WEBVTT - SEC Suing Coinbase, Sequoia Splitting Into Three Firms

0:00:02.279 --> 0:00:05.240
<v Speaker 1>This is Bloomberg Day Break Asia for It's Wednesday, June

0:00:05.320 --> 0:00:08.360
<v Speaker 1>seventh in Hong Kong, Tuesday June sixth in New York

0:00:08.400 --> 0:00:09.640
<v Speaker 1>and coming up today.

0:00:09.440 --> 0:00:13.240
<v Speaker 2>Coinbase is being sued by the sec for allegedly breaking

0:00:13.360 --> 0:00:14.680
<v Speaker 2>US securities rules.

0:00:14.800 --> 0:00:18.880
<v Speaker 1>Sequoia Capital will split into three firms by next March.

0:00:18.600 --> 0:00:22.120
<v Speaker 2>And China's biggest banks have reportedly been asked by authorities

0:00:22.160 --> 0:00:23.760
<v Speaker 2>to lower their deposit rates.

0:00:23.960 --> 0:00:26.240
<v Speaker 3>Reports of high level talks in the coming weeks between

0:00:26.280 --> 0:00:28.920
<v Speaker 3>the foreign ministers of the US and China. Ukraine and

0:00:29.000 --> 0:00:31.280
<v Speaker 3>Russia blame each other for the breach of a critical

0:00:31.360 --> 0:00:34.880
<v Speaker 3>dam in Ukraine. Chris Christian, I'm at Baxter with Global News.

0:00:37.040 --> 0:00:40.239
<v Speaker 4>That's all straight ahead on Bloomberg day Break Asia, the

0:00:40.280 --> 0:00:42.920
<v Speaker 4>business news you need to start your day in just

0:00:43.040 --> 0:00:47.520
<v Speaker 4>one fifteen minute podcast available on Apples, Spotify, the Bloomberg

0:00:47.560 --> 0:00:50.280
<v Speaker 4>Business app and everywhere you get your podcasts.

0:00:52.960 --> 0:00:55.840
<v Speaker 2>Good morning, I'm Doug Chrisner and I'm Brian Curtiz.

0:00:55.880 --> 0:00:59.080
<v Speaker 1>Here are the stories we're following today. The US Securities

0:00:59.120 --> 0:01:02.640
<v Speaker 1>in Exchange Commission and filing that lawsuit over Coinbase Global.

0:01:02.840 --> 0:01:05.360
<v Speaker 1>The regulator alleged that the company has been running an

0:01:05.400 --> 0:01:09.399
<v Speaker 1>illegal exchange. The SEC accused Coinbase of evading its rules

0:01:09.400 --> 0:01:13.920
<v Speaker 1>for years by letting users trade numerous crypto tookens tokens

0:01:13.959 --> 0:01:17.800
<v Speaker 1>that were actually unregistered securities. This comes a day after

0:01:17.840 --> 0:01:22.480
<v Speaker 1>the regulator sued Crypto Exchange Finance for breaking securities rules

0:01:22.520 --> 0:01:26.319
<v Speaker 1>as well. SEC chair Gary Gensler has repeatedly argued that

0:01:26.640 --> 0:01:31.319
<v Speaker 1>most cryptotokens are subject to his agency's oversight. Is Gensler,

0:01:31.400 --> 0:01:33.960
<v Speaker 1>speaking earlier on Bloomberg, I think.

0:01:33.800 --> 0:01:36.040
<v Speaker 5>The crypto industry more broadly, if it's going to have

0:01:36.240 --> 0:01:40.319
<v Speaker 5>any success going forward, has to come into compliance with

0:01:40.560 --> 0:01:48.720
<v Speaker 5>basic public policy about disclosure, about avoiding conflicts, about segregating properly,

0:01:48.840 --> 0:01:53.440
<v Speaker 5>segregating customer funds, and guarding against fraud manipulation.

0:01:54.240 --> 0:01:57.360
<v Speaker 1>Gensler said the SEC worked with ten states to bring

0:01:57.400 --> 0:02:00.680
<v Speaker 1>its complaint against Coinbase, and he said that the agency's

0:02:00.680 --> 0:02:03.920
<v Speaker 1>efforts to clamp down on crypto are designed to protect

0:02:04.000 --> 0:02:08.760
<v Speaker 1>investors and the US market integrity. Gwenbe shares finished down

0:02:08.800 --> 0:02:10.200
<v Speaker 1>twelve percent in New York.

0:02:10.360 --> 0:02:12.880
<v Speaker 2>Well Brian teed it up a moment ago. The PGA

0:02:13.000 --> 0:02:16.240
<v Speaker 2>Tour and Saudi backed Live Golf have agreed to a

0:02:16.280 --> 0:02:19.760
<v Speaker 2>shocking merger. Now, under terms of this deal, the PGA Tour,

0:02:20.320 --> 0:02:23.120
<v Speaker 2>Live Golf and the dp World Tour, as well as

0:02:23.160 --> 0:02:26.760
<v Speaker 2>the European Golf Circuit, will combine their golf related businesses

0:02:27.080 --> 0:02:31.880
<v Speaker 2>and rights into a new commercial entity, VISA VI and LLC.

0:02:32.120 --> 0:02:36.320
<v Speaker 2>Now financial terms were not disclosed. Live has spent millions

0:02:36.360 --> 0:02:38.320
<v Speaker 2>trying to lure away some of the biggest players on

0:02:38.360 --> 0:02:42.120
<v Speaker 2>the PGA Tour, and this new accord will bring an

0:02:42.240 --> 0:02:45.880
<v Speaker 2>end to all litigation between both sides. We heard earlier

0:02:45.880 --> 0:02:47.680
<v Speaker 2>today from Bloomberg's Jason Kelly.

