1
00:00:02,520 --> 00:00:05,760
Speaker 1: This is Bloomberg day Break Asia for this Wednesday, June

2
00:00:05,800 --> 00:00:09,280
Speaker 1: twenty first in Hong Kong, Tuesday June twentieth in New

3
00:00:09,360 --> 00:00:10,680
Speaker 1: York and coming up today.

4
00:00:10,880 --> 00:00:13,720
Speaker 2: US equities decline as the market looks ahead to FED

5
00:00:13,800 --> 00:00:16,400
Speaker 2: share Jay Powell's testimony on Capitol Hill.

6
00:00:16,600 --> 00:00:21,079
Speaker 1: Rivian adopts Tesla's electric vehicle charging ports into its existing

7
00:00:21,239 --> 00:00:22,600
Speaker 1: EV models.

8
00:00:22,239 --> 00:00:25,840
Speaker 2: And Jack Maw's longest serving lieutenants return to power at

9
00:00:25,840 --> 00:00:28,240
Speaker 2: Ali Baba to oversee a tough restructuring.

10
00:00:28,400 --> 00:00:31,160
Speaker 3: The search continues for the submersible that went down diving

11
00:00:31,200 --> 00:00:34,040
Speaker 3: on the Titanic. Hunter Biden will plead guilty to two

12
00:00:34,120 --> 00:00:37,000
Speaker 3: tax crimes and to be blanket and Chinese officials meet

13
00:00:37,080 --> 00:00:40,000
Speaker 3: yet again. On Ben Schwartzman, I'll have your news coming up.

14
00:00:44,120 --> 00:00:47,319
Speaker 4: That's all straight ahead on Bloomberg day Break Asia, the

15
00:00:47,360 --> 00:00:50,000
Speaker 4: business news you need to start your day, and just

16
00:00:50,120 --> 00:00:54,560
Speaker 4: one fifteen minute podcast available on Apple, Spotify, the Bloomberg

17
00:00:54,600 --> 00:00:57,360
Speaker 4: Business App, and everywhere you get your podcasts.

18
00:01:00,000 --> 00:01:02,840
Speaker 1: Good morning, I'm Doug Prisner and I'm Brian Curtis. Here

19
00:01:02,840 --> 00:01:04,520
Speaker 1: are the stories we're following today.

20
00:01:05,400 --> 00:01:05,760
Speaker 5: Chair J.

21
00:01:05,959 --> 00:01:10,640
Speaker 1: Powell will deliver the FED semi Annual Monetary Policy Report

22
00:01:10,720 --> 00:01:14,480
Speaker 1: to the House tomorrow. Bloomberg's Michael McKee has a preview.

23
00:01:14,760 --> 00:01:17,040
Speaker 6: In the House, the Fed chairman will have the opportunity

24
00:01:17,080 --> 00:01:20,240
Speaker 6: to clarify what some feel was a confusing message on

25
00:01:20,280 --> 00:01:23,480
Speaker 6: the path for interest rates. What would lead central bankers

26
00:01:23,520 --> 00:01:27,119
Speaker 6: to raise rates again something their own forecasts suggests will happen.

27
00:01:27,480 --> 00:01:30,840
Speaker 6: Does inflation have to rise, does unemployment or does it

28
00:01:30,920 --> 00:01:33,679
Speaker 6: just have to remain flat? What is the ultimate end rate?

29
00:01:33,880 --> 00:01:36,280
Speaker 6: And how soon after that might they begin the rate

30
00:01:36,400 --> 00:01:39,759
Speaker 6: cuts they foresee for twenty twenty four. There will also

31
00:01:39,800 --> 00:01:43,200
Speaker 6: be questions about the impact of March's bank failures and

32
00:01:43,280 --> 00:01:48,080
Speaker 6: on possible regulatory changes for the industry. Michael McKee, Bloomberg Daybreak.

33
00:01:48,120 --> 00:01:51,480
Speaker 1: Asia Powell will also testify before the US Senate the

34
00:01:51,520 --> 00:01:52,200
Speaker 1: following day.

35
00:01:52,240 --> 00:01:53,800
Speaker 6: On Thursday, after.

36
00:01:53,600 --> 00:01:56,080
Speaker 2: The bell, we heard from FedEx. The company gave a

37
00:01:56,120 --> 00:02:00,760
Speaker 2: profit outlook for twenty twenty four below analyst estimates. FedEx

38
00:02:00,800 --> 00:02:03,360
Speaker 2: has been dealing with a drop in packaged demand, and

39
00:02:03,400 --> 00:02:06,000
Speaker 2: that's kind of a reversal from two years of surging

40
00:02:06,040 --> 00:02:09,960
Speaker 2: demand from online shopping during the pandemic. We heard earlier

41
00:02:10,000 --> 00:02:12,000
Speaker 2: from Bloomberg's Lee Cascou.

42
00:02:11,800 --> 00:02:14,000
Speaker 7: There's a lot of uncertainty out there. You know, there's

43
00:02:14,040 --> 00:02:16,600
Speaker 7: still a risk of a US recession. There's still we

44
00:02:16,639 --> 00:02:18,480
Speaker 7: don't really know what's going on with China. You know,

45
00:02:18,520 --> 00:02:21,320
Speaker 7: are they going to increase stimulus. Is that going to

46
00:02:21,600 --> 00:02:25,000
Speaker 7: you know, help that economy. Cutex is pretty big in China,

47
00:02:25,320 --> 00:02:27,040
Speaker 7: so you know, that's been a kind of a drag

48
00:02:27,080 --> 00:02:30,760
Speaker 7: on their results, kind of the slow reopening of China

49
00:02:31,240 --> 00:02:32,919
Speaker 7: in the related Asian market.

