WEBVTT - Fed Leaves Rates Unchanged, FedEx Beats Estimates

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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>Let's take a closer look here at the FED. Doug,

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<v Speaker 1>it held at benchmark interest rate steady today, as mentioned,

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<v Speaker 1>in a range between five and a quarter and five

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<v Speaker 1>and a half percent. The FED central message was that

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<v Speaker 1>rates will be higher for longer. At the news conference,

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<v Speaker 1>Chair Powell addressed the issue of a soft landing, saying

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<v Speaker 1>it's a primary objective for the FED, although he wouldn't

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<v Speaker 1>call a soft landing a baseline expectation.

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<v Speaker 3>Ultimately, this may be decided by factors that are outside

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<v Speaker 3>our control at the end of the day. But I

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<v Speaker 3>do think it's I do think it's possible. A soft

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<v Speaker 3>landing is a primary objective, and I did not say otherwise.

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<v Speaker 3>I mean, that's what we've been trying to achieve for

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<v Speaker 3>all this time.

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<v Speaker 1>FED share J Powell. He described the current rate environment

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<v Speaker 1>as not yet sufficiently restrictive.

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<v Speaker 2>And that means one more rate hike is possible this year,

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<v Speaker 2>but former New York FED President to Bill Dudley is

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<v Speaker 2>saying he'd be surprised if another rate hike occurred in November,

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<v Speaker 2>so taking.

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<v Speaker 4>Quite a bit of signal of the fact that the

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<v Speaker 4>labor market seems to be ginning to better balance, even

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<v Speaker 4>without the unemployer rate rising very much. So they're more

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<v Speaker 4>confident that the labor market essentially normalized on its own,

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<v Speaker 4>that the FED doesn't have to generate as much slack

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<v Speaker 4>in the labor market to get inflation back down at

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<v Speaker 4>two percent.

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<v Speaker 2>He is Bill Dudley, the former head of the New

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<v Speaker 2>York Fed, Brian Well.

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<v Speaker 1>FedEx posted profit that topped analyst estimates, and then it

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<v Speaker 1>raised its earnings forecast to be a little bit higher.

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<v Speaker 1>The move is in part to cost cutting or the

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<v Speaker 1>move on profits, and partly due to cost cutting as

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<v Speaker 1>well as strong pricing customers who switched to the courier

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<v Speaker 1>from its main rival ups due to concerns over a

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<v Speaker 1>potential strike. We get more from Bloomberg Intelligence senior transportation

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<v Speaker 1>analyst Lee Clascal.

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<v Speaker 5>You know, the beat is what's telling us as that

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<v Speaker 5>management is beginning to execute on its strategy to cut

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<v Speaker 5>around six billion dollars and expenses. FedEx for a long

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<v Speaker 5>time has been a show me story, and they're actually

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<v Speaker 5>starting to, I guess, not show me, but show people

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<v Speaker 5>that they're able to execute on their plans.

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<v Speaker 1>FedEx Is Freight unit also picked up some volume from

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<v Speaker 1>trucking company Yellow, which had declared bankruptcy back in early August.

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<v Speaker 1>The company raised its guidance for annual adjusted earnings per

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<v Speaker 1>share to between seventeen and eighteen dollars and fifty cents

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<v Speaker 1>for fiscal twenty twenty four. Investor seemed to like the story.

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<v Speaker 1>FedEx shares about five percent ors So in late trading, let's.

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<v Speaker 2>Talk IPOs next, we had shares in Clavio climbing nine

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<v Speaker 2>percent on their trading debut. This is the marketing and

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<v Speaker 2>data automation provider. The company raised five hundred and seventy

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<v Speaker 2>six million through this offering. Now, the IPO is the

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<v Speaker 2>third major US listing in the past week, and you

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<v Speaker 2>would include on that list Arm Holdings and the grocery

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<v Speaker 2>delivery company Instacart. Well, speaking of Instacart, today, shares down

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<v Speaker 2>nearly eleven percent to close just ten cents above the

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<v Speaker 2>company's IPO price of thirty dollars. That's just one day

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<v Speaker 2>after going public.

