1
00:00:01,920 --> 00:00:04,720
Speaker 1: It is Bloomberg day Break Asia for this Thursday, May

2
00:00:04,760 --> 00:00:08,440
Speaker 1: eighteenth in Hong Kong, Wednesday May seventeenth in New York

3
00:00:08,520 --> 00:00:09,479
Speaker 1: and coming up today.

4
00:00:09,680 --> 00:00:12,760
Speaker 2: US stocks rise on Hope's Washington lawmakers will reach a

5
00:00:12,800 --> 00:00:14,120
Speaker 2: deal to avoid default.

6
00:00:14,280 --> 00:00:19,000
Speaker 1: Cisco orders slow as its customers weigh an uncertain economic outlook.

7
00:00:18,680 --> 00:00:21,600
Speaker 2: And ten Cent post its fastest pace of revenue growth

8
00:00:21,680 --> 00:00:22,599
Speaker 2: in more than a year.

9
00:00:22,760 --> 00:00:25,919
Speaker 3: India's Modi to go ahead with Australia trip Biden on

10
00:00:25,960 --> 00:00:28,760
Speaker 3: the way to Japan's as Quad can happen there. China

11
00:00:28,840 --> 00:00:32,600
Speaker 3: finds comedian for insults from the PLA and Taco Tuesday

12
00:00:32,680 --> 00:00:36,240
Speaker 3: trademark tiff Turbo charges, I'm at Baxter with lobalous.

13
00:00:37,040 --> 00:00:40,239
Speaker 4: That's all straight ahead on Bloomberg day Break Asia, The

14
00:00:40,280 --> 00:00:42,920
Speaker 4: business news you need to start your day in just

15
00:00:43,040 --> 00:00:47,520
Speaker 4: one fifteen minute podcast available on Apples, Spotify, the Bloomberg

16
00:00:47,560 --> 00:00:50,280
Speaker 4: Business app and everywhere you get your podcasts.

17
00:00:53,280 --> 00:00:56,240
Speaker 2: Good morning, I'm deg Krisner and I'm Brian Curtiz.

18
00:00:56,280 --> 00:00:59,160
Speaker 1: Here are the stories we're following today. The US stocks

19
00:00:59,280 --> 00:01:03,240
Speaker 1: rose on SPV that a narrower group of negotiators in

20
00:01:03,360 --> 00:01:06,399
Speaker 1: Washington will be able to break this deadlock on raising

21
00:01:06,440 --> 00:01:09,320
Speaker 1: the debt ceiling. This comes with the government potentially just

22
00:01:09,360 --> 00:01:12,959
Speaker 1: two weeks away from a payment's default. President Biden expressed

23
00:01:12,959 --> 00:01:16,200
Speaker 1: confidence that there will be no default, and House Speaker

24
00:01:16,240 --> 00:01:19,840
Speaker 1: Kevin McCarthy said reaching an agreement this week is doable.

25
00:01:20,280 --> 00:01:24,360
Speaker 1: In the meantime, JP Morgan Chase CEO Jamie Diamond may

26
00:01:24,400 --> 00:01:27,920
Speaker 1: be damning with fate. Praise said the US government probably

27
00:01:28,200 --> 00:01:31,000
Speaker 1: will not default on its debts, but Diamond said his

28
00:01:31,080 --> 00:01:33,280
Speaker 1: bank is ready for all possibilities.

29
00:01:33,560 --> 00:01:36,080
Speaker 5: Everyone what's a strong financial system, whatever it is, we

30
00:01:36,120 --> 00:01:36,840
Speaker 5: will be prepared.

31
00:01:37,040 --> 00:01:40,160
Speaker 1: Diamond City Group CEO Jane Fraser and other top bank

32
00:01:40,240 --> 00:01:43,920
Speaker 1: executives met today with Senate Majority Leader Chuck Schumer. They

33
00:01:43,959 --> 00:01:48,120
Speaker 1: discussed the debt limit at Schumer's direct request. Treasury Secretary

34
00:01:48,240 --> 00:01:51,680
Speaker 1: Jennet Yellen is also expected to gather with finance chiefs

35
00:01:51,680 --> 00:01:54,840
Speaker 1: this week. Yellen has warned that her department could run

36
00:01:54,920 --> 00:01:57,600
Speaker 1: out of sufficient cash to make good on all federal

37
00:01:57,640 --> 00:02:00,160
Speaker 1: obligations by the first of June.

38
00:02:00,240 --> 00:02:03,040
Speaker 2: After the bell, we heard from Cisco Systems, the company

39
00:02:03,120 --> 00:02:06,680
Speaker 2: saying that orders fell twenty three percent in the past quarter.

40
00:02:06,760 --> 00:02:08,560
Speaker 2: The story from Bloomberg's Charlie Pellett.

41
00:02:08,960 --> 00:02:12,400
Speaker 5: Cisco is the largest maker of machines that run corporate

42
00:02:12,440 --> 00:02:16,160
Speaker 5: networks and the Internet. It did deliver a strong sales

43
00:02:16,200 --> 00:02:21,240
Speaker 5: forecast that top analyst projections. CEO Chuck Robbins says demand

44
00:02:21,320 --> 00:02:25,239
Speaker 5: remains steady and an improved supply chain is giving customers

45
00:02:25,520 --> 00:02:29,000
Speaker 5: greater confidence to purchase equipment to cope with an ever

46
00:02:29,080 --> 00:02:33,480
Speaker 5: increasing flow of data. He says order cancelations also are

47
00:02:33,600 --> 00:02:38,320
Speaker 5: well below historic levels. In New York, Charlie Pellett Bloomberg

48
00:02:38,400 --> 00:02:39,639
Speaker 5: daybreak as right.

