WEBVTT - Traders Await Fed Testimony, Restructuring at Alibaba

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<v Speaker 1>This is Bloomberg day Break Asia for this Wednesday, June

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<v Speaker 1>twenty first in Hong Kong, Tuesday June twentieth in New

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<v Speaker 1>York and coming up today.

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<v Speaker 2>US equities decline as the market looks ahead to FED

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<v Speaker 2>share Jay Powell's testimony on Capitol Hill.

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<v Speaker 1>Rivian adopts Tesla's electric vehicle charging ports into its existing

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<v Speaker 1>EV models.

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<v Speaker 2>And Jack Maw's longest serving lieutenants return to power at

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<v Speaker 2>Ali Baba to oversee a tough restructuring.

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<v Speaker 3>The search continues for the submersible that went down diving

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<v Speaker 3>on the Titanic. Hunter Biden will plead guilty to two

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<v Speaker 3>tax crimes and to be blanket and Chinese officials meet

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<v Speaker 3>yet again. On Ben Schwartzman, I'll have your news coming up.

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<v Speaker 4>That's all straight ahead on Bloomberg day Break Asia, the

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<v Speaker 4>business news you need to start your day, and just

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<v Speaker 4>one fifteen minute podcast available on Apple, Spotify, the Bloomberg

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<v Speaker 4>Business App, and everywhere you get your podcasts.

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<v Speaker 1>Good morning, I'm Doug Prisner and I'm Brian Curtis. Here

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<v Speaker 1>are the stories we're following today.

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<v Speaker 5>Chair J.

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<v Speaker 1>Powell will deliver the FED semi Annual Monetary Policy Report

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<v Speaker 1>to the House tomorrow. Bloomberg's Michael McKee has a preview.

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<v Speaker 6>In the House, the Fed chairman will have the opportunity

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<v Speaker 6>to clarify what some feel was a confusing message on

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<v Speaker 6>the path for interest rates. What would lead central bankers

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<v Speaker 6>to raise rates again something their own forecasts suggests will happen.

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<v Speaker 6>Does inflation have to rise, does unemployment or does it

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<v Speaker 6>just have to remain flat? What is the ultimate end rate?

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<v Speaker 6>And how soon after that might they begin the rate

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<v Speaker 6>cuts they foresee for twenty twenty four. There will also

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<v Speaker 6>be questions about the impact of March's bank failures and

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<v Speaker 6>on possible regulatory changes for the industry. Michael McKee, Bloomberg Daybreak.

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<v Speaker 1>Asia Powell will also testify before the US Senate the

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<v Speaker 1>following day.

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<v Speaker 6>On Thursday, after.

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<v Speaker 2>The bell, we heard from FedEx. The company gave a

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<v Speaker 2>profit outlook for twenty twenty four below analyst estimates. FedEx

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<v Speaker 2>has been dealing with a drop in packaged demand, and

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<v Speaker 2>that's kind of a reversal from two years of surging

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<v Speaker 2>demand from online shopping during the pandemic. We heard earlier

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<v Speaker 2>from Bloomberg's Lee Cascou.

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<v Speaker 7>There's a lot of uncertainty out there. You know, there's

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<v Speaker 7>still a risk of a US recession. There's still we

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<v Speaker 7>don't really know what's going on with China. You know,

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<v Speaker 7>are they going to increase stimulus. Is that going to

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<v Speaker 7>you know, help that economy. Cutex is pretty big in China,

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<v Speaker 7>so you know, that's been a kind of a drag

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<v Speaker 7>on their results, kind of the slow reopening of China

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<v Speaker 7>in the related Asian market.

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<v Speaker 2>That is Bloomberg's League class cow. By the way, FedEx

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<v Speaker 2>also reported for the fourth quarter revenue of twenty one

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<v Speaker 2>point nine billion, missing the mark the street was looking

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<v Speaker 2>for twenty two point seven billion. FedEx will try to

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<v Speaker 2>continue and improve margins with its accelerated cost cutting plan

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<v Speaker 2>that was announced back in December. The company is hoping

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<v Speaker 2>to save about four billion dollars by fiscal twenty twenty

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<v Speaker 2>five and shares in FedEx right now the ticker fd

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<v Speaker 2>I see the stock down about two percent of the

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<v Speaker 2>late US trading.

