Speaker 1: Good morning.
Speaker 2: I'm Brian Curtis and I'm Doug Krisner. Here are the
Speaker 2: stories we're following today.
Speaker 1: General Motors CEO and chair Mary Bearra says the UAW
Speaker 1: strike did not need to happen. She says she's been
Speaker 1: directly involved in negotiations and that the company is well
Speaker 1: prepared to keep things running during this work stoppage. Is Bera,
Speaker 1: speaking Friday on.
Speaker 3: Bloomberg, I will say we're ready for this, you know,
Speaker 3: as we've dealt with COVID and dealt with the semiconductor
Speaker 3: shortage as well as other supply chain challenges that have
Speaker 3: you know, continued to persist from Covid. Our team knows
Speaker 3: how to manage these situations. They're staying agile and we're
Speaker 3: going to do what's right for the company. We're going
Speaker 3: to make sure everyone stays safe.
Speaker 1: The United Autoworkers began the strike against the Big three
Speaker 1: carmakers on Friday. It's an unprecedented move that could launch
Speaker 1: a costly showdown over wages and job security. The union
Speaker 1: has about one hundred and fifty thousand members at gm
Speaker 1: Ford and Stilantis. UAW says that he wants a share
Speaker 1: of corporate profits, which have surged since the last contract
Speaker 1: was signed. Mary Barra said that GM's latest offer, which
Speaker 1: includes twenty percent raises over four years, cost of living
Speaker 1: allowances and boost to existing pensioners, all that together marks
Speaker 1: makes it the best in the one hundred and fifteen
Speaker 1: year history of the company.
Speaker 2: Europe is pushing back against an influx of Chinese evs
Speaker 2: during German Foreign Minister and Alena Bherbach says the EU
Speaker 2: must reduce its reliance on China. She also supports the
Speaker 2: EU's investigation into the subsidies Beijing provides its EV industry.
Speaker 4: If you're bound to closely, it can endanger yourself, especially
Speaker 4: if you are having such a high dependency no decoupling
Speaker 4: because you cannot decouple in an interconnected world. So being
Speaker 4: a partner in climate issues, being a competitor obviously with
Speaker 4: China with new technology, but also seeing that we are
Speaker 4: systematic rivals and we have to protect our own vulnerability.
Speaker 2: That is German Foreign Minister and Alina Beherbach. By the way,
Speaker 2: the EU's anti subsidy probe could lead not only to
Speaker 2: tariffs on made in China EVE imports, it may spark
Speaker 2: a bit of retaliation from Beijing as well. Now, the
Speaker 2: EU says the probe will be discussed with Chinese officials
Speaker 2: during a high level visit to China in the next week.
Speaker 1: And Chinese developer Country Garden faces two more deadlines today.
Speaker 1: Bloomberg's Joan Wong has more from Hong Kong.
Speaker 5: Country Garden. Bondholders will have until ten pm Beijing time
Speaker 5: to vote on a proposal to stretch payments by three years.
Speaker 5: If they're rejected, the developer would need to pay about
Speaker 5: sixty eight million dollars of outstanding principal next month. This
Speaker 5: would be its largest near term maturity, just as its
Speaker 5: struggled to mix smaller payments. The developer already got approval
Speaker 5: to extend repayments on seven other notes. There's also about
Speaker 5: fifteen million dollars of interest. Do you want a dollar security?
Speaker 5: In twenty twenty five in Hong Kong, I'm joined Wan
Speaker 5: Bloomberg Radio.
Speaker 2: Chinese authorities have detained some staff members of China Evergrand
Speaker 2: Group the story from Bloomberg's Boniau in Hong Kong.
Speaker 6: China has launched an investigation into Evergrant's wealth management unit.
Speaker 6: This is a sign that the defaulted developer has entered
Speaker 6: a new phase involving the criminal justice system. No charges
Speaker 6: were disclosed, and the official statement did not say how
Speaker 6: many people are in custody. Only one of the detainees,
Speaker 6: surnamed Dou was mentioned. Police have called on investors to
Speaker 6: provide any leads to authorities in Hong Kong. I'm Bonnie
Speaker 6: al Bloomberg Radio.