0:02:48.200 --> 0:02:51.000
<v Speaker 6>What happened is basically this was not going to be sustainable.

0:02:51.000 --> 0:02:53.799
<v Speaker 6>These were like blood rivals in a lot of ways,

0:02:54.280 --> 0:02:58.519
<v Speaker 6>lawsuits back and forth, and Live really put a dent,

0:02:58.800 --> 0:03:02.760
<v Speaker 6>at least sort of theoretically in what the PGA was doing.

0:03:03.200 --> 0:03:06.280
<v Speaker 6>Now they're going to come together and be really the

0:03:06.320 --> 0:03:08.720
<v Speaker 6>most dominant voices in golf.

0:03:08.800 --> 0:03:11.120
<v Speaker 2>That is Bloomberg's Jason Kelly. By the way, this deal

0:03:11.200 --> 0:03:14.720
<v Speaker 2>also marks a significant victory for Saudi Arabia, which backed

0:03:14.760 --> 0:03:18.480
<v Speaker 2>Live Golf through its sovereign wealth Fund. The kingdom is

0:03:18.600 --> 0:03:21.680
<v Speaker 2>now assured of having a prominent voice in a major

0:03:21.720 --> 0:03:25.280
<v Speaker 2>sport as it deploys oil riches to try to increase

0:03:25.400 --> 0:03:26.600
<v Speaker 2>its global influence.

0:03:26.840 --> 0:03:27.040
<v Speaker 4>Right.

0:03:27.919 --> 0:03:30.800
<v Speaker 1>This one was really a big surprise. I heard and

0:03:30.880 --> 0:03:33.399
<v Speaker 1>saw a lot of players quoted just saying no way,

0:03:33.919 --> 0:03:36.560
<v Speaker 1>they couldn't believe it. So how they kept it quiet

0:03:36.600 --> 0:03:37.440
<v Speaker 1>too is interesting.

0:03:37.920 --> 0:03:38.040
<v Speaker 4>Well.

0:03:38.120 --> 0:03:41.720
<v Speaker 1>Venture capital powerhouse Sequoia Capital said it is breaking up

0:03:41.760 --> 0:03:45.280
<v Speaker 1>into three distinct entities around the world. The company has

0:03:45.320 --> 0:03:49.480
<v Speaker 1>been an umbrella brand for three already largely independent ventures.

0:03:49.720 --> 0:03:52.320
<v Speaker 1>One is focused on China, another on the US in Europe,

0:03:52.520 --> 0:03:56.160
<v Speaker 1>and a third on India and Southeast Asia. Sequoya said

0:03:56.200 --> 0:03:59.320
<v Speaker 1>a future split would occur no later than the end

0:03:59.400 --> 0:04:02.640
<v Speaker 1>of March next year. We get more from Bloomberg'sed Ludlow.

0:04:03.000 --> 0:04:06.480
<v Speaker 7>What the partners of each regional unit said in the

0:04:06.520 --> 0:04:11.160
<v Speaker 7>statement is that they're running decentralized organizations with a centralized

0:04:11.200 --> 0:04:14.320
<v Speaker 7>back office and it just isn't making any sense, particularly

0:04:14.360 --> 0:04:17.880
<v Speaker 7>when you consider the competing policy standpoints of the United

0:04:17.920 --> 0:04:21.599
<v Speaker 7>States and China right now and the difficulty not just

0:04:21.640 --> 0:04:25.680
<v Speaker 7>the difficulty, but the debate around deploying US originated capital

0:04:26.200 --> 0:04:27.560
<v Speaker 7>into Chinese startups.

0:04:28.880 --> 0:04:31.800
<v Speaker 1>And when the split occurs, the Sequoya China business will

0:04:31.839 --> 0:04:35.040
<v Speaker 1>retain its existing name in Chinese and adopt the name

0:04:35.120 --> 0:04:40.160
<v Speaker 1>hong Shan in English. Suquoya India and Southeast Asia meanwhile

0:04:40.200 --> 0:04:44.760
<v Speaker 1>will become Peak fifteen Partners with fifteen in Roman numerals,

0:04:45.080 --> 0:04:47.960
<v Speaker 1>and the US and europe venture capital business will continue

0:04:48.000 --> 0:04:49.960
<v Speaker 1>to be known as Suquoya Capital.

0:04:50.160 --> 0:04:54.360
<v Speaker 2>Well, there is a new problem for America's largest aircraft manufacturer,

0:04:54.400 --> 0:04:56.520
<v Speaker 2>Bloomberg's tom Busby as More.

0:04:56.560 --> 0:04:59.880
<v Speaker 8>Bowing has to delay deliveries of its massive long range

0:05:00.000 --> 0:05:03.160
<v Speaker 8>seven eighty seven Dreamliner JED after finding flawed parts in

0:05:03.240 --> 0:05:06.919
<v Speaker 8>the horizontal stabilizer during production. That means it'll have to

0:05:06.960 --> 0:05:11.799
<v Speaker 8>inspect and repair if necessary, ninety already built Dreamliners waiting

0:05:11.839 --> 0:05:13.840
<v Speaker 8>to be delivered, as well as the ones now when

0:05:13.880 --> 0:05:17.320
<v Speaker 8>its assembly lines in South Carolina. It's the latest snafu

0:05:17.520 --> 0:05:20.479
<v Speaker 8>for Boeing's Dreamliner production at that aircraft shut down for

0:05:20.520 --> 0:05:24.320
<v Speaker 8>nearly two years after defects were found in how sections

0:05:24.360 --> 0:05:27.080
<v Speaker 8>of its fuselage were joined before it got the all

0:05:27.160 --> 0:05:31.440
<v Speaker 8>clear from the FAA last August. Tom Buzzby Bloomberg Daybreak Asia.

