Speaker 1: Good morning.
Speaker 2: I'm Richard Saloma and I'm Doug Krisner. Here are the
Speaker 2: stories we're following today.
Speaker 3: And it's all about also, you know what that job's
Speaker 3: report is likely to do in the US should provide
Speaker 3: us with just a snapshot of where the US economy is,
Speaker 3: which is of course vital for setting monetary policy. Getting
Speaker 3: that data in a little under fourteen and a half hours,
Speaker 3: Bloomberg's Michael McKee has a preview.
Speaker 4: Barring a surprise, the payrolls report is forecast to show
Speaker 4: a continuing slowdown in hiring during August. Well, this week's
Speaker 4: Jolts report showed the number of openings remains elevated. Monthly
Speaker 4: jobs creation has been trending lower. Companies aren't laying off workers,
Speaker 4: but they are cutting back on hiring as they wait
Speaker 4: to see whether recession forecasts come true. FED officials also
Speaker 4: want to see if unemployment starts to rise. So far,
Speaker 4: it's remained near historic lows, even given the rise in
Speaker 4: interest rates. And of course, top of mind for everyone
Speaker 4: will be average hourly earnings. Thursday's incomes report suggested wage
Speaker 4: game means are finally cooling as demand for workers eases.
Speaker 4: Michael McKee Bloomberg Daybreak Asia.
Speaker 2: We go to China next to where the government is
Speaker 2: cutting down payments for home buyers and reducing mortgage rates.
Speaker 2: The story from Bloomberg's Juan Wong in Hong Kong.
Speaker 5: The nationwide minimum down payment will be twenty percent for
Speaker 5: first time buyers and thirty percent for second time purchasers.
Speaker 5: The mortgage rate cuts will be negotiated between banks and customers.
Speaker 5: Both policies will go into effect on September twenty fifth.
Speaker 5: This is China's latest attempt to curup the country's property crisis.
Speaker 5: The announcements came as data showed China's two year property
Speaker 5: slum worsened. This month's sales by the country's one hundred
Speaker 5: largest developers dropped thirty four percent from a year earlier,
Speaker 5: according to the China Real Estate Information Corporation. That was
Speaker 5: the biggest drop in more than a year. In Hong Kong,
Speaker 5: joined Wong Bloomberg Day Brigaisia.
Speaker 3: And indeed staying with property and developers, a group of
Speaker 3: Country Garden creditors are seeking to declare a default on
Speaker 3: a Yuang bond. Let's get to this from Bloomberg's a
Speaker 3: Bonnie Out who has more from Hong Kong.
Speaker 6: Investors have proposed a note be declared in default because
Speaker 6: of a recent downgrade. That's according to a filing to
Speaker 6: the Shanghai Stock Exchange's privatest Closure platform. The investors say
Speaker 6: that effectively hold ten and a half percent of a
Speaker 6: yuan bond effectively due September fourth, but at least fifty
Speaker 6: percent support is needed for each proposal being vaulted. Holders
Speaker 6: of the yuan bond had until yesterday to fault on
Speaker 6: the proposal to call it default. Moody's has downgraded a
Speaker 6: country Garden three notches. As more pressure piles on the
Speaker 6: distressed developer in Hong Kong. I'm Bonnie Olt Bloomberg Daybreak Asia.
Speaker 3: Meanwhile, the China evergrahamd said it couldn't make payments for
Speaker 3: investment products this once due to a liquidity crunch. Its
Speaker 3: restructuring process has been in limber since it defaulted a
Speaker 3: couple of years ago.
Speaker 2: Well, US treasure Secretary of Janet Yellen is heading to India,
Speaker 2: but China is also very much on her mind. The
Speaker 2: story from Bloomberg's Denise Pellegrini.
Speaker 7: Yellen will go to Delhi this second week in September
Speaker 7: joining President Biden at the G twenty summit. This is
Speaker 7: her fourth visit to India in less than a year.
Speaker 7: She'll be meeting her Indian counterparts and seeking to strengthen
Speaker 7: bilateral economic ties. The gathering will also offer another opportunity
Speaker 7: to engage with Chinese officials at a time of mounting
Speaker 7: concern over the potential ripple effect of China's economic slowdown
Speaker 7: and financial strains among the property developers. President Biden says
Speaker 7: he hopes China's President Chi Jimping shows up, but sources
Speaker 7: tell Bloomberg that Chi Jimping will not be attending. Among
Speaker 7: the other issues on the US agenda for New Delhi,
Speaker 7: rallying support for Ukraine and for sanctions on Russia, and
Speaker 7: also bolstering the resources of multilateral development banks. Denise Pellegrini,
Speaker 7: Bloomberg day Break Asia.
