1 00:00:02,480 --> 00:00:06,800 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:10,080 --> 00:00:13,800 Speaker 2: This is the Bloomberg Daybreak Asia podcast. I'm Brian Curtis, 3 00:00:13,880 --> 00:00:16,599 Speaker 2: along with Doug Krisner join us each day for the 4 00:00:16,640 --> 00:00:20,000 Speaker 2: stories making news and moving markets in the Asia Pacific. 5 00:00:20,239 --> 00:00:22,640 Speaker 2: You can subscribe to the show anywhere you get your 6 00:00:22,680 --> 00:00:26,600 Speaker 2: podcasts and always on Bloomberg Radio, the Bloomberg Terminal, and 7 00:00:26,680 --> 00:00:30,120 Speaker 2: the Bloomberg Business App. Joining us on the program is 8 00:00:30,160 --> 00:00:34,400 Speaker 2: Andrew Giuliani, former special assistant to former President Donald Trump 9 00:00:34,640 --> 00:00:38,080 Speaker 2: and former candidate for Governor of New York, to talk 10 00:00:38,120 --> 00:00:41,960 Speaker 2: a little bit more about the current state of play. Well, 11 00:00:42,440 --> 00:00:45,239 Speaker 2: mister Giuliani, thank you so much for joining us right 12 00:00:45,280 --> 00:00:48,280 Speaker 2: off the ball Let's talk about the vice presidential selection. 13 00:00:48,680 --> 00:00:51,520 Speaker 2: What does jd. Vance bring to the ticket in your view? 14 00:00:52,840 --> 00:00:54,480 Speaker 3: I think it's a look right at the rust belt. 15 00:00:54,480 --> 00:00:57,600 Speaker 4: I mean, obviously the senator the Junior Center from Ohio 16 00:00:58,360 --> 00:01:01,040 Speaker 4: carried Ohio was able to win that state. But as 17 00:01:01,080 --> 00:01:05,200 Speaker 4: we know, Pennsylvania, Michigan, Wisconsin, all three states the President 18 00:01:05,200 --> 00:01:08,880 Speaker 4: Trump won in twenty sixteen went Biden's way in twenty twenty, 19 00:01:08,920 --> 00:01:11,000 Speaker 4: and there are three swing states that are going to 20 00:01:11,040 --> 00:01:14,040 Speaker 4: be very very important to determining who wins the presidency 21 00:01:14,160 --> 00:01:16,960 Speaker 4: on November fifth, You have to think that jd Vance 22 00:01:17,000 --> 00:01:20,640 Speaker 4: speaks directly to most of the residents of those three states, 23 00:01:20,640 --> 00:01:22,880 Speaker 4: including his home state of Ohio, which should be in 24 00:01:22,920 --> 00:01:25,759 Speaker 4: the red column but has been a swing states recently 25 00:01:25,800 --> 00:01:28,839 Speaker 4: as twenty twelve. So when you look at the math 26 00:01:28,959 --> 00:01:31,760 Speaker 4: of the electoral map, I think that's exactly what the 27 00:01:31,800 --> 00:01:34,000 Speaker 4: Trump team was doing when they selected jd. 28 00:01:34,120 --> 00:01:34,440 Speaker 3: Vance. 29 00:01:34,880 --> 00:01:37,960 Speaker 2: So it's a good blue collar pick. What about his age? 30 00:01:38,040 --> 00:01:41,679 Speaker 2: Does jd Vance's age lift a former President Trump's chances? 31 00:01:42,680 --> 00:01:43,320 Speaker 3: Yeah? It may. 32 00:01:43,400 --> 00:01:46,280 Speaker 4: I mean, look, there's been so much talk, probably more 33 00:01:46,319 --> 00:01:49,680 Speaker 4: about Biden, but also about President Trump as well, with 34 00:01:49,800 --> 00:01:53,520 Speaker 4: them being eighty one and seventy eight years old, respectfully, 35 00:01:54,120 --> 00:01:56,280 Speaker 4: I think you get some youth on this ticket, and 36 00:01:56,320 --> 00:01:58,440 Speaker 4: it changes it a little bit in terms of what 37 00:01:58,520 --> 00:02:01,040 Speaker 4: does that conversation like now. I know you'll have other 38 00:02:01,040 --> 00:02:03,240 Speaker 4: people that will say, well, look, this is somebody who's 39 00:02:03,240 --> 00:02:05,280 Speaker 4: only served a year and a half in the Senate here, 40 00:02:05,560 --> 00:02:08,520 Speaker 4: somebody who's young, maybe a little bit inexperienced in some 41 00:02:08,600 --> 00:02:10,840 Speaker 4: kind of way, but he's also somebody that is connected 42 00:02:11,160 --> 00:02:14,640 Speaker 4: with the American people, the American masses, through his book, 43 00:02:14,760 --> 00:02:17,600 Speaker 4: through his Senate run in a way that I think 44 00:02:17,600 --> 00:02:21,480 Speaker 4: most politicians have not on a national level. And having 45 00:02:21,520 --> 00:02:24,560 Speaker 4: talked to President Trump just as recently as yesterday, I 46 00:02:24,600 --> 00:02:26,880 Speaker 4: know that something that he was really really looking at 47 00:02:26,919 --> 00:02:29,600 Speaker 4: as he was trying to make his final selection here 48 00:02:29,639 --> 00:02:32,079 Speaker 4: for who was going to join him on the presidential ticket. 