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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Bloomberg Daybreak Asia podcast. I'm Brian Curtis

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Speaker 2: along with Doug Krisner. Join us each day for the

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Speaker 2: stories making news and moving markets in the Asia Pacific.

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Speaker 2: You can subscribe to the show anywhere you get your

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Speaker 2: podcasts and always on Bloomberg Radio, the Bloomberg Terminal, and

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Speaker 2: the Bloomberg Business App.

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Speaker 1: Joining us now in the Bloomberg Interactive Broker Studio in

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Speaker 1: New York is Gene Goldman. He is the CIO of

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Speaker 1: Setera Financial Group in the New York visiting from California.

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Speaker 1: Good of you to drop by. Thanks for making time

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Speaker 1: with us.

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Speaker 3: Thank you.

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Speaker 1: One of the things that I'm curious about we talk

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Speaker 1: about the PCEE data, the personal spending data. Let's focus

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Speaker 1: on that right now because I think that may have

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Speaker 1: been the data point that the bond market was trading

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Speaker 1: off of. Are you concerned about a meaningful downshift in growth?

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Speaker 4: Sure?

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Speaker 3: And Doug first, well, thanks for having me back on

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Speaker 3: your show. I think the pce that data report that

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Speaker 3: came up Friday was a paradigm shift in terms of

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Speaker 3: what the Fed is thinking in terms of our economy.

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Speaker 3: First off, with the FED, the FED, the PC, the

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Speaker 3: flare came in as expected. Basically, rate hikes are off

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Speaker 3: the table. That let's the Fed do nothing. Basically, it

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Speaker 3: suggests that inflation is not as bad as people had

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Speaker 3: anticipated earlier in the year. But the other part of

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Speaker 3: the stories that the Fed needs to pay more attention

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Speaker 3: to is to slow down in economic growth. Personal consumption

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Speaker 3: below expectations, real spending negative. Combine this with first quarter

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Speaker 3: GDP being revised lower, I think we have a growth problem.

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Speaker 3: I think consumers are starting to weigh under the fact

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Speaker 3: of higher rates, the FED, lower savings, student loan repayments,

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Speaker 3: credit card debt delinquencies rising. All this together suggests to

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Speaker 3: me that the FED, not only you know, I know

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Speaker 3: they're dual mandate is to focus on inflation and to

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Speaker 3: focus on make sure we all have jobs. But the

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Speaker 3: other thing they need to focus on is the economic

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Speaker 3: aspect that the economy is slowing down pretty fast and

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Speaker 3: pretty quickly.

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Speaker 2: Well, they could focus on the second half of the

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Speaker 2: mandate on jobs by starting to talk down rates. I

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Speaker 2: suppose is that something we should expect now that they'll

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Speaker 2: go in that direction.

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Speaker 3: Yeah, I think we'll see what happens on Friday's payroll report.

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Speaker 3: We think Friday's paywroll report will be lower than expected.

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Speaker 3: We do think if you look at quit rates are following,

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Speaker 3: you look at jobless claims are increasing, You look at

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Speaker 3: the PMI employment indices are all starring the suggestors weakness

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Speaker 3: in the labor market. Average hourly earnings are starting the rollover.

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Speaker 2: Take all this together, But Jeane, these are sort of

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Speaker 2: welcome changes, aren't they. I mean, they haven't crossed over

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Speaker 2: into the danger zone. You're not saying that, are you.

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Speaker 3: I think they're getting close to the danger zone. I mean,

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Speaker 3: this is something we're watching very carefully. The consumer. Consumer

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Speaker 3: has kept us out of a recession for the past

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Speaker 3: few years, the past couple of years, but the consumer

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Speaker 3: is slowing down pretty quickly, especially the lower income households.

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Speaker 3: Even listen to some of the retailer's earnings reports. They're

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Speaker 3: talking about there's a dynamic shift going on from general

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Speaker 3: merchandisers saying, hey, there's a shift from discretionary to more

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Speaker 3: stables purchasing. And the major retailer, I can't say their name,

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Speaker 3: but they just cut costs on five thousand different items

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Speaker 3: every day items. There is a shift going on in

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Speaker 3: terms of our consumer right now.

