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: Let's take a closer look here at the FED. Doug,
Speaker 1: it held at benchmark interest rate steady today, as mentioned,
Speaker 1: in a range between five and a quarter and five
Speaker 1: and a half percent. The FED central message was that
Speaker 1: rates will be higher for longer. At the news conference,
Speaker 1: Chair Powell addressed the issue of a soft landing, saying
Speaker 1: it's a primary objective for the FED, although he wouldn't
Speaker 1: call a soft landing a baseline expectation.
Speaker 3: Ultimately, this may be decided by factors that are outside
Speaker 3: our control at the end of the day. But I
Speaker 3: do think it's I do think it's possible. A soft
Speaker 3: landing is a primary objective, and I did not say otherwise.
Speaker 3: I mean, that's what we've been trying to achieve for
Speaker 3: all this time.
Speaker 1: FED share J Powell. He described the current rate environment
Speaker 1: as not yet sufficiently restrictive.
Speaker 2: And that means one more rate hike is possible this year,
Speaker 2: but former New York FED President to Bill Dudley is
Speaker 2: saying he'd be surprised if another rate hike occurred in November,
Speaker 2: so taking.
Speaker 4: Quite a bit of signal of the fact that the
Speaker 4: labor market seems to be ginning to better balance, even
Speaker 4: without the unemployer rate rising very much. So they're more
Speaker 4: confident that the labor market essentially normalized on its own,
Speaker 4: that the FED doesn't have to generate as much slack
Speaker 4: in the labor market to get inflation back down at
Speaker 4: two percent.
Speaker 2: He is Bill Dudley, the former head of the New
Speaker 2: York Fed, Brian Well.
Speaker 1: FedEx posted profit that topped analyst estimates, and then it
Speaker 1: raised its earnings forecast to be a little bit higher.
Speaker 1: The move is in part to cost cutting or the
Speaker 1: move on profits, and partly due to cost cutting as
Speaker 1: well as strong pricing customers who switched to the courier
Speaker 1: from its main rival ups due to concerns over a
Speaker 1: potential strike. We get more from Bloomberg Intelligence senior transportation
Speaker 1: analyst Lee Clascal.
Speaker 5: You know, the beat is what's telling us as that
Speaker 5: management is beginning to execute on its strategy to cut
Speaker 5: around six billion dollars and expenses. FedEx for a long
Speaker 5: time has been a show me story, and they're actually
Speaker 5: starting to, I guess, not show me, but show people
Speaker 5: that they're able to execute on their plans.
Speaker 1: FedEx Is Freight unit also picked up some volume from
Speaker 1: trucking company Yellow, which had declared bankruptcy back in early August.
Speaker 1: The company raised its guidance for annual adjusted earnings per
Speaker 1: share to between seventeen and eighteen dollars and fifty cents
Speaker 1: for fiscal twenty twenty four. Investor seemed to like the story.
Speaker 1: FedEx shares about five percent ors So in late trading, let's.
Speaker 2: Talk IPOs next, we had shares in Clavio climbing nine
Speaker 2: percent on their trading debut. This is the marketing and
Speaker 2: data automation provider. The company raised five hundred and seventy
Speaker 2: six million through this offering. Now, the IPO is the
Speaker 2: third major US listing in the past week, and you
Speaker 2: would include on that list Arm Holdings and the grocery
Speaker 2: delivery company Instacart. Well, speaking of Instacart, today, shares down
Speaker 2: nearly eleven percent to close just ten cents above the
Speaker 2: company's IPO price of thirty dollars. That's just one day
Speaker 2: after going public.
Speaker 1: Brian, Well, let's take a closer look here what we're
Speaker 1: getting from the PBOC. So we had some comments from
Speaker 1: a current leader at the PBOC and then also the
Speaker 1: former head the People's Bank of China saying it has
Speaker 1: sufficient policy space to support the economy's recovery. And get
Speaker 1: the story from Bloomberg's Joan Wong in Hong.
Speaker 6: Kong, Dolan, head of the PBOC Monetary Policy Department, said
Speaker 6: the central Bank has ample policy room to react to challenges.