0:05:32.440 --> 0:05:35.680
<v Speaker 1>China's biggest banks have reportedly been asked by authorities to

0:05:35.800 --> 0:05:39.440
<v Speaker 1>lower their deposit rates. Bloomberg's Joan Wong has More.

0:05:39.720 --> 0:05:43.440
<v Speaker 9>Bank of China, ICBC and Bank of Communications were said

0:05:43.480 --> 0:05:46.039
<v Speaker 9>to be advised to cut rates on a range of products.

0:05:46.160 --> 0:05:49.239
<v Speaker 9>Sources say that includes on demand deposits by five basis

0:05:49.279 --> 0:05:52.400
<v Speaker 9>points and three year and five year time deposits by

0:05:52.440 --> 0:05:55.240
<v Speaker 9>at least ten basis points. Were told the cut may

0:05:55.320 --> 0:05:57.800
<v Speaker 9>happen as soon as this week, and this will be

0:05:57.839 --> 0:05:59.919
<v Speaker 9>the second time in less than a year a right

0:06:00.160 --> 0:06:02.240
<v Speaker 9>es have been seeking to do so lending to bolster

0:06:02.360 --> 0:06:05.760
<v Speaker 9>us lowing economy. Cutting deposit rates with lower costs for

0:06:05.839 --> 0:06:08.320
<v Speaker 9>the banks. In theory, that would allow them to reduce

0:06:08.400 --> 0:06:11.359
<v Speaker 9>lending rates over time, and by extension, it would be

0:06:11.400 --> 0:06:14.880
<v Speaker 9>more attractive for consumers and businesses to borrow. That said,

0:06:15.160 --> 0:06:18.680
<v Speaker 9>lower deposit rates would make it less attractive for ordinary

0:06:18.680 --> 0:06:21.440
<v Speaker 9>consumers to parks or cash at the banks in Hong Kong.

0:06:21.520 --> 0:06:23.599
<v Speaker 9>Joined one Bloomberg Day Brigasia.

0:06:23.720 --> 0:06:26.520
<v Speaker 1>I'm Brian Curtis along with Doug Krisner. Rashad Salama will

0:06:26.560 --> 0:06:29.440
<v Speaker 1>join us in a few moments. Cutting deposit rates by

0:06:29.480 --> 0:06:32.600
<v Speaker 1>five basis points doesn't sound too much, but demand deposits

0:06:32.600 --> 0:06:34.839
<v Speaker 1>only pay twenty five basis points at the moment, so

0:06:35.279 --> 0:06:37.000
<v Speaker 1>that's a step in a certain direction.

0:06:37.240 --> 0:06:38.160
<v Speaker 4>Doug. Yeah.

0:06:38.240 --> 0:06:41.760
<v Speaker 2>If you look at the weekly activity index from Bloomberg Economics,

0:06:41.800 --> 0:06:45.279
<v Speaker 2>if you consider the fact that things like car and

0:06:45.400 --> 0:06:49.719
<v Speaker 2>home sales, online searches for jobs, everything that we're seeing

0:06:49.800 --> 0:06:52.120
<v Speaker 2>right now in terms of high frequency data where China

0:06:52.200 --> 0:06:55.680
<v Speaker 2>is concerned, really indicating that the recovery has stalled or

0:06:55.680 --> 0:06:57.719
<v Speaker 2>did stall in the month of May. In fact, the

0:06:57.760 --> 0:07:01.640
<v Speaker 2>Bloomberg Weekly Activity Index brian and is back below levels

0:07:01.680 --> 0:07:04.000
<v Speaker 2>we saw in twenty nineteen. That seems hard to believe.

0:07:04.960 --> 0:07:07.560
<v Speaker 1>Yeah, and it's also interesting, is the same thing happening

0:07:07.560 --> 0:07:10.160
<v Speaker 1>in the United States, because it's also been a little

0:07:10.160 --> 0:07:13.760
<v Speaker 1>bit of a transition here of late. It's pretty early

0:07:14.120 --> 0:07:17.400
<v Speaker 1>in this strange phenomenon that has developed where you get

0:07:17.400 --> 0:07:21.080
<v Speaker 1>some cyclicals Doug playing ketchup to the s and P

0:07:21.160 --> 0:07:25.440
<v Speaker 1>five hundred. But it's definitely been happening in June. And

0:07:25.800 --> 0:07:28.400
<v Speaker 1>you know, it seems odd if the US economy is

0:07:28.480 --> 0:07:32.440
<v Speaker 1>actually slowing to the point where it could conceivably drift

0:07:32.520 --> 0:07:33.320
<v Speaker 1>into recession.

0:07:33.480 --> 0:07:35.760
<v Speaker 2>Yeah, and so what you're saying there reminds me of

0:07:35.760 --> 0:07:39.520
<v Speaker 2>a comment made today by the CEO of Apollo Global Management,

0:07:39.560 --> 0:07:42.160
<v Speaker 2>Mark Rowan. He was saying, the US is having a

0:07:42.240 --> 0:07:46.920
<v Speaker 2>non recession recession, so financial markets feel some pain while

0:07:47.000 --> 0:07:50.240
<v Speaker 2>the underlying economy does remain strong. Look at the employment

0:07:50.280 --> 0:07:52.080
<v Speaker 2>report that we had just last week.