49 00:02:32,320 --> 00:02:35,160 Speaker 2: After the attempt at assassination of Donald Trump. But we've 50 00:02:35,160 --> 00:02:40,320 Speaker 2: seen calls from many quarters throughout the country towards seeking 51 00:02:40,360 --> 00:02:45,679 Speaker 2: seeking more unity in the country, coming together as one America. 52 00:02:45,840 --> 00:02:48,640 Speaker 2: Do you see these two President Trump and former President 53 00:02:48,680 --> 00:02:52,120 Speaker 2: Trump and Jade Vance as calling for more unity here 54 00:02:52,680 --> 00:02:55,840 Speaker 2: or kind of going back to sort of tear the 55 00:02:55,880 --> 00:02:57,760 Speaker 2: house down type of ideology. 56 00:02:58,960 --> 00:03:01,720 Speaker 4: Well, look, I unity, but I also think answers are 57 00:03:01,800 --> 00:03:06,000 Speaker 4: very important. I don't want unity to lead to ignorance, 58 00:03:06,040 --> 00:03:08,320 Speaker 4: if you will. In terms of the answers that my 59 00:03:08,480 --> 00:03:10,880 Speaker 4: Orchis was talking about, I want to make sure that 60 00:03:10,960 --> 00:03:14,040 Speaker 4: I know exactly what happened in these security ellapses. Have 61 00:03:14,120 --> 00:03:16,760 Speaker 4: to have a shooter one hundred and twenty five meters 62 00:03:16,800 --> 00:03:19,960 Speaker 4: away when the longest shots ever made have been thirty 63 00:03:20,000 --> 00:03:23,960 Speaker 4: times that length. That's something that I sat through hundreds 64 00:03:24,000 --> 00:03:27,320 Speaker 4: of White House security briefings looking at high points that 65 00:03:27,360 --> 00:03:30,680 Speaker 4: were outside of security perimeters to make sure that the 66 00:03:30,720 --> 00:03:33,720 Speaker 4: president was safe even if it was outside of the. 67 00:03:33,639 --> 00:03:35,120 Speaker 3: Secret Service security perimeter. 68 00:03:35,200 --> 00:03:38,080 Speaker 4: So I think we need answers to exactly what ended 69 00:03:38,160 --> 00:03:41,520 Speaker 4: up happening on that day. And frankly, I also think 70 00:03:41,560 --> 00:03:43,680 Speaker 4: this needs to go both ways. Joe Biden needs to 71 00:03:43,680 --> 00:03:45,640 Speaker 4: have a better answer for why he said just a 72 00:03:45,680 --> 00:03:48,520 Speaker 4: few short days ago Donald Trump needs to be in 73 00:03:48,560 --> 00:03:50,880 Speaker 4: the bullseye. I don't think his answer to Lester Holt 74 00:03:50,880 --> 00:03:53,960 Speaker 4: today was adequate. 75 00:03:54,760 --> 00:03:57,560 Speaker 2: Even the way the former president was moved to the 76 00:03:57,680 --> 00:04:03,560 Speaker 2: van after the shooter down that presupposes there was only 77 00:04:03,600 --> 00:04:06,600 Speaker 2: one shooter. And you wonder, you know, we have lots 78 00:04:06,600 --> 00:04:09,680 Speaker 2: of columns getting written like the motive of the shooter 79 00:04:09,760 --> 00:04:13,800 Speaker 2: is irrelevant, Francis Wilkinson, for instance, writes in our own 80 00:04:13,800 --> 00:04:16,120 Speaker 2: pages here at Bloomberg. But it does sort of raise 81 00:04:16,160 --> 00:04:19,360 Speaker 2: the question as to who else might have been involved. 82 00:04:19,680 --> 00:04:21,760 Speaker 2: Do we have any sense of that? And do you 83 00:04:21,839 --> 00:04:22,480 Speaker 2: fear that. 84 00:04:23,880 --> 00:04:24,240 Speaker 3: Right now? 85 00:04:24,279 --> 00:04:27,280 Speaker 4: We don't, And I think that's the problem. I think 86 00:04:27,440 --> 00:04:30,720 Speaker 4: we need answers as soon as possible on this. We 87 00:04:30,760 --> 00:04:34,520 Speaker 4: can't allow theories to win the day, right. You want 88 00:04:34,560 --> 00:04:37,480 Speaker 4: facts to be able to look at this stuff because frankly, 89 00:04:37,560 --> 00:04:39,479 Speaker 4: this is going to be President Trump is going to 90 00:04:39,480 --> 00:04:41,800 Speaker 4: be going out and doing rallies, maybe as soon as 91 00:04:41,800 --> 00:04:44,880 Speaker 4: this weekend. And you think about same thing for Biden 92 00:04:44,920 --> 00:04:47,960 Speaker 4: as well, and RFK Junior. These candidates, they deserve to 93 00:04:47,960 --> 00:04:50,440 Speaker 4: be protective. If we believe in the First Amendment in 94 00:04:50,480 --> 00:04:53,400 Speaker 4: this country, then the public square needs to be safe, 95 00:04:53,960 --> 00:04:57,119 Speaker 4: whether it's red, whether it's blue, whatever it is there. 96 00:04:57,200 --> 00:04:59,920 Speaker 3: So well, let's hope right now, it's just theories. 97 00:05:00,440 --> 00:05:02,640 Speaker 2: Let's hope this was the one often that they will 98 00:05:02,680 --> 00:05:07,440 Speaker 2: be safe. I'm curious about whether or not you think 99 00:05:07,480 --> 00:05:10,839 Speaker 2: that it will be different this time in terms of 100 00:05:11,080 --> 00:05:14,440 Speaker 2: former President Trump's aides, because one of the things that 101 00:05:14,480 --> 00:05:17,279 Speaker 2: we noticed obviously in the prior administration was that so 102 00:05:17,360 --> 00:05:19,640 Speaker 2: many of his aides eventually left either of their own 103 00:05:19,720 --> 00:05:24,320 Speaker 2: volition or they were booted out by former President Trump. 