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Speaker 1: So right now the market is debating one rate cut,

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Speaker 1: maybe none. What's your view on the FED? How aggressive

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Speaker 1: will the FED be? Given what I'm hearing from you,

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Speaker 1: you're a couple of raiate conspts that seem to be

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Speaker 1: baked into your equation.

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Speaker 3: I mean love to come in after the payroll report

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Speaker 3: in Friday. I think the payroll report Friday is the

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Speaker 3: last employment of report we get before the next FED meeting.

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Speaker 3: I think it's going to be lower than expected. I

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Speaker 3: don't think the federial cut in June, but I think

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Speaker 3: this gives us potentially maybe July, September, and after the

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Speaker 3: election in November. So we're saying three rate cuts. Still,

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Speaker 3: we still believe this because a inflation is rolling over.

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Speaker 3: If you pull out on PC if you pull out rent,

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Speaker 3: for example, we're about two point one percent in your

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Speaker 3: re year. We're close to the Fed's target on PCE

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Speaker 3: already if you pull out rent. Also, if you think

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Speaker 3: about the economic growth, FED rate hikes takes about twelve

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Speaker 3: to fifteen months to be felled by the economy. We

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Speaker 3: often fell a lot last year's hikes, So I think

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Speaker 3: this is weighing on the economy, This is weighing on

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Speaker 3: the consumer, and we have to watch this very carefully.

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Speaker 2: I'm always amazed by how these data can be interpreted

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Speaker 2: in different ways. Let me walk you through thirty seconds

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Speaker 2: of earnings revisions here and you tell me what you think.

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Speaker 2: So I was making some notes yesterday. Bloomberg Intelligence has

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Speaker 2: a report saying that earnings revisions turn positive for global

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Speaker 2: equities outside the US and China, so including that a

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Speaker 2: lot of emerging markets. It's turned positive for the first

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Speaker 2: time since twenty twenty two. And yet we have a

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Speaker 2: separate story this morning out on the terminal. It says

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Speaker 2: that companies in the MSCI are Emerging Markets Index, that

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Speaker 2: half of them have missed analyst estimates and average profits

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Speaker 2: have slumped ten percent compared with the prior year period.

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Speaker 2: How do you make sense of that?

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Speaker 3: That's the same story we're seeing here in the United

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Speaker 3: States and MAG seven versus the rest of the S

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Speaker 3: and P five hundred. Earnings are being driven domestically by

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Speaker 3: the MAG seven, and analysts are raising estimates for the

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Speaker 3: next twelve months. We worry that there's a lot of

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Speaker 3: frothy valuations, a lot of frothiness put into some of

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Speaker 3: these earnings numbers that need to be ratcheted down a

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Speaker 3: little bit. So again it's just you add this with

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Speaker 3: high valuations in the S and P taken together, something

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Speaker 3: we talked about earlier. We do think a pullback in

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Speaker 3: the market is likely, like a short pullback like we

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Speaker 3: saw in October of last year, a correction which provides

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Speaker 3: opportunities for long term investors.

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Speaker 1: Were you in terms of the way in which government

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Speaker 1: policy has impacted the economy, whether it's the infrastructure bill,

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Speaker 1: the chips and science ACKed. I was just in Arizona

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Speaker 1: for a few days last week and it was a

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Speaker 1: remarkable to see a couple of things, the enthusiasm around

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Speaker 1: reshoring of semiconductor production and the establishment of a lot

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Speaker 1: of on a massive scale new warehousing.

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Speaker 4: Yeah, that's a great question.

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Speaker 3: First of all, I'm independent, I'm not a Republican, I'm

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Speaker 3: not a Democrats, so keep politics.

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Speaker 4: Out of this.

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Speaker 3: But I do believe that the current government administration has

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Speaker 3: not gotten enough credit in terms of what has driven

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Speaker 3: in terms of the bounce back and manufacturing. Remember, manufacturing

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Speaker 3: has been in the recession for eighteen straight months. It's

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Speaker 3: starting to come back. Part of this is the ships sacked.