0:07:52.720 --> 0:07:55.640
<v Speaker 1>Yeah, it's a very peculiar environment. It's not easy to

0:07:55.720 --> 0:07:58.720
<v Speaker 1>draw lessons from history. You can imagine that there's some

0:07:58.760 --> 0:08:03.320
<v Speaker 1>frustration creeping into investors who piled into short term treasuries

0:08:03.360 --> 0:08:05.440
<v Speaker 1>getting four and a half to five percent, And now

0:08:05.480 --> 0:08:09.280
<v Speaker 1>the Nasdaq one hundred has returned thirty three percent year today.

0:08:09.400 --> 0:08:11.800
<v Speaker 1>Now that's not just one stock, that's an index of

0:08:11.840 --> 0:08:15.360
<v Speaker 1>one hundred well known names. So if you've got bearish

0:08:15.400 --> 0:08:18.200
<v Speaker 1>and conservative, well you're not getting a lot of love

0:08:18.200 --> 0:08:19.440
<v Speaker 1>at your dinner party, now.

0:08:19.320 --> 0:08:19.560
<v Speaker 4>Are you.

0:08:20.560 --> 0:08:22.360
<v Speaker 2>And then you have the FED meeting next week. I

0:08:22.400 --> 0:08:24.720
<v Speaker 2>think the market right now is convinced that the FED

0:08:24.760 --> 0:08:29.280
<v Speaker 2>will go on hold, although create maybe an option, some

0:08:29.440 --> 0:08:32.280
<v Speaker 2>optionality for a rate hike later on this year. Today, though,

0:08:32.679 --> 0:08:35.360
<v Speaker 2>the former a vice chair of the FED, Richard Clarter,

0:08:35.480 --> 0:08:38.680
<v Speaker 2>was saying he's thinking it's unlikely that the FED will

0:08:38.720 --> 0:08:41.040
<v Speaker 2>begin cutting rates until twenty twenty four.

0:08:42.240 --> 0:08:44.000
<v Speaker 1>Yeah, that might be a good thing for the bulls,

0:08:44.000 --> 0:08:45.960
<v Speaker 1>you know, cutting rates, say in a few months, that

0:08:46.000 --> 0:08:48.760
<v Speaker 1>would send some bad signs.

0:08:48.800 --> 0:08:49.360
<v Speaker 10>I suppose.

0:08:49.760 --> 0:08:52.040
<v Speaker 1>All right, we are here at ten minutes past the hour.

0:08:52.520 --> 0:08:58.360
<v Speaker 1>It's time for global news reports emerging that high level

0:08:58.480 --> 0:09:01.480
<v Speaker 1>China US talks will happen in the coming weeks and

0:09:01.640 --> 0:09:03.520
<v Speaker 1>back to with Global News in the nine to sixty

0:09:03.600 --> 0:09:04.800
<v Speaker 1>newsroom in San Francisco.

0:09:04.960 --> 0:09:07.720
<v Speaker 3>And yeah, that's right, Brian, this is a US looks

0:09:07.720 --> 0:09:10.600
<v Speaker 3>to resume the high level talks. Bloomberg sources say he

0:09:10.679 --> 0:09:13.520
<v Speaker 3>will meet with other high level officials, Bloomberg's and Marie

0:09:13.520 --> 0:09:13.960
<v Speaker 3>hor Durn.

0:09:14.120 --> 0:09:17.280
<v Speaker 11>He'll be meeting with officials, likely his counterpart. But there's

0:09:17.320 --> 0:09:20.400
<v Speaker 11>also the possibility, and this would really be the win

0:09:20.480 --> 0:09:23.800
<v Speaker 11>for the Biden administration and potentially also as well for

0:09:24.000 --> 0:09:27.600
<v Speaker 11>the Chinese Communist Party, is he'll be meeting potentially possibly

0:09:28.080 --> 0:09:29.160
<v Speaker 11>with Shijing Ping.

0:09:29.679 --> 0:09:32.120
<v Speaker 3>Yeah, Ed Anne Marie says. The hope then, too is

0:09:32.160 --> 0:09:34.280
<v Speaker 3>that it will open the door for others. Others have

0:09:34.400 --> 0:09:38.000
<v Speaker 3>expressed desire to go, and of course Bloomberg's Wendy Benjaminson says,

0:09:38.040 --> 0:09:40.920
<v Speaker 3>the US has political implications as well.

0:09:40.800 --> 0:09:44.200
<v Speaker 12>Going into the election. I think it will be who

0:09:44.240 --> 0:09:47.480
<v Speaker 12>can be the most hawkish on China. But I also

0:09:47.480 --> 0:09:50.520
<v Speaker 12>think voters want to see a steady hand, responsible hand,

0:09:50.760 --> 0:09:54.240
<v Speaker 12>and not war, so they will they even if they're

0:09:54.280 --> 0:09:56.640
<v Speaker 12>being hawkish. I think they will try. The Democrats are

0:09:56.679 --> 0:09:59.640
<v Speaker 12>being hawkish. I think they will try to sound reasonable

0:09:59.679 --> 0:10:00.000
<v Speaker 12>and resent.

