WEBVTT - PCE Data Overview, Nvidia AI Chip Roadmap 0:00:02.480 --> 0:00:06.800 Bloomberg Audio Studios, podcasts, radio news. 0:00:10.800 --> 0:00:14.560 This is the Bloomberg Daybreak Asia podcast. I'm Brian Curtis 0:00:14.560 --> 0:00:17.279 along with Doug Krisner. Join us each day for the 0:00:17.360 --> 0:00:20.720 stories making news and moving markets in the Asia Pacific. 0:00:20.920 --> 0:00:23.360 You can subscribe to the show anywhere you get your 0:00:23.400 --> 0:00:27.320 podcasts and always on Bloomberg Radio, the Bloomberg Terminal, and 0:00:27.360 --> 0:00:28.760 the Bloomberg Business App. 0:00:29.520 --> 0:00:32.199 Joining us now in the Bloomberg Interactive Broker Studio in 0:00:32.200 --> 0:00:34.519 New York is Gene Goldman. He is the CIO of 0:00:34.600 --> 0:00:39.200 Setera Financial Group in the New York visiting from California. 0:00:39.280 --> 0:00:41.560 Good of you to drop by. Thanks for making time 0:00:41.600 --> 0:00:41.919 with us. 0:00:42.200 --> 0:00:42.479 Thank you. 0:00:43.080 --> 0:00:44.839 One of the things that I'm curious about we talk 0:00:44.920 --> 0:00:49.720 about the PCEE data, the personal spending data. Let's focus 0:00:49.760 --> 0:00:51.640 on that right now because I think that may have 0:00:51.680 --> 0:00:54.200 been the data point that the bond market was trading 0:00:54.240 --> 0:00:57.640 off of. Are you concerned about a meaningful downshift in growth? 0:00:58.040 --> 0:00:58.280 Sure? 0:00:58.320 --> 0:00:59.760 And Doug first, well, thanks for having me back on 0:00:59.800 --> 0:01:02.520 your show. I think the pce that data report that 0:01:02.560 --> 0:01:05.399 came up Friday was a paradigm shift in terms of 0:01:05.400 --> 0:01:07.440 what the Fed is thinking in terms of our economy. 0:01:07.959 --> 0:01:10.280 First off, with the FED, the FED, the PC, the 0:01:10.280 --> 0:01:13.160 flare came in as expected. Basically, rate hikes are off 0:01:13.200 --> 0:01:15.920 the table. That let's the Fed do nothing. Basically, it 0:01:16.040 --> 0:01:19.200 suggests that inflation is not as bad as people had 0:01:19.200 --> 0:01:21.440 anticipated earlier in the year. But the other part of 0:01:21.440 --> 0:01:23.200 the stories that the Fed needs to pay more attention 0:01:23.319 --> 0:01:26.560 to is to slow down in economic growth. Personal consumption 0:01:26.640 --> 0:01:30.280 below expectations, real spending negative. Combine this with first quarter 0:01:30.400 --> 0:01:33.480 GDP being revised lower, I think we have a growth problem. 0:01:33.520 --> 0:01:36.320 I think consumers are starting to weigh under the fact 0:01:36.360 --> 0:01:40.840 of higher rates, the FED, lower savings, student loan repayments, 0:01:40.959 --> 0:01:44.600 credit card debt delinquencies rising. All this together suggests to 0:01:44.600 --> 0:01:46.240 me that the FED, not only you know, I know 0:01:46.280 --> 0:01:48.200 they're dual mandate is to focus on inflation and to 0:01:48.240 --> 0:01:50.920 focus on make sure we all have jobs. But the 0:01:50.960 --> 0:01:53.120 other thing they need to focus on is the economic 0:01:53.160 --> 0:01:55.680 aspect that the economy is slowing down pretty fast and 0:01:55.680 --> 0:01:56.400 pretty quickly. 0:01:56.840 --> 0:01:59.120 Well, they could focus on the second half of the 0:01:59.200 --> 0:02:03.280 mandate on jobs by starting to talk down rates. I 0:02:03.320 --> 0:02:07.040 suppose is that something we should expect now that they'll 0:02:07.040 --> 0:02:07.800 go in that direction. 0:02:08.440 --> 0:02:10.799 Yeah, I think we'll see what happens on Friday's payroll report. 0:02:10.880 --> 0:02:13.639 We think Friday's paywroll report will be lower than expected. 0:02:13.919 --> 0:02:16.560 We do think if you look at quit rates are following, 0:02:16.560 --> 0:02:18.880 you look at jobless claims are increasing, You look at 0:02:19.080 --> 0:02:22.560 the PMI employment indices are all starring the suggestors weakness 0:02:22.560 --> 0:02:25.520 in the labor market. Average hourly earnings are starting the rollover. 