49
00:02:39,480 --> 00:02:42,480
Speaker 2: Now shares in Cisco down four point three percent in

50
00:02:42,520 --> 00:02:43,480
Speaker 2: the late US session.

51
00:02:43,560 --> 00:02:47,640
Speaker 1: Brian, a panel that oversees the credit default swaps market,

52
00:02:47,720 --> 00:02:51,120
Speaker 1: has issued a ruling on Credit Sueez, Bloomberg's and Kate's

53
00:02:51,320 --> 00:02:52,000
Speaker 1: with the story.

54
00:02:52,240 --> 00:02:55,160
Speaker 6: The Credit Derivatives Determinations Committee says the write down of

55
00:02:55,200 --> 00:02:57,800
Speaker 6: Credit Suie's additional Tier one notes will not trigger an

56
00:02:57,840 --> 00:03:00,480
Speaker 6: insurance payout. The securities had been at the center of

57
00:03:00,480 --> 00:03:03,560
Speaker 6: a heated market debate. On one side, funds including four

58
00:03:03,600 --> 00:03:06,720
Speaker 6: to six three Capital and Diameter Capital Partners, had been

59
00:03:06,760 --> 00:03:09,360
Speaker 6: betting that the panel will call for a payout. Meanwhile,

60
00:03:09,360 --> 00:03:12,240
Speaker 6: traders and strategists that City Group, Barclay's, and JP Morgan

61
00:03:12,360 --> 00:03:14,959
Speaker 6: Chase had been telling their clients that a payout would

62
00:03:14,960 --> 00:03:19,000
Speaker 6: be unlikely. In Washington and Kates Bloomberg Daybreak, Asia.

63
00:03:19,080 --> 00:03:22,760
Speaker 2: Ten Cents Holdings posted its fastest pace of revenue growth

64
00:03:22,800 --> 00:03:25,080
Speaker 2: in more than a year. We have that story from

65
00:03:25,120 --> 00:03:26,320
Speaker 2: Bloomberg's Joanne.

66
00:03:26,000 --> 00:03:30,320
Speaker 7: Wong China's most valuable companies, as sales gained eleven percent

67
00:03:30,360 --> 00:03:33,640
Speaker 7: in the prior quarter and advertising jump to seventeen percent.

68
00:03:33,960 --> 00:03:36,720
Speaker 7: Ten Cents Fintech and cloud arm also returned to double

69
00:03:36,840 --> 00:03:39,560
Speaker 7: digit growth, but net income fell short of the mark.

70
00:03:39,880 --> 00:03:43,760
Speaker 7: This comes as China's reopening boosted economic activity. Advertising and

71
00:03:43,800 --> 00:03:47,640
Speaker 7: gaming are only now emerging from regulatory crackdowns and COVID restrictions.

72
00:03:47,960 --> 00:03:51,240
Speaker 7: To revitalize the business, ten Cent aims to integrate AI

73
00:03:51,360 --> 00:03:55,360
Speaker 7: capabilities across its products, but investors will be watching costs

74
00:03:55,560 --> 00:03:58,960
Speaker 7: as the company builds out as cloud surface. Just this week,

75
00:03:59,080 --> 00:04:01,560
Speaker 7: the wach had Operated cut prices for some of its

76
00:04:01,600 --> 00:04:04,880
Speaker 7: core cloud products by as much as forty percent. Ten

77
00:04:04,960 --> 00:04:07,840
Speaker 7: Sans eightyr gained one point eight percent in New York.

78
00:04:08,040 --> 00:04:10,320
Speaker 7: In Hong Kong, I'm joined one Bloomberg day Break Asia.

79
00:04:10,480 --> 00:04:13,720
Speaker 1: Hua Hoongs Semiconductor has received a green light for its

80
00:04:13,760 --> 00:04:17,520
Speaker 1: second listing on the Shanghai Starboard. That story from Bloomberg

81
00:04:17,640 --> 00:04:18,600
Speaker 1: zivon men.

82
00:04:18,720 --> 00:04:21,560
Speaker 8: At two point six billion dollars, the listing would be

83
00:04:21,680 --> 00:04:25,279
Speaker 8: China's biggest so far this year. Huahong is already listed

84
00:04:25,279 --> 00:04:28,680
Speaker 8: in Hong Kong and just got Shanghai approval yesterday. The

85
00:04:28,720 --> 00:04:31,520
Speaker 8: company still has to register its plans with the regulator

86
00:04:31,720 --> 00:04:34,400
Speaker 8: and there's no timeline yet for the Shanghai listing, but

87
00:04:34,480 --> 00:04:37,280
Speaker 8: Beijing is supporting the sector and the plans may move

88
00:04:37,360 --> 00:04:40,839
Speaker 8: forward quickly. China is trying to counter US moves to

89
00:04:40,880 --> 00:04:44,560
Speaker 8: block Chinese access to high level technologies in Hong Kong.

90
00:04:44,600 --> 00:04:46,640
Speaker 8: I'm yvon Man, Bloomberg day Break Asia.