104 00:05:24,720 --> 00:05:26,200 Speaker 2: Will JD. Vance be any different? 105 00:05:28,440 --> 00:05:28,960 Speaker 3: I think so. 106 00:05:29,120 --> 00:05:31,160 Speaker 4: I mean, I think this is a guy who, obviously, 107 00:05:31,200 --> 00:05:33,240 Speaker 4: as of eight years ago, he was not the biggest 108 00:05:33,240 --> 00:05:35,000 Speaker 4: fan of Trump, and I'm sure you guys have run 109 00:05:35,080 --> 00:05:37,839 Speaker 4: through some of the stuff that he has said, but 110 00:05:37,920 --> 00:05:40,680 Speaker 4: he's a guy who was really won over, I think 111 00:05:40,760 --> 00:05:42,520 Speaker 4: to the Trump world by the. 112 00:05:42,480 --> 00:05:44,359 Speaker 3: Policies, by the policy successes. 113 00:05:44,400 --> 00:05:47,080 Speaker 4: Maybe he didn't fall in love necessarily with the Twitter 114 00:05:47,120 --> 00:05:49,560 Speaker 4: feed and the current ex feed and truth feed at 115 00:05:49,600 --> 00:05:52,839 Speaker 4: the time, but was won over by the policies. I 116 00:05:52,880 --> 00:05:55,920 Speaker 4: think that shows me somebody who was able to keep 117 00:05:55,960 --> 00:05:58,440 Speaker 4: an open mind even though he came in as so 118 00:05:58,520 --> 00:06:03,359 Speaker 4: called never Trumper, and realize that this president, while he 119 00:06:03,440 --> 00:06:06,719 Speaker 4: may have a unique style, he's able to accomplish things 120 00:06:06,760 --> 00:06:10,159 Speaker 4: that maybe a typical politician is not able to accomplish. 121 00:06:10,240 --> 00:06:12,480 Speaker 4: And I think you could just look at the successes 122 00:06:12,520 --> 00:06:14,680 Speaker 4: of the forty fifth president and compare it to the 123 00:06:14,680 --> 00:06:15,599 Speaker 4: forty sixth president. 124 00:06:15,720 --> 00:06:17,120 Speaker 3: Let's talk about foreign policy. 125 00:06:17,240 --> 00:06:19,000 Speaker 4: If you talk about the two foreign wars that have 126 00:06:19,040 --> 00:06:22,200 Speaker 4: started under Joe Biden, with Trump, you saw peace through strength. 127 00:06:22,240 --> 00:06:24,159 Speaker 4: You can talk about the economy as well. You cover 128 00:06:24,240 --> 00:06:27,400 Speaker 4: that very very well every single day. I think the 129 00:06:27,400 --> 00:06:31,040 Speaker 4: success of the Trump administration from a deregulatory standpoint was 130 00:06:31,560 --> 00:06:34,760 Speaker 4: extremely successful. And you look at the Biden administration, We've 131 00:06:34,760 --> 00:06:37,440 Speaker 4: seen inflation continue to creep up. I know those numbers 132 00:06:37,440 --> 00:06:39,600 Speaker 4: are down a little now, but they're still up much 133 00:06:39,680 --> 00:06:41,359 Speaker 4: higher than it was in twenty nineteen. 134 00:06:42,360 --> 00:06:45,679 Speaker 3: And I think vance I think probably that won vance 135 00:06:45,720 --> 00:06:46,280 Speaker 3: over if you. 136 00:06:46,240 --> 00:06:49,880 Speaker 2: Will, could you see yourself playing a role in an 137 00:06:49,920 --> 00:06:53,040 Speaker 2: administration under President Trump if he were to win, and 138 00:06:53,080 --> 00:06:55,760 Speaker 2: if so, what might be Well. 139 00:06:55,760 --> 00:06:58,800 Speaker 4: Look, I had that conversation with President Trump last week, 140 00:06:58,839 --> 00:07:01,480 Speaker 4: and I told him I'm always willing to serve, whether 141 00:07:01,520 --> 00:07:06,039 Speaker 4: it's inside the administration, whether it's outside the administration. You know, 142 00:07:06,200 --> 00:07:08,160 Speaker 4: I can tell you when when I heard that he 143 00:07:08,240 --> 00:07:10,200 Speaker 4: was shot on Saturday. This is a guy that I've 144 00:07:10,240 --> 00:07:12,880 Speaker 4: known for nearly thirty years, had the honor of working 145 00:07:12,920 --> 00:07:15,320 Speaker 4: four years from in the White House, and I felt 146 00:07:15,360 --> 00:07:17,480 Speaker 4: like it was a family member in those moments where 147 00:07:17,520 --> 00:07:19,080 Speaker 4: I didn't know if he was going to live or 148 00:07:19,120 --> 00:07:22,480 Speaker 4: going to die. And I told him, look, I'll support you, 149 00:07:22,520 --> 00:07:24,880 Speaker 4: whether it's on the inside, whether it's on the outside. 150 00:07:25,520 --> 00:07:27,520 Speaker 3: Most importantly, we need to save our country. 