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Speaker 3: Part of this is this reshoring, and something we talked

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Speaker 3: about earlier. You look at imports from Mexico for the

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Speaker 3: first time in two decades are now exceeding imports from

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Speaker 3: China to the United States. I think the government today

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Speaker 3: needs to get a little bit more credit. Again, I'm

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Speaker 3: not putting politics in this, but we should get a

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Speaker 3: little bit more credit in terms of some of the

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Speaker 3: changes taking place.

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Speaker 2: But gen does reshoring mean higher costs and does that

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Speaker 2: almost necessarily mean higher inflation? Pressure is going forward?

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Speaker 3: Yeah, definitely reshoring. It is a little bit more expensive

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Speaker 3: here in the same time, but at the opportunity is

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Speaker 3: that you have the opportunity to merge lower input costs,

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Speaker 3: especially with commodities, especially with services. I know labor is

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Speaker 3: a little bit more expensive, but a lot of the

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Speaker 3: commodity costs, especially oil down seventy six dollars a barrow.

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Speaker 3: Import costs are coming down pretty dramatically. I think these

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Speaker 3: two will balance each other out at the end of

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Speaker 3: the day.

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Speaker 1: We were talking about artificial intelligence earlier. Where are you

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Speaker 1: on the AI trade? And I'm curious when you look

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Speaker 1: at the way in which electric utility companies kind of

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Speaker 1: intersect with this theme. I'm looking at one utility right now,

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Speaker 1: Vistra Corporation, which is up by one hundred and sixty

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Speaker 1: percent so far this year.

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Speaker 3: Yeah, great question, and I really can't comment on individual stocks,

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Speaker 3: but there is a paradigm shift taking place in utilities.

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Speaker 3: Utilities to say, really aren't They're not one of our

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Speaker 3: favorite sectors, but they're starting to get very attractive in

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Speaker 3: terms of the paradigm shift taking place. You have this

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Speaker 3: shift going on from legacy legacy infrastructure into new rebuilds

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Speaker 3: and especially the use of AI to help kind of

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Speaker 3: facilitate the transformation of power grid to make sure that

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Speaker 3: power is being used correctly in the overall power grid.

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Speaker 3: Today's power grids are extremely complex, and try managing that

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Speaker 3: with an old infrastructure system. It's very difficult. But you

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Speaker 3: layer on top of AI to say, okay, where do

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Speaker 3: we allocate more power in the power grid based in

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Speaker 3: the time of day, based and the uses. I think

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Speaker 3: you have a huge opportunity.

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Speaker 4: And you add on.

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Speaker 3: Top of this utilities lower interest rates tends to benefit

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Speaker 3: that sector. As the third worst performing sector in the

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Speaker 3: SMP this year.

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Speaker 2: Doesn't that bring in the independent power producers more than

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Speaker 2: the utilities, which have a lot of constraints.

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Speaker 3: I think overall, anything paying a high dibend, which they

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Speaker 3: all do at a lower rate, will benefit from this

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Speaker 3: paradigm shift.

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Speaker 1: Give me thesis here thirty seconds as to why you're

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Speaker 1: favoring the areas of the market let's say call them materials,

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Speaker 1: call it industrials, cyclical stocks. When you're expecting a slow

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Speaker 1: down in the economy.

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Speaker 3: Sure, I think part of is evaluation. We do believe

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Speaker 3: that more the slow down it's going to take place

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Speaker 3: on the growth side. So especially you look at last week,

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Speaker 3: we saw a lot of software companies, AI companies. They

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Speaker 3: said earning came in above expectations, but the guidance was

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Speaker 3: a little bit lower, and you have fraughthy evaluations and

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Speaker 3: fraughty expectations. We do think the cheaper parts of the market,

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Speaker 3: the more conservative, safer areas should do well. Industrials, financials,

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Speaker 3: and safe growth like healthcare.

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Speaker 1: We'll leave it there, Gane, thank you so much for

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Speaker 1: stopping by. Jean Goldman there cio of Satero Financial Group,

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Speaker 1: joining us in the Bloomberg Interactive Broker Studio. Let's go

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Speaker 1: to technology next and in Vidia. The company is planning

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Speaker 1: to upgrade it's AI accelerators every year. The CEO of

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Speaker 1: the company is Jensen Wog. He made this announcement on Sunday,

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Speaker 1: on the eve of the Computex trade show in Taiwan. Now,

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Speaker 1: Huang announced a Blackwell Ultra chip that's for twenty twenty five,

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Speaker 1: and then he went on to say a next generation

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Speaker 1: AI platform called Ruben is set for twenty twenty six.

