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Speaker 1: Good morning. I'm Brian Curtis. Here are the stories we're

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Speaker 1: following today. Nvidia is selling a less capable version of

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Speaker 1: its top graphics product for video gamers in China. This

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Speaker 1: comes after the US government tightened restrictions on what the

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Speaker 1: company can market there. The version of the GTX forty

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Speaker 1: ninety D ship is listed for sale on in Vidia's

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Speaker 1: China website, but it has about ten percent fewer processing

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Speaker 1: cores than the forty ninety that is sold in other countries,

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Speaker 1: and Vidia's CEO Jensen Huang has said that the company

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Speaker 1: will produce versions of its products for China that comply

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Speaker 1: with US export curves. Well half of the container ship

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Speaker 1: fleet that regularly transits the Red Sea and Suez Canal

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Speaker 1: is avoiding the route now because of the threat of attacks.

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Speaker 1: We get the story from Bloomberg's Karen Moscow.

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Speaker 2: A tally can file them by Flexport shows almost three

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Speaker 2: hundred vessels with a combined capacity to carry four point

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Speaker 2: three million containers have either changed course or planned to.

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Speaker 2: That's about double the number from a week ago and

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Speaker 2: equates to about eighteen percent of global capacity. Thanks Forward

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Speaker 2: says that diverted journeys around Africa can take as much

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Speaker 2: as twenty five percent longer than using the Suez Canal

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Speaker 2: shortcut between Asia and Europe. Those trips are more costly

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Speaker 2: and may lead to higher prices for consumers on everything

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Speaker 2: from sneakers to food to oil if the longer journeys persist.

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Speaker 2: Karen Moscow Bloomberg Radio.

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Speaker 3: One of the.

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Speaker 1: World's best known department store chains is now shopping for

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Speaker 1: a financial lifeline. The story from Bloomberg's Tom.

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Speaker 4: Musby Cambridge Properties, owner of the iconic Selfridge department store

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Speaker 4: in London, may be in trouble. It's now asking its

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Speaker 4: parent company, Bangkok based Central Group for more cash. That's

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Speaker 4: to meet its debt payments and to make up for

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Speaker 4: the financial struggles of its other owner. Signa Prime Selection,

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Speaker 4: which file for insolvency on Thursday. Signa an alliance of

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Speaker 4: property holdings across several continents, with department stores in Germany, Austria, Switzerland.

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Speaker 4: It even owns a piece of New York City's famous

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Speaker 4: Chrysler building. A spokesman for Selfridge just says nothing changes

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Speaker 4: for its customers or shareholders. Selfridge shares trade independently of

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Speaker 4: Central Group and Signa. Tom Buzby Bloomberg Radio.

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Speaker 1: On the jobs front, initial applications for US unemployment benefits

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Speaker 1: ticked up in the week leading to Christmas, first time

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Speaker 1: claims rising twelve thousand to two hundred and eighteen thousand

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Speaker 1: in that week ending December twenty third. That's still at

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Speaker 1: a level consistent with the resilient labor market. Here's Laura Raim,

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Speaker 1: chief US economists at FS Investments.

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Speaker 5: While they're concerns about the labor market renormalizing, or people

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Speaker 5: are starting to talk about tracts in the labor market,

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Speaker 5: when I look at this indicator, I see companies still

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Speaker 5: really eager to hold on to workers.

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Speaker 1: First time claims figures tend to be quite volatile around

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Speaker 1: the holidays. The four week moving average, which offers a

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Speaker 1: clearer picture of the trend, was little changed at two

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Speaker 1: hundred twelve thousand last week. That's the lowest figures since

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Speaker 1: late October. China has vowed to step up existing monetary

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Speaker 1: policy and stimulate consumer prices. Bloomberg's Bonnie Au with the

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Speaker 1: story from Hong Kong.

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Speaker 6: The People's Bank of China has reaffirmed the bank's pledge

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Speaker 6: to push consumer prices higher. The central banks that it

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Speaker 6: will implement a policy in a targeted manner. China's recent

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Speaker 6: consumer prices and producer costs fell more than expected and

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Speaker 6: deeper into negative territory. That added to fears of deflation.

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Speaker 6: The central Bank also promised to guide what it caused

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Speaker 6: a reasonable growth of credit. It also fouled to increase

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Speaker 6: support for tech, infrastructure and other sectors in Hong Kong.