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<v Speaker 1>Brian, Well, let's take a closer look here what we're

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<v Speaker 1>getting from the PBOC. So we had some comments from

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<v Speaker 1>a current leader at the PBOC and then also the

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<v Speaker 1>former head the People's Bank of China saying it has

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<v Speaker 1>sufficient policy space to support the economy's recovery. And get

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<v Speaker 1>the story from Bloomberg's Joan Wong in Hong.

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<v Speaker 6>Kong, Dolan, head of the PBOC Monetary Policy Department, said

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<v Speaker 6>the central Bank has ample policy room to react to challenges.

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<v Speaker 6>He also said the PBOC will step up its counter

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<v Speaker 6>cyclical adjustments. The comments add to expectations that there could

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<v Speaker 6>be more easy to come, including interest rate cuts. Separately,

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<v Speaker 6>former PBOC chief Yeegong said the central bank should ramp

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<v Speaker 6>up support for the economy in order to reach growth targets.

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<v Speaker 6>He made his remarks in an official paper affiliated with

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<v Speaker 6>the Chinese People's Political Consultative Conference. He also suggested giving

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<v Speaker 6>full play in monetary policy to support the housing sector

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<v Speaker 6>in Hong Kong. Join Long Bloomberg Radio.

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<v Speaker 1>So in one sense, Doug, it seems like Igong, the

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<v Speaker 1>former governor, is calling for the central bank to do more.

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<v Speaker 1>And then we had the comments there from the current

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<v Speaker 1>monetary policy chief at the PBOC saying, you know, we're

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<v Speaker 1>in a good place. We have the tools. So if

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<v Speaker 1>we look at what the currency did the currency weakened

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<v Speaker 1>a little, so it seems to imply that there are

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<v Speaker 1>more rooms for monetary easing. Thus the currency would slip

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<v Speaker 1>a little bit, So it'll be fun to watch it today.

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<v Speaker 2>Yeah, and a number of guests in our program have

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<v Speaker 2>been talking about their expectations for a cut in the

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<v Speaker 2>triple R in China. We'll have to see if that

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<v Speaker 2>comes to pass. But just to get back to the

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<v Speaker 2>FED in the notion of easing, one of the things

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<v Speaker 2>I was struck by Brian as a part of the

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<v Speaker 2>new dot plot the FED projecting just fifty basis points

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<v Speaker 2>and raid cuts in twenty twenty four. That's about fifty

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<v Speaker 2>basis points below what the FED was forecasting in June

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<v Speaker 2>when one hundred basis points in cuts was being discussed.

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<v Speaker 1>So if you put that together with the feds expectations

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<v Speaker 1>to raise one more time this year, and if you

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<v Speaker 1>put that together with the markets, the bond market in particular,

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<v Speaker 1>with the inversion of the yield curve, it seems like

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<v Speaker 1>you're getting a sort of bearish input into risk assets.

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<v Speaker 1>And it may not be the case depending upon your

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<v Speaker 1>time frame, but if you look at the performance today,

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<v Speaker 1>it was definitely.

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<v Speaker 2>Weaker definitely weaker in terms of equity market action. You're right,

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<v Speaker 2>and then moves up across the yield curve, particularly in

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<v Speaker 2>a two year right where you're up about seven basis

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<v Speaker 2>points to five seventeen. That's high yield.

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<v Speaker 1>So we'll be talking with our guests about this all

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<v Speaker 1>throughout the morning. Coming up. Danielle di Martino Booth, the

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<v Speaker 1>CEO and chief strategist for QI in Research. Used to

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<v Speaker 1>be Quill but now QI Research. That's coming up in

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<v Speaker 1>a few moments. Now it's time for Global News UK

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<v Speaker 1>Prime Minister Rishie Sunak diluting key parts of his Climate

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<v Speaker 1>Nets zero agenda at Bacheter covering that story and with

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<v Speaker 1>Global News in San Francisco.

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<v Speaker 5>Ed.

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<v Speaker 7>Yeah, all right, Brian, thank you. You're right. Sunakas pushing back

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<v Speaker 7>on a ban on the sale of new petrol and

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<v Speaker 7>diesel cars by five years. It's now will be twenty

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<v Speaker 7>thirty five. He says, most citizens will have electric cars

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<v Speaker 7>by that time. Anyway, we've had.