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Speaker 1: Huang said in Vidio style of accelerating computation will help

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Speaker 1: firms cut cost.

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Speaker 5: The savings are quite extraordinary. You're getting sixty times performance

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Speaker 5: per dollar, one hundred times speed up. You only increase

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Speaker 5: your power by three x. One hundred times speed up,

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Speaker 5: you only increase your cost by one point five x.

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Speaker 5: There's an enormous amount of captured loss that we can

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Speaker 5: now regain and that will translate into savings, savings and money,

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Speaker 5: savings and energy. And that's the reason why you've heard

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Speaker 5: me say the more you buy, the more you say.

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Speaker 1: Jensen Wong there the CEO of Nvidia. By the way,

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Speaker 1: the company also introduced some new AI tools as well

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Speaker 1: as software models.

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Speaker 2: Brian Jane Lennie Lee Bloomberg Technology reporter joins us now

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Speaker 2: from the Computex in Taipei to take a closer look here.

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Speaker 2: So Jane, the man's a good talker and the man

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Speaker 2: has a good product.

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Speaker 6: He was quite a show last nights took place in

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Speaker 6: National Taiwan University's a sports center. He is considered basically

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Speaker 6: Taiwan's you know, tech rock star. He's been running around

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Speaker 6: for a week local TV. He's been shooting him eating noodles,

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Speaker 6: getting his haircut, going to the night market. Yesterday, the

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Speaker 6: one really interesting thing of the show was that he

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Speaker 6: introduced the next generation chips AI chip, which is going

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Speaker 6: to be named Ruben. And this is a bit of

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Speaker 6: a shocker, at least to you know, a chip entrepreneur

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Speaker 6: who was sitting next to me who said he's never

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Speaker 6: done that before. And some speculate that maybe it was

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Speaker 6: because there wasn't any other new news to bring to

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Speaker 6: the show. So you know, that was something that Jensen

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Speaker 6: Quong dangled for everybody to get excited about.

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Speaker 1: Can we assume that the next generation of these AI chips,

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Speaker 1: the processors, the accelerators that are used in these computer servers,

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Speaker 1: are they going to be much more expensive? Does this

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Speaker 1: company have just a pricing power beyond belief.

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Speaker 6: Oh yeah, they are going to be much more expensive.

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Speaker 6: In fact, when we look at the price between the

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Speaker 6: previous chip, which was called an A one hundred, and

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Speaker 6: then we go to the H one hundred, I mean

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Speaker 6: the price has quadrupled. The problem with semiconductors today is

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Speaker 6: that as they improve and they move to the next generation,

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Speaker 6: they use manufacturing technology that is increasingly difficult. The transistors,

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Speaker 6: which are you know, the things that create the zeros

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Speaker 6: and ones on the chip, They're getting smaller and smaller

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Speaker 6: and being measured in the size of numbers of atoms,

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Speaker 6: and so the manufacturing cost is growing exponentially and this

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Speaker 6: is going to be a big challenge in the industry.

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Speaker 2: So, you know, we went from Hopper to the Blackwell,

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Speaker 2: which hasn't even shipped, and now we're talking about Ruben

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Speaker 2: coming in twenty twenty six. That's a lot of cost

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Speaker 2: that companies have to depreciate very quickly if they're going

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Speaker 2: to make these purchases. Are we getting any pushback from

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Speaker 2: companies on that.

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Speaker 6: I think companies are starting to talk about the problem,

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Speaker 6: and consultants and analysts are saying, hey, at some point,

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Speaker 6: AI models are going to have to make money for people.

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Speaker 6: You can get you know, CHATCHYPT four. My family just

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Speaker 6: subscribed to it for you know, nineteen dollars a month.