151 00:07:27,560 --> 00:07:30,280 Speaker 4: And I also told him, I said, let's make sure 152 00:07:30,320 --> 00:07:32,640 Speaker 4: we have that conversation on November six. 153 00:07:32,760 --> 00:07:35,760 Speaker 3: That's the conversation I want to be at all. 154 00:07:35,880 --> 00:07:38,000 Speaker 2: Right, Well, we'll have to leave it there, unfortunately, but 155 00:07:38,080 --> 00:07:41,320 Speaker 2: a good conversation. Mister Giuliani, thank you very much for 156 00:07:41,400 --> 00:07:45,360 Speaker 2: joining us. Andrew Giuliani there former special assistant to former 157 00:07:45,400 --> 00:07:49,240 Speaker 2: President Donald Trump and a former candidate for the Governorship 158 00:07:49,400 --> 00:07:59,240 Speaker 2: of New York. Say good morning to Fred Numan, Chief 159 00:07:59,280 --> 00:08:03,760 Speaker 2: Asia missed at HSBC for a few choice words about 160 00:08:03,800 --> 00:08:07,160 Speaker 2: the Third Planum. Fred, thank you for coming on. Boy, 161 00:08:07,200 --> 00:08:11,480 Speaker 2: what a contrast between the very public and free wheeling 162 00:08:11,520 --> 00:08:15,720 Speaker 2: Republican National Convention and the Third Planum in Beijing. It's 163 00:08:15,800 --> 00:08:18,120 Speaker 2: rather opaque. It's kind of a black box. We don't 164 00:08:18,160 --> 00:08:21,000 Speaker 2: know exactly what we'll get. What are you expecting? 165 00:08:22,360 --> 00:08:24,920 Speaker 1: Well, thank you, Right, we don't have live cameras in 166 00:08:25,000 --> 00:08:28,680 Speaker 1: Beijing following the meetings that we do with the Republican Convention, 167 00:08:29,280 --> 00:08:31,760 Speaker 1: but I think we're gonna we have to calibrate a 168 00:08:31,800 --> 00:08:34,720 Speaker 1: little bit our expectations for the Third planm. Of course, 169 00:08:35,040 --> 00:08:38,280 Speaker 1: we had a reminder yesterday that the economy is very weak, 170 00:08:38,559 --> 00:08:41,920 Speaker 1: at least slower, grew slower than expect in the second quarter, 171 00:08:41,960 --> 00:08:44,480 Speaker 1: and that reminded, I think investor that is still a 172 00:08:44,559 --> 00:08:47,160 Speaker 1: need for stimulus. But this won't come out of this 173 00:08:47,280 --> 00:08:51,439 Speaker 1: particular Planum. This is really about long term structural reforms. 174 00:08:51,480 --> 00:08:55,920 Speaker 1: It's about sort of broad based targets, and therefore it 175 00:08:56,000 --> 00:08:59,360 Speaker 1: won't really change the cyclical direction of the economy for 176 00:08:59,400 --> 00:09:02,360 Speaker 1: the time being. There might be some nuggets here and 177 00:09:02,400 --> 00:09:06,240 Speaker 1: there in terms of long term structural reforms like for example, 178 00:09:06,280 --> 00:09:09,760 Speaker 1: helping local governments with the finances or maybe addressing the 179 00:09:09,760 --> 00:09:13,120 Speaker 1: pension system, but nothing that really changes the narrative for 180 00:09:13,160 --> 00:09:14,240 Speaker 1: the next few quarters. 181 00:09:15,160 --> 00:09:17,439 Speaker 2: When we talk about reform in China, it means a 182 00:09:17,440 --> 00:09:19,760 Speaker 2: different thing than it does in a lot of other places. 183 00:09:20,080 --> 00:09:24,440 Speaker 2: The traditional meaning of reform might be modernizing and making 184 00:09:24,600 --> 00:09:27,640 Speaker 2: changes and liberalizing, but it could be just the opposite. 185 00:09:27,720 --> 00:09:31,640 Speaker 1: In China, it could be a bit of both, and 186 00:09:31,720 --> 00:09:35,760 Speaker 1: we've seen certainly in some areas still the state of 187 00:09:35,840 --> 00:09:39,319 Speaker 1: desire to liberalize that we had, for example, even in 188 00:09:39,679 --> 00:09:43,400 Speaker 1: recent meetings, indications that they want to continue to liberalize, 189 00:09:43,400 --> 00:09:48,600 Speaker 1: for example, the exchange rate. That's a modernization process capital flow. 190 00:09:48,760 --> 00:09:52,680 Speaker 1: Still there's a desire state desire to modernize. There's also 191 00:09:53,240 --> 00:09:56,040 Speaker 1: a desire to move to a more interest rate based 192 00:09:56,400 --> 00:10:00,520 Speaker 1: monetary system, for example, monetary policy system. You're right in 193 00:10:00,559 --> 00:10:04,319 Speaker 1: other areas as well, we've seen, for example, tighter regulations. 