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Speaker 6: I'm Bonnie al Bloomberg Radio.

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Speaker 1: Now it's time for global news. Let's get right over

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Speaker 1: to Ed Baxter. He is tracking this story. The US

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Speaker 1: sanctioning some Middle East networks that are financing who the

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Speaker 1: shipping attacks.

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Speaker 7: D Yeah, thank you. You guys were talking about the

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Speaker 7: number of Brian you at the top, about the number

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Speaker 7: of ships that are staying out of the Red Sea. Now,

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Speaker 7: now the US has decided to fight back this way.

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Speaker 7: Sanctions come from the US Treasury designates individual, one individual

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Speaker 7: and three entities of facilitating the flow of Iranian financial

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Speaker 7: assistance to the Houthis on exchange houses in Yemen and Turkey.

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Speaker 7: The USS it hopes it will send a message in

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Speaker 7: that it's serious in cutting funds to the Houthis. And

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Speaker 7: we'll have more on that. As I say, in just

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Speaker 7: a couple of minutes. Second American hostage in Gaza has

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Speaker 7: been declared dead. We get the tails now from Bloomberg's

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Speaker 7: Nancy Lyons.

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Speaker 8: President Biden says he and his wife Jill, are devastated

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Speaker 8: to hear that American Judy Weinstein Hagai was killed following

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Speaker 8: the October seventh Hamas incursion. The President says the news

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Speaker 8: cuts especially deep since her husband, god Ha Gui is

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Speaker 8: also believed to have been killed by Hamas. A spokesperson

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Speaker 8: for their Kibbutz says Hamas is believed to still be

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Speaker 8: holding both bodies. They disappeared early on October seventh and

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Speaker 8: had not been seen since. Gd Weinstein Hagai was seven

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Speaker 8: years old and the mother of four and grandmother of

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Speaker 8: seven in Washington, Nancy Lyons Bloomberg Radio or Nancy thank You.

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Speaker 7: In the aftermath of the Biden administration's announcement that it

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Speaker 7: is sending another two hundred and fifty million dollar package

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Speaker 7: to Ukraine, the Congress, when it gets back, will be

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Speaker 7: confronted with that same issue. The founder of Pangaea Policy

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Speaker 7: Dry Terry Haynes, says, Congress really wants to ask questions.

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Speaker 9: What Congress is really.

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Speaker 10: Going to want to know is how quickly those weapons

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Speaker 10: are going to come, exactly what they are, and whether

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Speaker 10: there is a continued resolve in the Biden administration to

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Speaker 10: actually provide its weapons in the time they manner, because

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Speaker 10: one thing that's happened is is frequently taken months for

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Speaker 10: that to occur.

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Speaker 7: Meanwhile, Ukraine's premier has sounded the alarm over the country's finances,

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Speaker 7: requesting an emergency meeting with international donors as Kiev confronts

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Speaker 7: as he says, exceptionally high uncertainty over its budget. At

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Speaker 7: the start of the year, US and Philippine top diplomats

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Speaker 7: have discussed important opportunities further strengthen their long standing alliance

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Speaker 7: next year. US Secretary of State Anthony Lincoln and Foreign

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Speaker 7: Secretary and Riki Manalo held a call pledging steadfast commitments.

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Speaker 7: Last week. Manalo also talked with China's Foreign Minister Wanghi

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Speaker 7: and warned of serious difficulties in their relationship. Republican presidential

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Speaker 7: candidate Nikki Haley is doing some damage control today after

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Speaker 7: failing to mention slavery is the cause of the Civil

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Speaker 7: War when quized at a forum in New Hampshire last night.

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Speaker 7: This morning, she appeared in the radio program The Pulse

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Speaker 7: in New Hampshire and addressed what some are calling a

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Speaker 7: major gaff.

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Speaker 11: Of course, the Civil War was about slavery. We know that.

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Speaker 11: That's the easy part of it. What I was saying

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Speaker 11: was what does it mean to us today? What it

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Speaker 11: means to us today is about freedom. That's what that

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Speaker 11: was all about.

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Speaker 7: Haley says. Democratic operatives were sent to ask questions. Ronda

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Speaker 7: Santis posted her video and the word yikes, and President

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Speaker 7: Biden did the same with a quote it was about slavery.

