procedural votes that are very party line,

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Speaker 10: especially if the legislation as partisan. And so the fact

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Speaker 10: that some Democrats had to come in and basically give

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Speaker 10: the votes to McCarthy to get the groundwork through in

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Speaker 10: order to get the debt limit deal done, I think

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Speaker 10: is a pretty good indication that they're willing to bail

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Speaker 10: them out when it comes to really important things.

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Speaker 2: And McCarthy himself, well, he's working the phones and he's

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Speaker 2: been working the hallways today of Congress trying to make

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Speaker 2: sure that it has the votes to pass his message.

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Speaker 3: If I'm a.

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Speaker 11: Member of Congress, I wouldn't want history to pass me

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Speaker 11: by when I could do the biggest and that could

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Speaker 11: do work performs for welfare.

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Speaker 2: And his House majority whip Tom Emmer, Republican from Minnesota,

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Speaker 2: says he's sure the votes are in hand House Minority

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Speaker 2: Leader Hakim Jeffrey says he has the committed votes to

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Speaker 2: pass the legislation if Republicans follow suit.

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Speaker 7: We continue to maintain that House Republicans need to keep

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Speaker 7: their commitment to produce one hundred and fifty votes.

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Speaker 2: So after the see saw several of weeks, maybe months,

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Speaker 2: the vote itself, although a moving target, is expected about

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Speaker 2: eight thirty pm Wall Street time. China's actions in the

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Speaker 2: air regarding close flybys against not only US but other

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Speaker 2: countries is growing. This according to US Secretary of State

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Speaker 2: Anthony Blincoln. He says the latest one.

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Speaker 11: Our planes were flying in international airspace on a routine mission.

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Speaker 11: Chinese pilot took dangerous action in approaching the plane very

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Speaker 11: very closely.

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Speaker 2: He says, it very much points to the fact that

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Speaker 2: lines of communication between the two nations is very much

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Speaker 2: lacking now.

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Speaker 11: Chinese pilot took dangerous action in approaching the plane very

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Speaker 11: very closely. There have been a series of these actions

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Speaker 11: directed not just at US but at other countries in

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Speaker 11: recent months.

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Speaker 3: Now.

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Speaker 2: The reports say reconnaissance plane had to fly through the

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Speaker 2: wake of a Chinese fighter jet, which which can be

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Speaker 2: a very dangerous situation. EU commissioned President Ursula van Daleyan

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Speaker 2: is a calling for a just piece in Ukraine and

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Speaker 2: rejecting a ceasefire.

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Speaker 12: A ceasefire would be inherently unstable and destabilize the region

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Speaker 12: along the contact line. Nobody would invest or rebuild, and

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Speaker 12: the conflict could flare up again at any time.

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Speaker 2: She says a just piece must result in the withdrawal

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Speaker 2: of Russian forces and equipment from Ukraine. Former Vice President

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Speaker 2: US Mike pens will officially kick off as presidential run

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Speaker 2: June seventh. He's been laying the groundwork now for over

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Speaker 2: a year. And Bill Ackman, founder and CEO of per

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Speaker 2: Square Capital, says JP Morgan Chase CEO Jamie Diamond should

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Speaker 2: run for president in this election cycle. He says Diamond

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Speaker 2: is a centrist who is pro business and pro free enterprise,

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Speaker 2: while also supportive of well designed social programs. He says

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Speaker 2: Diamond could beat either Joe Biden or Donald Trump.

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Speaker 3: Now.

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Speaker 2: Diamond actually opened himself up for this endorsement on Bloomberg Television, saying.

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Speaker 6: I love my country, and maybe one day I'll serve

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Speaker 6: my country in one capacity or another, but I love

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Speaker 6: what I do.

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Speaker 10: I think Shade Morgan do a great job for helping

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Speaker 10: Americans pelpic countries around the world.

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Speaker 2: Yeah, so he kind of well, he hinted. He did

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Speaker 2: say he loves JP Morgan's team and is happy where

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Speaker 2: he is right now. Global News powered by more than

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Speaker 2: twenty seven hundred journalists and analysts in over one hundred

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Speaker 2: and twenty countries. In San Francisco, I'm at Baxter in

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Speaker 2: This is Bloomberg.

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Speaker 1: This is Bloomberg Daybreak, ASA, Brian Curtis and Rashad So'

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Speaker 1: and our guest is William kurtain Or, a folio manager

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Speaker 1: at Milford Asset Management. So, William, we had a little

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Speaker 1: bit of crack in tech today. I mean, markets go

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Speaker 1: up and down, so not such a big deal, but

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Speaker 1: it's one of those things where you wonder whether not

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Speaker 1: investors would need to see some kind of broadening of

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Speaker 1: the gains in the market to suggest that a bull

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Speaker 1: run has started. There's a lot of negativity that have

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Speaker 1: been supporting the bear position, and chief among them is

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Speaker 1: this is a pretty narrow market. Do you see that

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Speaker 1: as a possibility that tech could slip a little bit

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Speaker 1: but the market could broaden out.

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Speaker 3: Yeah.

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Speaker 13: Absolutely, I mean I think a lot of the stocks

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Speaker 13: left behind in the recent rally and markets of becoming

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Speaker 13: increasingly bitter value. We EHV have been trumming some of

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Speaker 13: our megacap holdings and adding to the various more mid

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Speaker 13: cap holdings that represent better value. So certainly, yeah, the

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Speaker 13: negative breadth is always a harb used as a technical

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Speaker 13: harbinger of an amnute downturn. I mean, it's certainly possible,

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Speaker 13: but we think it's probably just as big a possibility

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Speaker 13: you do see a call off and some of the

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Speaker 13: larger keptic stocks have driven this rally initially a rotation

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Speaker 13: to some extent back into the smaller the key companies.

