WEBVTT - UAW Strike Fallout, China Evergrande Latest

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<v Speaker 1>Good morning.

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<v Speaker 2>I'm Brian Curtis and I'm Doug Krisner. Here are the

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<v Speaker 2>stories we're following today.

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<v Speaker 1>General Motors CEO and chair Mary Bearra says the UAW

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<v Speaker 1>strike did not need to happen. She says she's been

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<v Speaker 1>directly involved in negotiations and that the company is well

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<v Speaker 1>prepared to keep things running during this work stoppage. Is Bera,

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<v Speaker 1>speaking Friday on.

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<v Speaker 3>Bloomberg, I will say we're ready for this, you know,

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<v Speaker 3>as we've dealt with COVID and dealt with the semiconductor

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<v Speaker 3>shortage as well as other supply chain challenges that have

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<v Speaker 3>you know, continued to persist from Covid. Our team knows

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<v Speaker 3>how to manage these situations. They're staying agile and we're

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<v Speaker 3>going to do what's right for the company. We're going

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<v Speaker 3>to make sure everyone stays safe.

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<v Speaker 1>The United Autoworkers began the strike against the Big three

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<v Speaker 1>carmakers on Friday. It's an unprecedented move that could launch

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<v Speaker 1>a costly showdown over wages and job security. The union

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<v Speaker 1>has about one hundred and fifty thousand members at gm

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<v Speaker 1>Ford and Stilantis. UAW says that he wants a share

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<v Speaker 1>of corporate profits, which have surged since the last contract

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<v Speaker 1>was signed. Mary Barra said that GM's latest offer, which

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<v Speaker 1>includes twenty percent raises over four years, cost of living

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<v Speaker 1>allowances and boost to existing pensioners, all that together marks

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<v Speaker 1>makes it the best in the one hundred and fifteen

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<v Speaker 1>year history of the company.

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<v Speaker 2>Europe is pushing back against an influx of Chinese evs

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<v Speaker 2>during German Foreign Minister and Alena Bherbach says the EU

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<v Speaker 2>must reduce its reliance on China. She also supports the

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<v Speaker 2>EU's investigation into the subsidies Beijing provides its EV industry.

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<v Speaker 4>If you're bound to closely, it can endanger yourself, especially

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<v Speaker 4>if you are having such a high dependency no decoupling

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<v Speaker 4>because you cannot decouple in an interconnected world. So being

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<v Speaker 4>a partner in climate issues, being a competitor obviously with

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<v Speaker 4>China with new technology, but also seeing that we are

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<v Speaker 4>systematic rivals and we have to protect our own vulnerability.

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<v Speaker 2>That is German Foreign Minister and Alina Beherbach. By the way,

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<v Speaker 2>the EU's anti subsidy probe could lead not only to

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<v Speaker 2>tariffs on made in China EVE imports, it may spark

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<v Speaker 2>a bit of retaliation from Beijing as well. Now, the

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<v Speaker 2>EU says the probe will be discussed with Chinese officials

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<v Speaker 2>during a high level visit to China in the next week.

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<v Speaker 1>And Chinese developer Country Garden faces two more deadlines today.

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<v Speaker 1>Bloomberg's Joan Wong has more from Hong Kong.

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<v Speaker 5>Country Garden. Bondholders will have until ten pm Beijing time

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<v Speaker 5>to vote on a proposal to stretch payments by three years.

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<v Speaker 5>If they're rejected, the developer would need to pay about

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<v Speaker 5>sixty eight million dollars of outstanding principal next month. This

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<v Speaker 5>would be its largest near term maturity, just as its

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<v Speaker 5>struggled to mix smaller payments. The developer already got approval

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<v Speaker 5>to extend repayments on seven other notes. There's also about

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<v Speaker 5>fifteen million dollars of interest. Do you want a dollar security?

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<v Speaker 5>In twenty twenty five in Hong Kong, I'm joined Wan

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<v Speaker 5>Bloomberg Radio.

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<v Speaker 2>Chinese authorities have detained some staff members of China Evergrand

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<v Speaker 2>Group the story from Bloomberg's Boniau in Hong Kong.