50
00:02:32,760 --> 00:02:35,400
Speaker 2: That is Bloomberg's League class cow. By the way, FedEx

51
00:02:35,440 --> 00:02:40,040
Speaker 2: also reported for the fourth quarter revenue of twenty one

52
00:02:40,080 --> 00:02:42,640
Speaker 2: point nine billion, missing the mark the street was looking

53
00:02:42,720 --> 00:02:45,960
Speaker 2: for twenty two point seven billion. FedEx will try to

54
00:02:46,000 --> 00:02:50,120
Speaker 2: continue and improve margins with its accelerated cost cutting plan

55
00:02:50,440 --> 00:02:52,840
Speaker 2: that was announced back in December. The company is hoping

56
00:02:52,960 --> 00:02:56,800
Speaker 2: to save about four billion dollars by fiscal twenty twenty

57
00:02:56,800 --> 00:02:59,880
Speaker 2: five and shares in FedEx right now the ticker fd

58
00:03:00,639 --> 00:03:02,519
Speaker 2: I see the stock down about two percent of the

59
00:03:02,560 --> 00:03:03,400
Speaker 2: late US trading.

60
00:03:03,480 --> 00:03:08,320
Speaker 1: Brian Rivian has agreed to incorporate Tesla's electric vehicle charging

61
00:03:08,400 --> 00:03:11,320
Speaker 1: ports into its existing EV models. We're hearing that the

62
00:03:11,360 --> 00:03:14,040
Speaker 1: new agreement will give Rivian drivers access to more than

63
00:03:14,080 --> 00:03:18,079
Speaker 1: twelve thousand Tesla superchargers right across the United States and

64
00:03:18,240 --> 00:03:22,120
Speaker 1: Canada beginning from next year. More from Bloomberg's Ed Ludlow.

65
00:03:22,440 --> 00:03:24,720
Speaker 8: And it was really interesting because it's probably a bitter

66
00:03:24,760 --> 00:03:27,400
Speaker 8: pill for Rivian to swallow. You know, they wanted to

67
00:03:27,440 --> 00:03:30,560
Speaker 8: be their own person, their own electric vehicle startup. They're

68
00:03:30,560 --> 00:03:34,040
Speaker 8: actually building out their own CCS charging network, which they

69
00:03:34,080 --> 00:03:37,880
Speaker 8: say they're committed to. But the news is that from

70
00:03:37,960 --> 00:03:41,080
Speaker 8: next year, Rivian owners can use the Tesla charging network

71
00:03:41,080 --> 00:03:43,520
Speaker 8: with an adaptor, and then from twenty twenty five they'll

72
00:03:43,560 --> 00:03:47,760
Speaker 8: start building their vehicles modified to reflect that Tesla standard.

73
00:03:49,080 --> 00:03:52,640
Speaker 1: Rivian's announcement follows similar moves by Ford and General Motors.

74
00:03:52,920 --> 00:03:56,560
Speaker 1: The availability and reliability of charging infrastructure is seen as

75
00:03:56,560 --> 00:04:01,119
Speaker 1: a critical factor for broader EV adoption. Standard could give

76
00:04:01,160 --> 00:04:04,680
Speaker 1: consumers greater confidence as they consider a plug in purchase.

77
00:04:05,160 --> 00:04:09,400
Speaker 1: Tesla's charging network has a reputation for reliability that ranks

78
00:04:09,440 --> 00:04:13,120
Speaker 1: the highest in a recent jd Power survey of EV drivers,

79
00:04:13,120 --> 00:04:15,680
Speaker 1: and as mentioned, Tesla stock was up more than five

80
00:04:15,720 --> 00:04:18,440
Speaker 1: percent today and Rivian stock was up five and a

81
00:04:18,480 --> 00:04:19,480
Speaker 1: half percent well.

82
00:04:19,520 --> 00:04:22,480
Speaker 2: Speaking of Tesla, talks between the company and the Government

83
00:04:22,520 --> 00:04:26,560
Speaker 2: of India on a new EV plant may gain momentum.

84
00:04:26,600 --> 00:04:29,920
Speaker 2: Prime Minister Narenvvermodi is visiting the US and we hear

85
00:04:30,000 --> 00:04:33,640
Speaker 2: an important meeting maybe on the agenda this evening here

86
00:04:33,680 --> 00:04:36,400
Speaker 2: in New York. We have more from Bloomberg's Tom Busby.

87
00:04:36,360 --> 00:04:39,839
Speaker 5: Mody slated to meet with Tesla's CEO Elon Musk as

88
00:04:39,920 --> 00:04:42,799
Speaker 5: India tries to lure the automaker to produce its electric

89
00:04:42,839 --> 00:04:45,840
Speaker 5: cars there. This meeting, which could also include upwards of

90
00:04:45,920 --> 00:04:49,919
Speaker 5: two dozen high profile participants, comes after Tesla and India

91
00:04:50,000 --> 00:04:52,680
Speaker 5: revived talks to build an assembly plant there in May,

92
00:04:52,720 --> 00:04:56,680
Speaker 5: following a year long standoff. Asia's third largest economy now

93
00:04:56,720 --> 00:04:59,920
Speaker 5: trying to position itself as an alternate destination for Teesch

94
00:05:00,360 --> 00:05:02,599
Speaker 5: and other companies that want to limit their exposure to

95
00:05:02,680 --> 00:05:06,880
Speaker 5: China or at least diversify their sourcing of autoparts and production.