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<v Speaker 8>The fastest reduction in greenhouse gas missions in the G

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<v Speaker 8>seven down almost fifty percent since nineteen ninety, France twenty

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<v Speaker 8>two percent, the US, no change at all, China up

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<v Speaker 8>by three hundred percent, and when now our share of

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<v Speaker 8>global emissions is less than one percent, how can it

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<v Speaker 8>be right that British citizens are now being told to

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<v Speaker 8>sacrifice even more than others.

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<v Speaker 7>And he says the effort faces a major pushback if

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<v Speaker 7>it continues the way it is now.

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<v Speaker 8>If we continue down this path, we risk losing the

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<v Speaker 8>consent of the British people and the resulting backlash would

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<v Speaker 8>not just be against specific policies, but against the mission itself,

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<v Speaker 8>meaning we might never achieve our goal.

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<v Speaker 7>But climate control advocates are not happy at all. C

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<v Speaker 7>and then caught up with al Gore today, who says

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<v Speaker 7>he realizes he's not a British citizen, but.

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<v Speaker 9>I've heard from many of my friends in the UK,

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<v Speaker 9>including a lot of Conservative Party members by the way,

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<v Speaker 9>who have used the phrase utter disgust. And some of

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<v Speaker 9>the young people there feel as if their generation has

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<v Speaker 9>been stabbed in the back.

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<v Speaker 7>Sunak, by the way, says, still committed, dude, not zero

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<v Speaker 7>by twenty fifty, but in a more proportionate way. US

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<v Speaker 7>Secretary of State Anthony Blincoln took verbal aim at Russia

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<v Speaker 7>in front of the UN Security Council today.

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<v Speaker 10>For over a year and a half. Russia has shredded

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<v Speaker 10>the major tenants of the United Nations Charter, the Universal

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<v Speaker 10>Decoration of Human Rights, international humanitarian Law, and flouted one

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<v Speaker 10>Security Council resolution after another.

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<v Speaker 7>Now b Lincoln says Moscow is blocking Ukrainian food exports,

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<v Speaker 7>using illegal Iranian drones, and even arranging weapons deals with

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<v Speaker 7>North Korea. US President Joe Biden. Meanwhile, i'm the sidelines

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<v Speaker 7>of the UNA sat down with the Brazil's president Lulu

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<v Speaker 7>Lula to talk about workers' rights. The message to Lula,

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<v Speaker 7>but most importantly in an indirect way to the labor

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<v Speaker 7>situation in the United States for.

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<v Speaker 11>Working lockstep to tackle a climate crisis, including mobilizing hundreds

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<v Speaker 11>of millions of dollars to conserve the Amazon and the

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<v Speaker 11>critical ecosystems in Latin America.

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<v Speaker 7>And this comes with a UAW and strike as well

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<v Speaker 7>as the writers and Actors' unions. China says it's simplified.

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<v Speaker 7>It's a visa application process as it looks to attract

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<v Speaker 7>more visitors from overseas. Now applicants now need to list

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<v Speaker 7>where they have traveled in the past year rather than five.

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<v Speaker 7>It says it wants more streamlined process. Global News Fower

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<v Speaker 7>by more than twenty seven hundred journalists and analysts in

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<v Speaker 7>over one hundred and twenty countries. In San Francisco, I'm

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<v Speaker 7>at Baxter and this is Bloomberg.

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<v Speaker 1>This is Bloomberg Deabreak Asia. I'm Brian Curtis in Hong

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<v Speaker 1>Kong along with three Salama. Our guest is Danielle di Martino,

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<v Speaker 1>Booth CEO and chief strategist for QI Research. Danielle, thanks

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<v Speaker 1>very much for joining us. We've just been talking here

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<v Speaker 1>about the FED projections implying a hike at the end

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<v Speaker 1>of the year and two fewer cuts next year. I

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<v Speaker 1>suppose it sort of encourages us to think that maybe

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<v Speaker 1>this is a little bit more of a hawkish pause

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<v Speaker 1>than what the market was expecting.

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<v Speaker 12>What do you think, Well, I think that the market

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<v Speaker 12>was fully anticipating that the Fetter Reserve was going to

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<v Speaker 12>keep November or December a live meeting. But I don't think,

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<v Speaker 12>to your point, that they were anticipating that two rate

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<v Speaker 12>cuts would be coming off the table, which really hammers

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<v Speaker 12>home this idea of higher for longer.