0:02:25.680 --> 0:02:27.639 Take all this together, But Jeane, these are sort of 0:02:27.680 --> 0:02:30.160 welcome changes, aren't they. I mean, they haven't crossed over 0:02:30.200 --> 0:02:32.280 into the danger zone. You're not saying that, are you. 0:02:32.400 --> 0:02:34.400 I think they're getting close to the danger zone. I mean, 0:02:34.400 --> 0:02:38.200 this is something we're watching very carefully. The consumer. Consumer 0:02:38.240 --> 0:02:40.600 has kept us out of a recession for the past 0:02:40.600 --> 0:02:43.119 few years, the past couple of years, but the consumer 0:02:43.200 --> 0:02:46.400 is slowing down pretty quickly, especially the lower income households. 0:02:46.639 --> 0:02:49.160 Even listen to some of the retailer's earnings reports. They're 0:02:49.200 --> 0:02:52.040 talking about there's a dynamic shift going on from general 0:02:52.639 --> 0:02:56.480 merchandisers saying, hey, there's a shift from discretionary to more 0:02:56.520 --> 0:02:59.200 stables purchasing. And the major retailer, I can't say their name, 0:02:59.320 --> 0:03:01.880 but they just cut costs on five thousand different items 0:03:01.919 --> 0:03:04.240 every day items. There is a shift going on in 0:03:04.280 --> 0:03:05.480 terms of our consumer right now. 0:03:05.520 --> 0:03:08.239 So right now the market is debating one rate cut, 0:03:08.320 --> 0:03:11.040 maybe none. What's your view on the FED? How aggressive 0:03:11.040 --> 0:03:13.120 will the FED be? Given what I'm hearing from you, 0:03:13.120 --> 0:03:15.640 you're a couple of raiate conspts that seem to be 0:03:15.680 --> 0:03:16.720 baked into your equation. 0:03:17.480 --> 0:03:19.640 I mean love to come in after the payroll report 0:03:19.639 --> 0:03:21.480 in Friday. I think the payroll report Friday is the 0:03:21.520 --> 0:03:23.800 last employment of report we get before the next FED meeting. 0:03:24.000 --> 0:03:25.440 I think it's going to be lower than expected. I 0:03:25.440 --> 0:03:27.280 don't think the federial cut in June, but I think 0:03:27.320 --> 0:03:30.280 this gives us potentially maybe July, September, and after the 0:03:30.280 --> 0:03:32.840 election in November. So we're saying three rate cuts. Still, 0:03:33.160 --> 0:03:35.880 we still believe this because a inflation is rolling over. 0:03:35.920 --> 0:03:38.840 If you pull out on PC if you pull out rent, 0:03:38.840 --> 0:03:41.320 for example, we're about two point one percent in your 0:03:41.360 --> 0:03:43.320 re year. We're close to the Fed's target on PCE 0:03:43.600 --> 0:03:46.160 already if you pull out rent. Also, if you think 0:03:46.160 --> 0:03:49.360 about the economic growth, FED rate hikes takes about twelve 0:03:49.360 --> 0:03:51.800 to fifteen months to be felled by the economy. We 0:03:51.920 --> 0:03:54.000 often fell a lot last year's hikes, So I think 0:03:54.040 --> 0:03:56.160 this is weighing on the economy, This is weighing on 0:03:56.160 --> 0:03:58.040 the consumer, and we have to watch this very carefully. 0:03:59.160 --> 0:04:03.600 I'm always amazed by how these data can be interpreted 0:04:03.640 --> 0:04:06.320 in different ways. Let me walk you through thirty seconds 0:04:06.360 --> 0:04:08.920 of earnings revisions here and you tell me what you think. 0:04:09.160 --> 0:04:12.360 So I was making some notes yesterday. Bloomberg Intelligence has 0:04:12.400 --> 0:04:16.159 a report saying that earnings revisions turn positive for global 0:04:16.200 --> 0:04:19.680 equities outside the US and China, so including that a 0:04:19.720 --> 0:04:23.120 lot of emerging markets. It's turned positive for the first 0:04:23.200 --> 0:04:25.800 time since twenty twenty two. And yet we have a 0:04:25.839 --> 0:04:28.360 separate story this morning out on the terminal. It says 0:04:28.360 --> 0:04:32.640 that companies in the MSCI are Emerging Markets Index, that 0:04:32.839 --> 0:04:36.400 half of them have missed analyst estimates and average profits 0:04:36.400 --> 0:04:39.560 have slumped ten percent compared with the prior year period. 