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Speaker 1: Good morning.

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Speaker 2: I'm Richard Saloma and I'm Doug Krisner. Here are the

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Speaker 2: stories we're following today.

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Speaker 3: And it's all about also, you know what that job's

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Speaker 3: report is likely to do in the US should provide

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Speaker 3: us with just a snapshot of where the US economy is,

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Speaker 3: which is of course vital for setting monetary policy. Getting

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Speaker 3: that data in a little under fourteen and a half hours,

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Speaker 3: Bloomberg's Michael McKee has a preview.

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Speaker 4: Barring a surprise, the payrolls report is forecast to show

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Speaker 4: a continuing slowdown in hiring during August. Well, this week's

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Speaker 4: Jolts report showed the number of openings remains elevated. Monthly

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Speaker 4: jobs creation has been trending lower. Companies aren't laying off workers,

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Speaker 4: but they are cutting back on hiring as they wait

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Speaker 4: to see whether recession forecasts come true. FED officials also

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Speaker 4: want to see if unemployment starts to rise. So far,

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Speaker 4: it's remained near historic lows, even given the rise in

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Speaker 4: interest rates. And of course, top of mind for everyone

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Speaker 4: will be average hourly earnings. Thursday's incomes report suggested wage

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Speaker 4: game means are finally cooling as demand for workers eases.

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Speaker 4: Michael McKee Bloomberg Daybreak Asia.

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Speaker 2: We go to China next to where the government is

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Speaker 2: cutting down payments for home buyers and reducing mortgage rates.

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Speaker 2: The story from Bloomberg's Juan Wong in Hong Kong.

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Speaker 5: The nationwide minimum down payment will be twenty percent for

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Speaker 5: first time buyers and thirty percent for second time purchasers.

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Speaker 5: The mortgage rate cuts will be negotiated between banks and customers.

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Speaker 5: Both policies will go into effect on September twenty fifth.

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Speaker 5: This is China's latest attempt to curup the country's property crisis.

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Speaker 5: The announcements came as data showed China's two year property

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Speaker 5: slum worsened. This month's sales by the country's one hundred

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Speaker 5: largest developers dropped thirty four percent from a year earlier,

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Speaker 5: according to the China Real Estate Information Corporation. That was

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Speaker 5: the biggest drop in more than a year. In Hong Kong,

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Speaker 5: joined Wong Bloomberg Day Brigaisia.

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Speaker 3: And indeed staying with property and developers, a group of

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Speaker 3: Country Garden creditors are seeking to declare a default on

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Speaker 3: a Yuang bond. Let's get to this from Bloomberg's a

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Speaker 3: Bonnie Out who has more from Hong Kong.

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Speaker 6: Investors have proposed a note be declared in default because

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Speaker 6: of a recent downgrade. That's according to a filing to

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Speaker 6: the Shanghai Stock Exchange's privatest Closure platform. The investors say

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Speaker 6: that effectively hold ten and a half percent of a

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Speaker 6: yuan bond effectively due September fourth, but at least fifty

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Speaker 6: percent support is needed for each proposal being vaulted. Holders

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Speaker 6: of the yuan bond had until yesterday to fault on

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Speaker 6: the proposal to call it default. Moody's has downgraded a

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Speaker 6: country Garden three notches. As more pressure piles on the

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Speaker 6: distressed developer in Hong Kong. I'm Bonnie Olt Bloomberg Daybreak Asia.

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Speaker 3: Meanwhile, the China evergrahamd said it couldn't make payments for

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Speaker 3: investment products this once due to a liquidity crunch. Its

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Speaker 3: restructuring process has been in limber since it defaulted a

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Speaker 3: couple of years ago.

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Speaker 2: Well, US treasure Secretary of Janet Yellen is heading to India,

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Speaker 2: but China is also very much on her mind. The

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Speaker 2: story from Bloomberg's Denise Pellegrini.

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Speaker 7: Yellen will go to Delhi this second week in September

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Speaker 7: joining President Biden at the G twenty summit. This is

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Speaker 7: her fourth visit to India in less than a year.