194 00:10:05,280 --> 00:10:11,680 Speaker 1: We've seen kind of a return of maybe government decision 195 00:10:11,679 --> 00:10:15,000 Speaker 1: making in into the into the economy. But we should 196 00:10:15,040 --> 00:10:18,360 Speaker 1: also remember that the context years at globally, we actually 197 00:10:18,360 --> 00:10:20,360 Speaker 1: see a return of the state that we've seen in 198 00:10:20,400 --> 00:10:23,160 Speaker 1: arise in regulations, for example when it comes to big tech, 199 00:10:23,200 --> 00:10:25,320 Speaker 1: and so the Chinese are not necessarily alone in this. 200 00:10:26,120 --> 00:10:28,880 Speaker 2: So sometimes I'll like to really simplify the question to 201 00:10:28,880 --> 00:10:30,400 Speaker 2: get to the heart of the matter, and I think 202 00:10:30,440 --> 00:10:34,240 Speaker 2: this one does. Does President she trust the private sector 203 00:10:34,360 --> 00:10:34,839 Speaker 2: in China? 204 00:10:37,080 --> 00:10:41,600 Speaker 1: He certainly has indicated that he still wants a private 205 00:10:41,600 --> 00:10:45,240 Speaker 1: sector to drive the economy. There's sort of the the 206 00:10:45,360 --> 00:10:49,800 Speaker 1: unswerving as they call it, the unswerving intention to have 207 00:10:49,880 --> 00:10:53,079 Speaker 1: the private sector play a decisive role in the economy. 208 00:10:53,440 --> 00:10:56,880 Speaker 1: But it doesn't necessarily mean that the public sector is 209 00:10:57,000 --> 00:11:00,680 Speaker 1: in retreat. We've seen in recent years state on enterprizes 210 00:11:00,720 --> 00:11:05,560 Speaker 1: place likely larger role. Again, we've seen the share of GDP, 211 00:11:05,760 --> 00:11:10,680 Speaker 1: for example, increase. China certainly cannot live without the private sector. 212 00:11:10,720 --> 00:11:13,480 Speaker 1: It is one of the most innovative private sectors in 213 00:11:13,520 --> 00:11:17,280 Speaker 1: the world if you think about areas like electric vehicles 214 00:11:17,280 --> 00:11:20,720 Speaker 1: for examples, driven by the private sector. But there is 215 00:11:20,840 --> 00:11:23,720 Speaker 1: certainly a sense that under cigen paining, we've seen a 216 00:11:23,760 --> 00:11:26,720 Speaker 1: recalibration between the private and public sector, and at the moment, 217 00:11:26,960 --> 00:11:29,880 Speaker 1: State on enterprise is certainly benefited in recent years from 218 00:11:29,880 --> 00:11:30,360 Speaker 1: that trend. 219 00:11:31,440 --> 00:11:34,640 Speaker 2: Might we see any policies perhaps not right out of 220 00:11:34,679 --> 00:11:38,000 Speaker 2: this meeting, but coming soon that would help stimulate the 221 00:11:38,040 --> 00:11:40,240 Speaker 2: private sector. And what might they be or what would 222 00:11:40,240 --> 00:11:41,000 Speaker 2: you like to see. 223 00:11:42,480 --> 00:11:44,600 Speaker 1: Well, the focus right now is on a third Plan, 224 00:11:44,800 --> 00:11:47,360 Speaker 1: but we really pay more attention a little bit to 225 00:11:47,440 --> 00:11:50,400 Speaker 1: the political meeting at the end of this month. This 226 00:11:50,440 --> 00:11:54,640 Speaker 1: is a monthly meeting and partaking in July. Traditionally they 227 00:11:54,679 --> 00:11:58,640 Speaker 1: have taken more cyclical measures during that meeting, and that's 228 00:11:58,640 --> 00:12:02,360 Speaker 1: would be probably the better meeting to announce some sort 229 00:12:02,360 --> 00:12:06,240 Speaker 1: of near term stimulus because economic data was disappointing for 230 00:12:06,320 --> 00:12:09,920 Speaker 1: the second quarter. That could be an announcement for more 231 00:12:09,960 --> 00:12:14,720 Speaker 1: fiscal spending, in particular coming through maybe higher issuance quota 232 00:12:14,800 --> 00:12:18,160 Speaker 1: for bonds. They did this last year in fact, that 233 00:12:18,160 --> 00:12:20,920 Speaker 1: that helped to stabilize growth into year end, and so 234 00:12:20,960 --> 00:12:22,520 Speaker 1: we might see a bit of a rerun in that, 235 00:12:22,679 --> 00:12:24,280 Speaker 1: but it wouldn't be the Third Plan, and it'd be 236 00:12:24,280 --> 00:12:26,240 Speaker 1: the political meeting at the end of July. 237 00:12:27,080 --> 00:12:30,959 Speaker 2: Yeah. Well, in terms of addressing issues in the property sector, 238 00:12:31,360 --> 00:12:33,640 Speaker 2: is this going to be a long drawn out fight 239 00:12:34,000 --> 00:12:36,040 Speaker 2: or is there something that can be done in the 240 00:12:36,080 --> 00:12:38,520 Speaker 2: shorter term to see some progress. 241 00:12:40,080 --> 00:12:42,720 Speaker 1: Well, you could only always throw more money at the problem. 