0:04:39.720 --> 0:04:41.680 How do you make sense of that? 0:04:41.680 --> 0:04:43.200 That's the same story we're seeing here in the United 0:04:43.200 --> 0:04:45.560 States and MAG seven versus the rest of the S 0:04:45.600 --> 0:04:49.000 and P five hundred. Earnings are being driven domestically by 0:04:49.040 --> 0:04:51.920 the MAG seven, and analysts are raising estimates for the 0:04:51.960 --> 0:04:54.120 next twelve months. We worry that there's a lot of 0:04:54.120 --> 0:04:56.919 frothy valuations, a lot of frothiness put into some of 0:04:56.920 --> 0:04:59.440 these earnings numbers that need to be ratcheted down a 0:04:59.480 --> 0:05:02.480 little bit. So again it's just you add this with 0:05:02.560 --> 0:05:05.000 high valuations in the S and P taken together, something 0:05:05.000 --> 0:05:07.120 we talked about earlier. We do think a pullback in 0:05:07.120 --> 0:05:09.400 the market is likely, like a short pullback like we 0:05:09.440 --> 0:05:12.680 saw in October of last year, a correction which provides 0:05:12.720 --> 0:05:14.279 opportunities for long term investors. 0:05:14.560 --> 0:05:16.520 Were you in terms of the way in which government 0:05:16.560 --> 0:05:22.320 policy has impacted the economy, whether it's the infrastructure bill, 0:05:22.880 --> 0:05:25.680 the chips and science ACKed. I was just in Arizona 0:05:25.720 --> 0:05:27.640 for a few days last week and it was a 0:05:27.680 --> 0:05:31.000 remarkable to see a couple of things, the enthusiasm around 0:05:31.120 --> 0:05:36.120 reshoring of semiconductor production and the establishment of a lot 0:05:36.160 --> 0:05:39.320 of on a massive scale new warehousing. 0:05:39.880 --> 0:05:40.960 Yeah, that's a great question. 0:05:41.040 --> 0:05:43.000 First of all, I'm independent, I'm not a Republican, I'm 0:05:43.000 --> 0:05:44.800 not a Democrats, so keep politics. 0:05:44.440 --> 0:05:44.719 Out of this. 0:05:44.800 --> 0:05:47.920 But I do believe that the current government administration has 0:05:47.920 --> 0:05:50.880 not gotten enough credit in terms of what has driven 0:05:50.920 --> 0:05:54.240 in terms of the bounce back and manufacturing. Remember, manufacturing 0:05:54.279 --> 0:05:56.320 has been in the recession for eighteen straight months. It's 0:05:56.320 --> 0:05:58.880 starting to come back. Part of this is the ships sacked. 0:05:58.960 --> 0:06:01.279 Part of this is this reshoring, and something we talked 0:06:01.320 --> 0:06:03.840 about earlier. You look at imports from Mexico for the 0:06:03.880 --> 0:06:07.520 first time in two decades are now exceeding imports from 0:06:07.640 --> 0:06:10.559 China to the United States. I think the government today 0:06:10.600 --> 0:06:12.240 needs to get a little bit more credit. Again, I'm 0:06:12.240 --> 0:06:14.560 not putting politics in this, but we should get a 0:06:14.600 --> 0:06:16.000 little bit more credit in terms of some of the 0:06:16.080 --> 0:06:16.919 changes taking place. 0:06:17.520 --> 0:06:21.600 But gen does reshoring mean higher costs and does that 0:06:21.880 --> 0:06:26.719 almost necessarily mean higher inflation? Pressure is going forward? 0:06:27.040 --> 0:06:29.800 Yeah, definitely reshoring. It is a little bit more expensive 0:06:30.320 --> 0:06:32.920 here in the same time, but at the opportunity is 0:06:33.320 --> 0:06:38.840 that you have the opportunity to merge lower input costs, 0:06:38.880 --> 0:06:41.800 especially with commodities, especially with services. I know labor is 0:06:41.839 --> 0:06:43.880 a little bit more expensive, but a lot of the 0:06:43.920 --> 0:06:47.040 commodity costs, especially oil down seventy six dollars a barrow. 