91
00:04:46,839 --> 00:04:49,839
Speaker 1: I'm Brian Curtis along with Doug Christner. Doug, we did

92
00:04:49,920 --> 00:04:52,880
Speaker 1: have the shares of Huahung yesterday in Hong Kong trade

93
00:04:52,920 --> 00:04:56,080
Speaker 1: down four point eight percent, but that story could move

94
00:04:56,120 --> 00:04:59,159
Speaker 1: along quite quickly as we as we heard there. In

95
00:04:59,279 --> 00:05:02,200
Speaker 1: terms of the route on Wall Street, you mentioned that

96
00:05:02,360 --> 00:05:06,600
Speaker 1: investors took some heart from the debt ceiling discussions, but

97
00:05:06,640 --> 00:05:09,960
Speaker 1: one wonders about that. I'll speak Kevin McCarthy saying that

98
00:05:10,680 --> 00:05:13,120
Speaker 1: an agreement is doable this week, but I think if

99
00:05:13,160 --> 00:05:16,599
Speaker 1: it translated, that means you know if you come over

100
00:05:16,640 --> 00:05:17,520
Speaker 1: to our side.

101
00:05:17,680 --> 00:05:20,640
Speaker 2: Well, you kind of were talking a moment ago about

102
00:05:20,800 --> 00:05:23,960
Speaker 2: the pressure that Jamie Dimond, the CEO of JP Morgan Chase,

103
00:05:24,040 --> 00:05:27,640
Speaker 2: was applying in that meeting with Chuck Schumer. Other bank

104
00:05:27,680 --> 00:05:30,240
Speaker 2: executives were a part of the conversation too, And I

105
00:05:30,320 --> 00:05:33,320
Speaker 2: think the pressure is on. But obviously Schumer is in

106
00:05:33,360 --> 00:05:36,840
Speaker 2: their camp, right, it's McCarthy and the Republicans that are

107
00:05:36,839 --> 00:05:39,159
Speaker 2: going to be pushing back. They want to see reductions

108
00:05:39,200 --> 00:05:42,880
Speaker 2: in spending. Now, McCarthy did say, yeah, maybe something is

109
00:05:42,960 --> 00:05:45,279
Speaker 2: doable this week, but you're right, there is a fair

110
00:05:45,320 --> 00:05:47,440
Speaker 2: amount of risk. And it's kind of surprising today that

111
00:05:47,480 --> 00:05:49,320
Speaker 2: we had as much optimism as we did in the

112
00:05:49,320 --> 00:05:50,080
Speaker 2: equity market.

113
00:05:50,320 --> 00:05:53,880
Speaker 1: Yeah, absolutely, just about every sector hired today. As you said,

114
00:05:53,960 --> 00:05:57,440
Speaker 1: banking played a role today, which is I'm sure welcomed

115
00:05:57,800 --> 00:06:00,280
Speaker 1: by many. You know, we've made a lot of the

116
00:06:00,320 --> 00:06:04,479
Speaker 1: big tech stocks is dominating the numbers this year, and

117
00:06:04,560 --> 00:06:06,720
Speaker 1: I've sort of made a lot on this show about

118
00:06:06,920 --> 00:06:10,920
Speaker 1: how the equal weight stock index is only just flat

119
00:06:10,960 --> 00:06:13,280
Speaker 1: for the year, but if you go back three years,

120
00:06:13,480 --> 00:06:15,560
Speaker 1: this is pretty interesting. If you go back three years,

121
00:06:15,960 --> 00:06:18,720
Speaker 1: the equal weight S and P five hundred has outperformed

122
00:06:18,720 --> 00:06:21,359
Speaker 1: the Nasdaq one hundred. So maybe one of the stories

123
00:06:21,360 --> 00:06:24,240
Speaker 1: this year is not so much just pure tech out performance,

124
00:06:24,600 --> 00:06:25,680
Speaker 1: but mean reversion.

125
00:06:26,440 --> 00:06:28,839
Speaker 2: Yeah, and maybe we can bring into the conversation the

126
00:06:28,880 --> 00:06:31,360
Speaker 2: possibility that the market is still convinced that we're going

127
00:06:31,400 --> 00:06:34,160
Speaker 2: to see rate cuts by the end of the year.

128
00:06:34,279 --> 00:06:36,200
Speaker 2: I know you and I have spoken a lot about this.

129
00:06:36,279 --> 00:06:38,800
Speaker 2: Certainly that's not what we're hearing from the FED. The

130
00:06:38,920 --> 00:06:41,360
Speaker 2: question is maybe the market is right and the FED

131
00:06:41,440 --> 00:06:41,799
Speaker 2: is wrong.

132
00:06:42,160 --> 00:06:45,640
Speaker 1: Yeah. You know these hedge fund groupings that we've had

133
00:06:46,000 --> 00:06:50,400
Speaker 1: both and the so talks here and then you had

134
00:06:50,400 --> 00:06:53,960
Speaker 1: one in the States. It seems like some big investors

135
00:06:53,960 --> 00:06:57,279
Speaker 1: are saying they do expect rate cuts this year, but

136
00:06:57,360 --> 00:06:59,359
Speaker 1: I think for most of them it's really towards the

137
00:06:59,480 --> 00:07:01,200
Speaker 1: end of the year. So does it matter all that

138
00:07:01,279 --> 00:07:04,560
Speaker 1: much if it's like November versus a March of next year,

139
00:07:04,920 --> 00:07:07,560
Speaker 1: Perhaps not so much. Maybe just a quick word on

140
00:07:07,640 --> 00:07:11,480
Speaker 1: ten Cent before we get into the news. Tencent had

141
00:07:11,480 --> 00:07:15,120
Speaker 1: some modest improvements there and the stock was rewarded both

142
00:07:15,160 --> 00:07:18,960
Speaker 1: in Amsterdam and also in the ad RS, but Bloomberg

143
00:07:19,040 --> 00:07:22,800
Speaker 1: Intelligence says the momentum might not be sustained. Still, I

144
00:07:22,840 --> 00:07:25,120
Speaker 1: think it may provide a little sucker in Hong Kong today,

145
00:07:25,160 --> 00:07:27,040
Speaker 1: So an interesting one to watch on our show.