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<v Speaker 6>China has launched an investigation into Evergrant's wealth management unit.

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<v Speaker 6>This is a sign that the defaulted developer has entered

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<v Speaker 6>a new phase involving the criminal justice system. No charges

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<v Speaker 6>were disclosed, and the official statement did not say how

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<v Speaker 6>many people are in custody. Only one of the detainees,

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<v Speaker 6>surnamed Dou was mentioned. Police have called on investors to

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<v Speaker 6>provide any leads to authorities in Hong Kong. I'm Bonnie

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<v Speaker 6>al Bloomberg Radio.

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<v Speaker 1>Well, the Federal Reserve will be very much in focus

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<v Speaker 1>this week, along with a number of earnings reports. Let's

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<v Speaker 1>get the story from Bloomberg's Charlie Pellett.

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<v Speaker 7>This week we hear from FedEx, General Mills, and Darden restaurants,

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<v Speaker 7>and investors will be focusing on how they are dealing

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<v Speaker 7>with higher input prices and weaker customer spending. David Lefkowitz

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<v Speaker 7>is head of Equities Americas. That you financial services.

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<v Speaker 8>The earnings recession looks like it's over. It looks like

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<v Speaker 8>we're going to be returning to earnings growth here in

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<v Speaker 8>the third quarter. That's certainly I think the message we

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<v Speaker 8>were getting from It's been conferences and a lot of

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<v Speaker 8>companies out talking to investors, you know, sounds like it's

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<v Speaker 8>more status quo, no big change in the in the environment.

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<v Speaker 7>Also reporting this week, AutoZone and kb Home in New York,

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<v Speaker 7>Charlie Bloomberg Radio DOUG.

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<v Speaker 1>At the macro level, even at this stage, investors simply

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<v Speaker 1>don't know whether the FED has already done enough or

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<v Speaker 1>whether or not there's more work to be done. And

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<v Speaker 1>even the FED, you know, with the expected pause this week,

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<v Speaker 1>seems to suggest that they need to see more. So

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<v Speaker 1>that's one big macro story that we'll be talking with

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<v Speaker 1>our guests about. And also I wanted to mention that

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<v Speaker 1>it became even clearer last week that foreign investors are

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<v Speaker 1>fleeing China. So what does this mean for China's decoupling

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<v Speaker 1>from the rest of the world. Is that an example?

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<v Speaker 1>So there's a lot to put to our guests. Upcoming

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<v Speaker 1>Parker Roy will join as chief revenue officer at Access Capital.

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<v Speaker 2>Well to your point about the FED, Brian, I think

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<v Speaker 2>that's why this week's dot plot projections are going to

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<v Speaker 2>be all the more important. A couple of key issues here,

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<v Speaker 2>not the least of which is whether or not the

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<v Speaker 2>FIT is going to maintain expectations for one more rate

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<v Speaker 2>hike by the end of the year. And secondly, how

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<v Speaker 2>much easing is going to be penciled in by the

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<v Speaker 2>end of twenty twenty four.

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<v Speaker 1>Yep, it sets up as a very interesting week for

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<v Speaker 1>more the commentary than it does for whatever they exactly do.

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<v Speaker 1>All right, now it's time for Global News. US and

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<v Speaker 1>Chinese officials have met in Malta through the weekend with

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<v Speaker 1>the goal of keeping communication lines open, and Baxter has

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<v Speaker 1>Global News from the nine to sixty news room in

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<v Speaker 1>San Francisco.

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<v Speaker 9>Ed, Yeah, exactly right. Brian US National Security Advisor Jake

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<v Speaker 9>Sullivan with Chinese Foreign Minister Wang Yie discussed the possibility

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<v Speaker 9>of a Shee Biden meeting, and it comes at a

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<v Speaker 9>time when tensions between the two have reached a high point.

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<v Speaker 9>Wellong a schedule a visit Moscow for talks this week.