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Speaker 7: She'll be meeting her Indian counterparts and seeking to strengthen

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Speaker 7: bilateral economic ties. The gathering will also offer another opportunity

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Speaker 7: to engage with Chinese officials at a time of mounting

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Speaker 7: concern over the potential ripple effect of China's economic slowdown

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Speaker 7: and financial strains among the property developers. President Biden says

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Speaker 7: he hopes China's President Chi Jimping shows up, but sources

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Speaker 7: tell Bloomberg that Chi Jimping will not be attending. Among

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Speaker 7: the other issues on the US agenda for New Delhi,

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Speaker 7: rallying support for Ukraine and for sanctions on Russia, and

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Speaker 7: also bolstering the resources of multilateral development banks. Denise Pellegrini,

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Speaker 7: Bloomberg day Break Asia.

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Speaker 3: We're hearing that All the Holdings is preparing to set

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Speaker 3: a price range for its us IPO before embarking on

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Speaker 3: an investor roadshow next week. The ship designer considering pricing

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Speaker 3: its shares on the thirteenth of September, and it wants

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Speaker 3: to begin trading the next day yes to promote the offering.

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Speaker 3: It's expected to come after the Labor Day holiday, and

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Speaker 3: we're told arm is aiming to raise between five and

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Speaker 3: seven billion dollars with this offering, and the valuation then

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Speaker 3: could end up in the range of between fifty and

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Speaker 3: sixty billion dollars.

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Speaker 2: Broadcom is one of the world's five largest semiconductor manufacturers,

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Speaker 2: and today the company gave a disappointing forecast for the

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Speaker 2: current quarter. Of the story from Bloomberg's Charlie Pellett.

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Speaker 1: It signals that demand for electronic components remains sluggish. Broadcom

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Speaker 1: said revenue will be about nine point twenty seven billion

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Speaker 1: dollars in the fiscal fourth quarter. That compares with an

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Speaker 1: average Wall Street estimate of nine point twenty eight billion dollars,

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Speaker 1: with some analysts predicting as much as nine point eight billion.

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Speaker 1: The outlook shows that Broadcom is mired in a broad

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Speaker 1: spending slowdown, even as the artificial intelligence boom fuels demand

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Speaker 1: and pockets of the industry in New York. Charlie Pellett

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Speaker 1: Boomberg Daybreak Asia.

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Speaker 2: So the employment report for August due tomorrow morning, eight

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Speaker 2: thirty am Walls Street Time. We told you about that

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Speaker 2: a moment ago. Word today that US small businesses reported

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Speaker 2: fewer unfilled positions in the month of August. This is

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Speaker 2: data from the National Federation of Independent Business. It shows

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Speaker 2: unfilled positions are now at their lowest level since February

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Speaker 2: twenty twenty one, and the NFIB also reported fewer small

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Speaker 2: business owners raising worker compensation well at the same time today,

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Speaker 2: job cuts, that's the survey from Challenger Gray in Christmas.

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Speaker 2: Overall cuts totaled more than seventy five thousand in the

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Speaker 2: month of August, obviously a number amplified by the bankruptcy

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Speaker 2: of Yellow Corporation. That August Employment data due tomorrow and today.

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Speaker 2: A survey from twenty two v Research finds sixty percent

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Speaker 2: of investors are expecting a softer than estimated number on

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Speaker 2: job growth. Let's get to Global News next. Former President

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Speaker 2: Donald Trump pleads not guilty in Georgia. Dan Schwartzman is here, Danny.

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Speaker 8: Doug, get your popcorn ready, because this is going to

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Speaker 8: be something to behold. Trump has waived his right to

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Speaker 8: an in person arraignment, sparing him from having to appear

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Speaker 8: in court on September sixth, and that would have been

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Speaker 8: broadcast live. Trump led not guilty to state charges he

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Speaker 8: conspired to overturn the twenty twenty presidential election results. Excuse me.

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Speaker 8: The seventy seven year old is one of nineteen defendants

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Speaker 8: indicted by Fulton County da Fani Willis if participating in

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Speaker 8: a quote criminal enterprise to keep Trump as president. Meanwhile,

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Speaker 8: the Atlanta Journal Constitution reports that the Fulton County judge

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Speaker 8: has said that Trump court proceedings will in fact be televised.

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Speaker 8: China and the US acknowledging that military officials from the

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Speaker 8: two countries met earlier this month at a defense chiefs

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Speaker 8: conference in Fiji. Admiral John Aquilino, the head of the

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Speaker 8: US Indo Pacific Command, in General Shu Sheiling, the deputy

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Speaker 8: Joint Chief of Staff of the People's Liberation Army, held

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Speaker 8: a meeting for what's believed to be the first time

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Speaker 8: since August of twenty twenty two. China had suspended military

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Speaker 8: ties with the US after then House Speaker Nancy Pelosi

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Speaker 8: visited Taiwan. Relations were then even more strained after the

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Speaker 8: U s shotdown in a ledged Chinese spy balloon that

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Speaker 8: flew over the country. That was back in February. Former

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Speaker 8: House Speaker in Nancy Pelosi and has sit down with

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Speaker 8: Bloomberg's Francine Lacoi and Venice Italy. Says, despite differences, we

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Speaker 8: do have to work with China.