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Speaker 7: Well news twenty four hours a day and whenever you

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Speaker 7: want it with Bloomberg News Now in San Francisco. I'm

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Speaker 7: Ed Baxter, and this is Bloomberg.

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Speaker 1: Let's welcome our guest in, Zachary Hill, head of portfolio.

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Speaker 3: Management at Horizon Investments.

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Speaker 1: Zachary, thanks very much for taking out the time to

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Speaker 1: be with us.

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Speaker 3: So the SMB five hundred is right on the cusp

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Speaker 3: of a new all time high.

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Speaker 1: So I guess the way you look at that might

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Speaker 1: dictate what you think will happen going forward. Do you

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Speaker 1: see a break above that as something positive and bullish or.

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Speaker 3: Would it be a good time to sell?

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Speaker 9: Yeah, Brian, thanks for having me.

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Speaker 12: You know, we close today less than one percent from

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Speaker 12: all time highs and both the S and P five

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Speaker 12: hundred and the Nasdaq one hundred, So you know, certainly

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Speaker 12: I think that's something that's very much in the cards,

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Speaker 12: you know, over the next few days, maybe not tomorrow,

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Speaker 12: maybe the first week of the year tends to be

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Speaker 12: a good time, you know, seasonally for equity markets. And

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Speaker 12: you know, we do think this this rally is on

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Speaker 12: pretty firm footing. You know, we've had a major kind

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Speaker 12: of policy headwinds that have that are now going to

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Speaker 12: be turning to tailwinds in a material way. We've got

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Speaker 12: continued strength in the economy, and especially with the you know,

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Speaker 12: tech and communication services parts of the market, there's really

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Speaker 12: really strong earnings. And so, you know, putting all that together,

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Speaker 12: I'm not sure you know what what people are complaining

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Speaker 12: about when they look forward to twenty twenty four.

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Speaker 1: Well, I think a lot of people just think so

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Speaker 1: much is already baked in, So you know, what do

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Speaker 1: you what do you do from here? You can wait

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Speaker 1: on the data, and that's fine, because if the earnings

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Speaker 1: get stronger, if the economy even picks up some steam,

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Speaker 1: then that would be good, but some people want to

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Speaker 1: get out in front of that.

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Speaker 3: Are you thinking that that's possible?

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Speaker 12: Well, I mean, you know, the last three years have

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Speaker 12: kind of shown that anything is possible, and I do think.

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Speaker 9: You know this, as we look forward, we need to be.

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Speaker 12: Humble about kind of the way the economy is going

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Speaker 12: to evolve because you know, there are a lot of

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Speaker 12: people that are trained on traditional business cycles and this

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Speaker 12: this cycle has look nothing like that whatsoever. A lot

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Speaker 12: of different reasons for that, you know, stimulus, the quantity

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Speaker 12: of that wealth effect, you know, demographics, just a whole

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Speaker 12: whole host of things that have kind of you know,

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Speaker 12: confounded typical macro economic analysis, and so we do have

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Speaker 12: to be humble as we look forward, but kind of

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Speaker 12: as you know, as we see it, I think twenty

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Speaker 12: twenty four is gonna be about a year of kind

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Speaker 12: of getting away from cash and cash like instruments where

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Speaker 12: people have been sheltering in a really material way and

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Speaker 12: getting back reinvested in portfolios that can you know, really

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Speaker 12: drive you know, long term financial results.

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Speaker 3: So you're not all that positive about the bond market.

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Speaker 12: I mean, if if I had to rank them, I

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Speaker 12: would say, you know, stocks over bonds over cash. Next year,

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Speaker 12: you know, bonds are are are definitely you know, much

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Speaker 12: more attractive. And I think the important thing, one important

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Speaker 12: thing to think about that we haven't had.

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Speaker 9: Over the last two years is you know, the.

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Speaker 12: FED has got space now if we do hit a

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Speaker 12: growth hiccup, which we don't see coming, but if we

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Speaker 12: do hit one that you know, plenty of exogenous things

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Speaker 12: can cause that. If we do hit a growth hiccups,

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Speaker 12: the FED can cut, and they can cut materially. You know,

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Speaker 12: typically in a recession the FED cuts four or five

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Speaker 12: hundred basis points. Well, they have that room to do

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Speaker 12: that now, you know that wasn't the case for the

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Speaker 12: last two years, and so you know, from a probability

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Speaker 12: way to perspective, that is something that that definitely has

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Speaker 12: to weigh in on the you know, investors calculus, and

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Speaker 12: I think that's why, you know, the curve is so

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Speaker 12: inverted and the market is expecting a good a good

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Speaker 12: amount of cuts next year.