96
00:05:07,400 --> 00:05:09,480
Speaker 5: Tom buzzby Bloomberg day Break Asia.

97
00:05:10,320 --> 00:05:14,200
Speaker 1: Ali Baba shares fell after it announced an unexpected shakeup

98
00:05:14,279 --> 00:05:17,560
Speaker 1: at the top. Bloomberg's Yvon Mann has more from Hong Kong.

99
00:05:18,120 --> 00:05:20,960
Speaker 9: Ali Baba's US traded shares fell four and a half

100
00:05:21,040 --> 00:05:24,840
Speaker 9: percent in New York. The company's surprise investors with this move,

101
00:05:25,360 --> 00:05:28,920
Speaker 9: Eddie Wu and Joseph Say will replace Daniel Jong as

102
00:05:29,000 --> 00:05:33,600
Speaker 9: CEO and executive chairman, respectively. Both Wu and Hi are

103
00:05:33,720 --> 00:05:38,480
Speaker 9: longtime confidants of co founder Jack ma. John's unexpected departure

104
00:05:38,600 --> 00:05:42,279
Speaker 9: comes after Ali Baba announced a six way restructuring. He

105
00:05:42,360 --> 00:05:44,960
Speaker 9: will still remain as the head of the cloud business

106
00:05:45,160 --> 00:05:49,200
Speaker 9: to potentially sharpen opportunities in AI. Ali Baba hopes a

107
00:05:49,240 --> 00:05:52,040
Speaker 9: Newbury shuffle will help guide the company through a tough

108
00:05:52,080 --> 00:05:56,120
Speaker 9: restructuring in Hong Kong. I'm yvon Mann Bloomberg Day Break Asia.

109
00:05:56,720 --> 00:05:59,400
Speaker 1: It's quite interesting that Ali Baba traded down so much

110
00:05:59,440 --> 00:06:01,840
Speaker 1: more in the New York session that it did in

111
00:06:01,880 --> 00:06:04,800
Speaker 1: Hong Kong yesterday. This news was out early in the

112
00:06:04,880 --> 00:06:07,400
Speaker 1: day yesterday and Ali Baba was only down one and

113
00:06:07,440 --> 00:06:10,240
Speaker 1: a half percent. But I suppose when you look at

114
00:06:10,279 --> 00:06:14,040
Speaker 1: this story, Doug, it just any sort of trouble at

115
00:06:14,040 --> 00:06:15,960
Speaker 1: the top, or any sort of big moves at the

116
00:06:16,000 --> 00:06:21,080
Speaker 1: top will unnerve some investors. And this is still a

117
00:06:21,080 --> 00:06:24,839
Speaker 1: complicated process of separating this company into six different parts.

118
00:06:25,000 --> 00:06:27,719
Speaker 2: Yeah, and we were talking about the fact that Jack

119
00:06:27,800 --> 00:06:31,200
Speaker 2: May is still involved maybe in making these decisions or

120
00:06:31,240 --> 00:06:34,000
Speaker 2: helping to guide the company going forward. Kind of underscores

121
00:06:34,040 --> 00:06:36,760
Speaker 2: the fact that he remains the spiritual leader of BABA.

122
00:06:37,200 --> 00:06:39,560
Speaker 2: And I'm wondering, Brian, given the price action that we

123
00:06:39,600 --> 00:06:41,800
Speaker 2: saw in New York and the ADRs, whether some of

124
00:06:41,839 --> 00:06:44,679
Speaker 2: this has to do with a bigger macro story in China.

125
00:06:45,040 --> 00:06:48,520
Speaker 2: The disappointment we were talking about earlier with the cut

126
00:06:48,520 --> 00:06:51,440
Speaker 2: in the five year loan prime rate by only ten

127
00:06:51,480 --> 00:06:54,719
Speaker 2: basis points, A lot of economists were looking for something

128
00:06:55,160 --> 00:06:57,440
Speaker 2: maybe in the neighborhood of fifteen doesn't sound like a

129
00:06:57,440 --> 00:07:01,240
Speaker 2: big difference, but I'm thinking about the psycho logical impact

130
00:07:01,279 --> 00:07:04,160
Speaker 2: and the message that consumers may be getting when they

131
00:07:04,200 --> 00:07:05,040
Speaker 2: get news like this.

132
00:07:06,000 --> 00:07:08,400
Speaker 1: Yeah, I think that's I think that's an accurate comment.

133
00:07:08,480 --> 00:07:10,760
Speaker 1: In fact, it's something that we heard from you. Remember

134
00:07:10,800 --> 00:07:14,000
Speaker 1: our old colleague vasern Lang, who used to work at

135
00:07:14,160 --> 00:07:18,120
Speaker 1: Bloomberg Intelligence now as a managing director at UBP, and

136
00:07:18,160 --> 00:07:21,040
Speaker 1: he said, basically, in terms of looking at Ali Baba,

137
00:07:21,080 --> 00:07:24,600
Speaker 1: it's such a China proxy that is really dragged down

138
00:07:24,640 --> 00:07:28,320
Speaker 1: by the geopolitics and by China's economy. Never mind you

139
00:07:28,520 --> 00:07:31,720
Speaker 1: some of this restructuring. What's interesting is you have two

140
00:07:31,840 --> 00:07:38,320
Speaker 1: very cool stories of corporates getting changed here, one from

141
00:07:38,440 --> 00:07:41,520
Speaker 1: the inside out, and the other from the outside in.

142
00:07:42,200 --> 00:07:45,240
Speaker 1: I'm speaking first of Ali Baba, which we've just talked about,

143
00:07:45,480 --> 00:07:47,640
Speaker 1: and the other Perelli, and that's a move that was

144
00:07:47,680 --> 00:07:49,520
Speaker 1: really prompted by the Italian government.