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<v Speaker 1>Brian Rivian has agreed to incorporate Tesla's electric vehicle charging

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<v Speaker 1>ports into its existing EV models. We're hearing that the

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<v Speaker 1>new agreement will give Rivian drivers access to more than

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<v Speaker 1>twelve thousand Tesla superchargers right across the United States and

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<v Speaker 1>Canada beginning from next year. More from Bloomberg's Ed Ludlow.

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<v Speaker 8>And it was really interesting because it's probably a bitter

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<v Speaker 8>pill for Rivian to swallow. You know, they wanted to

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<v Speaker 8>be their own person, their own electric vehicle startup. They're

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<v Speaker 8>actually building out their own CCS charging network, which they

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<v Speaker 8>say they're committed to. But the news is that from

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<v Speaker 8>next year, Rivian owners can use the Tesla charging network

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<v Speaker 8>with an adaptor, and then from twenty twenty five they'll

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<v Speaker 8>start building their vehicles modified to reflect that Tesla standard.

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<v Speaker 1>Rivian's announcement follows similar moves by Ford and General Motors.

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<v Speaker 1>The availability and reliability of charging infrastructure is seen as

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<v Speaker 1>a critical factor for broader EV adoption. Standard could give

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<v Speaker 1>consumers greater confidence as they consider a plug in purchase.

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<v Speaker 1>Tesla's charging network has a reputation for reliability that ranks

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<v Speaker 1>the highest in a recent jd Power survey of EV drivers,

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<v Speaker 1>and as mentioned, Tesla stock was up more than five

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<v Speaker 1>percent today and Rivian stock was up five and a

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<v Speaker 1>half percent well.

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<v Speaker 2>Speaking of Tesla, talks between the company and the Government

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<v Speaker 2>of India on a new EV plant may gain momentum.

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<v Speaker 2>Prime Minister Narenvvermodi is visiting the US and we hear

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<v Speaker 2>an important meeting maybe on the agenda this evening here

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<v Speaker 2>in New York. We have more from Bloomberg's Tom Busby.

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<v Speaker 5>Mody slated to meet with Tesla's CEO Elon Musk as

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<v Speaker 5>India tries to lure the automaker to produce its electric

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<v Speaker 5>cars there. This meeting, which could also include upwards of

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<v Speaker 5>two dozen high profile participants, comes after Tesla and India

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<v Speaker 5>revived talks to build an assembly plant there in May,

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<v Speaker 5>following a year long standoff. Asia's third largest economy now

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<v Speaker 5>trying to position itself as an alternate destination for Teesch

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<v Speaker 5>and other companies that want to limit their exposure to

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<v Speaker 5>China or at least diversify their sourcing of autoparts and production.

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<v Speaker 5>Tom buzzby Bloomberg day Break Asia.

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<v Speaker 1>Ali Baba shares fell after it announced an unexpected shakeup

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<v Speaker 1>at the top. Bloomberg's Yvon Mann has more from Hong Kong.

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<v Speaker 9>Ali Baba's US traded shares fell four and a half

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<v Speaker 9>percent in New York. The company's surprise investors with this move,

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<v Speaker 9>Eddie Wu and Joseph Say will replace Daniel Jong as

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<v Speaker 9>CEO and executive chairman, respectively. Both Wu and Hi are

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<v Speaker 9>longtime confidants of co founder Jack ma. John's unexpected departure

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<v Speaker 9>comes after Ali Baba announced a six way restructuring. He

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<v Speaker 9>will still remain as the head of the cloud business

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<v Speaker 9>to potentially sharpen opportunities in AI. Ali Baba hopes a

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<v Speaker 9>Newbury shuffle will help guide the company through a tough

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<v Speaker 9>restructuring in Hong Kong. I'm yvon Mann Bloomberg Day Break Asia.