242 00:12:42,920 --> 00:12:46,400 Speaker 1: You could make a set up asset management companies that 243 00:12:46,559 --> 00:12:50,400 Speaker 1: essentially clean out the banks and the developers and sort 244 00:12:50,400 --> 00:12:53,360 Speaker 1: of reset, if you will, the property sector. But it 245 00:12:53,400 --> 00:12:57,440 Speaker 1: doesn't look like China is choosing that path and it 246 00:12:57,480 --> 00:13:00,800 Speaker 1: will likely grind us out. We're probably over the worst 247 00:13:00,840 --> 00:13:04,120 Speaker 1: in general, but it doesn't look like a quick fix 248 00:13:04,320 --> 00:13:07,880 Speaker 1: is going to come. We've seen maybe steady progress, some 249 00:13:07,920 --> 00:13:11,679 Speaker 1: green shoots already emerge in a secondary home. Demand has 250 00:13:11,720 --> 00:13:14,480 Speaker 1: picked up in some areas, but it does feel like 251 00:13:14,559 --> 00:13:17,000 Speaker 1: it will take quite some time before we are back 252 00:13:17,280 --> 00:13:20,760 Speaker 1: off to improving property market. I think I'll be here 253 00:13:20,840 --> 00:13:22,960 Speaker 1: for another year, year and a half until we see 254 00:13:23,000 --> 00:13:24,960 Speaker 1: that that full turnaround come through. 255 00:13:26,040 --> 00:13:29,000 Speaker 2: So we saw prices yesterday down for both used and 256 00:13:29,679 --> 00:13:33,880 Speaker 2: or existing and new home sales. What we'll move first, Well, 257 00:13:33,920 --> 00:13:35,800 Speaker 2: transactions pick up first. Is that the key. 258 00:13:37,280 --> 00:13:40,880 Speaker 1: Yeah, it's all about transactions. You know, people look at prices, 259 00:13:40,880 --> 00:13:44,760 Speaker 1: but ultimately prices are a lagging indicator. You almost want 260 00:13:44,800 --> 00:13:48,120 Speaker 1: prices to adjust lower to kind of bring demand back in. 261 00:13:48,200 --> 00:13:51,760 Speaker 1: And prices have declined again last month, and maybe that's 262 00:13:51,800 --> 00:13:53,560 Speaker 1: just part of the of the medicine you need to 263 00:13:53,600 --> 00:13:54,440 Speaker 1: revive the sector. 264 00:13:54,800 --> 00:13:57,240 Speaker 2: Yeah, all right, Frederick, thank you very much for joining us. 265 00:13:57,480 --> 00:14:07,160 Speaker 2: Bred Newman there, Chief Asia Economists Toda hsb See Jung 266 00:14:07,240 --> 00:14:11,840 Speaker 2: you Ma, Chief investment Officer, BEMO Wealth Management. So do 267 00:14:11,920 --> 00:14:15,040 Speaker 2: you see a case here for a sort of continued 268 00:14:15,120 --> 00:14:17,040 Speaker 2: broadening in the market. 269 00:14:18,320 --> 00:14:20,040 Speaker 5: Hi, Brian, great to be here. We do think there's 270 00:14:20,120 --> 00:14:23,320 Speaker 5: a good case for continued broadening the market. We think 271 00:14:23,560 --> 00:14:26,640 Speaker 5: the market is really solidified on two ideas right now, 272 00:14:26,680 --> 00:14:30,520 Speaker 5: one of them being that the trended inflation is solidly downward, 273 00:14:30,880 --> 00:14:33,080 Speaker 5: and the second one being that the FED is on 274 00:14:33,120 --> 00:14:36,120 Speaker 5: the cusp of cutting rates and due to beginning September, 275 00:14:36,160 --> 00:14:38,240 Speaker 5: and that's going to be not just one or two cuts, 276 00:14:38,240 --> 00:14:41,800 Speaker 5: but probably a rate cutting campaign that goes into twenty 277 00:14:41,880 --> 00:14:44,280 Speaker 5: twenty five and probably through the end of twenty twenty five. 278 00:14:44,680 --> 00:14:47,480 Speaker 5: So we think that is pretty supportive of a broadening 279 00:14:47,480 --> 00:14:50,560 Speaker 5: the rally. It's helpful to ease some of the pressures 280 00:14:50,600 --> 00:14:53,160 Speaker 5: that have been on small caps mid caps and really 281 00:14:53,280 --> 00:14:57,240 Speaker 5: just take the focus towards some of the other stocks, 282 00:14:57,400 --> 00:15:00,400 Speaker 5: even large cap stocks that are not the make it 283 00:15:00,480 --> 00:15:03,360 Speaker 5: cap technology stocks. So we do see a good prospect 284 00:15:03,360 --> 00:15:07,240 Speaker 5: for broadening here. We don't necessarily think the map technology 285 00:15:07,240 --> 00:15:10,160 Speaker 5: stocks are going to underperform, but we do think that 286 00:15:10,360 --> 00:15:13,440 Speaker 5: a lot of the market will come along with those 287 00:15:13,480 --> 00:15:14,600 Speaker 5: stocks have been leading the way. 288 00:15:15,560 --> 00:15:18,120 Speaker 2: Do you worry that if the economy is weakening that 289 00:15:18,200 --> 00:15:22,280 Speaker 2: it sort of gathers momentum and weakens too sharply and 290 00:15:22,280 --> 00:15:24,560 Speaker 2: that the market would not respond well to that. 291 00:15:26,320 --> 00:15:28,720 Speaker 5: Yeah, that's a great question. It is somewhat of a 292 00:15:28,800 --> 00:15:32,480 Speaker 5: narrow lane. The economy is walking here, but we don't 293 00:15:32,520 --> 00:15:38,080 Speaker 5: see the prospects in place for a sustained down momentum 294 00:15:38,200 --> 00:15:41,520 Speaker 5: in economic growth. We think there's some softness, some moderation, 295 00:15:42,000 --> 00:15:45,800 Speaker 5: but we actually think the stabilizing forces such as wage 296 00:15:45,800 --> 