Speaker 3: We're hearing that All the Holdings is preparing to set
Speaker 3: a price range for its us IPO before embarking on
Speaker 3: an investor roadshow next week. The ship designer considering pricing
Speaker 3: its shares on the thirteenth of September, and it wants
Speaker 3: to begin trading the next day yes to promote the offering.
Speaker 3: It's expected to come after the Labor Day holiday, and
Speaker 3: we're told arm is aiming to raise between five and
Speaker 3: seven billion dollars with this offering, and the valuation then
Speaker 3: could end up in the range of between fifty and
Speaker 3: sixty billion dollars.
Speaker 2: Broadcom is one of the world's five largest semiconductor manufacturers,
Speaker 2: and today the company gave a disappointing forecast for the
Speaker 2: current quarter. Of the story from Bloomberg's Charlie Pellett.
Speaker 1: It signals that demand for electronic components remains sluggish. Broadcom
Speaker 1: said revenue will be about nine point twenty seven billion
Speaker 1: dollars in the fiscal fourth quarter. That compares with an
Speaker 1: average Wall Street estimate of nine point twenty eight billion dollars,
Speaker 1: with some analysts predicting as much as nine point eight billion.
Speaker 1: The outlook shows that Broadcom is mired in a broad
Speaker 1: spending slowdown, even as the artificial intelligence boom fuels demand
Speaker 1: and pockets of the industry in New York. Charlie Pellett
Speaker 1: Boomberg Daybreak Asia.
Speaker 2: So the employment report for August due tomorrow morning, eight
Speaker 2: thirty am Walls Street Time. We told you about that
Speaker 2: a moment ago. Word today that US small businesses reported
Speaker 2: fewer unfilled positions in the month of August. This is
Speaker 2: data from the National Federation of Independent Business. It shows
Speaker 2: unfilled positions are now at their lowest level since February
Speaker 2: twenty twenty one, and the NFIB also reported fewer small
Speaker 2: business owners raising worker compensation well at the same time today,
Speaker 2: job cuts, that's the survey from Challenger Gray in Christmas.
Speaker 2: Overall cuts totaled more than seventy five thousand in the
Speaker 2: month of August, obviously a number amplified by the bankruptcy
Speaker 2: of Yellow Corporation. That August Employment data due tomorrow and today.
Speaker 2: A survey from twenty two v Research finds sixty percent
Speaker 2: of investors are expecting a softer than estimated number on
Speaker 2: job growth. Let's get to Global News next. Former President
Speaker 2: Donald Trump pleads not guilty in Georgia. Dan Schwartzman is here, Danny.
Speaker 8: Doug, get your popcorn ready, because this is going to
Speaker 8: be something to behold. Trump has waived his right to
Speaker 8: an in person arraignment, sparing him from having to appear
Speaker 8: in court on September sixth, and that would have been
Speaker 8: broadcast live. Trump led not guilty to state charges he
Speaker 8: conspired to overturn the twenty twenty presidential election results. Excuse me.
Speaker 8: The seventy seven year old is one of nineteen defendants
Speaker 8: indicted by Fulton County da Fani Willis if participating in
Speaker 8: a quote criminal enterprise to keep Trump as president. Meanwhile,
Speaker 8: the Atlanta Journal Constitution reports that the Fulton County judge
Speaker 8: has said that Trump court proceedings will in fact be televised.
Speaker 8: China and the US acknowledging that military officials from the
Speaker 8: two countries met earlier this month at a defense chiefs
Speaker 8: conference in Fiji. Admiral John Aquilino, the head of the
Speaker 8: US Indo Pacific Command, in General Shu Sheiling, the deputy
Speaker 8: Joint Chief of Staff of the People's Liberation Army, held
Speaker 8: a meeting for what's believed to be the first time
Speaker 8: since August of twenty twenty two. China had suspended military
Speaker 8: ties with the US after then House Speaker Nancy Pelosi
Speaker 8: visited Taiwan. Relations were then even more strained after the
Speaker 8: U s shotdown in a ledged Chinese spy balloon that
Speaker 8: flew over the country. That was back in February. Former
Speaker 8: House Speaker in Nancy Pelosi and has sit down with
Speaker 8: Bloomberg's Francine Lacoi and Venice Italy. Says, despite differences, we
Speaker 8: do have to work with China.