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Speaker 6: Play with this thing. It's at the level still of

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Speaker 6: people playing with it, but the investments going in on

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Speaker 6: the other side to train these models are you know,

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Speaker 6: in the tens of hundreds of billions, and so at

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Speaker 6: some point the world is going to wake up and say, hey,

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Speaker 6: this isn't making money yet, and then we might see,

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Speaker 6: you know, we might see the bubble burst. But for now,

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Speaker 6: because there's such a shortage of these chips, I don't

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Speaker 6: think anyone really dares say that too openly because everybody

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Speaker 6: is still in the mode we're in fomo. We need

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Speaker 6: to get our Nvidia chips, we need to get our

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Speaker 6: data centers, need to get our modeled up and running,

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Speaker 6: and so it's not super public, but underground, there's a

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Speaker 6: you know, an undercurrent of people starting to voice concern.

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Speaker 1: Jane, I'm wondering about the openness of the concentration of

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Speaker 1: semiconductor production in Taiwan. Is that an issue for people

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Speaker 1: now as they look at the world, not just the

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Speaker 1: tension between let's say the US China where it relates

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Speaker 1: to Taiwan. But everything we learned coming out of the

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Speaker 1: pandemic supply chains, the degree to which we are overly

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Speaker 1: concentrated in certain areas, I mean, is that being openly

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Speaker 1: discussed now, particularly when you look at the reshoring that

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Speaker 1: some chip companies are involved in and moving production to

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Speaker 1: the US and elsewhere like Japan.

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Speaker 6: Oh yeah, that's absolutely been talked about very openly. And

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Speaker 6: that you know TSMC, which has kept most of its

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Speaker 6: production except maybe like a research lab in the US US,

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Speaker 6: it is expanding into Arizona Kumamoto plants in Japan. The

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Speaker 6: first one is already built and we'll go into production

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Speaker 6: later this year. Germany, Dresden, there will be a fact

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Speaker 6: going there or a chip factory, and so yeah, this

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Speaker 6: is definitely a concern. Government and have been pushing their

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Speaker 6: companies to diversify the supply chain, and the companies have

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Speaker 6: been pushing TSMC to diversify the supply chain. And that's

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Speaker 6: what we're seeing now. Whether or not this diversification it

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Speaker 6: will go smoothly is a big question because TSMC is

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Speaker 6: moving the product part of the production overseas. But in reality,

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Speaker 6: if you look at what's happening the packaging, So the

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Speaker 6: end part, the later part of the chip making process

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Speaker 6: is still all happening in Asia. That's not really happening

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Speaker 6: in the US. Arizona. You're going to build a factory

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Speaker 6: and then body is telling me those those wafers that

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Speaker 6: around shiny things are gonna have to get on a

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Speaker 6: plane or a boat and come back to Asia packaged.

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Speaker 2: So diversification, yeah, yeah, yeah, no, Sorr. I just wanted

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Speaker 2: to to get to some of the heavyweights that are

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Speaker 2: there because we understand that Christiano and on from Qualcomm

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Speaker 2: and Lisa sue Is they'll be speaking. I'm a little

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Speaker 2: bit curious about the Chinese presence. Do you have Smick

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Speaker 2: there and and Huawei?

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Speaker 6: Do you have absolutely.

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Speaker 4: Not nothing else?

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Speaker 6: The Yeah, the Chin the Chinese UH chip makers and

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Speaker 6: equipment makers do not show up for for computechs UH.

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Speaker 6: It's still difficult for for some Chinese people to travel

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Speaker 6: directly to Taiwan today. One person I know had to

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Speaker 6: fly to Macau to fly to Taiwan. Only Chinese these

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Speaker 6: days who live outside of China are able to get

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Speaker 6: a path of visa to come to Taiwan. So it's

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Speaker 6: still quite strange.

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Speaker 1: So are most of the companies very quickly, Jane, that

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Speaker 1: are being representative US. Are they Japanese? Are they South Korean?

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Speaker 1: How is it distributed?

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Speaker 2: Oh?

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Speaker 6: Yeah again, So it's it's quite interesting. I mean, I

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Speaker 6: myself lived in Korea for quite a long time. I

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Speaker 6: spent my formative years there, and so it was quite

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Speaker 6: interesting when I arrived in Taiwan to see that Korea

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Speaker 6: and Taiwan don't seem to get along. There's this big

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Speaker 6: tension and competition between these two countries, especially with Samson

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Speaker 6: and sa highenex sing in Korea and then CSMC being here.