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<v Speaker 1>It's quite interesting that Ali Baba traded down so much

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<v Speaker 1>more in the New York session that it did in

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<v Speaker 1>Hong Kong yesterday. This news was out early in the

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<v Speaker 1>day yesterday and Ali Baba was only down one and

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<v Speaker 1>a half percent. But I suppose when you look at

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<v Speaker 1>this story, Doug, it just any sort of trouble at

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<v Speaker 1>the top, or any sort of big moves at the

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<v Speaker 1>top will unnerve some investors. And this is still a

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<v Speaker 1>complicated process of separating this company into six different parts.

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<v Speaker 2>Yeah, and we were talking about the fact that Jack

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<v Speaker 2>May is still involved maybe in making these decisions or

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<v Speaker 2>helping to guide the company going forward. Kind of underscores

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<v Speaker 2>the fact that he remains the spiritual leader of BABA.

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<v Speaker 2>And I'm wondering, Brian, given the price action that we

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<v Speaker 2>saw in New York and the ADRs, whether some of

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<v Speaker 2>this has to do with a bigger macro story in China.

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<v Speaker 2>The disappointment we were talking about earlier with the cut

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<v Speaker 2>in the five year loan prime rate by only ten

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<v Speaker 2>basis points, A lot of economists were looking for something

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<v Speaker 2>maybe in the neighborhood of fifteen doesn't sound like a

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<v Speaker 2>big difference, but I'm thinking about the psycho logical impact

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<v Speaker 2>and the message that consumers may be getting when they

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<v Speaker 2>get news like this.

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<v Speaker 1>Yeah, I think that's I think that's an accurate comment.

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<v Speaker 1>In fact, it's something that we heard from you. Remember

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<v Speaker 1>our old colleague vasern Lang, who used to work at

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<v Speaker 1>Bloomberg Intelligence now as a managing director at UBP, and

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<v Speaker 1>he said, basically, in terms of looking at Ali Baba,

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<v Speaker 1>it's such a China proxy that is really dragged down

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<v Speaker 1>by the geopolitics and by China's economy. Never mind you

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<v Speaker 1>some of this restructuring. What's interesting is you have two

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<v Speaker 1>very cool stories of corporates getting changed here, one from

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<v Speaker 1>the inside out, and the other from the outside in.

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<v Speaker 1>I'm speaking first of Ali Baba, which we've just talked about,

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<v Speaker 1>and the other Perelli, and that's a move that was

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<v Speaker 1>really prompted by the Italian government.

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<v Speaker 2>Yeah, that is a very interesting story. But to get

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<v Speaker 2>back to Boba very quickly here, I think it's also

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<v Speaker 2>fair to point out that the company has been facing

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<v Speaker 2>increasing competition. I'm thinking of Pindwo Duo as one example, right,

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<v Speaker 2>and I think that's part of the struggle here for

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<v Speaker 2>the company to get back on track in the face

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<v Speaker 2>of a very very different landscape than when Baba first

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<v Speaker 2>showed up however, many years ago.

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<v Speaker 1>And that's the way it should be. I mean, there

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<v Speaker 1>should be a lot of competition, and I think this

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<v Speaker 1>move to separate into six parts will allow each company

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<v Speaker 1>to try to become nimble and the best performer in

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<v Speaker 1>the respective area. And Daniel Jong, the existing CEO who

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<v Speaker 1>has had his position change, is not leaving. He's going

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<v Speaker 1>to head up the cloud division, as we talked about earlier,

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<v Speaker 1>and that might be the most important in that it

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<v Speaker 1>will embrace AI. So there's a lot coming up on

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<v Speaker 1>this story. Now it's time for Global News. The search

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<v Speaker 1>continues for the missing submersible, and Dan Schwartzman has more

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<v Speaker 1>from the New York newsroom.