Speaker 9: We don't have shared values, but we have a shared
Speaker 9: planet and we have to work with the Chinese to
Speaker 9: save the planet because they're now I think the biggest emitter,
Speaker 9: if not us, their second, and they're part of the
Speaker 9: solution in all of this.
Speaker 8: You can see that full interview on Leaders with Lacroix,
Speaker 8: airing at nine thirty pm New York time on September
Speaker 8: twenty seventh in the States, then at six thirty pm
Speaker 8: London time the next day. President Biden says he'll visit
Speaker 8: Hurricane to dally a ravaged Florida on Saturday. The Category
Speaker 8: three storm flooded towns across the state, leaving hundreds of
Speaker 8: thousands without power. Biden has been criticized for a seemingly
Speaker 8: slow response to the wildfire and maw we earlier this month.
Speaker 8: Biden says he has spoken with Governor Ron De Santis
Speaker 8: three times today to assure him that the federal government
Speaker 8: would continue to provide all necessary resources to help the
Speaker 8: state recover in Florida. DeSantis gives an update on power
Speaker 8: outages across the state.
Speaker 10: As of six am today, there are approximately one hundred
Speaker 10: and forty six thousand power outages reported across the state,
Speaker 10: but power is being restored quickly. Thus far, four hundred
Speaker 10: and twenty thousand accounts that lost power during the storm
Speaker 10: have been restored.
Speaker 8: Biden will be in Florida Saturday to tour areas hit
Speaker 8: hard by Hurricane Nadalia. Global News twenty five hours a
Speaker 8: day power by more than twenty seven hundred journalists and
Speaker 8: analysts in more than one hundred and twenty countries. I'm
Speaker 8: Dan Schwartzman. This is Bloomberg.
Speaker 2: Let's get to our guest. Liz Anne Saunders is with us.
Speaker 2: She is managing director, also the chief investment strategistic Charles
Speaker 2: Schwab and Lizen is in Boston, Massachusetts. Lazan, thanks for
Speaker 2: being with us. I'm curious to get your take right
Speaker 2: out of the gate on how you see the economy
Speaker 2: in the States right now and where the FED is
Speaker 2: in all of that mix.
Speaker 11: Sure, and thanks for having me. We've had the view
Speaker 11: that this has been a rolling recession or a series
Speaker 11: of rolling recessions at the sectoral level, meeting segments of
Speaker 11: the economy for more than a year and a half
Speaker 11: right now, and I think that's the best way to
Speaker 11: think about this very unique cycle where we've had recessions
Speaker 11: in areas of housing, housing related, a lot of consumer
Speaker 11: oriented goods, manufacturing, we just had the later offsetting strength
Speaker 11: on the services side and in turn the labor market.
Speaker 11: And I think from the FEDS perspective, part of the
Speaker 11: reason why they're focusing on inflation metrics at a more
Speaker 11: granular level like core services x housing is they want
Speaker 11: to get to the heart of where inflation has been
Speaker 11: most sticky, and that's where it accelerated later. So I
Speaker 11: think the simplicity around recession versus no recession, and in
Speaker 11: turn what the Fed's reaction function misses the nuances that
Speaker 11: make this cycle unlike any other.
Speaker 3: So tell me here as well, then you know when
Speaker 3: you look here at what happened, Liz with the design
Speaker 3: with the PCE number, what did you make of it? It
Speaker 3: was pretty much in line. But again it's not gone up.
Speaker 11: It is it was in line, and it's PCE is
Speaker 11: often in line because although the weights are different, the
Speaker 11: components of PCE you have already via CPI and PPI.
Speaker 11: So economists don't tend to be all that far off,
Speaker 11: at least on the main headline and core numbers. Where
Speaker 11: there was a bit of an upside surprise today was
Speaker 11: in that core services x housing and interestingly, the biggest
Speaker 11: component of that outsize jump up was portfolio management fees,
Speaker 11: and that has been driven by the stronger performance by
Speaker 11: the stock market. So that can obviously ebb and flow.
Speaker 11: But given that that Powell has stressed the desire to
Speaker 11: go to two percent, that two months trend does make
Speaker 11: a longer term trend. They're not there yet on inflation,
Speaker 11: and it's part of the reason why there's so much
Speaker 11: focus on tomorrow's jobs report. Today's action and the market
Speaker 11: was very churn like, and I think that reflects the
Speaker 11: uncertainty with regard to tomorrow.