0:06:47.400 --> 0:06:50.400 Import costs are coming down pretty dramatically. I think these 0:06:50.400 --> 0:06:52.040 two will balance each other out at the end of 0:06:52.080 --> 0:06:52.400 the day. 0:06:52.560 --> 0:06:55.640 We were talking about artificial intelligence earlier. Where are you 0:06:55.720 --> 0:06:58.920 on the AI trade? And I'm curious when you look 0:06:58.960 --> 0:07:02.160 at the way in which electric utility companies kind of 0:07:02.200 --> 0:07:05.160 intersect with this theme. I'm looking at one utility right now, 0:07:05.240 --> 0:07:08.160 Vistra Corporation, which is up by one hundred and sixty 0:07:08.160 --> 0:07:09.360 percent so far this year. 0:07:09.800 --> 0:07:12.320 Yeah, great question, and I really can't comment on individual stocks, 0:07:12.320 --> 0:07:14.800 but there is a paradigm shift taking place in utilities. 0:07:15.080 --> 0:07:16.960 Utilities to say, really aren't They're not one of our 0:07:17.000 --> 0:07:19.280 favorite sectors, but they're starting to get very attractive in 0:07:19.360 --> 0:07:22.400 terms of the paradigm shift taking place. You have this 0:07:22.480 --> 0:07:27.960 shift going on from legacy legacy infrastructure into new rebuilds 0:07:28.240 --> 0:07:30.440 and especially the use of AI to help kind of 0:07:30.480 --> 0:07:33.960 facilitate the transformation of power grid to make sure that 0:07:35.120 --> 0:07:37.320 power is being used correctly in the overall power grid. 0:07:37.400 --> 0:07:40.960 Today's power grids are extremely complex, and try managing that 0:07:41.000 --> 0:07:43.880 with an old infrastructure system. It's very difficult. But you 0:07:44.000 --> 0:07:46.320 layer on top of AI to say, okay, where do 0:07:46.360 --> 0:07:48.360 we allocate more power in the power grid based in 0:07:48.400 --> 0:07:50.520 the time of day, based and the uses. I think 0:07:50.560 --> 0:07:51.800 you have a huge opportunity. 0:07:52.120 --> 0:07:53.080 And you add on. 0:07:53.040 --> 0:07:56.240 Top of this utilities lower interest rates tends to benefit 0:07:56.320 --> 0:07:58.560 that sector. As the third worst performing sector in the 0:07:58.600 --> 0:07:59.360 SMP this year. 0:08:00.040 --> 0:08:03.360 Doesn't that bring in the independent power producers more than 0:08:03.480 --> 0:08:05.480 the utilities, which have a lot of constraints. 0:08:05.920 --> 0:08:08.120 I think overall, anything paying a high dibend, which they 0:08:08.160 --> 0:08:10.640 all do at a lower rate, will benefit from this 0:08:10.760 --> 0:08:11.559 paradigm shift. 0:08:12.360 --> 0:08:15.800 Give me thesis here thirty seconds as to why you're 0:08:15.840 --> 0:08:20.440 favoring the areas of the market let's say call them materials, 0:08:20.480 --> 0:08:23.720 call it industrials, cyclical stocks. When you're expecting a slow 0:08:23.800 --> 0:08:25.320 down in the economy. 0:08:25.000 --> 0:08:28.720 Sure, I think part of is evaluation. We do believe 0:08:28.760 --> 0:08:30.920 that more the slow down it's going to take place 0:08:30.920 --> 0:08:33.520 on the growth side. So especially you look at last week, 0:08:33.559 --> 0:08:36.280 we saw a lot of software companies, AI companies. They 0:08:36.280 --> 0:08:39.079 said earning came in above expectations, but the guidance was 0:08:39.120 --> 0:08:41.240 a little bit lower, and you have fraughthy evaluations and 0:08:41.280 --> 0:08:44.160 fraughty expectations. We do think the cheaper parts of the market, 0:08:44.400 --> 0:08:48.359 the more conservative, safer areas should do well. Industrials, financials, 0:08:48.360 --> 0:08:49.800 and safe growth like healthcare. 0:08:49.840 --> 0:08:51.560 We'll leave it there, Gane, thank you so much for 0:08:51.559 --> 0:08:55.200 stopping by. Jean Goldman there cio of Satero Financial Group, 0:08:55.280 --> 0:09:03.960 joining us in the Bloomberg Interactive Broker Studio. Let's go 0:09:04.000 --> 0:09:07.000 to technology next and in Vidia. The company is planning 0:09:07.000 --> 0:09:11.160 to upgrade it's AI accelerators every year. The CEO of 0:09:11.440 --> 0:09:14.440 the company is Jensen Wog. He made this announcement on Sunday, 0:09:14.800 --> 0:09:18.480 on the eve of the Computex trade show in Taiwan. Now, 0:09:18.559 --> 0:09:23.480 Huang announced a Blackwell