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Speaker 1: Good morning.

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Speaker 2: I'm Brian Curtiz and I'm Doug Krisner. Here are the

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Speaker 2: stories we're following today.

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Speaker 1: Democrats and Republicans avoiding a government shutdown. The compromise is

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Speaker 1: a spending bill that will keep the US government open

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Speaker 1: until November seventeenth. The stompgap spending bill was passed by

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Speaker 1: Congress and signed by President Biden on Saturday night. The bill, however,

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Speaker 1: does not include more funding for Ukraine. However, Biden's budget

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Speaker 1: director Shalanda Jung says she sure it will be passed later.

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Speaker 2: Those votes are there, We know there's a willing coalition,

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Speaker 2: and I certainly expect members and the Speaker to keep

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Speaker 2: their commitment not to us, but the Ukrainian people.

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Speaker 3: We told we would be there.

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Speaker 1: That Shalanda Young. The federal stopgap deal also gets financial

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Speaker 1: markets a little breathing room. Some analysts had warned that

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Speaker 1: an extended closure of federal agencies would spur fresh gyrations

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Speaker 1: in the treasury curve and also hit stocks. For now,

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Speaker 1: Democrats and Republicans have watched some time to negotiate longer

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Speaker 1: term funding.

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Speaker 2: We go to Apple next. The company is blaming a

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Speaker 2: software bug for the way some of its new iPhone

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Speaker 2: fifteens are getting hot. The iPhone maker also said some

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Speaker 2: third party apps are overloading its system.

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Speaker 1: Now.

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Speaker 2: Apple said it's working with developers behind these apps, and

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Speaker 2: the company set a fix is coming to address the

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Speaker 2: problem very soon. You know, some users have said on

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Speaker 2: Instagram that these apps are making the phones too hot

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Speaker 2: to handle.

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Speaker 1: Bran Well, yeah, let's take a closer look at this

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Speaker 1: one two factory downtime that could slam the brakes on

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Speaker 1: Tesla's winning streak. The story from Bloomberg's Denise Pellegrini.

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Speaker 3: Well, Tesla has broken four quarterly car delivery records in

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Speaker 3: a row, but that could be about to change because

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Speaker 3: over the summer the electric vehicle makers shut down some

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Speaker 3: of its facilities to make upgrades. Also, it's possible it's

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Speaker 3: being hit by consumer inflation pain, with potential buyers having

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Speaker 3: a harder time making big purchases. Because NLE is surveyed

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Speaker 3: by Bloomberg estimate, Tesla will report as soon as Monday

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Speaker 3: it delivered almost four hundred and fifty seven thousand cars

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Speaker 3: in the third quarter, below the just about four hundred

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Speaker 3: and sixty six thousand units delivered in the second quarter.

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Speaker 3: This would be the first decline since early twenty twenty two. Meantime,

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Speaker 3: in China, Tesla has just released an updated model Y,

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Speaker 3: slightly faster with a new wheel design and added lighting.

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Speaker 3: The starting price, though remains the same. Denise Pellgrity Bloomberg

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Speaker 3: Radio Well.

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Speaker 2: Over the weekend we got the official PMI data for China.

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Speaker 2: This would be for the month of September. Some encouraging signs,

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Speaker 2: to say the least, brought a little bit of frailty

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Speaker 2: as well. Bloomberg's Joanne Wong has more from Hong Kong.

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Speaker 4: China's manufacturing activity returned to expansion for the first time

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Speaker 4: in six months. The official PMI rose to fifty points

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Speaker 4: two in September from forty nine point seven in August.

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Speaker 4: But Bloomberg Economics says the data show that the rebound

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Speaker 4: is highly unbalanced, as a price drop in the chic

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Speaker 4: in manufacturing PMI also signals some fragility. It's a reminder

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Speaker 4: that without more policy support, the recovery could stumble. The

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Speaker 4: non manufacturing sector Accelerated media communications of financial services are

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Speaker 4: gaining and are becoming key drivers of the recovery in

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Speaker 4: Hong Kong.

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Speaker 5: Join one Bloomberg Radio.

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Speaker 1: McCaw's casino gaming revenue growth decelerated last month, but it's complicated.

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Speaker 1: Bloomberg's Bonni Oo has more from Hong Kong.

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Speaker 5: Gross gaming revenue grew more than four hundred percent to

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Speaker 5: one point eighty five billion dollars in September. That sounds

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Speaker 5: like a massive jump, but revenues are still down about

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Speaker 5: one third from pre pandemic levels. The results were mostly

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Speaker 5: in line with estimates. Growth is expected to accelerate in October,

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Speaker 5: in part due to China's eight day Golden Week holiday.