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<v Speaker 3>Dan, Yeah, it's like a bad movie, to say the

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<v Speaker 3>least Brian. They've now shifted underwater with that search. As

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<v Speaker 3>air efforts did not find the craft, which has five

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<v Speaker 3>passengers on board. As say that the crew has around

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<v Speaker 3>forty hours of oxygen left. That was pretty much as

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<v Speaker 3>of earlier this afternoon, based on the design of the craft,

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<v Speaker 3>which is supposed to have an oxygen supply of ninety

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<v Speaker 3>six hours in case of an emergency. The New York

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<v Speaker 3>Times saying that passengers pay a quarter of a million

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<v Speaker 3>dollars to Ocean Gate expeditions to go down to the

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<v Speaker 3>wreck aboard the diving vessel called Titan. US Coast Guard

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<v Speaker 3>were Admiral John Mayer says teams are using everything available

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<v Speaker 3>in this search.

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<v Speaker 10>Our crews in the Coast Guard and partners across both

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<v Speaker 10>the US government and within Canada and the private sector

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<v Speaker 10>have been working around the clock to bring all capabilities

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<v Speaker 10>that we have to bear on finding the submersibon locating

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<v Speaker 10>the people.

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<v Speaker 3>The search area is the size of Connecticut. President Biden's

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<v Speaker 3>son Hunter will plead guilty to two misdemeanor tax crimes.

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<v Speaker 3>Biden will also enter into an agreement with prosecutors to

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<v Speaker 3>avoid charges of possessing a firearm while addicted to an

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<v Speaker 3>illegal drug. The deal comes on the heels of a

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<v Speaker 3>five year investigation, will likely with Hunter Biden avoiding jail time.

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<v Speaker 3>Biden is expected to participate in a federal diversion program,

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<v Speaker 3>which could lead to the weapons charges being dropped if

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<v Speaker 3>he complies with certain conditions over a specific time period.

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<v Speaker 3>Republican Senator Lindsay Graham questions the charges.

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<v Speaker 11>Sorry, he's had problems.

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<v Speaker 10>You know, I don't wish that own any family, But

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<v Speaker 10>this has taken over four years, and to wind up

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<v Speaker 10>with tax evation and a gun charge, there'll be a

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<v Speaker 10>lot of questions.

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<v Speaker 3>Graham was speaking in South Carolina. A non bailable arrest

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<v Speaker 3>warrant has been issued against cricket star turned former Prime

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<v Speaker 3>Minister of Pakistan Imran Khan, an anti terrorist cord in Lahore,

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<v Speaker 3>giving the order at the prosecutor's request as con in

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<v Speaker 3>some of his aides are allegedly linked to violence in

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<v Speaker 3>the country last month. Protests broke out on May ninth

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<v Speaker 3>after Cohn was briefly arrested on corruption allegations. Cohn has

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<v Speaker 3>faced more than one hundred cases against him since being

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<v Speaker 3>ousted from power last year, although he says they are

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<v Speaker 3>all politically motivated. More than a week after the collapse

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<v Speaker 3>of a section of Highway I ninety five in Philadelphia,

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<v Speaker 3>temporary of lanes will be opening this weekend, Pennsylvania Governor

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<v Speaker 3>Josh Shapiro saying permanent repairs were to follow after the

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<v Speaker 3>June eleventh collapse due to a tractor trailer carrying gasoline

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<v Speaker 3>flipping over an off ramp, leading to a fire that

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<v Speaker 3>brought down the section of highway. More than one hundred

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<v Speaker 3>and fifty thousand vehicles, including over fourteen thousand trucks, use

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<v Speaker 3>that portion of I ninety five on a daily basis,

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<v Speaker 3>Governor Shapiro, with details.

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<v Speaker 12>And dot's already working on that.

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<v Speaker 3>We're going to have three lanes nor A three lanes south.

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<v Speaker 3>Traffic's going to be flowing while while that's happening, we'll

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<v Speaker 3>be rebuilding the bridge from the outside in. There'll be

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<v Speaker 3>no disruption to traffic.

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<v Speaker 5>There'll always be six lanes moving during that process.

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<v Speaker 3>Global News twenty fours a day, power by more than

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<v Speaker 3>twenty seven hundred journalists and analysts in more than one

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<v Speaker 3>hundred and twenty countries. I'm Dan Schwartzman. This is Bloomberg.