Ultra chip that's for twenty twenty five, 0:09:23.520 --> 0:09:25.920 and then he went on to say a next generation 0:09:26.040 --> 0:09:29.640 AI platform called Ruben is set for twenty twenty six. 0:09:30.280 --> 0:09:33.920 Huang said in Vidio style of accelerating computation will help 0:09:33.960 --> 0:09:35.000 firms cut cost. 0:09:36.120 --> 0:09:41.280 The savings are quite extraordinary. You're getting sixty times performance 0:09:41.400 --> 0:09:44.760 per dollar, one hundred times speed up. You only increase 0:09:44.800 --> 0:09:47.600 your power by three x. One hundred times speed up, 0:09:48.000 --> 0:09:51.240 you only increase your cost by one point five x. 0:09:51.600 --> 0:09:55.160 There's an enormous amount of captured loss that we can 0:09:55.200 --> 0:09:58.800 now regain and that will translate into savings, savings and money, 0:09:59.280 --> 0:10:03.000 savings and energy. And that's the reason why you've heard 0:10:03.040 --> 0:10:05.640 me say the more you buy, the more you say. 0:10:05.760 --> 0:10:08.320 Jensen Wong there the CEO of Nvidia. By the way, 0:10:08.360 --> 0:10:11.920 the company also introduced some new AI tools as well 0:10:11.960 --> 0:10:13.120 as software models. 0:10:13.120 --> 0:10:17.920 Brian Jane Lennie Lee Bloomberg Technology reporter joins us now 0:10:18.240 --> 0:10:22.360 from the Computex in Taipei to take a closer look here. 0:10:22.440 --> 0:10:25.480 So Jane, the man's a good talker and the man 0:10:25.559 --> 0:10:26.360 has a good product. 0:10:28.280 --> 0:10:32.400 He was quite a show last nights took place in 0:10:33.480 --> 0:10:39.360 National Taiwan University's a sports center. He is considered basically 0:10:39.480 --> 0:10:43.120 Taiwan's you know, tech rock star. He's been running around 0:10:43.240 --> 0:10:49.840 for a week local TV. He's been shooting him eating noodles, 0:10:50.000 --> 0:10:54.720 getting his haircut, going to the night market. Yesterday, the 0:10:54.840 --> 0:10:58.880 one really interesting thing of the show was that he 0:11:00.280 --> 0:11:06.800 introduced the next generation chips AI chip, which is going 0:11:06.840 --> 0:11:09.600 to be named Ruben. And this is a bit of 0:11:09.800 --> 0:11:15.720 a shocker, at least to you know, a chip entrepreneur 0:11:15.760 --> 0:11:19.080 who was sitting next to me who said he's never 0:11:19.120 --> 0:11:23.160 done that before. And some speculate that maybe it was 0:11:23.200 --> 0:11:26.280 because there wasn't any other new news to bring to 0:11:26.360 --> 0:11:30.560 the show. So you know, that was something that Jensen 0:11:31.080 --> 0:11:34.400 Quong dangled for everybody to get excited about. 0:11:34.559 --> 0:11:39.880 Can we assume that the next generation of these AI chips, 0:11:39.920 --> 0:11:45.120 the processors, the accelerators that are used in these computer servers, 0:11:45.480 --> 0:11:47.720 are they going to be much more expensive? Does this 0:11:47.800 --> 0:11:50.840 company have just a pricing power beyond belief. 0:11:52.280 --> 0:11:54.440 Oh yeah, they are going to be much more expensive. 0:11:54.440 --> 0:11:57.959 In fact, when we look at the price between the 0:11:58.000 --> 0:12:01.840 previous chip, which was called an A one hundred, and 0:12:01.880 --> 0:12:03.679 then we go to the H one hundred, I mean 0:12:03.720 --> 0:12:09.600 the price has quadrupled. The problem with semiconductors today is 0:12:09.640 --> 0:12:14.040 that as they improve and they move to the next generation, 0:12:14.600 --> 0:12:20.520 they use manufacturing technology that is increasingly difficult. The transistors, 0:12:20.559 --> 0:12:23.600 which are you know, the things that create the zeros 0:12:23.600 --> 0:12:28.040 and ones on the chip, They're getting smaller and smaller 0:12:28.040 --> 0:12:32.120 and being measured in the size of numbers of atoms, 0:12:32.520 --> 0:12:37.280 and so the manufacturing cost is growing exponentially and this 0:12:37.400 --> 0:12:40.319 is going to be a big challenge in the industry. 