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Speaker 6: And so when I asked the Korean ship industry people,

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Speaker 6: are you coming to computext thing straight out said no,

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Speaker 6: we don't come back.

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Speaker 2: You can't make it. Yeup, all right, Jane, Thanks so much, Jane.

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Speaker 2: LENNI leave Bloomberg Technology Report. Joining us now is Jason

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Speaker 2: Bett's president of Redwood Wealth Advisors and an advisor at

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Speaker 2: Americ Price Financial. So, Jason, the Surgeon stocks that we

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Speaker 2: had in May seems like it's thrown out of gas

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Speaker 2: a bit here. Momentum is down from the highs breadth

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Speaker 2: as well. We just went through the PCEE data that

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Speaker 2: probably helps a little on the inflation side, but then

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Speaker 2: the spending data hurts the on the growth side. Net

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Speaker 2: what we're hearing from some investors is that they fear

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Speaker 2: a retest of the lows in April. Do you.

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Speaker 4: We're gonna have to see where how the data plays out,

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Speaker 4: But I would say that you know, for sure, in

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Speaker 4: terms of testing the high we're abound forty k on

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Speaker 4: the Dow in fifty three, one hundred on the S

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Speaker 4: and P those resistance points without any material uptick in

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Speaker 4: data or softening an inflation, I'd be surprised if we

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Speaker 4: test those levels on the upside anytime soon. In terms

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Speaker 4: of retests in the lows, I think, once again, it

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Speaker 4: just depends on what we see in terms of you know,

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Speaker 4: top line and earnings as well as just overall economic data.

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Speaker 4: Specifically the jobs and also the personal savings and the

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Speaker 4: personal spending numbers are a big deal. So we'll see

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Speaker 4: where that goes from here.

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Speaker 1: Most definitely jobs data on Friday. So what's the house

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Speaker 1: view over at Redwood on fed cuts this year?

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Speaker 4: Yeah, so we believe somewhere between zero to two. I

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Speaker 4: think the market for much of the beginning of the

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Speaker 4: year was in this la la land of expecting you know,

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Speaker 4: four to six rate cuts. Yeah, the Fed's made it

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Speaker 4: really clear that they're not interested in catering to the market.

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Speaker 4: They want they want to curb inflation. And while they've

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Speaker 4: done a decent job at that, the work isn't done yet.

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Speaker 4: And so while we have seen a few little what

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Speaker 4: i'll call mini misses in terms of data and consumer

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Speaker 4: settiment came in I believe really low a couple of

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Speaker 4: weeks ago, it's not enough. We need to see things

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Speaker 4: softened materially. We need to see inflation come down. I

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Speaker 4: think before the FED really considers reduce rates, and I

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Speaker 4: don't see that happening. Of course, I don't think you

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Speaker 4: see that happened in June. Be surprised that it happens

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Speaker 4: before fourth quarter.

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Speaker 2: That said, I mean, we we had earnings, and earnings

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Speaker 2: sort of carried the day in a sense. So we

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Speaker 2: got through this last earning season with about a seven

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Speaker 2: percent average gain in revenue for S and P five

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Speaker 2: hundred companies. I would say this though, that over the

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Speaker 2: past two months, it's been really kind of flat for

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Speaker 2: the equity market. If you take the drop in April

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Speaker 2: and then the modest gains in May. Is that telling

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Speaker 2: a broader story? What does that tell you?

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Speaker 4: What it tells me is that the that this earnings

387
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Speaker 4: growth was already priced into stocks, and it was expected,

388
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Speaker 4: and it's and it's common, it's and it's been good.

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Speaker 4: But but the market wants more. And so we'll see

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Speaker 4: where things kind of transpire from there. But I think

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Speaker 4: we need to see continued improvement and earnings, and we

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Speaker 4: need to see continued strong data. If we don't, I

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Speaker 4: think we could see volatility return to the market more materially.