145
00:07:49,680 --> 00:07:52,160
Speaker 2: Yeah, that is a very interesting story. But to get

146
00:07:52,200 --> 00:07:54,840
Speaker 2: back to Boba very quickly here, I think it's also

147
00:07:55,120 --> 00:07:57,800
Speaker 2: fair to point out that the company has been facing

148
00:07:58,000 --> 00:08:02,480
Speaker 2: increasing competition. I'm thinking of Pindwo Duo as one example, right,

149
00:08:02,520 --> 00:08:05,600
Speaker 2: and I think that's part of the struggle here for

150
00:08:05,640 --> 00:08:07,800
Speaker 2: the company to get back on track in the face

151
00:08:07,840 --> 00:08:10,640
Speaker 2: of a very very different landscape than when Baba first

152
00:08:10,680 --> 00:08:12,239
Speaker 2: showed up however, many years ago.

153
00:08:12,800 --> 00:08:14,240
Speaker 1: And that's the way it should be. I mean, there

154
00:08:14,280 --> 00:08:17,000
Speaker 1: should be a lot of competition, and I think this

155
00:08:17,080 --> 00:08:20,520
Speaker 1: move to separate into six parts will allow each company

156
00:08:20,560 --> 00:08:23,560
Speaker 1: to try to become nimble and the best performer in

157
00:08:23,600 --> 00:08:28,280
Speaker 1: the respective area. And Daniel Jong, the existing CEO who

158
00:08:28,360 --> 00:08:30,840
Speaker 1: has had his position change, is not leaving. He's going

159
00:08:30,920 --> 00:08:33,360
Speaker 1: to head up the cloud division, as we talked about earlier,

160
00:08:33,679 --> 00:08:35,559
Speaker 1: and that might be the most important in that it

161
00:08:35,840 --> 00:08:39,280
Speaker 1: will embrace AI. So there's a lot coming up on

162
00:08:39,400 --> 00:08:44,760
Speaker 1: this story. Now it's time for Global News. The search

163
00:08:44,800 --> 00:08:49,040
Speaker 1: continues for the missing submersible, and Dan Schwartzman has more

164
00:08:49,280 --> 00:08:50,440
Speaker 1: from the New York newsroom.

165
00:08:50,480 --> 00:08:52,319
Speaker 3: Dan, Yeah, it's like a bad movie, to say the

166
00:08:52,400 --> 00:08:55,440
Speaker 3: least Brian. They've now shifted underwater with that search. As

167
00:08:55,480 --> 00:08:57,800
Speaker 3: air efforts did not find the craft, which has five

168
00:08:57,840 --> 00:09:00,840
Speaker 3: passengers on board. As say that the crew has around

169
00:09:00,920 --> 00:09:03,880
Speaker 3: forty hours of oxygen left. That was pretty much as

170
00:09:03,920 --> 00:09:06,920
Speaker 3: of earlier this afternoon, based on the design of the craft,

171
00:09:06,960 --> 00:09:09,600
Speaker 3: which is supposed to have an oxygen supply of ninety

172
00:09:09,600 --> 00:09:11,959
Speaker 3: six hours in case of an emergency. The New York

173
00:09:11,960 --> 00:09:14,160
Speaker 3: Times saying that passengers pay a quarter of a million

174
00:09:14,200 --> 00:09:16,880
Speaker 3: dollars to Ocean Gate expeditions to go down to the

175
00:09:16,920 --> 00:09:20,040
Speaker 3: wreck aboard the diving vessel called Titan. US Coast Guard

176
00:09:20,080 --> 00:09:23,480
Speaker 3: were Admiral John Mayer says teams are using everything available

177
00:09:23,520 --> 00:09:24,040
Speaker 3: in this search.

178
00:09:24,440 --> 00:09:28,400
Speaker 10: Our crews in the Coast Guard and partners across both

179
00:09:28,400 --> 00:09:31,760
Speaker 10: the US government and within Canada and the private sector

180
00:09:32,120 --> 00:09:36,439
Speaker 10: have been working around the clock to bring all capabilities

181
00:09:36,720 --> 00:09:41,520
Speaker 10: that we have to bear on finding the submersibon locating

182
00:09:41,800 --> 00:09:42,480
Speaker 10: the people.

183
00:09:42,840 --> 00:09:46,280
Speaker 3: The search area is the size of Connecticut. President Biden's

184
00:09:46,280 --> 00:09:49,400
Speaker 3: son Hunter will plead guilty to two misdemeanor tax crimes.

185
00:09:49,559 --> 00:09:52,920
Speaker 3: Biden will also enter into an agreement with prosecutors to

186
00:09:52,920 --> 00:09:55,960
Speaker 3: avoid charges of possessing a firearm while addicted to an

187
00:09:55,960 --> 00:09:58,320
Speaker 3: illegal drug. The deal comes on the heels of a

188
00:09:58,360 --> 00:10:01,880
Speaker 3: five year investigation, will likely with Hunter Biden avoiding jail time.

189
00:10:02,120 --> 00:10:05,280
Speaker 3: Biden is expected to participate in a federal diversion program,

190
00:10:05,400 --> 00:10:07,800
Speaker 3: which could lead to the weapons charges being dropped if

191
00:10:07,840 --> 00:10:11,080
Speaker 3: he complies with certain conditions over a specific time period.

192
00:10:11,360 --> 00:10:14,120
Speaker 3: Republican Senator Lindsay Graham questions the charges.