Speaker 1: Well, the Federal Reserve will be very much in focus
Speaker 1: this week, along with a number of earnings reports. Let's
Speaker 1: get the story from Bloomberg's Charlie Pellett.
Speaker 7: This week we hear from FedEx, General Mills, and Darden restaurants,
Speaker 7: and investors will be focusing on how they are dealing
Speaker 7: with higher input prices and weaker customer spending. David Lefkowitz
Speaker 7: is head of Equities Americas. That you financial services.
Speaker 8: The earnings recession looks like it's over. It looks like
Speaker 8: we're going to be returning to earnings growth here in
Speaker 8: the third quarter. That's certainly I think the message we
Speaker 8: were getting from It's been conferences and a lot of
Speaker 8: companies out talking to investors, you know, sounds like it's
Speaker 8: more status quo, no big change in the in the environment.
Speaker 7: Also reporting this week, AutoZone and kb Home in New York,
Speaker 7: Charlie Bloomberg Radio DOUG.
Speaker 1: At the macro level, even at this stage, investors simply
Speaker 1: don't know whether the FED has already done enough or
Speaker 1: whether or not there's more work to be done. And
Speaker 1: even the FED, you know, with the expected pause this week,
Speaker 1: seems to suggest that they need to see more. So
Speaker 1: that's one big macro story that we'll be talking with
Speaker 1: our guests about. And also I wanted to mention that
Speaker 1: it became even clearer last week that foreign investors are
Speaker 1: fleeing China. So what does this mean for China's decoupling
Speaker 1: from the rest of the world. Is that an example?
Speaker 1: So there's a lot to put to our guests. Upcoming
Speaker 1: Parker Roy will join as chief revenue officer at Access Capital.
Speaker 2: Well to your point about the FED, Brian, I think
Speaker 2: that's why this week's dot plot projections are going to
Speaker 2: be all the more important. A couple of key issues here,
Speaker 2: not the least of which is whether or not the
Speaker 2: FIT is going to maintain expectations for one more rate
Speaker 2: hike by the end of the year. And secondly, how
Speaker 2: much easing is going to be penciled in by the
Speaker 2: end of twenty twenty four.
Speaker 1: Yep, it sets up as a very interesting week for
Speaker 1: more the commentary than it does for whatever they exactly do.
Speaker 1: All right, now it's time for Global News. US and
Speaker 1: Chinese officials have met in Malta through the weekend with
Speaker 1: the goal of keeping communication lines open, and Baxter has
Speaker 1: Global News from the nine to sixty news room in
Speaker 1: San Francisco.
Speaker 9: Ed, Yeah, exactly right. Brian US National Security Advisor Jake
Speaker 9: Sullivan with Chinese Foreign Minister Wang Yie discussed the possibility
Speaker 9: of a Shee Biden meeting, and it comes at a
Speaker 9: time when tensions between the two have reached a high point.
Speaker 9: Wellong a schedule a visit Moscow for talks this week.
Speaker 9: He and she are skipping the UN General Assembly in
Speaker 9: New York, and She and Biden are positioned to meet
Speaker 9: at the APEX summit in San Francisco this November. Donald Trump,
Speaker 9: making an appearance on NBC's Meet the Press Today, has
Speaker 9: heard on Bloomberg very wide reaching. He hasn't stopped the
Speaker 9: name calling, referring here to prosecutors and judges in the case.
Speaker 10: These people are thugs, horrible people, fascists, Marxist sick people.
Speaker 10: They've been after me from the day came down the
Speaker 10: escalator with Melania.
Speaker 9: And saying that he would solve the Ukraine invasion first
Speaker 9: with Putin.
Speaker 10: I would get him into a room. I'd get Zolenski
Speaker 10: into a room that I'd bring him together and I'd
Speaker 10: have a deal worked out. I would get a deal worked.
Speaker 9: At and claiming still that the twenty election was rigged
Speaker 9: and saying that his asking for votes in Georgia doesn't
Speaker 9: mean anything. But listen to this question. Did he admit
Speaker 9: here that he lost the election?
Speaker 11: Are you saying you needed those votes in order to win?