0:12:41.720 --> 0:12:44.600 So, you know, we went from Hopper to the Blackwell, 0:12:44.600 --> 0:12:46.880 which hasn't even shipped, and now we're talking about Ruben 0:12:47.320 --> 0:12:50.240 coming in twenty twenty six. That's a lot of cost 0:12:50.559 --> 0:12:54.160 that companies have to depreciate very quickly if they're going 0:12:54.200 --> 0:12:57.360 to make these purchases. Are we getting any pushback from 0:12:57.600 --> 0:12:58.439 companies on that. 0:13:00.760 --> 0:13:04.920 I think companies are starting to talk about the problem, 0:13:05.040 --> 0:13:08.160 and consultants and analysts are saying, hey, at some point, 0:13:09.080 --> 0:13:12.679 AI models are going to have to make money for people. 0:13:12.679 --> 0:13:17.080 You can get you know, CHATCHYPT four. My family just 0:13:17.120 --> 0:13:19.960 subscribed to it for you know, nineteen dollars a month. 0:13:20.080 --> 0:13:23.520 Play with this thing. It's at the level still of 0:13:23.559 --> 0:13:26.920 people playing with it, but the investments going in on 0:13:26.960 --> 0:13:29.640 the other side to train these models are you know, 0:13:29.720 --> 0:13:33.400 in the tens of hundreds of billions, and so at 0:13:33.400 --> 0:13:36.880 some point the world is going to wake up and say, hey, 0:13:38.080 --> 0:13:42.160 this isn't making money yet, and then we might see, 0:13:42.240 --> 0:13:46.040 you know, we might see the bubble burst. But for now, 0:13:46.200 --> 0:13:49.600 because there's such a shortage of these chips, I don't 0:13:49.600 --> 0:13:52.840 think anyone really dares say that too openly because everybody 0:13:52.880 --> 0:13:55.920 is still in the mode we're in fomo. We need 0:13:55.960 --> 0:13:59.120 to get our Nvidia chips, we need to get our 0:13:59.160 --> 0:14:01.640 data centers, need to get our modeled up and running, 0:14:02.960 --> 0:14:07.120 and so it's not super public, but underground, there's a 0:14:08.120 --> 0:14:12.720 you know, an undercurrent of people starting to voice concern. 0:14:13.120 --> 0:14:16.440 Jane, I'm wondering about the openness of the concentration of 0:14:16.480 --> 0:14:20.640 semiconductor production in Taiwan. Is that an issue for people 0:14:20.680 --> 0:14:23.560 now as they look at the world, not just the 0:14:23.640 --> 0:14:27.200 tension between let's say the US China where it relates 0:14:27.200 --> 0:14:29.400 to Taiwan. But everything we learned coming out of the 0:14:29.440 --> 0:14:32.840 pandemic supply chains, the degree to which we are overly 0:14:32.920 --> 0:14:36.240 concentrated in certain areas, I mean, is that being openly 0:14:36.280 --> 0:14:39.320 discussed now, particularly when you look at the reshoring that 0:14:39.400 --> 0:14:42.160 some chip companies are involved in and moving production to 0:14:42.200 --> 0:14:44.320 the US and elsewhere like Japan. 0:14:46.160 --> 0:14:50.760 Oh yeah, that's absolutely been talked about very openly. And 0:14:50.880 --> 0:14:55.040 that you know TSMC, which has kept most of its 0:14:55.040 --> 0:15:00.560 production except maybe like a research lab in the US US, 0:15:01.200 --> 0:15:05.800 it is expanding into Arizona Kumamoto plants in Japan. The 0:15:05.840 --> 0:15:08.040 first one is already built and we'll go into production 0:15:08.160 --> 0:15:13.800 later this year. Germany, Dresden, there will be a fact 0:15:13.880 --> 0:15:18.280 going there or a chip factory, and so yeah, this 0:15:18.440 --> 0:15:22.160 is definitely a concern. Government and have been pushing their 0:15:22.200 --> 0:15:25.280 companies to diversify the supply chain, and the companies have 0:15:25.320 --> 0:15:29.520 been pushing TSMC to diversify the supply chain. And that's 0:15:29.520 --> 0:15:34.360 what we're seeing now. Whether or not this diversification it 0:15:34.400 --> 0:15:37.840 will go smoothly is a big question because TSMC is 0:15:37.880 --> 0:15:44.040 moving the product part of the production overseas. But in reality, 0:15:44.520 --> 0:15:48.280 if you look at what's happening the packaging, So the 0:15:48.400 --> 0:15:51.960 end part, the later part of the chip making process 0:15:52.120 --> 0:15:55.600 is still all happening in Asia. That's not really happening 0:15:55.640 --> 0:15:59.240 in the US. Arizona. You're going to build a factory 0:15:59.440 --> 0:16:02.600 and then body is telling me those those wafers that 0:16:02.680 --> 0:16:05.000 around shiny things are gonna have to get on a 0:16:05.000 --> 0:16:07.920 plane or a boat and come back to Asia packaged. 