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Speaker 5: Analyst predict gaming revenue could return to seventy two percent

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Speaker 5: of pre pandemic levels. That would be the highest percentage

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Speaker 5: since the onset of COVID in Hong Kong. I'm Bonnie

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Speaker 5: Ol Bloomberg Radio.

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Speaker 1: So it's and take doug in both the Hong Kong

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Speaker 1: and Chinese economies. Now you find yourself constantly saying, well,

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Speaker 1: there was some improvement. Then on the other hand, there

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Speaker 1: was this, and we saw that with the PMI report,

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Speaker 1: and then also for Hong Kong, retail sales jumped in

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Speaker 1: in August, a lot of mainland visitors coming back, but

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Speaker 1: we had a million people leave over the weekend. Just

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Speaker 1: about a million people. We only have seven point three

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Speaker 1: million people living in Hong Kong. And although that's holiday

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Speaker 1: time and you can understand pend up desire to go,

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Speaker 1: I'm not sure if it's a good thing or a

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Speaker 1: bad thing, because obviously, you know, with that many people leaving,

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Speaker 1: that's a lot of people that wouldn't be spending money

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Speaker 1: in Hong Kong.

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Speaker 2: And a little bit of debate here in the US,

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Speaker 2: Brian Bloomberg Economics is saying that a US recession is

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Speaker 2: still more likely than a soft landing. Our economist, you're

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Speaker 2: looking at things like the major auto strike that we're

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Speaker 2: dealing with right now, along with the resumption of student

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Speaker 2: loan repayments. We can maybe say for the moment that

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Speaker 2: the government is staying open, we have avoided a shutdown,

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Speaker 2: but it may they yet come back after November seventeenth,

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Speaker 2: and that may all of these things together may shave

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Speaker 2: as much as one percentage point from GDP for the

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Speaker 2: fourth quarter. And then if you look beyond that, things

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Speaker 2: like dwindling pandemic savings, higher interest rates, higher oil. Maybe

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Speaker 2: if you take all of this stuff together, we could

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Speaker 2: be looking at a recession before the early part of

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Speaker 2: maybe next year or as soon as the end of

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Speaker 2: this year.

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Speaker 1: Sounds like you're saying we shouldn't expect too much of

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Speaker 1: a relief rally in the next couple of days. We'll

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Speaker 1: put that question into Dana Doria. She's coming up a

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Speaker 1: cocio at invest Net and also a moment of truth

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Speaker 1: for House Republicans, now what this means for Kevin McCarthy

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Speaker 1: and for a challenger like the Florida Congressman Matt Gates.

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Speaker 1: So we'll see that's something we can put to our

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Speaker 1: guests all throughout the morning.

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Speaker 6: Any final thoughts before we move into the next phase. No,

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Speaker 6: I think it covered it. But you're right about the

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Speaker 6: risk for the equity market. You know, for September, the

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Speaker 6: S and P five hundred, it had its worst month

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Speaker 6: of the year. And if you look at the quarter

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Speaker 6: that we just ended, the third quarter, the first quarterly

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Speaker 6: loss we have seen since the third quarter of twenty

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Speaker 6: twenty two.

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Speaker 1: Yeah, it is a mini correction. Does it become a

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Speaker 1: full blown correction in the equity markets? And how do

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Speaker 1: we sort that with all the negative news that is

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Speaker 1: looming again? More fodder for the great guests that we

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Speaker 1: have coming up again, Dana Doria coming up shortly. Now

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Speaker 1: it's time for Global News. Well, House Speaker Kevin McCarthy

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Speaker 1: is facing a movement to oust him from his position.

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Speaker 1: We get more from Dan Schwartzman in New York.

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Speaker 7: Dan, Yeah, Brian, it's getting very contentious right now. We

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Speaker 7: have Florida Republican Matt Gates saying he's going to be

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Speaker 7: filing a motion this week to vacate the chair. It's

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Speaker 7: a parliamentary process that hasn't led to the removal of

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Speaker 7: this speaker since nineteen ten. The far right Republicans are

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Speaker 7: angry with McCarthy for embracing a bipartisan dealed of what

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Speaker 7: a government shut down that didn't take into consideration the

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Speaker 7: deep spending cuts that the right wingers had wanted. Now

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Speaker 7: McCarthy's going to need a simple majority of House members

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Speaker 7: to vote for him to be able to stop the

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Speaker 7: effort to remove him. Gates says he's going to do

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Speaker 7: what he can to remove and replace those who won't

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Speaker 7: tackle spending in deficits.