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<v Speaker 9>He and she are skipping the UN General Assembly in

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<v Speaker 9>New York, and She and Biden are positioned to meet

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<v Speaker 9>at the APEX summit in San Francisco this November. Donald Trump,

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<v Speaker 9>making an appearance on NBC's Meet the Press Today, has

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<v Speaker 9>heard on Bloomberg very wide reaching. He hasn't stopped the

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<v Speaker 9>name calling, referring here to prosecutors and judges in the case.

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<v Speaker 10>These people are thugs, horrible people, fascists, Marxist sick people.

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<v Speaker 10>They've been after me from the day came down the

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<v Speaker 10>escalator with Melania.

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<v Speaker 9>And saying that he would solve the Ukraine invasion first

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<v Speaker 9>with Putin.

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<v Speaker 10>I would get him into a room. I'd get Zolenski

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<v Speaker 10>into a room that I'd bring him together and I'd

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<v Speaker 10>have a deal worked out. I would get a deal worked.

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<v Speaker 9>At and claiming still that the twenty election was rigged

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<v Speaker 9>and saying that his asking for votes in Georgia doesn't

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<v Speaker 9>mean anything. But listen to this question. Did he admit

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<v Speaker 9>here that he lost the election?

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<v Speaker 11>Are you saying you needed those votes in order to win?

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<v Speaker 10>Are you acknowledging you didn't win. I'm not not acknowledging. No,

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<v Speaker 10>I say I won the election.

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<v Speaker 9>And extrapolated to the election as a whole.

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<v Speaker 10>I think somebody said twenty two thousand votes to win. Yeah,

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<v Speaker 10>if you divided among the states, it was twenty two

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<v Speaker 10>thousand something.

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<v Speaker 8>To that effect to win the election.

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<v Speaker 10>If I would have had another twenty two thousand votes,

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<v Speaker 10>overhaul but look the election.

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<v Speaker 9>And at one point told new moderator Christian Welker that

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<v Speaker 9>she would never succeed at the job. Meanwhile, German foreign

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<v Speaker 9>minister and Elena Barbeck says that Europe would be better

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<v Speaker 9>prepared if Trump returned to the White House. She has

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<v Speaker 9>been in the US ahead of the UN General Assembly

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<v Speaker 9>talking with Republicans because she says Trump did some things

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<v Speaker 9>that surprised all of Europe the first time around.

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<v Speaker 4>I would say hardly anybody in Europe could imagine there

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<v Speaker 4>would be a US president who would question NATO, because

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<v Speaker 4>this is for US Europeans our life insurance. So obviously,

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<v Speaker 4>many many things back in time was a tootal shock.

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<v Speaker 4>And this was also something I, for example, mentioned in

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<v Speaker 4>the discussions I had with Republican.

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<v Speaker 9>She says Trump did some things that were well more

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<v Speaker 9>than irritating UAW President Sean Fain today, while saying talks

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<v Speaker 9>thus far this week and have been productive. The move

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<v Speaker 9>by Stileanis to offer twenty one percent wage increase apparently

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<v Speaker 9>will not work. Fain on CBS has heard on Bloomberg

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<v Speaker 9>says their demand is still forty percent.

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<v Speaker 11>You know, our demands are just we're asking for our

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<v Speaker 11>fair share in this economy and the fruits of our labor.

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<v Speaker 11>So twenty one percent is a no go for you.

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<v Speaker 11>It's definitely a no go, and we've made that very

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<v Speaker 11>clear to the companies.

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<v Speaker 9>And he made an attack on GM CEO Mary Barrus

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<v Speaker 9>twenty nine million dollar annual salary.

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<v Speaker 11>That a CEO gets on air this last in the

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<v Speaker 11>last few days and says that her twenty nine million

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<v Speaker 11>dollar salaries justified by her performance. No, it's not. It's

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<v Speaker 11>justified by the performance of the worker on the backs

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<v Speaker 11>of the workers and by paying them poverty wages, and

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<v Speaker 11>that's unacceptable.

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<v Speaker 9>And Fain also said UAW workers believe in a great

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<v Speaker 9>economy that want to be taken along and the profits

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<v Speaker 9>made Global newspowered by more than twenty seven hundred journalist

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<v Speaker 9>and analysts in over one hundred and twenty countries. In

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<v Speaker 9>San Francisco, I'm Ed Baxter and this is Bloomberg.