146
00:07:27,120 --> 00:07:27,840
Speaker 4: All right, it's.

147
00:07:27,680 --> 00:07:33,200
Speaker 1: Time for Global News. India's Prime Minister Narendra Modi says

148
00:07:33,280 --> 00:07:36,720
Speaker 1: he will visit Australia next week as scheduled because even

149
00:07:36,760 --> 00:07:40,440
Speaker 1: though the full Quad meetings will not be held in Sydney.

150
00:07:40,760 --> 00:07:42,520
Speaker 1: At Baxter has Global News.

151
00:07:42,440 --> 00:07:45,160
Speaker 3: Ed, Yeah, that's right, Brian. The US President Joe Biden

152
00:07:45,400 --> 00:07:49,520
Speaker 3: shortened his trip. Modi will meet though with Australian Broadcasting Commission,

153
00:07:49,560 --> 00:07:52,840
Speaker 3: have a bilateral meeting with Prime Minister Anthony Albanezi, and

154
00:07:53,160 --> 00:07:57,000
Speaker 3: take part in a very public rally at Sydney's Homebush Arena. Meanwhile,

155
00:07:57,040 --> 00:08:00,400
Speaker 3: President Biden, on his way to Japan. National Security Advisor

156
00:08:00,480 --> 00:08:03,280
Speaker 3: Jake Sullivan on Air Force One says the Quad can

157
00:08:03,320 --> 00:08:04,240
Speaker 3: meet in Hiroshiba.

158
00:08:04,320 --> 00:08:06,640
Speaker 9: By the way, the country's in the Quad because both

159
00:08:06,960 --> 00:08:10,600
Speaker 9: Australia and India will be in Hiroshiva and he will

160
00:08:10,600 --> 00:08:12,680
Speaker 9: have the opportunity to engage with them there.

161
00:08:13,160 --> 00:08:15,200
Speaker 3: And Sullivan says to work with a quad and with

162
00:08:15,280 --> 00:08:17,440
Speaker 3: a G seven is very important. Along with the debt

163
00:08:17,480 --> 00:08:20,720
Speaker 3: ceiling talks, Sullivan says the US will have a package

164
00:08:20,720 --> 00:08:24,640
Speaker 3: of sanctions associated with a G seven statement regarding Ukraine.

165
00:08:24,760 --> 00:08:27,400
Speaker 3: I Meanwhile, the President before departing, said he has confident

166
00:08:27,480 --> 00:08:29,560
Speaker 3: things will get done regarding the debt ceiling.

167
00:08:29,640 --> 00:08:32,840
Speaker 4: This negotiation is about the outlines of what the budget

168
00:08:32,880 --> 00:08:35,400
Speaker 4: will look like, not about whether or not we're going

169
00:08:35,440 --> 00:08:36,920
Speaker 4: to in fact para debts.

170
00:08:37,559 --> 00:08:40,720
Speaker 3: So he feels comfortable and beating away for a few days.

171
00:08:40,720 --> 00:08:43,040
Speaker 3: Republican Senator Lindsey Graham agrees.

172
00:08:42,800 --> 00:08:44,760
Speaker 10: I'm wanting to go because you know, we need our

173
00:08:44,760 --> 00:08:46,920
Speaker 10: president at the G seven meeting, and we know how

174
00:08:47,000 --> 00:08:49,240
Speaker 10: this is. There's going to be a deal. There's no use,

175
00:08:50,120 --> 00:08:53,360
Speaker 10: you know, blowing up everybody's break and having the President

176
00:08:53,920 --> 00:08:56,760
Speaker 10: not go to Australia. I just think it's silly, quite frankly.

177
00:08:57,040 --> 00:08:59,840
Speaker 3: And House Speaker Kevin McCarthy says work can be done

178
00:09:00,040 --> 00:09:01,160
Speaker 3: in the United States now.

179
00:09:01,200 --> 00:09:04,480
Speaker 9: The President and Leader Schumer have finally backed off their

180
00:09:04,520 --> 00:09:05,880
Speaker 9: idea that they won't negotiate.

181
00:09:06,160 --> 00:09:07,559
Speaker 4: They finally backed off the.

182
00:09:07,640 --> 00:09:13,880
Speaker 1: Insane, unrational, unsensible idea that you just raised the debt suit.

183
00:09:14,200 --> 00:09:17,320
Speaker 3: McCarthy says negotiations will go on, but ultimately it'll be

184
00:09:17,400 --> 00:09:20,320
Speaker 3: up to the President. At this point, and Bloomberg's Laura

185
00:09:20,400 --> 00:09:23,520
Speaker 3: Davison says, well, the mood does really seem to be

186
00:09:23,559 --> 00:09:24,080
Speaker 3: a bit better.

187
00:09:24,240 --> 00:09:26,520
Speaker 9: They're at least talking about the issues. Now there's talking

188
00:09:26,559 --> 00:09:30,160
Speaker 9: on specific things like food benefits and various concessions that

189
00:09:30,160 --> 00:09:32,880
Speaker 9: each side might give, but they're nowhere near a deal

190
00:09:32,920 --> 00:09:34,920
Speaker 9: being done by you know, say Friday.