193
00:10:14,640 --> 00:10:16,079
Speaker 11: Sorry, he's had problems.

194
00:10:16,120 --> 00:10:18,480
Speaker 10: You know, I don't wish that own any family, But

195
00:10:18,520 --> 00:10:21,920
Speaker 10: this has taken over four years, and to wind up

196
00:10:21,960 --> 00:10:25,160
Speaker 10: with tax evation and a gun charge, there'll be a

197
00:10:25,200 --> 00:10:26,040
Speaker 10: lot of questions.

198
00:10:26,520 --> 00:10:30,080
Speaker 3: Graham was speaking in South Carolina. A non bailable arrest

199
00:10:30,160 --> 00:10:33,000
Speaker 3: warrant has been issued against cricket star turned former Prime

200
00:10:33,000 --> 00:10:36,640
Speaker 3: Minister of Pakistan Imran Khan, an anti terrorist cord in Lahore,

201
00:10:36,679 --> 00:10:39,520
Speaker 3: giving the order at the prosecutor's request as con in

202
00:10:39,559 --> 00:10:41,840
Speaker 3: some of his aides are allegedly linked to violence in

203
00:10:41,880 --> 00:10:44,800
Speaker 3: the country last month. Protests broke out on May ninth

204
00:10:44,880 --> 00:10:48,480
Speaker 3: after Cohn was briefly arrested on corruption allegations. Cohn has

205
00:10:48,520 --> 00:10:51,040
Speaker 3: faced more than one hundred cases against him since being

206
00:10:51,080 --> 00:10:53,679
Speaker 3: ousted from power last year, although he says they are

207
00:10:53,760 --> 00:10:56,880
Speaker 3: all politically motivated. More than a week after the collapse

208
00:10:56,880 --> 00:10:59,719
Speaker 3: of a section of Highway I ninety five in Philadelphia,

209
00:11:00,000 --> 00:11:03,240
Speaker 3: temporary of lanes will be opening this weekend, Pennsylvania Governor

210
00:11:03,320 --> 00:11:06,120
Speaker 3: Josh Shapiro saying permanent repairs were to follow after the

211
00:11:06,200 --> 00:11:09,440
Speaker 3: June eleventh collapse due to a tractor trailer carrying gasoline

212
00:11:09,480 --> 00:11:11,880
Speaker 3: flipping over an off ramp, leading to a fire that

213
00:11:11,960 --> 00:11:14,559
Speaker 3: brought down the section of highway. More than one hundred

214
00:11:14,600 --> 00:11:17,679
Speaker 3: and fifty thousand vehicles, including over fourteen thousand trucks, use

215
00:11:17,760 --> 00:11:20,600
Speaker 3: that portion of I ninety five on a daily basis,

216
00:11:20,800 --> 00:11:22,880
Speaker 3: Governor Shapiro, with details.

217
00:11:22,760 --> 00:11:24,000
Speaker 12: And dot's already working on that.

218
00:11:24,040 --> 00:11:26,319
Speaker 3: We're going to have three lanes nor A three lanes south.

219
00:11:26,400 --> 00:11:30,320
Speaker 3: Traffic's going to be flowing while while that's happening, we'll

220
00:11:30,320 --> 00:11:32,920
Speaker 3: be rebuilding the bridge from the outside in. There'll be

221
00:11:33,000 --> 00:11:34,760
Speaker 3: no disruption to traffic.

222
00:11:34,760 --> 00:11:37,439
Speaker 5: There'll always be six lanes moving during that process.

223
00:11:38,160 --> 00:11:40,240
Speaker 3: Global News twenty fours a day, power by more than

224
00:11:40,280 --> 00:11:43,080
Speaker 3: twenty seven hundred journalists and analysts in more than one

225
00:11:43,160 --> 00:11:46,319
Speaker 3: hundred and twenty countries. I'm Dan Schwartzman. This is Bloomberg.

226
00:11:47,200 --> 00:11:50,640
Speaker 1: I'm Brian Curtis in Hong Kong alongside Rashad Salamat here

227
00:11:50,679 --> 00:11:54,079
Speaker 1: in our studios. And Catherine Kaminski joins US chief research

228
00:11:54,120 --> 00:11:58,600
Speaker 1: strategist and portfolio manager at Alpha Simplex Group on with

229
00:11:58,720 --> 00:12:02,880
Speaker 1: us from Brookline, Massachusetts. Well, Catherine, you probably noticed that

230
00:12:02,920 --> 00:12:05,559
Speaker 1: Doug and I got through our chat without even talking

231
00:12:05,600 --> 00:12:08,719
Speaker 1: about the FED for a moment, which I can take

232
00:12:08,800 --> 00:12:11,120
Speaker 1: as progress. It's nice to set the macroside a little bit,

233
00:12:11,240 --> 00:12:13,240
Speaker 1: of course, it's one of our top stories, and the

234
00:12:13,320 --> 00:12:16,680
Speaker 1: chair will be speaking. Will he toughen up his language?

235
00:12:16,840 --> 00:12:17,960
Speaker 1: Is that the sense you're getting?

236
00:12:19,280 --> 00:12:19,840
Speaker 11: I think so.

237
00:12:20,080 --> 00:12:22,520
Speaker 13: I mean, what's been interesting to us is that we've

238
00:12:22,760 --> 00:12:26,400
Speaker 13: can continue to have short signals and fixed income and

239
00:12:26,440 --> 00:12:28,520
Speaker 13: it feels sometimes like I'm the only one at the

240
00:12:28,559 --> 00:12:31,600
Speaker 13: table saying that. And what it means is that I

241
00:12:31,640 --> 00:12:33,840
Speaker 13: do really think there's going to be possibly one to

242
00:12:33,920 --> 00:12:37,120
Speaker 13: two more hikes this year because let's just be honest,

243
00:12:37,200 --> 00:12:41,719
Speaker 13: inflation is lower, but it's not low, so that's going

244
00:12:41,760 --> 00:12:44,280
Speaker 13: to take some effort. On their point, they probably want

245
00:12:44,280 --> 00:12:46,959
Speaker 13: to set expectations, so people don't get too optimistic.