Speaker 6: He also said the PBOC will step up its counter
Speaker 6: cyclical adjustments. The comments add to expectations that there could
Speaker 6: be more easy to come, including interest rate cuts. Separately,
Speaker 6: former PBOC chief Yeegong said the central bank should ramp
Speaker 6: up support for the economy in order to reach growth targets.
Speaker 6: He made his remarks in an official paper affiliated with
Speaker 6: the Chinese People's Political Consultative Conference. He also suggested giving
Speaker 6: full play in monetary policy to support the housing sector
Speaker 6: in Hong Kong. Join Long Bloomberg Radio.
Speaker 1: So in one sense, Doug, it seems like Igong, the
Speaker 1: former governor, is calling for the central bank to do more.
Speaker 1: And then we had the comments there from the current
Speaker 1: monetary policy chief at the PBOC saying, you know, we're
Speaker 1: in a good place. We have the tools. So if
Speaker 1: we look at what the currency did the currency weakened
Speaker 1: a little, so it seems to imply that there are
Speaker 1: more rooms for monetary easing. Thus the currency would slip
Speaker 1: a little bit, So it'll be fun to watch it today.
Speaker 2: Yeah, and a number of guests in our program have
Speaker 2: been talking about their expectations for a cut in the
Speaker 2: triple R in China. We'll have to see if that
Speaker 2: comes to pass. But just to get back to the
Speaker 2: FED in the notion of easing, one of the things
Speaker 2: I was struck by Brian as a part of the
Speaker 2: new dot plot the FED projecting just fifty basis points
Speaker 2: and raid cuts in twenty twenty four. That's about fifty
Speaker 2: basis points below what the FED was forecasting in June
Speaker 2: when one hundred basis points in cuts was being discussed.
Speaker 1: So if you put that together with the feds expectations
Speaker 1: to raise one more time this year, and if you
Speaker 1: put that together with the markets, the bond market in particular,
Speaker 1: with the inversion of the yield curve, it seems like
Speaker 1: you're getting a sort of bearish input into risk assets.
Speaker 1: And it may not be the case depending upon your
Speaker 1: time frame, but if you look at the performance today,
Speaker 1: it was definitely.
Speaker 2: Weaker definitely weaker in terms of equity market action. You're right,
Speaker 2: and then moves up across the yield curve, particularly in
Speaker 2: a two year right where you're up about seven basis
Speaker 2: points to five seventeen. That's high yield.
Speaker 1: So we'll be talking with our guests about this all
Speaker 1: throughout the morning. Coming up. Danielle di Martino Booth, the
Speaker 1: CEO and chief strategist for QI in Research. Used to
Speaker 1: be Quill but now QI Research. That's coming up in
Speaker 1: a few moments. Now it's time for Global News UK
Speaker 1: Prime Minister Rishie Sunak diluting key parts of his Climate
Speaker 1: Nets zero agenda at Bacheter covering that story and with
Speaker 1: Global News in San Francisco.
Speaker 5: Ed.
Speaker 7: Yeah, all right, Brian, thank you. You're right. Sunakas pushing back
Speaker 7: on a ban on the sale of new petrol and
Speaker 7: diesel cars by five years. It's now will be twenty
Speaker 7: thirty five. He says, most citizens will have electric cars
Speaker 7: by that time. Anyway, we've had.
Speaker 8: The fastest reduction in greenhouse gas missions in the G
Speaker 8: seven down almost fifty percent since nineteen ninety, France twenty
Speaker 8: two percent, the US, no change at all, China up
Speaker 8: by three hundred percent, and when now our share of
Speaker 8: global emissions is less than one percent, how can it
Speaker 8: be right that British citizens are now being told to
Speaker 8: sacrifice even more than others.
Speaker 7: And he says the effort faces a major pushback if
Speaker 7: it continues the way it is now.
Speaker 8: If we continue down this path, we risk losing the
Speaker 8: consent of the British people and the resulting backlash would
Speaker 8: not just be against specific policies, but against the mission itself,
Speaker 8: meaning we might never achieve our goal.
Speaker 7: But climate control advocates are not happy at all. C
Speaker 7: and then caught up with al Gore today, who says
Speaker 7: he realizes he's not a British citizen, but.
Speaker 9: I've heard from many of my friends in the UK,
Speaker 9: including a lot of Conservative Party members by the way,
Speaker 9: who have used the phrase utter disgust. And some of
Speaker 9: the young people there feel as if their generation has
Speaker 9: been stabbed in the back.