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Speaker 1: We just had a story a little moment ago about

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Speaker 1: Nvidia planning to upgrade its AI accelerators every year. That's

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Speaker 1: a pretty aggressive strategy, but I think it's essentially what

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Speaker 1: the market expects with that level of ambition to try

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Speaker 1: to get to the levels of productivity that the market

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Speaker 1: thinks AI will deliver. What's your view on AI right now?

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Speaker 4: I mean, we're still really in the very early stages

401
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Speaker 4: of it. A lot of the buying is still tied

402
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Speaker 4: of speculation, right so, you know, we see this with

403
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Speaker 4: any with any big thing, there's this type of well,

404
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Speaker 4: it's going to sell a lot more so it must

405
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Speaker 4: be a great place to invest, and obviously we've seen

406
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Speaker 4: that play out in appetite for the mag seven stocks.

407
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Speaker 4: We will see where that goes from here. With added

408
00:21:39,920 --> 00:21:42,080
Speaker 4: doubt AI is going to be some form of game changer,

409
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Speaker 4: I'm actually pretty optimistic about what I'll call the S

410
00:21:44,680 --> 00:21:49,920
Speaker 4: and P four ninety three. These companies have pretty attractive

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Speaker 4: valuations right now, all things considered, and most of these

412
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Speaker 4: companies have really yet to really implement or to really

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Speaker 4: you know, to really consume AI in a meaningful way

414
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Speaker 4: that would or will in fact drive revenues potentially and

415
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Speaker 4: certainly cut costs. So but to that's a big wildcard.

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Speaker 2: To your point though about valuation. I mean, when you

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Speaker 2: talk about AI, you obviously are talking about Nvidia and

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Speaker 2: Broadcom and some of those chip makers, But then Microsoft

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Speaker 2: is a name that that comes up. But if you

420
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Speaker 2: look at Microsoft, it's actually lower now than where it

421
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Speaker 2: was in February. Yes, now that that I mean part

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00:22:29,040 --> 00:22:32,320
Speaker 2: of that is that software generally is getting pummeled in

423
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Speaker 2: the market, and that's because everybody is you know, throwing

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Speaker 2: money at the at the AI hardware companies. But it

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Speaker 2: seems like, you know, with Microsoft actually down over the

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Speaker 2: last three months that that's a pretty strong message.

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Speaker 4: Yeah, it's it's a tough it's it's it's a tough

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Speaker 4: one because Microsoft obviously has its hands in a lot

429
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Speaker 4: of coping jars. And so to your point, there's there's this,

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Speaker 4: there's the hype of AI, and there's the excitement of AI.

431
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Speaker 4: But then there's also been the you know, the tough

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Speaker 4: waters that we've seen play out as well with with

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Speaker 4: with software. So I don't really have a strong opinion

434
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Speaker 4: one way or the other, other than it really comes

435
00:23:08,400 --> 00:23:10,720
Speaker 4: down at the end of the day, what happens with jobs,

436
00:23:10,760 --> 00:23:13,760
Speaker 4: what happens with continued consumption or lack thereof moving forward?

437
00:23:14,080 --> 00:23:15,520
Speaker 2: And I think that you know what it tells me.

438
00:23:16,040 --> 00:23:19,840
Speaker 2: It tells me that the market is actually very discerning here.

439
00:23:20,200 --> 00:23:22,960
Speaker 2: It's not like willy nilly, It's not willy nilly to

440
00:23:23,000 --> 00:23:25,880
Speaker 2: the upside, I mean, and that might be that might

441
00:23:26,000 --> 00:23:27,040
Speaker 2: actually be a positive.

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00:23:28,240 --> 00:23:30,000
Speaker 4: Oh, I think it's definitely a positive when you when

443
00:23:30,040 --> 00:23:32,920
Speaker 4: you put it in that perspective. I think we've seen

444
00:23:32,920 --> 00:23:36,679
Speaker 4: a lot of probably excessive buying, some hype buying, and

445
00:23:36,720 --> 00:23:38,280
Speaker 4: what we're seeing now is a market that's a little

446
00:23:38,280 --> 00:23:41,080
Speaker 4: bit more sobered to your point, a little bit more discerning,

447
00:23:41,119 --> 00:23:44,240
Speaker 4: a little bit more patient to wait and see kind

448
00:23:44,240 --> 00:23:46,960
Speaker 4: of how things play out, and for lack of ready

449
00:23:46,960 --> 00:23:49,400
Speaker 4: to put it put it maybe a little bit more pessimistic.