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<v Speaker 1>This is Bloomberg Daybreak Asia. I'm Brian Curtis along with

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<v Speaker 1>Rashad Salama. We are here in Hong Kong. Our guest

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<v Speaker 1>is Parker Roy, chief revenue officer at Access Capital in Miami. So, Parker,

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<v Speaker 1>we saw a big increase in bets last week that's

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<v Speaker 1>kind of running on the opposite side of the higher

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<v Speaker 1>for longer at the FED. These bets are suggesting that

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<v Speaker 1>the economy is going to hit the wall here sometime

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<v Speaker 1>by the early part of next year, and these bets

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<v Speaker 1>would make money if the fedastic cut rates aggressively before

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<v Speaker 1>June of next year. Do you see that as as

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<v Speaker 1>just a hedge or a reasonable bet your thoughts on that, so,

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<v Speaker 1>thank you very much.

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<v Speaker 12>You know, look, we look at money supply and the

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<v Speaker 12>inverted yield curve in its current environment, and it's very

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<v Speaker 12>clear to us that there are significant recessionary pressures that

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<v Speaker 12>are on the way. Right. If you look at money supply,

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<v Speaker 12>it's contracting. You look at the inverted yield curve, and

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<v Speaker 12>there is no doubt that there were recessionary pressures out there.

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<v Speaker 12>So historically that has predicted recession. However, money supply has

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<v Speaker 12>contracted to twenty trillion, that's still four trillion greater than

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<v Speaker 12>where we were pre pandemic. Where I'm going with this

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<v Speaker 12>is that there is a soft landing. We believe. With

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<v Speaker 12>unemployment at three point eight percent here domestically in the US,

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<v Speaker 12>with significant money supplies still in the markets, we think

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<v Speaker 12>that there is a soft land in the future. We

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<v Speaker 12>think Powell actually can pull us off.

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<v Speaker 13>Well, it'd be quite something, But you know, I just

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<v Speaker 13>goting to the other side of the equation, the market

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<v Speaker 13>is pricing in some quite deep rate cuts next year,

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<v Speaker 13>the latter part of next year. Do you think that

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<v Speaker 13>they're being rather optimistic? And do you think there's this

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<v Speaker 13>belief there that we're going to return to the free

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<v Speaker 13>money we had before when we may only just get

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<v Speaker 13>a you know, maybe one hundred basis points or less,

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<v Speaker 13>which is taking us back to what the old normal was.

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<v Speaker 12>So so so I'm in agreement. I think I think

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<v Speaker 12>they are overly optimistic. You know, we've gone down, We've

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<v Speaker 12>had a five hundred basis point move to take inflation

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<v Speaker 12>from eight percent to three percent. The last mile is

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<v Speaker 12>going to be a heavy lift, and you know, I

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<v Speaker 12>think that we may see potentially higher before we see

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<v Speaker 12>substantially lower. But look, it's not going to return to

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<v Speaker 12>a zero interest rate environment. We think that things are

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<v Speaker 12>going to normalize and we move into a normalized environment

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<v Speaker 12>across the yield curve, a normalized environment across inflation. But

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<v Speaker 12>that's going to take time as we move into twenty four,

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<v Speaker 12>into twenty five and beyond.

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<v Speaker 1>Why do you think after all the action we've seen

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<v Speaker 1>from the Fed and through all of this time, we

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<v Speaker 1>don't seem to be any clearer to figuring out whether

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<v Speaker 1>or not it's hard landing, soft landing, or something you

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<v Speaker 1>know in between.