Speaker 7: Sunak, by the way, says, still committed, dude, not zero
Speaker 7: by twenty fifty, but in a more proportionate way. US
Speaker 7: Secretary of State Anthony Blincoln took verbal aim at Russia
Speaker 7: in front of the UN Security Council today.
Speaker 10: For over a year and a half. Russia has shredded
Speaker 10: the major tenants of the United Nations Charter, the Universal
Speaker 10: Decoration of Human Rights, international humanitarian Law, and flouted one
Speaker 10: Security Council resolution after another.
Speaker 7: Now b Lincoln says Moscow is blocking Ukrainian food exports,
Speaker 7: using illegal Iranian drones, and even arranging weapons deals with
Speaker 7: North Korea. US President Joe Biden. Meanwhile, i'm the sidelines
Speaker 7: of the UNA sat down with the Brazil's president Lulu
Speaker 7: Lula to talk about workers' rights. The message to Lula,
Speaker 7: but most importantly in an indirect way to the labor
Speaker 7: situation in the United States for.
Speaker 11: Working lockstep to tackle a climate crisis, including mobilizing hundreds
Speaker 11: of millions of dollars to conserve the Amazon and the
Speaker 11: critical ecosystems in Latin America.
Speaker 7: And this comes with a UAW and strike as well
Speaker 7: as the writers and Actors' unions. China says it's simplified.
Speaker 7: It's a visa application process as it looks to attract
Speaker 7: more visitors from overseas. Now applicants now need to list
Speaker 7: where they have traveled in the past year rather than five.
Speaker 7: It says it wants more streamlined process. Global News Fower
Speaker 7: by more than twenty seven hundred journalists and analysts in
Speaker 7: over one hundred and twenty countries. In San Francisco, I'm
Speaker 7: at Baxter and this is Bloomberg.
Speaker 1: This is Bloomberg Deabreak Asia. I'm Brian Curtis in Hong
Speaker 1: Kong along with three Salama. Our guest is Danielle di Martino,
Speaker 1: Booth CEO and chief strategist for QI Research. Danielle, thanks
Speaker 1: very much for joining us. We've just been talking here
Speaker 1: about the FED projections implying a hike at the end
Speaker 1: of the year and two fewer cuts next year. I
Speaker 1: suppose it sort of encourages us to think that maybe
Speaker 1: this is a little bit more of a hawkish pause
Speaker 1: than what the market was expecting.
Speaker 12: What do you think, Well, I think that the market
Speaker 12: was fully anticipating that the Fetter Reserve was going to
Speaker 12: keep November or December a live meeting. But I don't think,
Speaker 12: to your point, that they were anticipating that two rate
Speaker 12: cuts would be coming off the table, which really hammers
Speaker 12: home this idea of higher for longer.
Speaker 13: Well, absolutely, you think when you look at that, how
Speaker 13: do you think the market is interpreting this?
Speaker 12: Well, I think that the market is rightly concerned that
Speaker 12: there might be a larger element of dissent entering into
Speaker 12: the debate among members of the Federal Open Market Committee.
Speaker 12: When you look at the June dot plot, and I'm
Speaker 12: not suggesting you just visualize the dots being a lot
Speaker 12: closer together, more cohesiveness philosophically, And then you take a
Speaker 12: look at September and you could drive a mack truck
Speaker 12: through what the anticipations are for twenty twenty four. So
Speaker 12: I think that there is a ton of anxiety right
Speaker 12: now with what the Cutter reserve is going to look
Speaker 12: like going forward, how they're going to deliberate going forward.
Speaker 1: Well, the FED seems as mystified as the rest of
Speaker 1: us on why the economy is resilient in the face
Speaker 1: of all these FED rate hikes, And I think, from
Speaker 1: an intellectual standpoint, can he really say that a soft
Speaker 1: landing is the primary objective given the mandate?
Speaker 12: Well, when I think that, when Powell was pointedly asked
Speaker 12: by a Reuter's reporter, do you have soft landing as
Speaker 12: your base case pre Powell, who is picarly a very
Speaker 12: dignified and quiet spoken individual, interrupted the reporter to say no, no,
Speaker 12: that that is not his base case. And then he
Speaker 12: flipped pronouns and moved to the word I. So I
Speaker 12: found that to be absolutely fascinating. And he is focused
Speaker 12: on that two percent, and it is that two percent
Speaker 12: that he is going to push towards.