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<v Speaker 1>I'm Brian Curtis in Hong Kong alongside Rashad Salamat here

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<v Speaker 1>in our studios. And Catherine Kaminski joins US chief research

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<v Speaker 1>strategist and portfolio manager at Alpha Simplex Group on with

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<v Speaker 1>us from Brookline, Massachusetts. Well, Catherine, you probably noticed that

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<v Speaker 1>Doug and I got through our chat without even talking

0:12:05.600 --> 0:12:08.719
<v Speaker 1>about the FED for a moment, which I can take

0:12:08.800 --> 0:12:11.120
<v Speaker 1>as progress. It's nice to set the macroside a little bit,

0:12:11.240 --> 0:12:13.240
<v Speaker 1>of course, it's one of our top stories, and the

0:12:13.320 --> 0:12:16.680
<v Speaker 1>chair will be speaking. Will he toughen up his language?

0:12:16.840 --> 0:12:17.960
<v Speaker 1>Is that the sense you're getting?

0:12:19.280 --> 0:12:19.840
<v Speaker 11>I think so.

0:12:20.080 --> 0:12:22.520
<v Speaker 13>I mean, what's been interesting to us is that we've

0:12:22.760 --> 0:12:26.400
<v Speaker 13>can continue to have short signals and fixed income and

0:12:26.440 --> 0:12:28.520
<v Speaker 13>it feels sometimes like I'm the only one at the

0:12:28.559 --> 0:12:31.600
<v Speaker 13>table saying that. And what it means is that I

0:12:31.640 --> 0:12:33.840
<v Speaker 13>do really think there's going to be possibly one to

0:12:33.920 --> 0:12:37.120
<v Speaker 13>two more hikes this year because let's just be honest,

0:12:37.200 --> 0:12:41.719
<v Speaker 13>inflation is lower, but it's not low, so that's going

0:12:41.760 --> 0:12:44.280
<v Speaker 13>to take some effort. On their point, they probably want

0:12:44.280 --> 0:12:46.959
<v Speaker 13>to set expectations, so people don't get too optimistic.

0:12:48.000 --> 0:12:49.920
<v Speaker 1>I almost think that the market has kind of moved

0:12:49.920 --> 0:12:52.760
<v Speaker 1>beyond it in a sense that the market just seems

0:12:52.760 --> 0:12:54.880
<v Speaker 1>investors just don't seem to be that concerned whether you

0:12:54.920 --> 0:12:57.600
<v Speaker 1>get another one or two rate hikes, have already had

0:12:57.960 --> 0:13:01.280
<v Speaker 1>so many to get to five percentage points.

0:13:02.480 --> 0:13:05.320
<v Speaker 13>I'd agree, And I think the main focus has really

0:13:05.360 --> 0:13:08.120
<v Speaker 13>been just how much the equity markets have been up,

0:13:08.800 --> 0:13:10.960
<v Speaker 13>and once we started to see that there was a

0:13:11.000 --> 0:13:15.040
<v Speaker 13>potential for a pause, there's just been this fervor that

0:13:15.360 --> 0:13:17.800
<v Speaker 13>people have just been not wanting to miss the boat,

0:13:18.080 --> 0:13:20.240
<v Speaker 13>you know, sort of a foamo trade that's sort of

0:13:20.440 --> 0:13:23.280
<v Speaker 13>been very strong for the last three weeks. So it

0:13:23.320 --> 0:13:26.080
<v Speaker 13>seems as if they're kind of forgetting about the FED

0:13:26.120 --> 0:13:26.679
<v Speaker 13>for a little bit.

0:13:26.760 --> 0:13:29.400
<v Speaker 11>But that might change tomorrow, depends on what he says.

0:13:29.880 --> 0:13:31.800
<v Speaker 12>Well, Captain, it's got lots going to depend on what

0:13:31.880 --> 0:13:34.400
<v Speaker 12>earnings are looking like, and some of called an earnings recession,

0:13:34.400 --> 0:13:36.800
<v Speaker 12>and we've still got this amazing rally going on. Give

0:13:36.880 --> 0:13:39.439
<v Speaker 12>us a sense of what is going on there.