191
00:09:35,200 --> 00:09:37,960
Speaker 3: So another day, another step, question mark, and it's the

192
00:09:38,000 --> 00:09:41,920
Speaker 3: Taco Tuesday trademarked tiff. Taco Bell has filed petition with

193
00:09:42,040 --> 00:09:45,240
Speaker 3: a US Patent and Trademark Office to avoid the Taco

194
00:09:45,320 --> 00:09:50,240
Speaker 3: Tuesday trademark hell by Wyoming based Taco John's. Taco John

195
00:09:50,280 --> 00:09:54,880
Speaker 3: employee Emmanuel Sondoval says, this should not happen.

196
00:09:55,000 --> 00:09:56,720
Speaker 2: I mean, we've been doing it for the longest, so

197
00:09:57,640 --> 00:10:00,840
Speaker 2: I feel like we said on it. Well, we have

198
00:10:00,960 --> 00:10:02,920
Speaker 2: the rights to onny, you know, because there's our chocolate

199
00:10:02,960 --> 00:10:04,320
Speaker 2: Tuesday now.

200
00:10:04,600 --> 00:10:08,880
Speaker 3: Taco Bell argues depriving the world of using the term

201
00:10:09,000 --> 00:10:14,239
Speaker 3: Taco Tuesday is like depriving the world of sunshine itself.

202
00:10:14,520 --> 00:10:17,560
Speaker 3: Global News powered by more than twenty seven hundred journalists

203
00:10:17,559 --> 00:10:20,280
Speaker 3: and analysts and over one hundred and twenty countries. In

204
00:10:20,559 --> 00:10:24,160
Speaker 3: San Francisco, I'm Ed Baxter, and this is Bloomberg.

205
00:10:23,920 --> 00:10:26,120
Speaker 1: And thank you very much. I'm Brian Curtisy in Hong

206
00:10:26,200 --> 00:10:29,719
Speaker 1: Kong along with Rashad Salamat. Our guest is Catherine Kaminski,

207
00:10:30,080 --> 00:10:35,400
Speaker 1: chief research strategist and portfolio manager at Alpha Simplex Group. Katie,

208
00:10:35,440 --> 00:10:37,880
Speaker 1: thanks very much for joining us. We mentioned that it

209
00:10:37,920 --> 00:10:40,040
Speaker 1: was a pretty broad rally today. Nice to see some

210
00:10:40,440 --> 00:10:43,920
Speaker 1: breadth in the market. Only utilities and consumer staples were

211
00:10:44,000 --> 00:10:47,720
Speaker 1: down out of all the different segments. Were you buying

212
00:10:47,760 --> 00:10:48,480
Speaker 1: that rally today?

213
00:10:49,800 --> 00:10:52,640
Speaker 9: Well, I'd have to say we've been long, so I'd

214
00:10:52,640 --> 00:10:54,920
Speaker 9: say that this rally is sort of a respite from

215
00:10:55,160 --> 00:10:57,839
Speaker 9: people treading water from what we've seen all this worry

216
00:10:57,840 --> 00:11:01,840
Speaker 9: about a dead ceiling, and I think that the signals

217
00:11:01,880 --> 00:11:06,280
Speaker 9: are long in equities on the technical side, Yeah, the

218
00:11:06,400 --> 00:11:09,719
Speaker 9: question is you are seeing that? Yeah, the people.

219
00:11:09,520 --> 00:11:12,600
Speaker 11: At the moment just looking at everything with the glass

220
00:11:12,640 --> 00:11:16,560
Speaker 11: half empty, and you know what's going to really change

221
00:11:16,559 --> 00:11:17,240
Speaker 11: that ultimately?

222
00:11:18,679 --> 00:11:21,120
Speaker 9: Well, I think the really big challenge right now is

223
00:11:21,120 --> 00:11:24,040
Speaker 9: that if you look across different asset classes, the markets

224
00:11:24,080 --> 00:11:27,760
Speaker 9: don't agree. So the equity markets are looking for hope,

225
00:11:27,800 --> 00:11:30,960
Speaker 9: they're looking for the soft landing, and they're sort of

226
00:11:31,040 --> 00:11:34,200
Speaker 9: treading water waiting to see that we can sort of

227
00:11:34,360 --> 00:11:37,079
Speaker 9: get through some of the tightening that we've already been through,

228
00:11:37,120 --> 00:11:41,199
Speaker 9: whereas the bond market, in my opinion, is still very pessimistic,

229
00:11:41,400 --> 00:11:45,199
Speaker 9: still pricing in a recession, and inflation numbers are supporting

230
00:11:45,240 --> 00:11:47,199
Speaker 9: some of that issue. And I think that's where you're

231
00:11:47,200 --> 00:11:50,000
Speaker 9: going to see the bigger moves later this year, is

232
00:11:50,000 --> 00:11:52,720
Speaker 9: we've got to watch the bond market to tell what's

233
00:11:52,720 --> 00:11:55,040
Speaker 9: really going to happen. So I think that's why it's

234
00:11:55,040 --> 00:11:57,840
Speaker 9: really hard to say, is that there's totally different views

235
00:11:58,120 --> 00:11:59,520
Speaker 9: even across asset classes.

236
00:12:00,160 --> 00:12:02,600
Speaker 1: Could you see a retest of the October lows?