Speaker 1: Is that's the case. If two percent, if inflation is
Speaker 1: the killer mandate, then how can you really say that
Speaker 1: a soft landing is a primary objective. I don't think
Speaker 1: you can.
Speaker 12: I don't think you can. But that conflicts with members
Speaker 12: of the Federal Open Market Committee raising their GDP forecast,
Speaker 12: lowering their unemployment forecast, which which we saw today in
Speaker 12: the Summary of Economic projections. So again a lot of
Speaker 12: at least for me, I was I was only the
Speaker 12: set for nine years, But there was a ton of
Speaker 12: con usion that was entered. At least to me, there
Speaker 12: was just a ton of confusion broadcast by j. Powell.
Speaker 12: It seemed like there was going to be cohesion when
Speaker 12: we saw the statement and when we saw the dot plot,
Speaker 12: and then he kind of wandered off the reservation with
Speaker 12: his own thoughts on monetary policy. And so you're seeing
Speaker 12: reflected the increasingly progressive bent of the newest, newest confirmed
Speaker 12: members of the Federal Reserve Board. It's really fascinating to dissect,
Speaker 12: I think today what the politics right now of the
Speaker 12: FED and how heated it appears the discussions have become.
Speaker 13: Well, you know at the end of the day that
Speaker 13: you're looking at the FED and internal divisions. It's not
Speaker 13: surprising because you know, the data itself is really very
Speaker 13: much of a potpouri. It's really how you want to
Speaker 13: interpret it. There's so many different data points that it's
Speaker 13: very confusing as well.
Speaker 12: Well, it's it's the data is confusing. The data revision
Speaker 12: are making me dizzy when when you get a retail
Speaker 12: sales report out and they they revised July and then
Speaker 12: June deeper, and economists are moving their GDT bogies around
Speaker 12: like ping pong. And then you add on to that
Speaker 12: the laundry list that he named at the podium, of
Speaker 12: the oil shot, which he brought up, by the way,
Speaker 12: not the Press Corps, but the oil shot, the student
Speaker 12: loan repayments, the potential shutdown of the government, the United
Speaker 12: Autoworkers Strike, so many different variables that are at play
Speaker 12: right now, and it's to the data being all over
Speaker 12: the map.
Speaker 13: Is very important. To the point you raise about oil. Now,
Speaker 13: this really has through an a spanner in all the works.
Speaker 12: Look, this, this situation can really get out of hands.
Speaker 12: There was not one time today at the podium that
Speaker 12: that care Powell used the word supercore. He actually altered
Speaker 12: the narrative without without actually saying so, because he mentioned oil,
Speaker 12: but he did not mention his supercore, which excludes just about.
Speaker 1: Every I think, you know, none of us would want
Speaker 1: to be in his position up there taking questions like that.
Speaker 1: And given you know, this incredibly complex mosaic that we
Speaker 1: have a quick question on China, it seems like there's
Speaker 1: a little bit of a of a you know, at
Speaker 1: the PBOC, a little bit of confidence that they're doing
Speaker 1: the right thing. But then the former chief said, you
Speaker 1: need to do more. How do you see it?
Speaker 12: Well, look, arguably we have seen a delay in the
Speaker 12: reopening trade because we've seen so much, so much new
Speaker 12: resilience in the domestic data coming out of China. But
Speaker 12: you have to ask yourself what's coming behind that, and
Speaker 12: the answer is not altogether that much. And so you know,
Speaker 12: compared to two fifteen, twenty sixteen, the industrial recession and
Speaker 12: the great natural part of China's not applying near is
Speaker 12: much stimulus.
Speaker 1: Yeah, yeah, absolutely, Danielle, Thanks very much for joining us.
Speaker 1: Danielle di Martino, Booth CEO and chief strategist at QI Research.
Speaker 1: This is Bomberg Daybreak Asia, your morning brief on the
Speaker 1: story's making news from Hong Kong to Singapore and Wall Street.
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Speaker 2: I'm Brian Curtis and I'm Doug Krisner. Join us again
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