0:13:40.640 --> 0:13:43.840
<v Speaker 13>Well, what's interesting to me is this rally is massive,

0:13:43.960 --> 0:13:46.880
<v Speaker 13>and what's even stranger what you were just talking about

0:13:46.880 --> 0:13:49.040
<v Speaker 13>with what's going on in China is that it's not

0:13:49.160 --> 0:13:52.560
<v Speaker 13>a consistent rally. It's particularly definitely in the AI sector.

0:13:53.000 --> 0:13:56.319
<v Speaker 13>It's more us than in other areas across the globe.

0:13:56.800 --> 0:13:59.240
<v Speaker 13>And I think the thing that's been the most interesting

0:13:59.320 --> 0:14:02.600
<v Speaker 13>is I think a lot of people are surprised at how.

0:14:02.400 --> 0:14:03.400
<v Speaker 11>Strong the rally's been.

0:14:03.400 --> 0:14:06.080
<v Speaker 13>I mean, let's just take an example, the nastas up

0:14:06.080 --> 0:14:08.880
<v Speaker 13>almost ten percent in the last two and a half weeks.

0:14:09.040 --> 0:14:12.720
<v Speaker 13>I mean that's a lot. And so I think that's

0:14:12.720 --> 0:14:15.720
<v Speaker 13>what's really been surprising to me. And I think people

0:14:16.240 --> 0:14:19.480
<v Speaker 13>today showed that example, they're worried about taking profit. They're

0:14:19.560 --> 0:14:22.640
<v Speaker 13>thinking about will this keep going or is this just fervor?

0:14:23.560 --> 0:14:26.880
<v Speaker 1>Yeah, you know. About a month ago, I noted that

0:14:26.960 --> 0:14:30.440
<v Speaker 1>one of the biggest bears on Wall Street, Savita Supermanian

0:14:30.880 --> 0:14:35.320
<v Speaker 1>at Bank of America, had turned positive, had turned bullish,

0:14:35.400 --> 0:14:39.560
<v Speaker 1>and she said she expected the equal weight part of

0:14:39.600 --> 0:14:41.760
<v Speaker 1>the S and P to rally and to take up

0:14:41.840 --> 0:14:45.760
<v Speaker 1>the slack, and that the megacaps MC go sideways or

0:14:45.760 --> 0:14:48.480
<v Speaker 1>they might drift around a little bit. And this is

0:14:48.520 --> 0:14:51.840
<v Speaker 1>something we've actually seen happen. Now you can say it's

0:14:51.880 --> 0:14:55.040
<v Speaker 1>not a trend yet, it's just a move. Maybe it's

0:14:55.040 --> 0:14:58.520
<v Speaker 1>a relief rally, but the cyclicals and the industrial or

0:14:58.560 --> 0:15:01.720
<v Speaker 1>the industrials and the material and the transports have rallied

0:15:01.760 --> 0:15:04.760
<v Speaker 1>seven to ten percent over the past month, and that

0:15:04.880 --> 0:15:07.280
<v Speaker 1>has to be good to the bulls as saying, look,

0:15:07.360 --> 0:15:09.280
<v Speaker 1>the breadth is coming, do you buy it?

0:15:10.920 --> 0:15:12.960
<v Speaker 13>I would agree that I would agree a little bit

0:15:12.960 --> 0:15:14.920
<v Speaker 13>as well, because we've tended to be a little more

0:15:15.000 --> 0:15:18.560
<v Speaker 13>bearish as well, and you've really seen one of the

0:15:18.600 --> 0:15:21.880
<v Speaker 13>few things that were short signals was the Russell, and

0:15:21.920 --> 0:15:24.360
<v Speaker 13>the Russell has definitely turned around as well.

0:15:24.440 --> 0:15:25.600
<v Speaker 11>And so I'd say that.

0:15:26.360 --> 0:15:30.280
<v Speaker 13>General optimism has spread from a simple tech story to

0:15:30.560 --> 0:15:34.560
<v Speaker 13>a things might be okay and that there may be

0:15:34.640 --> 0:15:38.880
<v Speaker 13>opportunities if things are on the right path going forward.

0:15:38.960 --> 0:15:42.520
<v Speaker 13>I think it's a little tricky with how strong it's been.