Speaker 10: Are you acknowledging you didn't win. I'm not not acknowledging. No,
Speaker 10: I say I won the election.
Speaker 9: And extrapolated to the election as a whole.
Speaker 10: I think somebody said twenty two thousand votes to win. Yeah,
Speaker 10: if you divided among the states, it was twenty two
Speaker 10: thousand something.
Speaker 8: To that effect to win the election.
Speaker 10: If I would have had another twenty two thousand votes,
Speaker 10: overhaul but look the election.
Speaker 9: And at one point told new moderator Christian Welker that
Speaker 9: she would never succeed at the job. Meanwhile, German foreign
Speaker 9: minister and Elena Barbeck says that Europe would be better
Speaker 9: prepared if Trump returned to the White House. She has
Speaker 9: been in the US ahead of the UN General Assembly
Speaker 9: talking with Republicans because she says Trump did some things
Speaker 9: that surprised all of Europe the first time around.
Speaker 4: I would say hardly anybody in Europe could imagine there
Speaker 4: would be a US president who would question NATO, because
Speaker 4: this is for US Europeans our life insurance. So obviously,
Speaker 4: many many things back in time was a tootal shock.
Speaker 4: And this was also something I, for example, mentioned in
Speaker 4: the discussions I had with Republican.
Speaker 9: She says Trump did some things that were well more
Speaker 9: than irritating UAW President Sean Fain today, while saying talks
Speaker 9: thus far this week and have been productive. The move
Speaker 9: by Stileanis to offer twenty one percent wage increase apparently
Speaker 9: will not work. Fain on CBS has heard on Bloomberg
Speaker 9: says their demand is still forty percent.
Speaker 11: You know, our demands are just we're asking for our
Speaker 11: fair share in this economy and the fruits of our labor.
Speaker 11: So twenty one percent is a no go for you.
Speaker 11: It's definitely a no go, and we've made that very
Speaker 11: clear to the companies.
Speaker 9: And he made an attack on GM CEO Mary Barrus
Speaker 9: twenty nine million dollar annual salary.
Speaker 11: That a CEO gets on air this last in the
Speaker 11: last few days and says that her twenty nine million
Speaker 11: dollar salaries justified by her performance. No, it's not. It's
Speaker 11: justified by the performance of the worker on the backs
Speaker 11: of the workers and by paying them poverty wages, and
Speaker 11: that's unacceptable.
Speaker 9: And Fain also said UAW workers believe in a great
Speaker 9: economy that want to be taken along and the profits
Speaker 9: made Global newspowered by more than twenty seven hundred journalist
Speaker 9: and analysts in over one hundred and twenty countries. In
Speaker 9: San Francisco, I'm Ed Baxter and this is Bloomberg.
Speaker 1: This is Bloomberg Daybreak Asia. I'm Brian Curtis along with
Speaker 1: Rashad Salama. We are here in Hong Kong. Our guest
Speaker 1: is Parker Roy, chief revenue officer at Access Capital in Miami. So, Parker,
Speaker 1: we saw a big increase in bets last week that's
Speaker 1: kind of running on the opposite side of the higher
Speaker 1: for longer at the FED. These bets are suggesting that
Speaker 1: the economy is going to hit the wall here sometime
Speaker 1: by the early part of next year, and these bets
Speaker 1: would make money if the fedastic cut rates aggressively before
Speaker 1: June of next year. Do you see that as as
Speaker 1: just a hedge or a reasonable bet your thoughts on that, so,
Speaker 1: thank you very much.
Speaker 12: You know, look, we look at money supply and the
Speaker 12: inverted yield curve in its current environment, and it's very
Speaker 12: clear to us that there are significant recessionary pressures that
Speaker 12: are on the way. Right. If you look at money supply,
Speaker 12: it's contracting. You look at the inverted yield curve, and
Speaker 12: there is no doubt that there were recessionary pressures out there.
Speaker 12: So historically that has predicted recession. However, money supply has
Speaker 12: contracted to twenty trillion, that's still four trillion greater than
Speaker 12: where we were pre pandemic. Where I'm going with this
Speaker 12: is that there is a soft landing. We believe. With
Speaker 12: unemployment at three point eight percent here domestically in the US,
Speaker 12: with significant money supplies still in the markets, we think
Speaker 12: that there is a soft land in the future. We
Speaker 12: think Powell actually can pull us off.