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Speaker 1: For a big part of this year, it was really

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Speaker 1: mean reversion that seemed to be working because you still

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Speaker 1: have the FED raising interest rates and there were a

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Speaker 1: lot of fears around about where the economy would eventually

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Speaker 1: go because the lag defect. But because stocks were so

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Speaker 1: bad last year, they became so good this year. I

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Speaker 1: mean that's not the only reason, but you know, it's

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Speaker 1: it's one of the things that does often happen in markets.

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Speaker 1: And I'm just noticing now that in Asia, you know,

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Speaker 1: you're starting to get a little bit of a fire

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Speaker 1: under on Kong in China, now, we've seen it before

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Speaker 1: and it has often turned out to be a false done.

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Speaker 1: Are you looking at China and do you think that

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Speaker 1: some money may take a punt there on the sort

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Speaker 1: of dogs of the doubt theory.

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Speaker 12: Yeah, I mean that's definitely been the case. We've seen

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Speaker 12: some some pretty whippy trends, you know, within global equities

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Speaker 12: under the hood, and definitely China has been one that

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Speaker 12: has confounded investors. You know, I do think, you know,

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Speaker 12: when we saw a pretty substantial rally today, I do

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Speaker 12: think the bar is higher than it has been, you know,

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Speaker 12: for for Chinese stocks. You know, put put simply, there's

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Speaker 12: just not a lot of trust that you know, the

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Speaker 12: administration is going to put forward policies that support growth

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Speaker 12: and import support equity holders.

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Speaker 1: Well, there's also the notion there's also the notion. I

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Speaker 1: didn't mention it directly, but places like Southeast Asia actually

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Speaker 1: stumbled a bit this year, mainly because the Chinese economy stumbled.

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Speaker 1: So if you're right, if you get reasonable policies for

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Speaker 1: growth but maybe not that market friendly, but Southeast Asia

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Speaker 1: maybe get a bit.

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Speaker 12: Yeah, I think, Brian, that's that's a great point, and

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Speaker 12: it's definitely the case as we think about.

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Speaker 9: You know, emerging market exposure more broadly.

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Speaker 12: It used to be the case, you know, over the

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Speaker 12: last really ten fifteen years, if you get China right,

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Speaker 12: you get all of them right.

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Speaker 9: That was generally the story.

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Speaker 12: You know, the economies were very intertwined, you know, in

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Speaker 12: terms of supply chain and and the like, and you know,

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Speaker 12: it really hasn't been that way for the last few years.

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Speaker 12: And so I do think that that's going to be

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Speaker 12: a continued theme in markets as people look, you know,

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Speaker 12: not just at the kind of a broad overall index levels,

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Speaker 12: but but start to look for individual stories where you know,

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Speaker 12: policies growth all kind of line up in a way.

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Speaker 9: That people can get behind that.

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Speaker 12: And you know, as we look at China right now,

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Speaker 12: I don't see you know, those those that kind of mosaic.

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Speaker 9: Of a supportive factors lining up right now.

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Speaker 3: It's it's crazy.

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Speaker 1: I mean, reporting on this every day as we do,

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Speaker 1: and talking to twelve guests, you know, you get examples

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Speaker 1: every day of the same old communist party, and then

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Speaker 1: you also get examples of how the tone has changed.

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Speaker 1: So perhaps we get a clearer picture next year. We

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Speaker 1: only have time for one more and I think I'll

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Speaker 1: give you a big, open platform question. What's your number

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Speaker 1: one call at the moment?

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Speaker 12: Number one call is you know, stocks hire next year?

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Speaker 12: You know, do not fall in love with your cash allocations.

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Speaker 12: You know, those those five and a half percent rates

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Speaker 12: that that people are are clipping right now are going

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Speaker 12: to look pretty pretty silly if we you know, maybe

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Speaker 12: not as high as we've done this year, but put

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Speaker 12: in a good, good equity market next year.

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Speaker 1: Yeah, all right, thanks very much, Zachary Zachary Hill, head

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Speaker 1: of portfolio management at Horizon Investments. This is Bloomberg Daybreak Asia,

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