0:15:42.760 --> 0:15:46.320
<v Speaker 13>That's generally the sentiment I've heard from others.

0:15:46.560 --> 0:15:49.920
<v Speaker 12>What is the equity market telling us about the economy,

0:15:49.920 --> 0:15:52.600
<v Speaker 12>And on top of that, how I mean it does

0:15:52.600 --> 0:15:55.480
<v Speaker 12>seem it also depends where you look on the on

0:15:55.520 --> 0:15:57.640
<v Speaker 12>the yield curve what the bond market is saying, because

0:15:57.640 --> 0:15:59.160
<v Speaker 12>that different stories coming out there.

0:16:00.480 --> 0:16:02.960
<v Speaker 13>I would agree, and I mean I think we tend

0:16:02.960 --> 0:16:05.120
<v Speaker 13>to kind of we were, you know, I was thinking

0:16:05.120 --> 0:16:07.400
<v Speaker 13>about this today. It feels a little bit like the

0:16:07.440 --> 0:16:11.000
<v Speaker 13>bond market is in somewhat of a disconnect. And it's

0:16:11.080 --> 0:16:14.240
<v Speaker 13>tricky because you're also seeing a lot of rebalancing, and

0:16:14.280 --> 0:16:18.320
<v Speaker 13>you're seeing people moving into money market funds, for example,

0:16:18.360 --> 0:16:21.400
<v Speaker 13>because they're interested in higher yield, but yet at the

0:16:21.440 --> 0:16:24.800
<v Speaker 13>same time they're buying fixed income with potential signal for

0:16:24.920 --> 0:16:28.080
<v Speaker 13>rate hikes later this year. We tend to think that

0:16:28.880 --> 0:16:31.720
<v Speaker 13>the yield curve is not really pricing in, so there's

0:16:31.760 --> 0:16:35.600
<v Speaker 13>a disconnect between what those higher rates might be for

0:16:35.680 --> 0:16:37.760
<v Speaker 13>the curve and where the curve is today.

0:16:38.920 --> 0:16:40.320
<v Speaker 12>I just sort of get a sense of, you know,

0:16:40.400 --> 0:16:43.080
<v Speaker 12>with equity markets in the US doing so well, and

0:16:43.120 --> 0:16:44.840
<v Speaker 12>you know, you're looking at a Nasdaq one hundred up

0:16:44.840 --> 0:16:47.280
<v Speaker 12>about thirty seven percent so far this year, you've got

0:16:47.320 --> 0:16:49.200
<v Speaker 12>to say to yourself, hang on, there's got to be

0:16:49.560 --> 0:16:51.640
<v Speaker 12>a gut check, that's got to be a down draft,

0:16:51.920 --> 0:16:53.320
<v Speaker 12>you know, and then maybe I can buy on the

0:16:53.320 --> 0:16:56.040
<v Speaker 12>dip later on. But you know, how did that make

0:16:56.080 --> 0:16:59.880
<v Speaker 12>you look at em and what part of them, if anywhere?

0:17:01.120 --> 0:17:03.720
<v Speaker 13>Well, this is definitely some of the divergence we've seen

0:17:03.760 --> 0:17:05.119
<v Speaker 13>from a technical perspective.

0:17:05.160 --> 0:17:07.440
<v Speaker 11>You've seen massive rallies.

0:17:06.960 --> 0:17:10.399
<v Speaker 13>In Japan, but you've seen em lagging to some degree,

0:17:10.400 --> 0:17:11.560
<v Speaker 13>and particularly China.

0:17:12.440 --> 0:17:14.600
<v Speaker 11>And this really goes with the narrative.

0:17:14.240 --> 0:17:18.719
<v Speaker 13>That certain economies are just moving in very different directions

0:17:18.760 --> 0:17:21.160
<v Speaker 13>more than we've seen in recent periods. And I think

0:17:21.600 --> 0:17:25.320
<v Speaker 13>those signals have been moderate. But you know, nowhere in

0:17:25.359 --> 0:17:25.960
<v Speaker 13>the same.