0:10:00.840 --> 0:10:04.320
<v Speaker 3>Yeah, so coming weeks, they say. Both Ukraine and Russia

0:10:04.320 --> 0:10:06.840
<v Speaker 3>are blaming each other for the breach of the Novakoki

0:10:06.880 --> 0:10:10.000
<v Speaker 3>of A dam and the Dnepro River. It threatens power

0:10:10.040 --> 0:10:14.920
<v Speaker 3>supplies and also the Zappaforia nuclear power plant nearby. National

0:10:14.960 --> 0:10:18.560
<v Speaker 3>Security Coordinator John Kirby says that US is definitely watching.

0:10:18.640 --> 0:10:22.080
<v Speaker 11>You know, there are casualties, including likely many deaths, though

0:10:22.080 --> 0:10:25.079
<v Speaker 11>these are early reports and we cannot quantify them right now.

0:10:25.280 --> 0:10:27.600
<v Speaker 3>Yes, leaves more for Ukraine to manage well in the

0:10:27.600 --> 0:10:30.800
<v Speaker 3>midst of a counter offensive. House Speaker Kevin McCarthy meanwhile,

0:10:30.800 --> 0:10:34.200
<v Speaker 3>as opposed to push by fellow Republican Hawks to expedite

0:10:34.240 --> 0:10:36.839
<v Speaker 3>more funding for Ukraine. He also says he will block

0:10:36.880 --> 0:10:39.520
<v Speaker 3>any bill that undercuts the new caps on US spending.

0:10:39.800 --> 0:10:42.240
<v Speaker 3>He says he has not ruled out further funding, that

0:10:42.320 --> 0:10:45.200
<v Speaker 3>there is no need for a rush, and President Joe

0:10:45.200 --> 0:10:47.440
<v Speaker 3>Biden heading into a cabinet meeting today.

0:10:47.600 --> 0:10:50.880
<v Speaker 13>Today we're going to discuss the progress for making investing

0:10:50.880 --> 0:10:54.319
<v Speaker 13>in America and the steps each agency around the table

0:10:54.360 --> 0:10:57.679
<v Speaker 13>here is taken to build on that progress and finish

0:10:57.760 --> 0:10:58.120
<v Speaker 13>the job.

0:10:58.160 --> 0:10:59.920
<v Speaker 3>Because we're not finished yet. We have more to do,

0:11:00.360 --> 0:11:02.680
<v Speaker 3>and that's the US. He says that there will be

0:11:02.800 --> 0:11:06.160
<v Speaker 3>continued support for Ukraine as well, and on a much

0:11:06.559 --> 0:11:13.960
<v Speaker 3>lighter note, the President. Over the golf weekend, Yeah, PGA Live,

0:11:14.080 --> 0:11:17.040
<v Speaker 3>mister President. A former in New Jersey governor Chris Christi

0:11:17.120 --> 0:11:19.720
<v Speaker 3>will formally announce his run for President's schedule for about

0:11:19.920 --> 0:11:22.640
<v Speaker 3>half an hour in New Hampshire. He has taken out

0:11:22.640 --> 0:11:26.440
<v Speaker 3>the papers. Republican strategist in Bloomberg contributor Lisa Cabuso Miller

0:11:26.800 --> 0:11:30.160
<v Speaker 3>says Christie brings something new. He will not be afraid

0:11:30.200 --> 0:11:32.040
<v Speaker 3>to go after Donald Trump.

0:11:32.040 --> 0:11:34.520
<v Speaker 10>He really does cut through a lot of that nonsense

0:11:34.880 --> 0:11:37.840
<v Speaker 10>and calls up what the facts really are and that

0:11:37.960 --> 0:11:40.320
<v Speaker 10>I think of all the strategists that I see on

0:11:40.400 --> 0:11:43.640
<v Speaker 10>these campaigns, the team that he is assembling are amongst

0:11:43.720 --> 0:11:47.080
<v Speaker 10>the best Republican operatives I know. They are some of

0:11:47.120 --> 0:11:49.840
<v Speaker 10>the sharpest. They know how to build a campaign in

0:11:49.840 --> 0:11:52.280
<v Speaker 10>a way that others perhaps haven't in the past.

0:11:52.559 --> 0:11:54.480
<v Speaker 3>Christie putting a lot of chips in a good showing

0:11:54.480 --> 0:11:57.480
<v Speaker 3>in New Hampshire, and China's cracked down to entertainment even

0:11:57.840 --> 0:12:00.640
<v Speaker 3>now hit the gay Pride events, first wave of last

0:12:00.720 --> 0:12:04.400
<v Speaker 3>mint of concert cancelations and gathering started last month continuing

0:12:04.480 --> 0:12:07.240
<v Speaker 3>now Global News powered by more than twenty seven hundred

0:12:07.320 --> 0:12:09.800
<v Speaker 3>journalists and analysts in over one hundred and twenty countries.

0:12:10.040 --> 0:12:13.239
<v Speaker 3>In San Francisco, I'm Ed Baxter, and this is Bloomberg.