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Speaker 9: We don't have shared values, but we have a shared

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Speaker 9: planet and we have to work with the Chinese to

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Speaker 9: save the planet because they're now I think the biggest emitter,

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Speaker 9: if not us, their second, and they're part of the

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Speaker 9: solution in all of this.

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Speaker 8: You can see that full interview on Leaders with Lacroix,

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Speaker 8: airing at nine thirty pm New York time on September

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Speaker 8: twenty seventh in the States, then at six thirty pm

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Speaker 8: London time the next day. President Biden says he'll visit

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Speaker 8: Hurricane to dally a ravaged Florida on Saturday. The Category

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Speaker 8: three storm flooded towns across the state, leaving hundreds of

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Speaker 8: thousands without power. Biden has been criticized for a seemingly

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Speaker 8: slow response to the wildfire and maw we earlier this month.

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Speaker 8: Biden says he has spoken with Governor Ron De Santis

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Speaker 8: three times today to assure him that the federal government

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Speaker 8: would continue to provide all necessary resources to help the

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Speaker 8: state recover in Florida. DeSantis gives an update on power

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Speaker 8: outages across the state.

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Speaker 10: As of six am today, there are approximately one hundred

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Speaker 10: and forty six thousand power outages reported across the state,

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Speaker 10: but power is being restored quickly. Thus far, four hundred

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Speaker 10: and twenty thousand accounts that lost power during the storm

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Speaker 10: have been restored.

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Speaker 8: Biden will be in Florida Saturday to tour areas hit

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Speaker 8: hard by Hurricane Nadalia. Global News twenty five hours a

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Speaker 8: day power by more than twenty seven hundred journalists and

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Speaker 8: analysts in more than one hundred and twenty countries. I'm

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Speaker 8: Dan Schwartzman. This is Bloomberg.

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Speaker 2: Let's get to our guest. Liz Anne Saunders is with us.

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Speaker 2: She is managing director, also the chief investment strategistic Charles

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Speaker 2: Schwab and Lizen is in Boston, Massachusetts. Lazan, thanks for

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Speaker 2: being with us. I'm curious to get your take right

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Speaker 2: out of the gate on how you see the economy

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Speaker 2: in the States right now and where the FED is

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Speaker 2: in all of that mix.

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Speaker 11: Sure, and thanks for having me. We've had the view

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Speaker 11: that this has been a rolling recession or a series

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Speaker 11: of rolling recessions at the sectoral level, meeting segments of

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Speaker 11: the economy for more than a year and a half

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Speaker 11: right now, and I think that's the best way to

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Speaker 11: think about this very unique cycle where we've had recessions

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Speaker 11: in areas of housing, housing related, a lot of consumer

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Speaker 11: oriented goods, manufacturing, we just had the later offsetting strength

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Speaker 11: on the services side and in turn the labor market.

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Speaker 11: And I think from the FEDS perspective, part of the

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Speaker 11: reason why they're focusing on inflation metrics at a more

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Speaker 11: granular level like core services x housing is they want

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Speaker 11: to get to the heart of where inflation has been

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Speaker 11: most sticky, and that's where it accelerated later. So I

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Speaker 11: think the simplicity around recession versus no recession, and in

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Speaker 11: turn what the Fed's reaction function misses the nuances that

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Speaker 11: make this cycle unlike any other.

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Speaker 3: So tell me here as well, then you know when

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Speaker 3: you look here at what happened, Liz with the design

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Speaker 3: with the PCE number, what did you make of it? It

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Speaker 3: was pretty much in line. But again it's not gone up.

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Speaker 11: It is it was in line, and it's PCE is

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Speaker 11: often in line because although the weights are different, the

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Speaker 11: components of PCE you have already via CPI and PPI.

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Speaker 11: So economists don't tend to be all that far off,

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Speaker 11: at least on the main headline and core numbers. Where

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Speaker 11: there was a bit of an upside surprise today was

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Speaker 11: in that core services x housing and interestingly, the biggest

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Speaker 11: component of that outsize jump up was portfolio management fees,

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Speaker 11: and that has been driven by the stronger performance by

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Speaker 11: the stock market. So that can obviously ebb and flow.