0:16:08.720 --> 0:16:13.840 So diversification, yeah, yeah, yeah, no, Sorr. I just wanted 0:16:13.880 --> 0:16:16.760 to to get to some of the heavyweights that are 0:16:16.760 --> 0:16:20.440 there because we understand that Christiano and on from Qualcomm 0:16:20.560 --> 0:16:23.480 and Lisa sue Is they'll be speaking. I'm a little 0:16:23.480 --> 0:16:26.520 bit curious about the Chinese presence. Do you have Smick 0:16:26.600 --> 0:16:28.600 there and and Huawei? 0:16:28.600 --> 0:16:30.400 Do you have absolutely. 0:16:29.840 --> 0:16:31.040 Not nothing else? 0:16:31.920 --> 0:16:38.320 The Yeah, the Chin the Chinese UH chip makers and 0:16:38.800 --> 0:16:43.760 equipment makers do not show up for for computechs UH. 0:16:43.880 --> 0:16:48.760 It's still difficult for for some Chinese people to travel 0:16:48.880 --> 0:16:53.520 directly to Taiwan today. One person I know had to 0:16:53.600 --> 0:16:59.240 fly to Macau to fly to Taiwan. Only Chinese these 0:16:59.320 --> 0:17:03.320 days who live outside of China are able to get 0:17:03.360 --> 0:17:07.320 a path of visa to come to Taiwan. So it's 0:17:07.359 --> 0:17:08.640 still quite strange. 0:17:09.280 --> 0:17:11.480 So are most of the companies very quickly, Jane, that 0:17:11.520 --> 0:17:15.639 are being representative US. Are they Japanese? Are they South Korean? 0:17:15.760 --> 0:17:17.000 How is it distributed? 0:17:17.480 --> 0:17:17.600 Oh? 0:17:17.680 --> 0:17:22.240 Yeah again, So it's it's quite interesting. I mean, I 0:17:22.320 --> 0:17:25.399 myself lived in Korea for quite a long time. I 0:17:25.480 --> 0:17:29.520 spent my formative years there, and so it was quite 0:17:29.560 --> 0:17:32.480 interesting when I arrived in Taiwan to see that Korea 0:17:32.520 --> 0:17:35.760 and Taiwan don't seem to get along. There's this big 0:17:35.880 --> 0:17:40.000 tension and competition between these two countries, especially with Samson 0:17:40.080 --> 0:17:43.679 and sa highenex sing in Korea and then CSMC being here. 0:17:44.440 --> 0:17:50.359 And so when I asked the Korean ship industry people, 0:17:50.359 --> 0:17:53.840 are you coming to computext thing straight out said no, 0:17:53.880 --> 0:17:54.960 we don't come back. 0:17:55.000 --> 0:17:57.680 You can't make it. Yeup, all right, Jane, Thanks so much, Jane. 0:17:57.720 --> 0:18:07.600 LENNI leave Bloomberg Technology Report. Joining us now is Jason 0:18:07.640 --> 0:18:11.399 Bett's president of Redwood Wealth Advisors and an advisor at 0:18:11.440 --> 0:18:15.679 Americ Price Financial. So, Jason, the Surgeon stocks that we 0:18:15.720 --> 0:18:17.760 had in May seems like it's thrown out of gas 0:18:17.800 --> 0:18:21.160 a bit here. Momentum is down from the highs breadth 0:18:21.160 --> 0:18:24.439 as well. We just went through the PCEE data that 0:18:24.480 --> 0:18:26.840 probably helps a little on the inflation side, but then 0:18:26.920 --> 0:18:31.520 the spending data hurts the on the growth side. Net 0:18:31.720 --> 0:18:35.240 what we're hearing from some investors is that they fear 0:18:35.320 --> 0:18:37.920 a retest of the lows in April. Do you. 0:18:39.640 --> 0:18:41.360 We're gonna have to see where how the data plays out, 0:18:41.400 --> 0:18:43.119 But I would say that you know, for sure, in 0:18:43.200 --> 0:18:45.240 terms of testing the high we're abound forty k on 0:18:45.280 --> 0:18:47.000 the Dow in fifty three, one hundred on the S 0:18:47.040 --> 0:18:51.840 and P those resistance points without any material uptick in 