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Speaker 13: Markets can kind of go a little bit lower or

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Speaker 13: go sideways, but just the rotation with them in markets

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Speaker 13: being the more important thing in video.

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Speaker 4: I mean, this is really the one which just sent

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Speaker 4: all these AI related stocks, soarings of the other chip

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Speaker 4: stocks as well.

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Speaker 3: Here.

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Speaker 4: Really the thing is that it was perhaps a lot

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Speaker 4: of froth develops, so we saw for five percent full thereabouts.

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Speaker 4: People took their money off the table, their gains. But

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Speaker 4: you know AI, and I'm sure they'll be saying this

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Speaker 4: AI has a great, great future. In two years time,

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Speaker 4: we'll be saying AI it's got a great, great.

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Speaker 13: Future exactly mean that in our view that the AI

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Speaker 13: stocks and most part of them are in a bubble.

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Speaker 13: But it's not it's not a really good enough to

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Speaker 13: be a genius to make their comic. What really as

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Speaker 13: important is you know, is the bubble going to burst

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Speaker 13: tomorrow or is it going to go a long time?

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Speaker 3: Now?

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Speaker 13: Like all good bubbles, it's got the makings and something real,

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Speaker 13: this AI Israel, It's going to eventually cause significant earnings

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Speaker 13: uplists for a lot of companies. With technological change, it

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Speaker 13: tends to be seven or eight for ten years before

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Speaker 13: companies actually make significant money on a technological revolution. You

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Speaker 13: look at Internet as an Amazon in nineteen the late

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Speaker 13: nineteen nineties, it wasn't really into past twenty ten that

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Speaker 13: these businesses started to turn this Internet revolution into money.

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Speaker 13: Maybe the AI revolution is a bit faster in that conversion,

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Speaker 13: but it will take time for the vast majority of

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Speaker 13: companies to turn this revolution into money. Now, what we

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Speaker 13: have as share prices that have already capitalized a lot

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Speaker 13: of these future earnings well after the fact in a

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Speaker 13: very very uncertain environment. So it's just the usual way

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Speaker 13: markets do. They tend that they priced things and too

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Speaker 13: quickly and often priced them in too much that needs

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Speaker 13: gain runings already in the share price.

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Speaker 1: The valuations are pretty high on some of the defensive stocks.

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Speaker 3: That you like.

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Speaker 13: No, that's right, and that's wherein the funds we have

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Speaker 13: been positioned very long defensives earlier in the year, and

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Speaker 13: the market to an extent shifted out of cyclicals into

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Speaker 13: defensives and into technology stocks. We have actually sort of

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Speaker 13: lighting positions in those sectors and instead would preferred to

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Speaker 13: just hold more cash again and actually hold a bit

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Speaker 13: of credit, you know, without too much interest interest rate duration.

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Speaker 13: So we see that the backdrop is actually at time

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Speaker 13: of actually been patient. Keeping your capital intact at the

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Speaker 13: moment in cash or low duration bond is not a

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Speaker 13: bad way to do that, and waiting for that for

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Speaker 13: those for those fat pictures and those other opportunities, which

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Speaker 13: we're sure of market movements over the next month or

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Speaker 13: two will bring up more opportunities or better at reward opportunities.

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Speaker 13: It's just when those opportunities come, you want to make

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Speaker 13: sure that your capitals of the are and it's liquid

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Speaker 13: and it's available very quickly.

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Speaker 4: Here as well, William, you know, we've seen what has

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Speaker 4: been happening with the data out of China. I mean,

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Speaker 4: yesterday's pm MY numbers really confirmed I arguably a big

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Speaker 4: slowdown in manufacturing, got more PMI numbers today, and you're saying,

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Speaker 4: you're saying emerging opportunities and copper and resource and surely

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Speaker 4: the slowdown in China would put a kibosh on that.

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Speaker 13: No, that's right, it's a contrier in the trade. I mean,

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Speaker 13: we always held the view that the China reopened, the

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Speaker 13: China trade that was in full swing in January and

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Speaker 13: earlier this year was going to be overblown and was

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Speaker 13: going to disappoint, and that it was largely premised on

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Speaker 13: the fact that we think it really is structural downturns

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Speaker 13: in Chinese property, in Chinese Old World infrastructure type investment.

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Speaker 13: That meant that the reflation and commodities like iron ore

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Speaker 13: and copper and others was significantly over below them. But

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Speaker 13: it took time for that they realize we despite having

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Speaker 13: that view, we were participating on the long side of

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Speaker 13: the China trade because there was clearly going to work

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Speaker 13: for a while, but we faded that trade removed a

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Speaker 13: lot of our iron ore minor positions and copper positions

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Speaker 13: now the market's come around to the view and the

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Speaker 13: evidence of data of China is terrible that this China

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Speaker 13: trade isn't on valuations and certain copper miners and resource

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Speaker 13: companies are coming back to quite attractive long run level.

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Speaker 13: So we're just beginning to dip our toe in the

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Speaker 13: water and starting to pick up some copper miners. And

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Speaker 13: the reason I signal like copper is coppers will be

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Speaker 13: the first metal people look to buy when they get

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Speaker 13: excited the power recoveries.

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Speaker 1: Yeah, I contrary and Carl William thank you very much

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Speaker 1: for joining us. William Kurtain, portfolio manager a Milford Asset Management.

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