237
00:12:04,480 --> 00:12:07,200
Speaker 9: Definitely? I mean I think for us, we're kind of

238
00:12:07,240 --> 00:12:11,240
Speaker 9: cross asset and we often look at patterns across different

239
00:12:11,240 --> 00:12:14,480
Speaker 9: asset classes and how that may change over time. And

240
00:12:14,520 --> 00:12:16,800
Speaker 9: what we've really seen is that the bond markets have

241
00:12:16,880 --> 00:12:19,400
Speaker 9: been leading the way since last year. And what we're

242
00:12:19,440 --> 00:12:22,040
Speaker 9: looking for, I think to be the catalyst is at

243
00:12:22,040 --> 00:12:25,640
Speaker 9: some point people saying, wait a minute, inflation stickier long

244
00:12:25,720 --> 00:12:28,800
Speaker 9: term cash flows might actually have to adjust even further,

245
00:12:29,240 --> 00:12:30,920
Speaker 9: and that's where you're going to start to see the

246
00:12:30,960 --> 00:12:34,679
Speaker 9: potential downturn comes in the bond market first, and then

247
00:12:34,720 --> 00:12:37,120
Speaker 9: everyone has to say, like wait a minute, here, comes

248
00:12:37,200 --> 00:12:41,160
Speaker 9: the recession that we've been looking for. Perhaps, well we

249
00:12:41,200 --> 00:12:41,600
Speaker 9: have one.

250
00:12:41,640 --> 00:12:41,840
Speaker 4: Though.

251
00:12:41,960 --> 00:12:45,440
Speaker 9: That's the thing here, Kevin, We'll see. I mean, I

252
00:12:45,440 --> 00:12:49,040
Speaker 9: think that's the big challenge. Like, you know, that's why

253
00:12:49,080 --> 00:12:51,920
Speaker 9: I'm saying maybe the equity markets aren't where you look first,

254
00:12:52,160 --> 00:12:56,160
Speaker 9: because the equity market seem to be optimistic until it's obvious.

255
00:12:57,120 --> 00:12:58,439
Speaker 9: I saw that during COVID.

256
00:12:58,920 --> 00:13:02,760
Speaker 1: Yeah, even some of the bulls though, you know, they

257
00:13:02,840 --> 00:13:05,880
Speaker 1: seem perhaps a mild recession, but then they think that

258
00:13:06,200 --> 00:13:08,440
Speaker 1: you know, that leads the FED to cut, and they're

259
00:13:08,440 --> 00:13:10,840
Speaker 1: willing to look out you know, nine months or a year,

260
00:13:10,880 --> 00:13:14,960
Speaker 1: because that's sort of what they do inequities. I was

261
00:13:14,960 --> 00:13:17,679
Speaker 1: listening to Mark lazri at Son, and you know, he

262
00:13:18,120 --> 00:13:21,360
Speaker 1: definitely thinks the FED will cut later this year. Is

263
00:13:21,400 --> 00:13:24,720
Speaker 1: there a way to make a cut into a bullish

264
00:13:24,760 --> 00:13:25,480
Speaker 1: reading for you?

265
00:13:27,080 --> 00:13:29,200
Speaker 9: I don't see that at all. Like I'm on the

266
00:13:29,240 --> 00:13:31,600
Speaker 9: other side of the fence, Like I really think that

267
00:13:31,760 --> 00:13:33,600
Speaker 9: the only way we're going to have a cut is

268
00:13:33,640 --> 00:13:38,200
Speaker 9: if we have very serious deterioration and financial conditions. And

269
00:13:38,280 --> 00:13:42,160
Speaker 9: for me, that's not a positive equity signal. I think

270
00:13:42,160 --> 00:13:44,440
Speaker 9: people just want this to go away, and they want

271
00:13:44,440 --> 00:13:46,120
Speaker 9: things to go back to the way it was, and

272
00:13:46,720 --> 00:13:48,760
Speaker 9: you know, cuts would be an easy way to get there,

273
00:13:48,800 --> 00:13:51,840
Speaker 9: but there's really no motivation when you have inflation at

274
00:13:51,920 --> 00:13:55,160
Speaker 9: much higher than target levels to actually do that.

275
00:13:56,360 --> 00:13:59,200
Speaker 11: Well, Gouthrie, I mean, that's the question I've been asking people,

276
00:13:59,240 --> 00:14:00,720
Speaker 11: because it does seem as that people want to go

277
00:14:00,800 --> 00:14:04,640
Speaker 11: back to the whole notion of the easy, free money

278
00:14:04,640 --> 00:14:07,400
Speaker 11: that we've had for the last decade and beyond, and

279
00:14:07,760 --> 00:14:10,160
Speaker 11: it's kind of like I just wanted to be back

280
00:14:10,200 --> 00:14:13,040
Speaker 11: in my comfort zone. So I'm going to believe that

281
00:14:13,040 --> 00:14:15,120
Speaker 11: they're going to cut because I want that to come true.

282
00:14:16,520 --> 00:14:18,880
Speaker 9: Of course. I mean, who wouldn't, right, I mean, I

283
00:14:18,920 --> 00:14:21,880
Speaker 9: think that's the challenge is if you look over longer history,

284
00:14:22,760 --> 00:14:25,920
Speaker 9: higher interest rates is not a weird thing. Low interests

285
00:14:26,000 --> 00:14:28,240
Speaker 9: like we've had is actually a very rare thing. And

286
00:14:28,280 --> 00:14:31,760
Speaker 9: so I think for us what's interesting is different cycles

287
00:14:31,800 --> 00:14:34,440
Speaker 9: where you've seen rising rates, you actually see very different

288
00:14:34,480 --> 00:14:37,880
Speaker 9: behavior in the bond markets, very different asset correlations. And

289
00:14:37,920 --> 00:14:40,680
Speaker 9: we've seen all that since last year. So I expected

290
00:14:40,720 --> 00:14:43,680
Speaker 9: to be more of the same of last year than

291
00:14:43,840 --> 00:14:45,880
Speaker 9: what we had in the past. I think we've really

292
00:14:46,000 --> 00:14:47,520
Speaker 9: changed to a new regime.