246
00:12:48,000 --> 00:12:49,920
Speaker 1: I almost think that the market has kind of moved

247
00:12:49,920 --> 00:12:52,760
Speaker 1: beyond it in a sense that the market just seems

248
00:12:52,760 --> 00:12:54,880
Speaker 1: investors just don't seem to be that concerned whether you

249
00:12:54,920 --> 00:12:57,600
Speaker 1: get another one or two rate hikes, have already had

250
00:12:57,960 --> 00:13:01,280
Speaker 1: so many to get to five percentage points.

251
00:13:02,480 --> 00:13:05,320
Speaker 13: I'd agree, And I think the main focus has really

252
00:13:05,360 --> 00:13:08,120
Speaker 13: been just how much the equity markets have been up,

253
00:13:08,800 --> 00:13:10,960
Speaker 13: and once we started to see that there was a

254
00:13:11,000 --> 00:13:15,040
Speaker 13: potential for a pause, there's just been this fervor that

255
00:13:15,360 --> 00:13:17,800
Speaker 13: people have just been not wanting to miss the boat,

256
00:13:18,080 --> 00:13:20,240
Speaker 13: you know, sort of a foamo trade that's sort of

257
00:13:20,440 --> 00:13:23,280
Speaker 13: been very strong for the last three weeks. So it

258
00:13:23,320 --> 00:13:26,080
Speaker 13: seems as if they're kind of forgetting about the FED

259
00:13:26,120 --> 00:13:26,679
Speaker 13: for a little bit.

260
00:13:26,760 --> 00:13:29,400
Speaker 11: But that might change tomorrow, depends on what he says.

261
00:13:29,880 --> 00:13:31,800
Speaker 12: Well, Captain, it's got lots going to depend on what

262
00:13:31,880 --> 00:13:34,400
Speaker 12: earnings are looking like, and some of called an earnings recession,

263
00:13:34,400 --> 00:13:36,800
Speaker 12: and we've still got this amazing rally going on. Give

264
00:13:36,880 --> 00:13:39,439
Speaker 12: us a sense of what is going on there.

265
00:13:40,640 --> 00:13:43,840
Speaker 13: Well, what's interesting to me is this rally is massive,

266
00:13:43,960 --> 00:13:46,880
Speaker 13: and what's even stranger what you were just talking about

267
00:13:46,880 --> 00:13:49,040
Speaker 13: with what's going on in China is that it's not

268
00:13:49,160 --> 00:13:52,560
Speaker 13: a consistent rally. It's particularly definitely in the AI sector.

269
00:13:53,000 --> 00:13:56,319
Speaker 13: It's more us than in other areas across the globe.

270
00:13:56,800 --> 00:13:59,240
Speaker 13: And I think the thing that's been the most interesting

271
00:13:59,320 --> 00:14:02,600
Speaker 13: is I think a lot of people are surprised at how.

272
00:14:02,400 --> 00:14:03,400
Speaker 11: Strong the rally's been.

273
00:14:03,400 --> 00:14:06,080
Speaker 13: I mean, let's just take an example, the nastas up

274
00:14:06,080 --> 00:14:08,880
Speaker 13: almost ten percent in the last two and a half weeks.

275
00:14:09,040 --> 00:14:12,720
Speaker 13: I mean that's a lot. And so I think that's

276
00:14:12,720 --> 00:14:15,720
Speaker 13: what's really been surprising to me. And I think people

277
00:14:16,240 --> 00:14:19,480
Speaker 13: today showed that example, they're worried about taking profit. They're

278
00:14:19,560 --> 00:14:22,640
Speaker 13: thinking about will this keep going or is this just fervor?

279
00:14:23,560 --> 00:14:26,880
Speaker 1: Yeah, you know. About a month ago, I noted that

280
00:14:26,960 --> 00:14:30,440
Speaker 1: one of the biggest bears on Wall Street, Savita Supermanian

281
00:14:30,880 --> 00:14:35,320
Speaker 1: at Bank of America, had turned positive, had turned bullish,

282
00:14:35,400 --> 00:14:39,560
Speaker 1: and she said she expected the equal weight part of

283
00:14:39,600 --> 00:14:41,760
Speaker 1: the S and P to rally and to take up

284
00:14:41,840 --> 00:14:45,760
Speaker 1: the slack, and that the megacaps MC go sideways or

285
00:14:45,760 --> 00:14:48,480
Speaker 1: they might drift around a little bit. And this is

286
00:14:48,520 --> 00:14:51,840
Speaker 1: something we've actually seen happen. Now you can say it's

287
00:14:51,880 --> 00:14:55,040
Speaker 1: not a trend yet, it's just a move. Maybe it's

288
00:14:55,040 --> 00:14:58,520
Speaker 1: a relief rally, but the cyclicals and the industrial or

289
00:14:58,560 --> 00:15:01,720
Speaker 1: the industrials and the material and the transports have rallied

290
00:15:01,760 --> 00:15:04,760
Speaker 1: seven to ten percent over the past month, and that

291
00:15:04,880 --> 00:15:07,280
Speaker 1: has to be good to the bulls as saying, look,

292
00:15:07,360 --> 00:15:09,280
Speaker 1: the breadth is coming, do you buy it?