00:15:49,560 Speaker 5: growth being above inflation, business spending kicking in in the 297 00:15:49,600 --> 00:15:52,200 Speaker 5: second half of the year, and next year profit growth 298 00:15:52,240 --> 00:15:55,880 Speaker 5: being high, all these things should stabilize the economy. And 299 00:15:55,960 --> 00:15:59,080 Speaker 5: there are no sectors that are overly leveraged, such as 300 00:15:59,120 --> 00:16:02,120 Speaker 5: the consumer sect or the business sector. There aren't major 301 00:16:02,120 --> 00:16:04,400 Speaker 5: imbalances that we think are going to lead to a 302 00:16:04,440 --> 00:16:07,880 Speaker 5: doward spiral. So we think we're probably in for a 303 00:16:07,920 --> 00:16:10,160 Speaker 5: little bit of soft data in the coming weeks, but 304 00:16:10,200 --> 00:16:12,800 Speaker 5: we don't think this is going to gather momentum to 305 00:16:12,880 --> 00:16:13,720 Speaker 5: the downside. 306 00:16:15,040 --> 00:16:17,240 Speaker 2: To what degree is there some danger that markets have 307 00:16:17,280 --> 00:16:19,280 Speaker 2: already priced in a lot of the good news. I mean, 308 00:16:19,320 --> 00:16:21,280 Speaker 2: we've seen this coming from a long way, that the 309 00:16:21,280 --> 00:16:24,320 Speaker 2: Fed would be cutting interest rates perhaps toward the end 310 00:16:24,360 --> 00:16:27,440 Speaker 2: of the year, that we had a soft landing inside, 311 00:16:27,440 --> 00:16:29,920 Speaker 2: and that earnings were pretty solid. I mean, there's a 312 00:16:29,960 --> 00:16:31,680 Speaker 2: lot that markets have already discounted. 313 00:16:33,400 --> 00:16:35,240 Speaker 5: That's a great point. I do think the markets have 314 00:16:35,320 --> 00:16:38,200 Speaker 5: discounted some of it, but I don't believe the markets 315 00:16:38,240 --> 00:16:40,800 Speaker 5: have fully discounted it. And a lot of these things, 316 00:16:40,880 --> 00:16:43,720 Speaker 5: even though we expect them to happen, they look likely 317 00:16:43,760 --> 00:16:46,560 Speaker 5: on the horizon, it's really until they get closer in 318 00:16:46,600 --> 00:16:49,400 Speaker 5: time that the market starts fully incorporating that. And we 319 00:16:49,440 --> 00:16:53,040 Speaker 5: saw that actually with the CPI report in the US 320 00:16:53,040 --> 00:16:56,200 Speaker 5: that came out last week, when it really took the 321 00:16:56,320 --> 00:16:59,560 Speaker 5: third month in a row of good inflation readings for 322 00:16:59,600 --> 00:17:02,400 Speaker 5: the market truly get excited about the prospect of rate cuts, 323 00:17:02,680 --> 00:17:05,199 Speaker 5: in the prospect of a doward trajectory. I think that 324 00:17:05,359 --> 00:17:09,639 Speaker 5: just shows us that the market prices these developments in 325 00:17:09,640 --> 00:17:12,919 Speaker 5: in clumps, and it's not all it's not all front loaded, 326 00:17:12,920 --> 00:17:14,960 Speaker 5: but should be happening over time as you go forward, 327 00:17:15,320 --> 00:17:19,000 Speaker 5: especially if we have continued low inflation continued rate cuts 328 00:17:19,040 --> 00:17:21,320 Speaker 5: into twenty twenty five. I think that should add a 329 00:17:21,320 --> 00:17:24,240 Speaker 5: sustained benefit to the markets, even though some of that's 330 00:17:24,240 --> 00:17:24,840 Speaker 5: been priced in. 331 00:17:24,880 --> 00:17:27,639 Speaker 2: For sure, we all know that mister market can be 332 00:17:27,720 --> 00:17:30,560 Speaker 2: vicious and can hurt sometimes the most people at any 333 00:17:30,560 --> 00:17:34,320 Speaker 2: given time. I'm wondering about people piling into small caps 334 00:17:34,359 --> 00:17:38,840 Speaker 2: now whether or not that's actually sustainable also, And one 335 00:17:38,840 --> 00:17:41,280 Speaker 2: of the things that might happen, I think is that 336 00:17:41,600 --> 00:17:43,920 Speaker 2: you know, people pile into some of those small caps 337 00:17:43,920 --> 00:17:46,720 Speaker 2: and then all of a sudden, the earnings come out 338 00:17:46,720 --> 00:17:49,040 Speaker 2: from some of the big AI players like Nvidia and 339 00:17:49,080 --> 00:17:52,680 Speaker 2: broad Common others, and the money just sweeps back into 340 00:17:52,720 --> 00:17:56,400 Speaker 2: those What are you expecting out of those AI firms 341 00:17:56,760 --> 00:17:59,280 Speaker 2: and what do you think about those notions of the 342 00:17:59,320 --> 00:18:00,359 Speaker 2: market hurting people. 343 00:18:02,359 --> 00:18:06,320 Speaker 5: Well, that's another good point, because this can happen in waves. 