0:12:13.480 --> 0:12:16.640
<v Speaker 1>I'm Brian Curtis in Hong Kong, along with Rashad Salamat,

0:12:16.679 --> 0:12:19.640
<v Speaker 1>and our guest is Ann Maletti, head of Active Equity

0:12:19.720 --> 0:12:23.880
<v Speaker 1>at all Spring Global Investments. And so looking at the

0:12:23.960 --> 0:12:26.640
<v Speaker 1>Wall Street here, we're not exactly performing like a bull

0:12:26.720 --> 0:12:30.800
<v Speaker 1>market given some of the inner metrics, but then not

0:12:30.880 --> 0:12:34.440
<v Speaker 1>exactly like a bear market either. Of twenty percent over

0:12:34.520 --> 0:12:38.040
<v Speaker 1>seven eight months and higher lows every time we get

0:12:38.080 --> 0:12:40.840
<v Speaker 1>a dip. How do you see things moving here over

0:12:40.840 --> 0:12:43.080
<v Speaker 1>the next three to nine months.

0:12:43.400 --> 0:12:46.360
<v Speaker 14>Well, I think you ask a really important question. It

0:12:46.440 --> 0:12:51.120
<v Speaker 14>is a confusing market for many investors today, and I

0:12:51.160 --> 0:12:54.839
<v Speaker 14>think what we're doing is really looking bottom up and

0:12:54.960 --> 0:12:57.400
<v Speaker 14>looking at company by company and trying to find the

0:12:57.400 --> 0:13:01.960
<v Speaker 14>best opportunities out there. And they do, but you have

0:13:02.040 --> 0:13:05.040
<v Speaker 14>to look carefully, as you suggest it. Those companies at

0:13:05.040 --> 0:13:08.000
<v Speaker 14>the top, some would call them the magnificence in seven

0:13:08.600 --> 0:13:13.760
<v Speaker 14>have really taken the news by storm and really controlled

0:13:13.760 --> 0:13:15.000
<v Speaker 14>the narrative those are.

0:13:15.160 --> 0:13:17.400
<v Speaker 1>Sure, but I know, I know people really think that.

0:13:17.480 --> 0:13:20.440
<v Speaker 1>That's why I mentioned NASTAC one hundred itself isteen thirty

0:13:20.480 --> 0:13:23.240
<v Speaker 1>three percent, So you know that's that is that is

0:13:23.320 --> 0:13:26.520
<v Speaker 1>itself dominated by those name But still you can buy

0:13:26.559 --> 0:13:27.760
<v Speaker 1>the cues easy.

0:13:27.800 --> 0:13:31.120
<v Speaker 14>You can. And I do think what we're seeing is

0:13:31.400 --> 0:13:35.240
<v Speaker 14>when you even ignore the large cap tech names, there

0:13:35.400 --> 0:13:39.480
<v Speaker 14>is a lot of interesting companies that are performing underneath.

0:13:39.559 --> 0:13:43.959
<v Speaker 14>And really what's Brian, what's most interesting is that instead

0:13:44.000 --> 0:13:49.600
<v Speaker 14>of being driven by just Macro twenty twenty three, stocks

0:13:49.640 --> 0:13:53.720
<v Speaker 14>are moving because of fundamentals, and that's really important and

0:13:53.760 --> 0:13:57.360
<v Speaker 14>it actually bodes well for stock pickers and active management

0:13:57.760 --> 0:14:00.480
<v Speaker 14>and our and our teams are doing really while this

0:14:00.559 --> 0:14:01.439
<v Speaker 14>year because of that.

0:14:02.640 --> 0:14:05.160
<v Speaker 15>Yeah, and this brings U nicey to talk about. How

0:14:05.400 --> 0:14:08.440
<v Speaker 15>do you think that earnings are being reflected in the

0:14:08.480 --> 0:14:11.079
<v Speaker 15>stock prices and do you think that the outlook for

0:14:11.120 --> 0:14:13.600
<v Speaker 15>the second half of this year is looking rather optimistic?

0:14:14.000 --> 0:14:18.200
<v Speaker 14>Well, you know, I think we do have some challenges ahead,

0:14:18.360 --> 0:14:21.440
<v Speaker 14>and we've seen some of the challenges throughout this earning cycle.

0:14:22.280 --> 0:14:25.400
<v Speaker 14>It wasn't easy for everyone. We've seen some margin compression,

0:14:25.520 --> 0:14:29.120
<v Speaker 14>we've seen some blips, and that's why it's not the

0:14:29.200 --> 0:14:32.320
<v Speaker 14>right time to own everything. It's the time to be

0:14:32.400 --> 0:14:36.520
<v Speaker 14>really selective. Some companies are going to see continued challenges

0:14:36.560 --> 0:14:40.760
<v Speaker 14>ahead and continued margin pressures. Others will be able to

0:14:40.840 --> 0:14:43.880
<v Speaker 14>thrive and survive in this type of environment. But I

0:14:43.920 --> 0:14:48.080
<v Speaker 14>think Forshad, You're right, I see more clouds in the

0:14:48.120 --> 0:14:52.200
<v Speaker 14>sky and potentially storms ahead, and so investors are going

0:14:52.240 --> 0:14:55.400
<v Speaker 14>to have to continue to be very, very thoughtful and

0:14:55.480 --> 0:14:58.000
<v Speaker 14>careful about the names that they are investing in.

0:14:58.960 --> 0:15:01.960
<v Speaker 1>It's tempting to think that you have this one big

0:15:02.000 --> 0:15:06.040
<v Speaker 1>story of artificial intelligence that is so big. I mean

0:15:06.760 --> 0:15:10.080
<v Speaker 1>it's like if you look at three big waves, the Internet,

0:15:10.320 --> 0:15:14.160
<v Speaker 1>then mobile and cloud as the second one, and now AI.