0:18:52.040 --> 0:18:55.600 data or softening an inflation, I'd be surprised if we 0:18:55.960 --> 0:18:59.560 test those levels on the upside anytime soon. In terms 0:18:59.560 --> 0:19:01.480 of retests in the lows, I think, once again, it 0:19:01.560 --> 0:19:04.480 just depends on what we see in terms of you know, 0:19:04.560 --> 0:19:07.920 top line and earnings as well as just overall economic data. 0:19:07.960 --> 0:19:12.399 Specifically the jobs and also the personal savings and the 0:19:12.400 --> 0:19:15.080 personal spending numbers are a big deal. So we'll see 0:19:15.080 --> 0:19:15.880 where that goes from here. 0:19:15.960 --> 0:19:18.440 Most definitely jobs data on Friday. So what's the house 0:19:18.560 --> 0:19:21.440 view over at Redwood on fed cuts this year? 0:19:22.520 --> 0:19:26.240 Yeah, so we believe somewhere between zero to two. I 0:19:26.280 --> 0:19:28.600 think the market for much of the beginning of the 0:19:28.640 --> 0:19:30.560 year was in this la la land of expecting you know, 0:19:30.640 --> 0:19:34.080 four to six rate cuts. Yeah, the Fed's made it 0:19:34.160 --> 0:19:37.040 really clear that they're not interested in catering to the market. 0:19:37.119 --> 0:19:39.520 They want they want to curb inflation. And while they've 0:19:39.520 --> 0:19:41.920 done a decent job at that, the work isn't done yet. 0:19:42.119 --> 0:19:44.600 And so while we have seen a few little what 0:19:44.640 --> 0:19:48.400 i'll call mini misses in terms of data and consumer 0:19:48.480 --> 0:19:51.000 settiment came in I believe really low a couple of 0:19:51.040 --> 0:19:54.560 weeks ago, it's not enough. We need to see things 0:19:54.640 --> 0:19:57.320 softened materially. We need to see inflation come down. I 0:19:57.320 --> 0:20:00.560 think before the FED really considers reduce rates, and I 0:20:00.560 --> 0:20:02.159 don't see that happening. Of course, I don't think you 0:20:02.200 --> 0:20:05.359 see that happened in June. Be surprised that it happens 0:20:05.400 --> 0:20:06.800 before fourth quarter. 0:20:07.800 --> 0:20:10.600 That said, I mean, we we had earnings, and earnings 0:20:10.760 --> 0:20:13.119 sort of carried the day in a sense. So we 0:20:13.240 --> 0:20:16.320 got through this last earning season with about a seven 0:20:16.359 --> 0:20:19.080 percent average gain in revenue for S and P five 0:20:19.280 --> 0:20:21.480 hundred companies. I would say this though, that over the 0:20:21.480 --> 0:20:24.399 past two months, it's been really kind of flat for 0:20:24.880 --> 0:20:28.480 the equity market. If you take the drop in April 0:20:28.520 --> 0:20:32.080 and then the modest gains in May. Is that telling 0:20:32.359 --> 0:20:34.000 a broader story? What does that tell you? 0:20:35.440 --> 0:20:38.440 What it tells me is that the that this earnings 0:20:38.480 --> 0:20:41.800 growth was already priced into stocks, and it was expected, 0:20:42.280 --> 0:20:44.760 and it's and it's common, it's and it's been good. 0:20:44.840 --> 0:20:48.200 But but the market wants more. And so we'll see 0:20:48.200 --> 0:20:50.200 where things kind of transpire from there. But I think 0:20:50.240 --> 0:20:53.199 we need to see continued improvement and earnings, and we 0:20:53.240 --> 0:20:55.879 need to see continued strong data. If we don't, I 0:20:55.880 --> 0:20:59.080 think we could see volatility return to the market more materially. 0:21:00.320 --> 0:21:03.040 We just had a story a little moment ago about 0:21:03.160 --> 0:21:06.320 Nvidia planning to upgrade its AI accelerators every year. That's 0:21:06.359 --> 0:21:09.280 a pretty aggressive strategy, but I think it's essentially what 0:21:09.320 --> 0:21:13.480 the market expects with that level of ambition to try 0:21:13.480 --> 0:21:15.800 to get to the levels of productivity that the market 0:21:16.040 --> 0:21:18.800 thinks AI will deliver. What's your view on AI right now? 0:21:19.640 --> 0:21:21.760 I mean, we're still really in the very early stages 0:21:21.840 --> 0:21:24.760