293
00:15:10,920 --> 00:15:12,960
Speaker 13: I would agree that I would agree a little bit

294
00:15:12,960 --> 00:15:14,920
Speaker 13: as well, because we've tended to be a little more

295
00:15:15,000 --> 00:15:18,560
Speaker 13: bearish as well, and you've really seen one of the

296
00:15:18,600 --> 00:15:21,880
Speaker 13: few things that were short signals was the Russell, and

297
00:15:21,920 --> 00:15:24,360
Speaker 13: the Russell has definitely turned around as well.

298
00:15:24,440 --> 00:15:25,600
Speaker 11: And so I'd say that.

299
00:15:26,360 --> 00:15:30,280
Speaker 13: General optimism has spread from a simple tech story to

300
00:15:30,560 --> 00:15:34,560
Speaker 13: a things might be okay and that there may be

301
00:15:34,640 --> 00:15:38,880
Speaker 13: opportunities if things are on the right path going forward.

302
00:15:38,960 --> 00:15:42,520
Speaker 13: I think it's a little tricky with how strong it's been.

303
00:15:42,760 --> 00:15:46,320
Speaker 13: That's generally the sentiment I've heard from others.

304
00:15:46,560 --> 00:15:49,920
Speaker 12: What is the equity market telling us about the economy,

305
00:15:49,920 --> 00:15:52,600
Speaker 12: And on top of that, how I mean it does

306
00:15:52,600 --> 00:15:55,480
Speaker 12: seem it also depends where you look on the on

307
00:15:55,520 --> 00:15:57,640
Speaker 12: the yield curve what the bond market is saying, because

308
00:15:57,640 --> 00:15:59,160
Speaker 12: that different stories coming out there.

309
00:16:00,480 --> 00:16:02,960
Speaker 13: I would agree, and I mean I think we tend

310
00:16:02,960 --> 00:16:05,120
Speaker 13: to kind of we were, you know, I was thinking

311
00:16:05,120 --> 00:16:07,400
Speaker 13: about this today. It feels a little bit like the

312
00:16:07,440 --> 00:16:11,000
Speaker 13: bond market is in somewhat of a disconnect. And it's

313
00:16:11,080 --> 00:16:14,240
Speaker 13: tricky because you're also seeing a lot of rebalancing, and

314
00:16:14,280 --> 00:16:18,320
Speaker 13: you're seeing people moving into money market funds, for example,

315
00:16:18,360 --> 00:16:21,400
Speaker 13: because they're interested in higher yield, but yet at the

316
00:16:21,440 --> 00:16:24,800
Speaker 13: same time they're buying fixed income with potential signal for

317
00:16:24,920 --> 00:16:28,080
Speaker 13: rate hikes later this year. We tend to think that

318
00:16:28,880 --> 00:16:31,720
Speaker 13: the yield curve is not really pricing in, so there's

319
00:16:31,760 --> 00:16:35,600
Speaker 13: a disconnect between what those higher rates might be for

320
00:16:35,680 --> 00:16:37,760
Speaker 13: the curve and where the curve is today.

321
00:16:38,920 --> 00:16:40,320
Speaker 12: I just sort of get a sense of, you know,

322
00:16:40,400 --> 00:16:43,080
Speaker 12: with equity markets in the US doing so well, and

323
00:16:43,120 --> 00:16:44,840
Speaker 12: you know, you're looking at a Nasdaq one hundred up

324
00:16:44,840 --> 00:16:47,280
Speaker 12: about thirty seven percent so far this year, you've got

325
00:16:47,320 --> 00:16:49,200
Speaker 12: to say to yourself, hang on, there's got to be

326
00:16:49,560 --> 00:16:51,640
Speaker 12: a gut check, that's got to be a down draft,

327
00:16:51,920 --> 00:16:53,320
Speaker 12: you know, and then maybe I can buy on the

328
00:16:53,320 --> 00:16:56,040
Speaker 12: dip later on. But you know, how did that make

329
00:16:56,080 --> 00:16:59,880
Speaker 12: you look at em and what part of them, if anywhere?

330
00:17:01,120 --> 00:17:03,720
Speaker 13: Well, this is definitely some of the divergence we've seen

331
00:17:03,760 --> 00:17:05,119
Speaker 13: from a technical perspective.

332
00:17:05,160 --> 00:17:07,440
Speaker 11: You've seen massive rallies.

333
00:17:06,960 --> 00:17:10,399
Speaker 13: In Japan, but you've seen em lagging to some degree,

334
00:17:10,400 --> 00:17:11,560
Speaker 13: and particularly China.

335
00:17:12,440 --> 00:17:14,600
Speaker 11: And this really goes with the narrative.

336
00:17:14,240 --> 00:17:18,719
Speaker 13: That certain economies are just moving in very different directions

337
00:17:18,760 --> 00:17:21,160
Speaker 13: more than we've seen in recent periods. And I think

338
00:17:21,600 --> 00:17:25,320
Speaker 13: those signals have been moderate. But you know, nowhere in

339
00:17:25,359 --> 00:17:25,960
Speaker 13: the same.

340
00:17:25,760 --> 00:17:28,760
Speaker 11: Ballpark is what you've seen in Japan or tech in

341
00:17:28,800 --> 00:17:29,359
Speaker 11: the US.

342
00:17:30,040 --> 00:17:35,359
Speaker 13: So that's an interesting you know, cross you cross geographical

343
00:17:35,520 --> 00:17:37,960
Speaker 13: opportunity sets, and so it's kind of an interesting time

344
00:17:37,960 --> 00:17:39,520
Speaker 13: to be an equity investor in that sense.