0:15:14.760 --> 0:15:17.000
<v Speaker 1>Is it big enough that it kind of changes the

0:15:17.040 --> 0:15:19.920
<v Speaker 1>story going forward? And maybe, you know, if we didn't

0:15:19.920 --> 0:15:21.560
<v Speaker 1>have the market telling us this, we might think we're

0:15:21.600 --> 0:15:23.960
<v Speaker 1>drifting into recessions. So you know, make sure you have

0:15:24.000 --> 0:15:27.200
<v Speaker 1>strong umbrella. But now you've got, you know, this kind

0:15:27.240 --> 0:15:29.440
<v Speaker 1>of winning product that could change everything about the way

0:15:29.480 --> 0:15:32.720
<v Speaker 1>the companies can do business, lower costs, improve their margins

0:15:32.760 --> 0:15:33.200
<v Speaker 1>and such.

0:15:34.160 --> 0:15:35.960
<v Speaker 14>Yeah, I do you know, when I talk to our

0:15:35.960 --> 0:15:42.600
<v Speaker 14>investment professionals, it is clear that regenitive, regenitive AI. It's

0:15:42.600 --> 0:15:46.040
<v Speaker 14>a real thing. This is not something that is going

0:15:46.080 --> 0:15:50.640
<v Speaker 14>to go away overnight. That being said, it's not something

0:15:50.680 --> 0:15:54.960
<v Speaker 14>that's going to change every company overnight. Either these things happen.

0:15:55.240 --> 0:15:57.560
<v Speaker 14>It's not a smooth path. There's bumps along the road,

0:15:58.280 --> 0:16:03.160
<v Speaker 14>and it changes the competitive landscape, which means there's going

0:16:03.200 --> 0:16:05.400
<v Speaker 14>to be winners and there's going to be losers, and

0:16:05.480 --> 0:16:09.520
<v Speaker 14>so it creates a lot more work and a lot

0:16:09.560 --> 0:16:12.840
<v Speaker 14>more analysis to try to pick through who can be

0:16:12.920 --> 0:16:15.120
<v Speaker 14>the winners and who are going to be the losers.

0:16:15.160 --> 0:16:17.000
<v Speaker 14>And so don't expect it to be a smooth path.

0:16:18.160 --> 0:16:21.880
<v Speaker 15>I just asks your chat GBT, who's.

0:16:21.000 --> 0:16:26.680
<v Speaker 14>Surely I would love to know the answer exactly.

0:16:27.360 --> 0:16:31.280
<v Speaker 1>But I just said, everybody's going to have chat, GPT

0:16:31.520 --> 0:16:34.440
<v Speaker 1>or some sort of form of AI as their personal advisor,

0:16:35.000 --> 0:16:37.640
<v Speaker 1>and it's going to tell you everything about how to

0:16:38.400 --> 0:16:43.520
<v Speaker 1>improve things that you do. Every day you google it,

0:16:43.960 --> 0:16:46.160
<v Speaker 1>you know, you get ten twenty thirty things you have

0:16:46.200 --> 0:16:47.880
<v Speaker 1>to read through, and then you have to piece together

0:16:47.920 --> 0:16:49.880
<v Speaker 1>and you have to compare and then finally come to

0:16:49.920 --> 0:16:51.760
<v Speaker 1>a decision. Now somebody's going to do that for you.

0:16:51.960 --> 0:16:57.040
<v Speaker 14>It's going to disintermediate, disintermediate a lot of businesses but

0:16:57.120 --> 0:17:00.680
<v Speaker 14>it's not going to replace many others. Who is still

0:17:00.720 --> 0:17:02.600
<v Speaker 14>going to come and do the plumbing in your house,

0:17:02.720 --> 0:17:04.879
<v Speaker 14>Who's going to do the electrical work in your house?

0:17:05.080 --> 0:17:07.760
<v Speaker 14>You know, I mean when we talk about AI, it's

0:17:07.760 --> 0:17:10.000
<v Speaker 14>going to add a lot of efficiency to a lot

0:17:10.040 --> 0:17:14.479
<v Speaker 14>of businesses, but it's not going to replace everything. And

0:17:14.520 --> 0:17:18.080
<v Speaker 14>again I'm talking about, you know, some very specific trades.

0:17:18.160 --> 0:17:22.080
<v Speaker 14>But if it's just an easy way to think about it,

0:17:22.080 --> 0:17:25.320
<v Speaker 14>it's not going to change everything overnight. I even think

0:17:25.320 --> 0:17:28.760
<v Speaker 14>about the asset management business. It can create a lot

0:17:28.800 --> 0:17:32.399
<v Speaker 14>of efficiencies in certain business models, maybe back in the

0:17:32.400 --> 0:17:36.560
<v Speaker 14>operational side, et cetera. But is chat GDP really going

0:17:36.600 --> 0:17:38.600
<v Speaker 14>to be able to pick stocks better than our active

0:17:38.640 --> 0:17:42.320
<v Speaker 14>management better than our active managers? Probably not in the

0:17:42.320 --> 0:17:44.520
<v Speaker 14>first couple of years at least, right And it's still

0:17:44.560 --> 0:17:49.200
<v Speaker 14>is going to take human beings to teach, you know,

0:17:49.640 --> 0:17:52.680
<v Speaker 14>the AI to be able to do this over.

0:17:52.520 --> 0:17:55.440
<v Speaker 15>Time, it seems to and that you and just go

0:17:55.600 --> 0:17:57.359
<v Speaker 15>back to your strategy here as well, that you know,

0:17:57.400 --> 0:18:00.679
<v Speaker 15>you're more sort of bottom up than top down, So

0:18:01.320 --> 0:18:03.280
<v Speaker 15>what do you look for and what have you been

0:18:03.320 --> 0:18:05.639
<v Speaker 15>buying that? And are probably not going to be stock specific,

0:18:05.680 --> 0:18:07.200
<v Speaker 15>but give us an idea of the industry groups.