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Speaker 8: If all the American people see is that it is

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Speaker 8: a uniparty that governs them, and that it is always

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Speaker 8: the Biden, McCarthy Jeffreys government that makes dispositive decisions on spending.

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Speaker 8: Then I am I am seeding the fields of future

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Speaker 8: primary contests to get better Republicans in Washington who will

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Speaker 8: actually tackle these deficits in debt.

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Speaker 7: That's FLOUDA representative Matt Gates. Earlier today on ABC's This Week,

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Speaker 7: Donald Trump expected to attend the opening of his New

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Speaker 7: York civil trial Monday. Trump's accused of committing fraud by

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Speaker 7: inflating his net worth by billions of dollars in financial transactions.

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Speaker 7: The Republican front runner for the twenty twenty four presidential

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Speaker 7: nomination is in jeopardy of losing control of his real

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Speaker 7: estate empire after judge authorized New York Attorney General Letitia

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Speaker 7: James to cancel certificates for companies that hold the assets.

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Speaker 7: Trump's presence at the civil trial is not mandatory. In

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Speaker 7: a blow to Ukraine, Slovakia has a lot Robert Fico

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Speaker 7: as its prime Minister. Fiko returns to the post he

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Speaker 7: resigned from back in twenty eighteen after public outrage over

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Speaker 7: the killing of an investigative journalist. Fico has publicly called

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Speaker 7: for ending military aid to Ukraine, while also deriding the

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Speaker 7: European Union's sanctions against Russia. Thailand expected to see a

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Speaker 7: four billion dollar increase in tourism revenue as a result

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Speaker 7: of the five month holiday period visa exemption program with

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Speaker 7: mainland China. In just the first two days of the program,

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Speaker 7: Thailand saw twenty two thousand Chinese tourists visit the country.

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Speaker 7: Before the pandemic, Chinese tourists were the number one group

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Speaker 7: of visitors to the country pre pandemic. Now, Thailand is

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Speaker 7: hoping that tourism will help jumpstart its slong economy and

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Speaker 7: keep it from falling into a recession. Europe winning the

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Speaker 7: Ryder Cup, beating the United States sixteen and a half

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Speaker 7: to eleven and a half in Rome, with Roy McElroy

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Speaker 7: leading the way and Tommy Fleetwood delivering the winning points.

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Speaker 7: The US was coming off a record nineteen to nine

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Speaker 7: win over Europe just two years ago at Whistling Straits

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Speaker 7: in Wisconsin. The US came in confident that they could

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Speaker 7: end the thirty years of losing away from European and

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Speaker 7: sore they haven't won since nineteen ninety three. Team USA

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Speaker 7: is going to get another crack at it to win

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Speaker 7: in Europe. Ireland's hosting in twenty twenty seven, Global News

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Speaker 7: twenty four hours a day, power by more than twenty

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Speaker 7: seven hundred journalists and analysts and more than one hundred

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Speaker 7: and twenty countries. I, Dan Schwartzman, this is Bloomberg.

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Speaker 1: This is Bloomberg. Deybreak Asia, Brian Curtis and Rashad Salommat

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Speaker 1: here in Hong Kong. Our guest is Dana Duria Cocio

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Speaker 1: at Nvestnet. Dana, thanks very much for joining us. It's

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Speaker 1: been sort of a negative Paul hanging over markets here

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Speaker 1: of late, particularly equity markets, but the bond market has

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Speaker 1: struggled as well. I don't suppose that the shutdown averted

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Speaker 1: is the catalyst to shock us out of that, is it?

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Speaker 9: Well, I don't know that it's enough of a catalyst

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Speaker 9: to shock us out of that, but it's certainly good news.

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Speaker 9: I think it's it's news that the market wasn't expecting.

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Speaker 9: You know, I get information from a lot of economic sources,

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Speaker 9: and I would say to you that it was pretty

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Speaker 9: much assumes to be a foregone conclusion that we were

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Speaker 9: going to have a shutdown, and in fact, a lot

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Speaker 9: of what I was seeing was concern about it being

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Speaker 9: potentially lengthier than average, just because of the acrimony even

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Speaker 9: within the House, let alone, you know, between the House

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Speaker 9: and Senate. So I do think it's a pretty positive

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Speaker 9: development for markets. I think it has positive repercussions around

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Speaker 9: concerns or at our ability to tackle things like the debt.

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Speaker 9: But to your point, at the end of the day,

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Speaker 9: shutdowns are really not a big impact on equity markets.