450
00:23:50,240 --> 00:23:53,439
Speaker 1: What do you see when you look off shore foreign markets,

451
00:23:53,480 --> 00:23:56,840
Speaker 1: particularly in Asia. Are there opportunities there that maybe are

452
00:23:56,880 --> 00:23:57,640
Speaker 1: a little compelling?

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00:23:58,720 --> 00:24:02,240
Speaker 4: There are there are. I'm we encourage our clients to

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00:24:02,600 --> 00:24:05,200
Speaker 4: be measured. We think international has a place in almost

455
00:24:05,200 --> 00:24:09,000
Speaker 4: every portfolio, obviously from a diversification standpoint and a hedge

456
00:24:09,000 --> 00:24:11,639
Speaker 4: on the US dollar, but we do take a measured

457
00:24:11,680 --> 00:24:13,800
Speaker 4: stance with that. Now that said with Asia, I'd say

458
00:24:13,800 --> 00:24:15,439
Speaker 4: the two areas I like the most would be Japan

459
00:24:15,840 --> 00:24:19,320
Speaker 4: and India. I'll start with India. India has had it's

460
00:24:19,320 --> 00:24:21,720
Speaker 4: coming off an incredible year, and it may be a

461
00:24:21,720 --> 00:24:24,159
Speaker 4: bit toppy, but I do like India for the long term.

462
00:24:24,520 --> 00:24:27,720
Speaker 4: I think that just the fundamentals look good, and I

463
00:24:27,760 --> 00:24:31,960
Speaker 4: think that there's continued foreign investment there. There's a growing, continued,

464
00:24:31,960 --> 00:24:36,520
Speaker 4: growing appetite for labor in the offshore market. So I

465
00:24:36,520 --> 00:24:39,000
Speaker 4: think India is a good long term play. Maybe look

466
00:24:39,000 --> 00:24:40,919
Speaker 4: at buying that on some dips if possible. And then

467
00:24:40,920 --> 00:24:44,600
Speaker 4: as far as Japan, is concerned. Gosh, isn't it so

468
00:24:44,720 --> 00:24:48,280
Speaker 4: nice that Japan finally got out of deflation? Right, and

469
00:24:48,359 --> 00:24:51,840
Speaker 4: so now we've got these these we got these stocks

470
00:24:51,840 --> 00:24:56,000
Speaker 4: that are undervalued. We've got a pretty decent looking backdrop.

471
00:24:56,080 --> 00:24:58,639
Speaker 4: In general, we've got an investor friendly government, and I

472
00:24:58,680 --> 00:25:00,840
Speaker 4: think there's a lot of opportunity and moving forward.

473
00:25:01,840 --> 00:25:05,080
Speaker 2: Yeah, we often hear about, you know, governance getting a

474
00:25:05,080 --> 00:25:08,840
Speaker 2: lot better and the fact that in the past owners

475
00:25:08,920 --> 00:25:11,480
Speaker 2: just sat on the money in Japan and now they're

476
00:25:11,760 --> 00:25:14,840
Speaker 2: raising dividends and raising buybacks, and that money is kind

477
00:25:14,840 --> 00:25:17,919
Speaker 2: of getting recirculated back into the economy, which is a

478
00:25:17,920 --> 00:25:20,360
Speaker 2: good thing. So we'll see if that continues. Jason, thank

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00:25:20,359 --> 00:25:22,919
Speaker 2: you so much for joining us. Jason Betts, Resident of

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00:25:22,960 --> 00:25:27,960
Speaker 2: Redwood Wealth Advisors and private wealth advisor over at Americorprise Financial.

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Speaker 1: This has been the Bloomberg Daybreak Asia podcast, bringing you

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00:25:32,760 --> 00:25:35,880
Speaker 1: the stories making news and moving markets in the Asia Pacific.

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Speaker 1: Visit the Bloomberg Podcast channel on YouTube to get more

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