Speaker 2: So you were talking earlier about the notion of a
Speaker 2: rolling recession. Maybe we have seen a few, one possibly
Speaker 2: in manufacturing, another that was in the housing market, at
Speaker 2: least temporarily. But one of the things that's really surprising
Speaker 2: is how well the consumer is holding up. I was
Speaker 2: struck by the consumer spending number today again in July
Speaker 2: of six tens of one percent. Haven't seen that since
Speaker 2: the beginning of the year. Where is the American consumer
Speaker 2: right now?
Speaker 11: In your view, so they've been in relatively healthy position
Speaker 11: given what had been some of the excess associated with
Speaker 11: this stimulus. Admittedly though that has really wound itself down,
Speaker 11: and given what you're seeing in terms of increased credit
Speaker 11: card usage and now delinquencies starting to kick in, and
Speaker 11: it wouldn't surprise me to start to see a bit
Speaker 11: of a faltering. When you saw the personal income and
Speaker 11: spending numbers today, the spending side was significantly higher than
Speaker 11: the income side, hence the now lower saving trade. I
Speaker 11: think what has been most closely tied to the resilience
Speaker 11: of the consumer has been less about wages, less about confidence,
Speaker 11: but more about the labor market. And I think if
Speaker 11: we start to see more than just the cracks we've
Speaker 11: begun to see in the labor market, that probably puts
Speaker 11: a quicker dent in the consumption side of the economy,
Speaker 11: especially with student loan forgiveness starting to wane here. So
Speaker 11: in addition, a lot of the consumption data retail sales
Speaker 11: is expressed in nominal terms, not in real terms, So
Speaker 11: I think important in this environment is to look at
Speaker 11: what's happening in terms of unit sales as opposed to
Speaker 11: dollar sales in nominal terms, which in many cases is
Speaker 11: sort of looks high because inflation and prices have been high.
Speaker 3: Now when you then look at all of the what
Speaker 3: you've just talked about here, you know, then you look
Speaker 3: at what's going on in the bond market, and it's
Speaker 3: bifurcated in the sense that we've got hedge funds as
Speaker 3: still shorting treasuries in large part, and asset managers off
Speaker 3: for obvious reasons, locking in that yield and buying what
Speaker 3: side of the equation would you be on.
Speaker 11: Well, you know, it's often said that the bond market
Speaker 11: tends to have a more rational perspective. I think maybe
Speaker 11: one of the ways to think about why the bond
Speaker 11: market and the equity market maybe aren't sending the same
Speaker 11: message is I think the bond market tends to live
Speaker 11: in the and if we were on camera, i'd have
Speaker 11: air quotes around the word the real world, meaning you know,
Speaker 11: x inflation. But I think the equity market tends to
Speaker 11: live in the nominal world. And I think that's where
Speaker 11: there's a bit of a disconnect, because the nominal data
Speaker 11: still looks fairly decent. It's the real data that is
Speaker 11: a bit more questionable, and we haven't seen it yet
Speaker 11: in terms of a blowout in credit spreads. But I
Speaker 11: think at some point the equity market is going to
Speaker 11: heed the message from the bond market so.
Speaker 2: Very quickly twenty seconds or so. Would you be expecting
Speaker 2: a significant move lower in stocks between now, let's say,
Speaker 2: in the end of the year.
Speaker 11: Yes and no. You know, I don't try to forecast
Speaker 11: short term moves in the market. I think we're right
Speaker 11: now in a bad news is good news for the
Speaker 11: equity market. That doesn't last in portuity. In perpetuity, I
Speaker 11: think if the news continues to be bad at some point,
Speaker 11: that has a negative impact on equities.
Speaker 2: This is Bloomberg day Break Asia. You're morning brief on
Speaker 2: the stories making news from Hong Kong to Singapore and
Speaker 2: Wall Street.
Speaker 3: Look for us on your podcast feed every day on Apples, Spotify,
Speaker 3: and anywhere else you can get you a podcast.
Speaker 2: You can also listen live each day on Bloomberg eleven
Speaker 2: three to oh in New York, Bloomberg ninety nine one
Speaker 2: in Washington, Bloomberg one oh sixty one in Boston, and
Speaker 2: Bloomberg nine sixty in San Francisco.
Speaker 3: Our flagship New York station is available on your Amazon
Speaker 3: Alexa devices. Just say Alexa played Bloomberg eleven thirty plus.
Speaker 2: Listen coast to coast on the Bloomberg Business app, Sirius
Speaker 2: XM Channel one nineteen, the iHeartRadio app, and on Bloomberg
Speaker 2: dot Com. I'm Doug Chrisner and.
Speaker 3: I'm Rashad Salama. Join us again tomorrow for all the
Speaker 3: news you need to start your day right here on
Speaker 3: Bloomberg day Break Asia