Speaker 13: Well, it'd be quite something, But you know, I just
Speaker 13: goting to the other side of the equation, the market
Speaker 13: is pricing in some quite deep rate cuts next year,
Speaker 13: the latter part of next year. Do you think that
Speaker 13: they're being rather optimistic? And do you think there's this
Speaker 13: belief there that we're going to return to the free
Speaker 13: money we had before when we may only just get
Speaker 13: a you know, maybe one hundred basis points or less,
Speaker 13: which is taking us back to what the old normal was.
Speaker 12: So so so I'm in agreement. I think I think
Speaker 12: they are overly optimistic. You know, we've gone down, We've
Speaker 12: had a five hundred basis point move to take inflation
Speaker 12: from eight percent to three percent. The last mile is
Speaker 12: going to be a heavy lift, and you know, I
Speaker 12: think that we may see potentially higher before we see
Speaker 12: substantially lower. But look, it's not going to return to
Speaker 12: a zero interest rate environment. We think that things are
Speaker 12: going to normalize and we move into a normalized environment
Speaker 12: across the yield curve, a normalized environment across inflation. But
Speaker 12: that's going to take time as we move into twenty four,
Speaker 12: into twenty five and beyond.
Speaker 1: Why do you think after all the action we've seen
Speaker 1: from the Fed and through all of this time, we
Speaker 1: don't seem to be any clearer to figuring out whether
Speaker 1: or not it's hard landing, soft landing, or something you
Speaker 1: know in between.
Speaker 12: Look, you know obviously this isn't. If it was easy,
Speaker 12: we'd have much much clearer insight, right, I mean what
Speaker 12: Powell is trying to navigate here with all of the
Speaker 12: global macro issues, whether it's it's it's a war in Europe,
Speaker 12: where it's it's China GDP growth at I now, I
Speaker 12: think around five percent. You're looking at the US GDP
Speaker 12: growth at two percent, and navigating that arena is difficult,
Speaker 12: and I think I think given those challenges, there has
Speaker 12: been a steady and measured He's been very transparent and
Speaker 12: what he's what he's attempted to achieve. We are likely
Speaker 12: going to pause here and hold and let these let
Speaker 12: the lag effect take place, which will which again I'll
Speaker 12: come back to our comment. We believe that it will
Speaker 12: be a softer landing than expected. We certainly do not
Speaker 12: expect a hard landing.
Speaker 13: I'm just going to ask another question with regard to
Speaker 13: how the market is priced and what you do about this.
Speaker 13: If you take an equal weighting of the S and
Speaker 13: P five hundred, for instance, excluding of course the big boys,
Speaker 13: the big tech companies. You'll see it's about four percent higher.
Speaker 13: That's indicative really of how narrow based this market has
Speaker 13: gone up by i e.
Speaker 7: Big Tech.
Speaker 13: Now is that in itself with these other companies struggling
Speaker 13: to eke out gains a representative also perhaps falling earnings
Speaker 13: and earning throughcession and also what do you do in
Speaker 13: this environment? You expect to come back from those companies
Speaker 13: and stay away from big tech or mega tech will
Speaker 13: remain there.
Speaker 11: Yees.
Speaker 12: So, Look, the move in the S and P five
Speaker 12: hundred has been and by the top five to seven firms,
Speaker 12: and the market weighted S and P five hundred versus
Speaker 12: the equal weighted S and P five hundred has certainly outperformed.
Speaker 12: Look in an environment where you have elevated interest rates,
Speaker 12: we think that it actually represents opportunities for the smaller
Speaker 12: and mid sized caps. We actually get access capital. We
Speaker 12: focus on private markets and we see a huge opportunity
Speaker 12: underway as we move towards these recessionary pressures, as we
Speaker 12: move into more distress, we think there are substantial opportunities
Speaker 12: within private equity. We think there's substantial opportunities within within private.
Speaker 1: Credit This is Bloomberg Daybreak Asia, your morning brief on
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Speaker 2: on Bloomberg day Break Asia.