0:18:07.280 --> 0:18:09.480
<v Speaker 14>Yeah, well, one of the things, you know, we started

0:18:09.480 --> 0:18:14.440
<v Speaker 14>the conversation by you know, some very large groups really

0:18:14.440 --> 0:18:16.840
<v Speaker 14>controlling a big part of the market. And you know,

0:18:16.840 --> 0:18:19.840
<v Speaker 14>if you just take for example, you know, Apple's market cap,

0:18:20.680 --> 0:18:24.359
<v Speaker 14>it's approaching three trillion dollars, I know, something everybody's talking

0:18:24.400 --> 0:18:27.800
<v Speaker 14>a lot about. If you take the entire Russell two

0:18:27.840 --> 0:18:32.280
<v Speaker 14>thousand index, that index is less than the market cap

0:18:32.680 --> 0:18:36.040
<v Speaker 14>of Apple today, and so if you look at all

0:18:36.080 --> 0:18:38.720
<v Speaker 14>of the names underneath that, so kind of the small

0:18:38.960 --> 0:18:40.840
<v Speaker 14>and mid cap space, I think there's a lot of

0:18:40.840 --> 0:18:44.639
<v Speaker 14>opportunities still for investors there. I do think even the

0:18:44.680 --> 0:18:48.359
<v Speaker 14>emerging markets are a place that have underperformed for a

0:18:48.480 --> 0:18:51.320
<v Speaker 14>very long time. I know there's a lot of discussion

0:18:51.400 --> 0:18:53.720
<v Speaker 14>around whether the US is the best place to be

0:18:54.080 --> 0:18:58.439
<v Speaker 14>or not, but I do believe there's many emerging markets

0:18:58.480 --> 0:19:01.600
<v Speaker 14>that are offering good risk reward here. And when I

0:19:01.600 --> 0:19:05.600
<v Speaker 14>talk to our investment teams that manage those markets. Given

0:19:05.640 --> 0:19:08.960
<v Speaker 14>the stability of the dollar and some pressure with the

0:19:09.000 --> 0:19:12.080
<v Speaker 14>dollar that we've seen this year, I do think that

0:19:12.080 --> 0:19:14.960
<v Speaker 14>that could be another opportunity place to invest.

0:19:16.000 --> 0:19:18.320
<v Speaker 1>Just thirty seconds on China.

0:19:17.760 --> 0:19:20.000
<v Speaker 14>You know, I you know, I know, I heard you

0:19:20.080 --> 0:19:23.119
<v Speaker 14>earlier talking about the Chinese banks. I do think that

0:19:23.280 --> 0:19:27.359
<v Speaker 14>is a sign that the government's a little bit worried

0:19:27.440 --> 0:19:31.119
<v Speaker 14>about the uneven recovery that they've seen there, and so

0:19:31.680 --> 0:19:33.920
<v Speaker 14>it is right, I think, to be a little bit

0:19:33.960 --> 0:19:37.200
<v Speaker 14>cautious about China. But they're headed in the right direction

0:19:37.359 --> 0:19:39.919
<v Speaker 14>by adding that stimulus. We're not going to see the

0:19:39.920 --> 0:19:42.560
<v Speaker 14>same kind of stimulus that we get here, but it's

0:19:42.560 --> 0:19:43.240
<v Speaker 14>the right direction.

0:19:44.600 --> 0:19:47.440
<v Speaker 1>This is Bloomberg Daybreak Asia, your morning brief on the

0:19:47.560 --> 0:19:51.120
<v Speaker 1>story's making news from Hong Kong to Singapore and Wall Street.

0:19:51.200 --> 0:19:55.200
<v Speaker 2>Look for us on your podcast feed every day, on Apple, Spotify,

0:19:55.440 --> 0:19:57.440
<v Speaker 2>and anywhere else you get your podcast.

0:19:57.800 --> 0:20:00.480
<v Speaker 1>You can also listen live each day on bloom eleven

0:20:00.520 --> 0:20:02.840
<v Speaker 1>three to zero in New York, Bloomberg ninety nine to

0:20:02.880 --> 0:20:06.120
<v Speaker 1>one in Washington, Bloomberg one oh sixty one in Boston,

0:20:06.400 --> 0:20:08.879
<v Speaker 1>and Bloomberg nine sixty in San Francisco.

0:20:09.200 --> 0:20:12.120
<v Speaker 2>Our flagship New York station is also available on your

0:20:12.160 --> 0:20:17.240
<v Speaker 2>Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.

0:20:17.080 --> 0:20:20.240
<v Speaker 1>Plus listen coast to coast on the Bloomberg Business app.

0:20:20.560 --> 0:20:24.720
<v Speaker 1>Sirius XM Channel one nineteen. The iHeartRadio app and on

0:20:24.800 --> 0:20:27.880
<v Speaker 1>Bloomberg dot Com. I'm Brian Curtis.

0:20:27.600 --> 0:20:30.040
<v Speaker 2>And I'm Doug Chrisner. Join us again tomorrow for all

0:20:30.080 --> 0:20:32.560
<v Speaker 2>the news you need to start your day right here

0:20:32.640 --> 0:20:35.520
<v Speaker 2>on Bloomberg Daybreak Asia