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Speaker 11: But given that that Powell has stressed the desire to

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Speaker 11: go to two percent, that two months trend does make

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Speaker 11: a longer term trend. They're not there yet on inflation,

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Speaker 11: and it's part of the reason why there's so much

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Speaker 11: focus on tomorrow's jobs report. Today's action and the market

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Speaker 11: was very churn like, and I think that reflects the

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Speaker 11: uncertainty with regard to tomorrow.

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Speaker 2: So you were talking earlier about the notion of a

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Speaker 2: rolling recession. Maybe we have seen a few, one possibly

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Speaker 2: in manufacturing, another that was in the housing market, at

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Speaker 2: least temporarily. But one of the things that's really surprising

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Speaker 2: is how well the consumer is holding up. I was

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Speaker 2: struck by the consumer spending number today again in July

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Speaker 2: of six tens of one percent. Haven't seen that since

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Speaker 2: the beginning of the year. Where is the American consumer

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Speaker 2: right now?

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Speaker 11: In your view, so they've been in relatively healthy position

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Speaker 11: given what had been some of the excess associated with

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Speaker 11: this stimulus. Admittedly though that has really wound itself down,

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Speaker 11: and given what you're seeing in terms of increased credit

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Speaker 11: card usage and now delinquencies starting to kick in, and

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Speaker 11: it wouldn't surprise me to start to see a bit

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Speaker 11: of a faltering. When you saw the personal income and

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Speaker 11: spending numbers today, the spending side was significantly higher than

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Speaker 11: the income side, hence the now lower saving trade. I

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Speaker 11: think what has been most closely tied to the resilience

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Speaker 11: of the consumer has been less about wages, less about confidence,

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Speaker 11: but more about the labor market. And I think if

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Speaker 11: we start to see more than just the cracks we've

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Speaker 11: begun to see in the labor market, that probably puts

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Speaker 11: a quicker dent in the consumption side of the economy,

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Speaker 11: especially with student loan forgiveness starting to wane here. So

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Speaker 11: in addition, a lot of the consumption data retail sales

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Speaker 11: is expressed in nominal terms, not in real terms, So

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Speaker 11: I think important in this environment is to look at

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Speaker 11: what's happening in terms of unit sales as opposed to

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Speaker 11: dollar sales in nominal terms, which in many cases is

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Speaker 11: sort of looks high because inflation and prices have been high.

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Speaker 3: Now when you then look at all of the what

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Speaker 3: you've just talked about here, you know, then you look

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Speaker 3: at what's going on in the bond market, and it's

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Speaker 3: bifurcated in the sense that we've got hedge funds as

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Speaker 3: still shorting treasuries in large part, and asset managers off

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Speaker 3: for obvious reasons, locking in that yield and buying what

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Speaker 3: side of the equation would you be on.

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Speaker 11: Well, you know, it's often said that the bond market

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Speaker 11: tends to have a more rational perspective. I think maybe

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Speaker 11: one of the ways to think about why the bond

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Speaker 11: market and the equity market maybe aren't sending the same

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Speaker 11: message is I think the bond market tends to live

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Speaker 11: in the and if we were on camera, i'd have

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Speaker 11: air quotes around the word the real world, meaning you know,

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Speaker 11: x inflation. But I think the equity market tends to

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Speaker 11: live in the nominal world. And I think that's where

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Speaker 11: there's a bit of a disconnect, because the nominal data

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Speaker 11: still looks fairly decent. It's the real data that is

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Speaker 11: a bit more questionable, and we haven't seen it yet

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Speaker 11: in terms of a blowout in credit spreads. But I

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Speaker 11: think at some point the equity market is going to

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Speaker 11: heed the message from the bond market so.

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Speaker 2: Very quickly twenty seconds or so. Would you be expecting

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Speaker 2: a significant move lower in stocks between now, let's say,

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Speaker 2: in the end of the year.

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Speaker 11: Yes and no. You know, I don't try to forecast

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Speaker 11: short term moves in the market. I think we're right

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Speaker 11: now in a bad news is good news for the

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Speaker 11: equity market. That doesn't last in portuity. In perpetuity, I

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Speaker 11: think if the news continues to be bad at some point,

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Speaker 11: that has a negative impact on equities.

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