0:17:25.760 --> 0:17:28.760
<v Speaker 11>Ballpark is what you've seen in Japan or tech in

0:17:28.800 --> 0:17:29.359
<v Speaker 11>the US.

0:17:30.040 --> 0:17:35.359
<v Speaker 13>So that's an interesting you know, cross you cross geographical

0:17:35.520 --> 0:17:37.960
<v Speaker 13>opportunity sets, and so it's kind of an interesting time

0:17:37.960 --> 0:17:39.520
<v Speaker 13>to be an equity investor in that sense.

0:17:40.640 --> 0:17:42.560
<v Speaker 1>I'm kind of sensing though that you're a bond girl

0:17:42.720 --> 0:17:46.480
<v Speaker 1>or a bond woman perhaps is more proper in that

0:17:46.880 --> 0:17:49.400
<v Speaker 1>some of the notes that you've got here about shorting

0:17:50.080 --> 0:17:53.639
<v Speaker 1>fixed income, it seems like you're still into that that

0:17:53.720 --> 0:17:56.399
<v Speaker 1>you see yields moving up and so there's still some

0:17:56.480 --> 0:18:00.320
<v Speaker 1>money to be made shorting some of these some of

0:18:00.359 --> 0:18:00.960
<v Speaker 1>these bonds.

0:18:02.040 --> 0:18:05.520
<v Speaker 13>Yeah, we've seen short signals across the board and fixed income,

0:18:05.640 --> 0:18:07.960
<v Speaker 13>and we tend to be the only person kind of

0:18:08.000 --> 0:18:11.560
<v Speaker 13>pointing out if inflation is sticky, it's.

0:18:11.400 --> 0:18:13.680
<v Speaker 11>Going to be difficult for long term cash flows.

0:18:13.720 --> 0:18:16.120
<v Speaker 13>And I think most people have this disconnect where they

0:18:16.119 --> 0:18:19.119
<v Speaker 13>just say, well, hey, rates are higher, who cares? And

0:18:19.160 --> 0:18:20.840
<v Speaker 13>I think for us, who are much more in a

0:18:20.880 --> 0:18:25.399
<v Speaker 13>frequency that's a shorter term frequency, we're thinking higher rates

0:18:26.000 --> 0:18:26.760
<v Speaker 13>negative MPV.

0:18:27.119 --> 0:18:29.800
<v Speaker 11>This is an interesting opportunity for a potential.

0:18:29.359 --> 0:18:33.160
<v Speaker 13>Steepener, and you might have some more interesting opportunities as

0:18:33.160 --> 0:18:36.000
<v Speaker 13>a short.

0:18:34.720 --> 0:18:36.400
<v Speaker 11>Bond trader like you did last year.

0:18:36.400 --> 0:18:38.000
<v Speaker 13>I mean, let's just be honest, that was the best

0:18:38.000 --> 0:18:39.760
<v Speaker 13>trade last year, and I think it still has some

0:18:39.840 --> 0:18:40.440
<v Speaker 13>room to run.

0:18:41.240 --> 0:18:44.480
<v Speaker 1>So short the short end of sovereigns and also credit.

0:18:45.880 --> 0:18:47.320
<v Speaker 11>So credit's a little trickier.

0:18:47.400 --> 0:18:49.679
<v Speaker 13>We are not as exposed to credit just because we

0:18:49.880 --> 0:18:52.560
<v Speaker 13>primarily focus in the futures markets. I think credit has

0:18:52.600 --> 0:18:56.280
<v Speaker 13>been moving a little bit disjointed with what we're seeing.

0:18:56.359 --> 0:18:58.719
<v Speaker 13>I think that is not something that I would have

0:18:58.760 --> 0:19:02.080
<v Speaker 13>a comment on. But I filiam seeing short positioning on

0:19:02.119 --> 0:19:05.159
<v Speaker 13>the long end of the curve as well, so I

0:19:05.160 --> 0:19:07.240
<v Speaker 13>think that's where there could be something interesting if we

0:19:07.320 --> 0:19:08.720
<v Speaker 13>have a strong steepener.

0:19:10.000 --> 0:19:12.800
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