344 00:18:06,480 --> 00:18:08,879 Speaker 5: And as we go through earning season, we're going to 345 00:18:08,920 --> 00:18:11,040 Speaker 5: hear a lot about AI, a lot about spending. I 346 00:18:11,040 --> 00:18:13,000 Speaker 5: think we're going to even here start to hear more 347 00:18:13,040 --> 00:18:16,680 Speaker 5: about companies' productivity gains from AI, even if they're early 348 00:18:16,760 --> 00:18:19,560 Speaker 5: cases or early anecdotes. I think that's going to become 349 00:18:19,600 --> 00:18:21,480 Speaker 5: more of a narrative that takes place, but of course 350 00:18:21,480 --> 00:18:24,280 Speaker 5: a spending is going to continue to be very large 351 00:18:24,359 --> 00:18:27,119 Speaker 5: in this area, so there could be a bit of 352 00:18:27,160 --> 00:18:30,360 Speaker 5: back and forth in terms of where investors' interest swings 353 00:18:30,400 --> 00:18:35,040 Speaker 5: to and and some of that short term money swinging 354 00:18:35,040 --> 00:18:37,280 Speaker 5: like a pendulum from one area to the other. I 355 00:18:37,359 --> 00:18:39,800 Speaker 5: do think that there's enough of a catch up trade 356 00:18:39,840 --> 00:18:42,760 Speaker 5: in small and mid caps and even large caps that 357 00:18:42,800 --> 00:18:46,160 Speaker 5: aren't in those megacap technology space that this probably still 358 00:18:46,200 --> 00:18:50,119 Speaker 5: has room to run. We don't think that there's been 359 00:18:50,280 --> 00:18:53,919 Speaker 5: surely there's been enthusiasm in the last few days for 360 00:18:54,000 --> 00:18:57,040 Speaker 5: small caps, but we don't think that that catch up 361 00:18:57,080 --> 00:18:59,480 Speaker 5: trade is really played out. If you look at small 362 00:18:59,520 --> 00:19:02,760 Speaker 5: caps as especially small cap value, the valuations are better there. 363 00:19:03,000 --> 00:19:06,080 Speaker 5: If you look at what took place in twenty sixteen 364 00:19:06,160 --> 00:19:10,440 Speaker 5: after President Trump was elected the first time, small caps 365 00:19:10,480 --> 00:19:13,680 Speaker 5: had a tremendous rally after that on the expectation that 366 00:19:13,800 --> 00:19:17,760 Speaker 5: large caps might have a more difficult time in the 367 00:19:17,800 --> 00:19:21,960 Speaker 5: context of a trade war or trade frictions with other 368 00:19:22,000 --> 00:19:24,359 Speaker 5: partners where they get a lot of their revenue from. 369 00:19:24,720 --> 00:19:28,280 Speaker 5: So I do think that's another element where some of 370 00:19:28,280 --> 00:19:32,200 Speaker 5: these medium small caps will start to generate more consistent 371 00:19:32,320 --> 00:19:34,720 Speaker 5: interests for investors, but there could be some back and forth. 372 00:19:34,760 --> 00:19:40,000 Speaker 2: For sure, you're positive on US infrastructure and technology and financials, 373 00:19:40,000 --> 00:19:41,240 Speaker 2: so what are you cautious on. 374 00:19:43,720 --> 00:19:47,200 Speaker 5: We're a little bit cautious on consumer staples. We think 375 00:19:47,720 --> 00:19:50,399 Speaker 5: a lot of the spending and consumer staples is taking 376 00:19:50,400 --> 00:19:55,520 Speaker 5: place among consumers have somewhat strained budgets on the lower 377 00:19:55,560 --> 00:19:58,200 Speaker 5: half or lower third of the income spectrum in the US. 378 00:19:58,560 --> 00:20:01,720 Speaker 5: A lot of those that group has been strained by 379 00:20:01,760 --> 00:20:04,280 Speaker 5: the inflation a lot more than the upper half of 380 00:20:04,320 --> 00:20:06,760 Speaker 5: the income spectrum. There's a lot of trade down plays 381 00:20:06,800 --> 00:20:09,840 Speaker 5: that are taking place, even in consumer staples. Not all 382 00:20:09,840 --> 00:20:14,760 Speaker 5: consumer staples are equal, right, Some are still trade down 383 00:20:15,000 --> 00:20:17,680 Speaker 5: plays that take place in that area, and growth is 384 00:20:17,760 --> 00:20:19,479 Speaker 5: just not going to be high in that space. 385 00:20:20,160 --> 00:20:22,320 Speaker 2: All right. Thank you so much for joining us. Jo 386 00:20:22,440 --> 00:20:28,520 Speaker 2: you Ma, chief investment Officer at BEMO Wealth Management. This 387 00:20:28,800 --> 00:20:32,240 Speaker 2: is the Bloomberg Daybreak Asia podcast, bringing you the stories 388 00:20:32,320 --> 00:20:35,760 Speaker 2: making news and moving markets in the Asia Pacific. Visit 389 00:20:35,760 --> 00:20:39,280 Speaker 2: the Bloomberg Podcast channel on YouTube to get more episodes 390 00:20:39,320 --> 00:20:42,639 Speaker 2: of this and other shows from Bloomberg. Subscribe to the 391 00:20:42,680 --> 00:20:46,720 Speaker 2: podcast on Apple, Spotify, or anywhere else you listen, and 392 00:20:46,840 --> 00:20:50,359 Speaker 2: always on Bloomberg Radio the Bloomberg terminal and the Bloomberg 393 00:20:50,440 --> 00:20:51,080 Speaker 2: Business app.