345
00:17:40,640 --> 00:17:42,560
Speaker 1: I'm kind of sensing though that you're a bond girl

346
00:17:42,720 --> 00:17:46,480
Speaker 1: or a bond woman perhaps is more proper in that

347
00:17:46,880 --> 00:17:49,400
Speaker 1: some of the notes that you've got here about shorting

348
00:17:50,080 --> 00:17:53,639
Speaker 1: fixed income, it seems like you're still into that that

349
00:17:53,720 --> 00:17:56,399
Speaker 1: you see yields moving up and so there's still some

350
00:17:56,480 --> 00:18:00,320
Speaker 1: money to be made shorting some of these some of

351
00:18:00,359 --> 00:18:00,960
Speaker 1: these bonds.

352
00:18:02,040 --> 00:18:05,520
Speaker 13: Yeah, we've seen short signals across the board and fixed income,

353
00:18:05,640 --> 00:18:07,960
Speaker 13: and we tend to be the only person kind of

354
00:18:08,000 --> 00:18:11,560
Speaker 13: pointing out if inflation is sticky, it's.

355
00:18:11,400 --> 00:18:13,680
Speaker 11: Going to be difficult for long term cash flows.

356
00:18:13,720 --> 00:18:16,120
Speaker 13: And I think most people have this disconnect where they

357
00:18:16,119 --> 00:18:19,119
Speaker 13: just say, well, hey, rates are higher, who cares? And

358
00:18:19,160 --> 00:18:20,840
Speaker 13: I think for us, who are much more in a

359
00:18:20,880 --> 00:18:25,399
Speaker 13: frequency that's a shorter term frequency, we're thinking higher rates

360
00:18:26,000 --> 00:18:26,760
Speaker 13: negative MPV.

361
00:18:27,119 --> 00:18:29,800
Speaker 11: This is an interesting opportunity for a potential.

362
00:18:29,359 --> 00:18:33,160
Speaker 13: Steepener, and you might have some more interesting opportunities as

363
00:18:33,160 --> 00:18:36,000
Speaker 13: a short.

364
00:18:34,720 --> 00:18:36,400
Speaker 11: Bond trader like you did last year.

365
00:18:36,400 --> 00:18:38,000
Speaker 13: I mean, let's just be honest, that was the best

366
00:18:38,000 --> 00:18:39,760
Speaker 13: trade last year, and I think it still has some

367
00:18:39,840 --> 00:18:40,440
Speaker 13: room to run.

368
00:18:41,240 --> 00:18:44,480
Speaker 1: So short the short end of sovereigns and also credit.

369
00:18:45,880 --> 00:18:47,320
Speaker 11: So credit's a little trickier.

370
00:18:47,400 --> 00:18:49,679
Speaker 13: We are not as exposed to credit just because we

371
00:18:49,880 --> 00:18:52,560
Speaker 13: primarily focus in the futures markets. I think credit has

372
00:18:52,600 --> 00:18:56,280
Speaker 13: been moving a little bit disjointed with what we're seeing.

373
00:18:56,359 --> 00:18:58,719
Speaker 13: I think that is not something that I would have

374
00:18:58,760 --> 00:19:02,080
Speaker 13: a comment on. But I filiam seeing short positioning on

375
00:19:02,119 --> 00:19:05,159
Speaker 13: the long end of the curve as well, so I

376
00:19:05,160 --> 00:19:07,240
Speaker 13: think that's where there could be something interesting if we

377
00:19:07,320 --> 00:19:08,720
Speaker 13: have a strong steepener.

378
00:19:10,000 --> 00:19:12,800
Speaker 1: This is Bloomberg Daybreak Asia, your morning brief on the

379
00:19:12,920 --> 00:19:16,600
Speaker 1: story's making news from Hong Kong to Singapore and Wall Street.

380
00:19:16,680 --> 00:19:19,879
Speaker 2: Look for us on your podcast feed every day, on Apple,

381
00:19:20,080 --> 00:19:22,920
Speaker 2: Spotify and anywhere else you get your podcast.

382
00:19:23,080 --> 00:19:25,680
Speaker 1: You can also listen live each day on Bloomberg eleven

383
00:19:25,720 --> 00:19:28,080
Speaker 1: three to zero in New York, Bloomberg ninety nine to

384
00:19:28,119 --> 00:19:31,360
Speaker 1: one in Washington, Bloomberg one oh six one in Boston,

385
00:19:31,640 --> 00:19:34,119
Speaker 1: and Bloomberg nine sixty in San Francisco.

386
00:19:34,400 --> 00:19:37,360
Speaker 2: Our flagship New York station is also available on your

387
00:19:37,400 --> 00:19:42,480
Speaker 2: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.

388
00:19:42,280 --> 00:19:45,480
Speaker 1: Plus listen coast to coast on the Bloomberg Business app,

389
00:19:45,760 --> 00:19:49,960
Speaker 1: Sirius XM Channel one nineteen, the iHeartRadio app, and on

390
00:19:50,000 --> 00:19:53,080
Speaker 1: Bloomberg dot Com. I'm Brian Curtis.

391
00:19:52,840 --> 00:19:55,280
Speaker 2: And I'm Doug Krisner. Join us again tomorrow for all

392
00:19:55,320 --> 00:19:57,800
Speaker 2: the news you need to start your day right here

393
00:19:57,880 --> 00:19:59,280
Speaker 2: on Bloomberg Daybreak Asia.

394
00:20:00,680 --> 00:20:01,199
Speaker 9: How can you do