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<v Speaker 13>Well, absolutely, you think when you look at that, how

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<v Speaker 13>do you think the market is interpreting this?

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<v Speaker 12>Well, I think that the market is rightly concerned that

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<v Speaker 12>there might be a larger element of dissent entering into

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<v Speaker 12>the debate among members of the Federal Open Market Committee.

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<v Speaker 12>When you look at the June dot plot, and I'm

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<v Speaker 12>not suggesting you just visualize the dots being a lot

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<v Speaker 12>closer together, more cohesiveness philosophically, And then you take a

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<v Speaker 12>look at September and you could drive a mack truck

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<v Speaker 12>through what the anticipations are for twenty twenty four. So

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<v Speaker 12>I think that there is a ton of anxiety right

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<v Speaker 12>now with what the Cutter reserve is going to look

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<v Speaker 12>like going forward, how they're going to deliberate going forward.

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<v Speaker 1>Well, the FED seems as mystified as the rest of

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<v Speaker 1>us on why the economy is resilient in the face

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<v Speaker 1>of all these FED rate hikes, And I think, from

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<v Speaker 1>an intellectual standpoint, can he really say that a soft

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<v Speaker 1>landing is the primary objective given the mandate?

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<v Speaker 12>Well, when I think that, when Powell was pointedly asked

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<v Speaker 12>by a Reuter's reporter, do you have soft landing as

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<v Speaker 12>your base case pre Powell, who is picarly a very

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<v Speaker 12>dignified and quiet spoken individual, interrupted the reporter to say no, no,

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<v Speaker 12>that that is not his base case. And then he

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<v Speaker 12>flipped pronouns and moved to the word I. So I

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<v Speaker 12>found that to be absolutely fascinating. And he is focused

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<v Speaker 12>on that two percent, and it is that two percent

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<v Speaker 12>that he is going to push towards.

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<v Speaker 1>Is that's the case. If two percent, if inflation is

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<v Speaker 1>the killer mandate, then how can you really say that

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<v Speaker 1>a soft landing is a primary objective. I don't think

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<v Speaker 1>you can.

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<v Speaker 12>I don't think you can. But that conflicts with members

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<v Speaker 12>of the Federal Open Market Committee raising their GDP forecast,

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<v Speaker 12>lowering their unemployment forecast, which which we saw today in

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<v Speaker 12>the Summary of Economic projections. So again a lot of

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<v Speaker 12>at least for me, I was I was only the

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<v Speaker 12>set for nine years, But there was a ton of

0:11:59.720 --> 0:12:03.360
<v Speaker 12>con usion that was entered. At least to me, there

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<v Speaker 12>was just a ton of confusion broadcast by j. Powell.

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<v Speaker 12>It seemed like there was going to be cohesion when

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<v Speaker 12>we saw the statement and when we saw the dot plot,

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<v Speaker 12>and then he kind of wandered off the reservation with

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<v Speaker 12>his own thoughts on monetary policy. And so you're seeing

0:12:19.800 --> 0:12:26.040
<v Speaker 12>reflected the increasingly progressive bent of the newest, newest confirmed

0:12:26.080 --> 0:12:30.480
<v Speaker 12>members of the Federal Reserve Board. It's really fascinating to dissect,

0:12:30.600 --> 0:12:33.840
<v Speaker 12>I think today what the politics right now of the

0:12:33.840 --> 0:12:37.520
<v Speaker 12>FED and how heated it appears the discussions have become.

0:12:37.400 --> 0:12:39.360
<v Speaker 13>Well, you know at the end of the day that

0:12:39.840 --> 0:12:43.440
<v Speaker 13>you're looking at the FED and internal divisions. It's not

0:12:43.600 --> 0:12:49.080
<v Speaker 13>surprising because you know, the data itself is really very

0:12:49.200 --> 0:12:51.920
<v Speaker 13>much of a potpouri. It's really how you want to

0:12:51.920 --> 0:12:54.360
<v Speaker 13>interpret it. There's so many different data points that it's

0:12:54.440 --> 0:12:55.559
<v Speaker 13>very confusing as well.