293
00:14:48,760 --> 00:14:51,640
Speaker 1: Unfortunately, do you get a little nervous when you see

294
00:14:51,680 --> 00:14:55,400
Speaker 1: some of these big whale investors Paul Tudor Jones, Steve Cohen,

295
00:14:55,720 --> 00:14:59,080
Speaker 1: folks like that turning more bullish on equities.

296
00:15:00,240 --> 00:15:02,720
Speaker 9: Well, I think there's still a bullish story in equities

297
00:15:02,760 --> 00:15:06,720
Speaker 9: because in the short run there's moderate inflation and that

298
00:15:06,760 --> 00:15:08,840
Speaker 9: tends to be good for equities in the short run.

299
00:15:09,160 --> 00:15:11,160
Speaker 9: The question is how short is the short run?

300
00:15:11,560 --> 00:15:11,720
Speaker 10: Right?

301
00:15:11,760 --> 00:15:13,800
Speaker 9: And this is what you're trying to ask me as well,

302
00:15:13,920 --> 00:15:17,480
Speaker 9: is that is it a year? Is it six months?

303
00:15:17,520 --> 00:15:20,120
Speaker 9: Of course, you know their time horizons may be a

304
00:15:20,120 --> 00:15:22,400
Speaker 9: little shorter than your long term investor, And I think

305
00:15:22,400 --> 00:15:25,480
Speaker 9: that's where the challenge is, is that different people are

306
00:15:25,480 --> 00:15:28,240
Speaker 9: thinking on different horizons in this market.

307
00:15:29,000 --> 00:15:31,880
Speaker 11: So what is the ideal portfolio? What does it look like?

308
00:15:33,280 --> 00:15:36,000
Speaker 9: Well, right now, the signals that I'm seeing are definitely

309
00:15:36,000 --> 00:15:39,640
Speaker 9: still long equities, but there's still short bonds, which I

310
00:15:39,640 --> 00:15:43,320
Speaker 9: think is a little different than most people. Commodities have

311
00:15:43,440 --> 00:15:46,560
Speaker 9: been short because they've been trading more in a recessionary fashion,

312
00:15:46,680 --> 00:15:52,880
Speaker 9: demand retraction kind of positioning, which I'd say the best

313
00:15:52,880 --> 00:15:56,480
Speaker 9: positioning is to be shorter duration and also to be

314
00:15:56,680 --> 00:15:59,240
Speaker 9: a little cautious in your equity exposure and make sure

315
00:15:59,280 --> 00:16:02,600
Speaker 9: that you're not too overly bullish if we should have

316
00:16:03,960 --> 00:16:05,400
Speaker 9: sort of a repeat of last year.

317
00:16:06,800 --> 00:16:09,280
Speaker 1: So, Katie, you're on a show that focuses on Asia.

318
00:16:09,400 --> 00:16:11,560
Speaker 1: Obviously in the first hour we do spend a lot

319
00:16:11,600 --> 00:16:13,920
Speaker 1: of time wrapping up the Wall Street action that helps

320
00:16:14,280 --> 00:16:17,360
Speaker 1: feed through into a narrative here in Asia. Are you

321
00:16:17,600 --> 00:16:19,920
Speaker 1: very well invested in Asian If so, what do you like?

322
00:16:21,120 --> 00:16:23,880
Speaker 9: So what's interesting is right now we're seeing some interesting

323
00:16:23,920 --> 00:16:27,880
Speaker 9: divergence in Asia in terms of indices and also in

324
00:16:27,920 --> 00:16:32,240
Speaker 9: the currency markets. Particularly you see this short positioning in China,

325
00:16:32,520 --> 00:16:36,440
Speaker 9: short positioning in em crossed with long positioning in Australia

326
00:16:36,480 --> 00:16:40,360
Speaker 9: and particularly long positioning in Japan. Some of that we

327
00:16:40,400 --> 00:16:42,400
Speaker 9: can talk about in a second. But you're also seeing

328
00:16:43,360 --> 00:16:47,560
Speaker 9: short positioning in most like the Chinese n the yen

329
00:16:47,640 --> 00:16:50,520
Speaker 9: as well Thusie dollar compared to the US dollars. So

330
00:16:50,560 --> 00:16:52,520
Speaker 9: that's a little different than what you're seeing in other

331
00:16:52,600 --> 00:16:56,200
Speaker 9: developed in European markets. So I think that's sort of

332
00:16:56,240 --> 00:16:58,320
Speaker 9: the key story is that there's a little divergence right

333
00:16:58,360 --> 00:17:02,480
Speaker 9: now even from US markets, but also in Asia itself.

334
00:17:03,680 --> 00:17:05,720
Speaker 11: I think you're going to say, let's talk a little

335
00:17:05,720 --> 00:17:08,480
Speaker 11: bit about more about Japan quite something. We have the

336
00:17:08,520 --> 00:17:11,040
Speaker 11: topics at thirty three year highs.