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<v Speaker 12>Look, you know obviously this isn't. If it was easy,

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<v Speaker 12>we'd have much much clearer insight, right, I mean what

0:12:26.920 --> 0:12:31.440
<v Speaker 12>Powell is trying to navigate here with all of the

0:12:31.480 --> 0:12:34.680
<v Speaker 12>global macro issues, whether it's it's it's a war in Europe,

0:12:34.679 --> 0:12:38.760
<v Speaker 12>where it's it's China GDP growth at I now, I

0:12:38.760 --> 0:12:42.640
<v Speaker 12>think around five percent. You're looking at the US GDP

0:12:42.840 --> 0:12:50.439
<v Speaker 12>growth at two percent, and navigating that arena is difficult,

0:12:50.440 --> 0:12:54.280
<v Speaker 12>and I think I think given those challenges, there has

0:12:54.280 --> 0:12:57.640
<v Speaker 12>been a steady and measured He's been very transparent and

0:12:57.679 --> 0:13:01.200
<v Speaker 12>what he's what he's attempted to achieve. We are likely

0:13:01.240 --> 0:13:04.400
<v Speaker 12>going to pause here and hold and let these let

0:13:04.440 --> 0:13:07.720
<v Speaker 12>the lag effect take place, which will which again I'll

0:13:07.720 --> 0:13:09.880
<v Speaker 12>come back to our comment. We believe that it will

0:13:09.960 --> 0:13:16.840
<v Speaker 12>be a softer landing than expected. We certainly do not

0:13:16.960 --> 0:13:18.200
<v Speaker 12>expect a hard landing.

0:13:20.320 --> 0:13:22.880
<v Speaker 13>I'm just going to ask another question with regard to

0:13:22.960 --> 0:13:25.679
<v Speaker 13>how the market is priced and what you do about this.

0:13:25.840 --> 0:13:28.480
<v Speaker 13>If you take an equal weighting of the S and

0:13:28.520 --> 0:13:31.720
<v Speaker 13>P five hundred, for instance, excluding of course the big boys,

0:13:31.720 --> 0:13:35.000
<v Speaker 13>the big tech companies. You'll see it's about four percent higher.

0:13:35.320 --> 0:13:39.480
<v Speaker 13>That's indicative really of how narrow based this market has

0:13:39.520 --> 0:13:40.360
<v Speaker 13>gone up by i e.

0:13:40.440 --> 0:13:41.000
<v Speaker 7>Big Tech.

0:13:41.360 --> 0:13:44.199
<v Speaker 13>Now is that in itself with these other companies struggling

0:13:44.240 --> 0:13:48.160
<v Speaker 13>to eke out gains a representative also perhaps falling earnings

0:13:48.240 --> 0:13:51.080
<v Speaker 13>and earning throughcession and also what do you do in

0:13:51.080 --> 0:13:53.280
<v Speaker 13>this environment? You expect to come back from those companies

0:13:53.280 --> 0:13:55.320
<v Speaker 13>and stay away from big tech or mega tech will

0:13:55.520 --> 0:13:56.080
<v Speaker 13>remain there.

0:13:57.440 --> 0:13:57.640
<v Speaker 11>Yees.

0:13:57.720 --> 0:13:59.120
<v Speaker 12>So, Look, the move in the S and P five

0:13:59.200 --> 0:14:03.360
<v Speaker 12>hundred has been and by the top five to seven firms,

0:14:05.320 --> 0:14:08.079
<v Speaker 12>and the market weighted S and P five hundred versus

0:14:08.080 --> 0:14:11.640
<v Speaker 12>the equal weighted S and P five hundred has certainly outperformed.

0:14:12.880 --> 0:14:17.640
<v Speaker 12>Look in an environment where you have elevated interest rates,

0:14:18.320 --> 0:14:25.960
<v Speaker 12>we think that it actually represents opportunities for the smaller

0:14:26.040 --> 0:14:28.800
<v Speaker 12>and mid sized caps. We actually get access capital. We

0:14:28.840 --> 0:14:32.680
<v Speaker 12>focus on private markets and we see a huge opportunity

0:14:33.960 --> 0:14:37.800
<v Speaker 12>underway as we move towards these recessionary pressures, as we

0:14:37.840 --> 0:14:44.080
<v Speaker 12>move into more distress, we think there are substantial opportunities

0:14:44.120 --> 0:14:47.880
<v Speaker 12>within private equity. We think there's substantial opportunities within within private.

0:14:47.560 --> 0:14:53.840
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