0:12:55.960 --> 0:12:59.840
<v Speaker 12>Well, it's it's the data is confusing. The data revision

0:13:00.200 --> 0:13:04.040
<v Speaker 12>are making me dizzy when when you get a retail

0:13:04.040 --> 0:13:07.360
<v Speaker 12>sales report out and they they revised July and then

0:13:07.559 --> 0:13:11.760
<v Speaker 12>June deeper, and economists are moving their GDT bogies around

0:13:11.800 --> 0:13:14.240
<v Speaker 12>like ping pong. And then you add on to that

0:13:14.320 --> 0:13:17.280
<v Speaker 12>the laundry list that he named at the podium, of

0:13:17.320 --> 0:13:19.320
<v Speaker 12>the oil shot, which he brought up, by the way,

0:13:19.360 --> 0:13:21.600
<v Speaker 12>not the Press Corps, but the oil shot, the student

0:13:21.720 --> 0:13:26.520
<v Speaker 12>loan repayments, the potential shutdown of the government, the United

0:13:26.520 --> 0:13:31.040
<v Speaker 12>Autoworkers Strike, so many different variables that are at play

0:13:31.120 --> 0:13:32.920
<v Speaker 12>right now, and it's to the data being all over

0:13:32.920 --> 0:13:33.439
<v Speaker 12>the map.

0:13:34.840 --> 0:13:37.320
<v Speaker 13>Is very important. To the point you raise about oil. Now,

0:13:37.480 --> 0:13:40.119
<v Speaker 13>this really has through an a spanner in all the works.

0:13:40.880 --> 0:13:44.079
<v Speaker 12>Look, this, this situation can really get out of hands.

0:13:44.440 --> 0:13:47.199
<v Speaker 12>There was not one time today at the podium that

0:13:47.200 --> 0:13:52.000
<v Speaker 12>that care Powell used the word supercore. He actually altered

0:13:52.000 --> 0:13:56.680
<v Speaker 12>the narrative without without actually saying so, because he mentioned oil,

0:13:56.720 --> 0:13:59.920
<v Speaker 12>but he did not mention his supercore, which excludes just about.

0:13:59.679 --> 0:14:04.800
<v Speaker 1>Every I think, you know, none of us would want

0:14:04.840 --> 0:14:07.559
<v Speaker 1>to be in his position up there taking questions like that.

0:14:07.880 --> 0:14:11.600
<v Speaker 1>And given you know, this incredibly complex mosaic that we

0:14:11.679 --> 0:14:15.080
<v Speaker 1>have a quick question on China, it seems like there's

0:14:15.120 --> 0:14:17.760
<v Speaker 1>a little bit of a of a you know, at

0:14:17.760 --> 0:14:20.360
<v Speaker 1>the PBOC, a little bit of confidence that they're doing

0:14:20.360 --> 0:14:22.600
<v Speaker 1>the right thing. But then the former chief said, you

0:14:22.640 --> 0:14:24.080
<v Speaker 1>need to do more. How do you see it?

0:14:24.600 --> 0:14:29.520
<v Speaker 12>Well, look, arguably we have seen a delay in the

0:14:29.560 --> 0:14:33.280
<v Speaker 12>reopening trade because we've seen so much, so much new

0:14:33.320 --> 0:14:37.640
<v Speaker 12>resilience in the domestic data coming out of China. But

0:14:37.760 --> 0:14:40.160
<v Speaker 12>you have to ask yourself what's coming behind that, and

0:14:40.200 --> 0:14:43.280
<v Speaker 12>the answer is not altogether that much. And so you know,

0:14:43.360 --> 0:14:46.880
<v Speaker 12>compared to two fifteen, twenty sixteen, the industrial recession and

0:14:46.920 --> 0:14:49.560
<v Speaker 12>the great natural part of China's not applying near is

0:14:49.600 --> 0:14:50.359
<v Speaker 12>much stimulus.

0:14:50.640 --> 0:14:53.640
<v Speaker 1>Yeah, yeah, absolutely, Danielle, Thanks very much for joining us.

0:14:53.680 --> 0:14:57.640
<v Speaker 1>Danielle di Martino, Booth CEO and chief strategist at QI Research.

0:14:59.200 --> 0:15:02.040
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