337
00:17:12,440 --> 00:17:16,000
Speaker 9: Yes, amazing, I mean really big. We were just looking

338
00:17:16,000 --> 00:17:18,119
Speaker 9: at a chart the other day and in the office

339
00:17:18,200 --> 00:17:21,480
Speaker 9: it just looks like it's going parabolic. It has gone

340
00:17:21,560 --> 00:17:24,640
Speaker 9: up so much. And the way we think about this

341
00:17:24,800 --> 00:17:28,760
Speaker 9: is as long as policy makers in Japan continue to

342
00:17:28,840 --> 00:17:31,400
Speaker 9: stay in the same zone and they continue to own

343
00:17:31,440 --> 00:17:34,000
Speaker 9: such a big part of the market, they become even

344
00:17:34,119 --> 00:17:38,600
Speaker 9: harder to unwind and thus allowing you know, real rates

345
00:17:38,600 --> 00:17:40,960
Speaker 9: to stay negative, which in the short run just pumps

346
00:17:41,040 --> 00:17:42,919
Speaker 9: up your equity markets. And then you can see it

347
00:17:43,000 --> 00:17:46,639
Speaker 9: right there in a chart it's gone up parabolic pretty much.

348
00:17:46,960 --> 00:17:50,360
Speaker 1: So we've got the offshore Chinese currency on the week

349
00:17:50,480 --> 00:17:52,879
Speaker 1: side of seven seven oh one here at the moment,

350
00:17:53,720 --> 00:17:58,480
Speaker 1: I haven't seen that since last December, so it could

351
00:17:58,600 --> 00:18:02,600
Speaker 1: speak to pronounce weakness in China. I think that's one

352
00:18:02,640 --> 00:18:04,239
Speaker 1: of the areas that you're going What would you need

353
00:18:04,280 --> 00:18:06,880
Speaker 1: to see happen in China for you to be more

354
00:18:06,920 --> 00:18:07,600
Speaker 1: positive there?

355
00:18:08,680 --> 00:18:10,840
Speaker 9: Well, I think the challenge with China, if you think

356
00:18:10,840 --> 00:18:13,280
Speaker 9: about it right here, people have had a lot of optimism.

357
00:18:13,640 --> 00:18:15,920
Speaker 9: They've been really hopeful that you know, the post COVID

358
00:18:16,080 --> 00:18:18,720
Speaker 9: recovery is just going to take steam really really fast.

359
00:18:19,080 --> 00:18:21,000
Speaker 9: I think it hasn't sped up as much as people

360
00:18:21,000 --> 00:18:24,040
Speaker 9: would like, because, to be honest with you, all the

361
00:18:24,080 --> 00:18:28,920
Speaker 9: economies are connected. There has been more tightening globally. Lower

362
00:18:29,480 --> 00:18:33,199
Speaker 9: Chinese Ye tells us that there's less capital flows, and

363
00:18:33,240 --> 00:18:35,879
Speaker 9: thus with less capital flows, really just kind of seeing

364
00:18:35,880 --> 00:18:39,919
Speaker 9: a little bit more tightness even spilling into the Chinese

365
00:18:39,960 --> 00:18:41,919
Speaker 9: currency as well. So I think that's sort of a

366
00:18:41,960 --> 00:18:44,720
Speaker 9: sign that it's really not a closed system.

367
00:18:45,359 --> 00:18:47,960
Speaker 1: Okay, the CNCH seven oh one oh three at the moment,

368
00:18:48,040 --> 00:18:51,800
Speaker 1: The CNY the Onshore closed yesterday at six ninety nine

369
00:18:51,920 --> 00:18:55,840
Speaker 1: sixty five. Catherine Kaminski, thank you so much for joining us.

370
00:18:55,880 --> 00:19:00,200
Speaker 1: Catherine is chief research strategist and portfolio manager at for

371
00:19:00,320 --> 00:19:04,560
Speaker 1: Simplex Group. This is Bloomberg Daybreak Asia, your morning brief

372
00:19:04,600 --> 00:19:07,600
Speaker 1: on the story's making news from Hong Kong to Singapore

373
00:19:07,720 --> 00:19:08,480
Speaker 1: and Wall Street.

374
00:19:08,480 --> 00:19:12,520
Speaker 2: Look for us on your podcast feed every day on Apple, Spotify,

375
00:19:12,760 --> 00:19:14,760
Speaker 2: and anywhere else you get your podcasts.

376
00:19:14,760 --> 00:19:17,359
Speaker 1: You can also listen live each day on Bloomberg eleven

377
00:19:17,400 --> 00:19:19,760
Speaker 1: three to zero in New York Bloomberg ninety nine to

378
00:19:19,760 --> 00:19:23,000
Speaker 1: one in Washington. Bloomberg one oh sixty one in Boston

379
00:19:23,280 --> 00:19:25,760
Speaker 1: and Bloomberg nine sixty in San Francisco.

380
00:19:25,840 --> 00:19:28,680
Speaker 2: Our flagship New York station is also available on your

381
00:19:28,720 --> 00:19:33,960
Speaker 2: Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty plus.

382
00:19:34,119 --> 00:19:37,480
Speaker 1: Listen coast to coast on the Bloomberg Business app, Sirius

383
00:19:37,640 --> 00:19:41,879
Speaker 1: XM Channel one nineteen, the iHeartRadio app, and on Bloomberg

384
00:19:41,960 --> 00:19:42,800
Speaker 1: dot Com.

385
00:19:42,920 --> 00:19:46,040
Speaker 2: I'm Brian Curtis and I'm Doug Krisner. Join us again

386
00:19:46,040 --> 00:19:48,080
Speaker 2: tomorrow for all the news you need to start your

387
00:19:48,160 --> 00:19:52,800
Speaker 2: day right here on Bloomberg Daybreak Asia