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Speaker 9: They're not even a big impact on GDP growth. They

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Speaker 9: really don't have a correlation. So you know, this is

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Speaker 9: nice news for a time, but at the end of

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Speaker 9: the day, probably not a huge impact.

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Speaker 10: But then you know, the thing is it starts off again.

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Speaker 10: It's only six weeks or seven weeks do we get

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Speaker 10: to all over again that the thing is is there

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Speaker 10: a better way of doing this?

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Speaker 3: Oh?

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Speaker 9: Yes, I mean, you know, it's interesting the United States

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Speaker 9: puts itself through this, right, it's a pretty abnormal when

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Speaker 9: it just are that we kind of go through this

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Speaker 9: struggle of are we going to pay our bills? You know,

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Speaker 9: both shut down as well as you know, raising debt limits.

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Speaker 9: And yeah, there certainly is. But you know, it's a

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Speaker 9: I guess a sign of the times that you have

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Speaker 9: to be really happy that McCarthy kind of stepped up

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Speaker 9: and said, you know what I'm I'm just I'm going

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Speaker 9: to do the sensible thing here, and you know, give

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Speaker 9: us some time to try to work through the problems

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Speaker 9: as opposed to letting the government shut down. So you know,

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Speaker 9: it's incrementalism here, I guess, but yeah.

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Speaker 1: For sure, it sort of is what it is. I mean,

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Speaker 1: Rish would have us go back to Plato in Theories

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Speaker 1: of society, you know, which is it's not easy to

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Speaker 1: rewrite the way that the US does business. Well, let's

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Speaker 1: talk about the impact going forward. That aside the impact

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Speaker 1: going forward for markets. Are we in this period where

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Speaker 1: we we should probably expect things to to deteriorate slightly

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Speaker 1: in the equity and bond markets until we get some

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Speaker 1: sort of major catalysts and what that might be, well,

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Speaker 1: we can't imagine at the moment.

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Speaker 3: Yeah, I think that's fair.

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Speaker 10: You know.

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Speaker 9: Part of my comments I'll say are about what should

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Speaker 9: you prepare for maybe than trying to predict exactly which

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Speaker 9: way it goes. And I think everyone's you know, given

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Speaker 9: obviously where markets have gone this year now, notwithstanding September,

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Speaker 9: but just you know, pretty great returns in a year

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Speaker 9: that the expectation was you know, softness at best. So

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Speaker 9: you know, I think you know, you're seeing even the

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Speaker 9: kind of most dug in bears saying, oh, maybe we

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Speaker 9: will stick this landing, which is fantastic if we do,

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Speaker 9: but unfortunately a lot of you know, monetary policy acts

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Speaker 9: with a lag. Consumer confidence now drifting lower. We know

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Speaker 9: the auto strike, we know loan repayments coming back in.

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Speaker 9: You know, luckily not a shutdown, but just a lot

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Speaker 9: of headwinds facing the consumer. And you know, personal consumption

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Speaker 9: is far and away the biggest part of GDP as

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Speaker 9: a single element. So and it's been the consumer kind

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Speaker 9: of propping up this economy along with employment. We're seeing

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Speaker 9: a little bit of signs of softness there too, So

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Speaker 9: it's certainly not a reason to say.

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Speaker 8: Yes.

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Speaker 10: Just want to say, inflation comes almost always in three cycles.

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Speaker 10: You know, you don't just have one and it is done.

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Speaker 10: I mean, we made in the second cycle, you know,

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Speaker 10: in the offing because we've got high fuel prices. Let's

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Speaker 10: forget that the unions ultimately want more money. That's going

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Speaker 10: to perhaps create that demand pull part of the inflation problem.

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Speaker 10: And the other theory is you can't really kill the

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Speaker 10: beast of inflation without tipping the economy into recession.

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Speaker 9: It's typically the case, and it's very much that tightening

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Speaker 9: cycles tend to push us into recession. And this was

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Speaker 9: a very abrupt tightening cycle. Right, So your comments are

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Speaker 9: exactly on point. Inflation tends to come in waves. These

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Speaker 9: are all more reasons to be, you know, somewhat cautious, right,

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Speaker 9: if you're an investor, it's not Look, it's not to

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Speaker 9: say get out of markets. Obviously, that you do that

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Speaker 9: and you potentially miss you know what highs that could

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Speaker 9: be coming still, but you know you should be circumspect

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Speaker 9: and not be sort of chasing equity markets. I think,

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Speaker 9: and I do because exactly the reasons that we're discussing here, right,

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Speaker 9: the consumer getting a little softer, unemployment, and have we

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Speaker 9: really broken the back of inflation? Oil prices suggest maybe not.

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