1 00:00:02,480 --> 00:00:10,440 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 2 00:00:10,520 --> 00:00:13,720 Speaker 1: Daybreak Asia podcast. I'm Doug Krisner. You can join Brian 3 00:00:13,800 --> 00:00:16,640 Speaker 1: Curtis and myself for the stories making news and moving 4 00:00:16,680 --> 00:00:19,560 Speaker 1: markets in the APAC region. You can subscribe to the 5 00:00:19,600 --> 00:00:23,080 Speaker 1: show anywhere you get your podcast and always on Bloomberg Radio, 6 00:00:23,320 --> 00:00:26,080 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business App. 7 00:00:27,320 --> 00:00:31,000 Speaker 2: Intel making a custom chip for Amazon Web Services for 8 00:00:31,200 --> 00:00:35,400 Speaker 2: use in artificial intelligence computing. A lot more on this story, 9 00:00:35,479 --> 00:00:38,520 Speaker 2: we will cover it now with Ian King, Bloomberg News 10 00:00:38,720 --> 00:00:42,839 Speaker 2: US Semiconductor reporter. So Ian investors really seem to like 11 00:00:42,880 --> 00:00:46,959 Speaker 2: this story in that obviously Aws a very big customer, 12 00:00:47,000 --> 00:00:52,280 Speaker 2: the largest cloud operator, and this will help the foundry business, 13 00:00:52,280 --> 00:00:55,440 Speaker 2: which Intel has been pushing. And then the postponing of 14 00:00:55,440 --> 00:00:58,960 Speaker 2: the foreign plants kind of helps on the cost side. 15 00:00:59,480 --> 00:01:01,920 Speaker 2: So it's seems like a good step. But my question 16 00:01:02,000 --> 00:01:04,120 Speaker 2: for you is how long will it take for some 17 00:01:04,160 --> 00:01:05,640 Speaker 2: of these gains to be reaped? 18 00:01:07,520 --> 00:01:11,640 Speaker 3: Quite a while, that's the issue at hand here. I mean, 19 00:01:11,680 --> 00:01:16,360 Speaker 3: the cost cutting should help actually closer to sort of 20 00:01:16,360 --> 00:01:19,679 Speaker 3: bring the company into sort of alignment with what it 21 00:01:19,680 --> 00:01:24,880 Speaker 3: can afford. The foundry wins from companies like a WS. 22 00:01:25,120 --> 00:01:28,720 Speaker 3: It's kind of in the future next couple of years 23 00:01:29,000 --> 00:01:31,640 Speaker 3: when those kind of things will kick in and hopefully 24 00:01:31,680 --> 00:01:34,280 Speaker 3: start to have those new plants pay for themselves a 25 00:01:34,319 --> 00:01:35,280 Speaker 3: bit more so. 26 00:01:35,760 --> 00:01:36,040 Speaker 4: Ian. 27 00:01:36,160 --> 00:01:40,640 Speaker 1: This is the Intel eighteen A microprocessor, right, or is 28 00:01:40,680 --> 00:01:46,280 Speaker 1: it more kind of like a GPU that in Nvidia 29 00:01:46,360 --> 00:01:50,240 Speaker 1: produces for a lot of these functions of using kind 30 00:01:50,280 --> 00:01:53,680 Speaker 1: of the data server as a way to process AI functionality. 31 00:01:54,480 --> 00:01:58,160 Speaker 3: Yeah, And eighteen A is the name of the process 32 00:01:58,240 --> 00:02:02,480 Speaker 3: technology that it is both using itself and offering for 33 00:02:02,720 --> 00:02:06,840 Speaker 3: use from external customers. So it's basically saying, hey, this 34 00:02:06,920 --> 00:02:10,280 Speaker 3: is our latest and greatest production technology. This comes in 35 00:02:10,880 --> 00:02:13,800 Speaker 3: to use kind of around now and into next year. 36 00:02:14,760 --> 00:02:17,920 Speaker 3: And guess what we've got a customer, what Amazon? The 37 00:02:17,960 --> 00:02:19,880 Speaker 3: only detail we've got is that it is what's called 38 00:02:19,880 --> 00:02:23,640 Speaker 3: a fabric chip that is usually a kind of chip 39 00:02:23,720 --> 00:02:27,800 Speaker 3: that links other chips together. So it's not the absolute 40 00:02:27,880 --> 00:02:33,640 Speaker 3: pinnacle of high volume or importance, but it's nonetheless an 41 00:02:33,680 --> 00:02:37,080 Speaker 3: important part of an overall computer network that would perhaps 42 00:02:37,160 --> 00:02:40,120 Speaker 3: link things like a GPU to other parts of the computer, 43 00:02:40,280 --> 00:02:42,720 Speaker 3: maybe to a CPU, the kind of thing that Intel 44 00:02:42,760 --> 00:02:46,120 Speaker 3: specializes in. So we need more details. We need volume, 45 00:02:46,200 --> 00:02:50,760 Speaker 3: and we need to see revenue. But having Amazon's name 46 00:02:50,919 --> 00:02:56,000 Speaker 3: associated with their founder is definitely something that helps Intel 47 00:02:56,080 --> 00:02:58,240 Speaker 3: sort of prove the naysayers wrong. 48 00:02:59,160 --> 00:03:01,600 Speaker 2: It's a big deal. Intel's been under a lot of pressure. 49 00:03:01,680 --> 00:03:04,079 Speaker 2: Must have been a very tough board meeting last week. 50 00:03:04,320 --> 00:03:07,320 Speaker 2: I'm wondering does this buy Pat Gelsinger some more time? 51 00:03:08,200 --> 00:03:08,399 Speaker 4: Yeah? 52 00:03:08,440 --> 00:03:11,840 Speaker 3: I mean we spoke with Pat earlier and asked, you know, 53 00:03:11,919 --> 00:03:14,960 Speaker 3: about his plan, about their support for it, and he 54 00:03:15,040 --> 00:03:17,799 Speaker 3: was very clear that it had been a rigorous board meeting. 55 00:03:17,880 --> 00:03:20,960 Speaker 3: You know, people had asked him tough questions and so forth, 56 00:03:21,400 --> 00:03:24,840 Speaker 3: but that you know, he has their support, that they 57 00:03:25,120 --> 00:03:28,400 Speaker 3: accepted his prognosis for how things are going to play out, 58 00:03:28,480 --> 00:03:29,880 Speaker 3: and that they are behind him. 59 00:03:30,160 --> 00:03:31,720 Speaker 1: So what does this do. I know there was some 60 00:03:31,800 --> 00:03:35,680 Speaker 1: concern that Intel may not qualify for funds being distributed 61 00:03:35,720 --> 00:03:38,480 Speaker 1: from the Chips and Science AEC. Does this help in 62 00:03:38,520 --> 00:03:38,960 Speaker 1: any way? 63 00:03:40,000 --> 00:03:42,400 Speaker 3: Well, the important thing to point out there is they 64 00:03:42,440 --> 00:03:45,320 Speaker 3: are qualified, right, but that doesn't mean they're going to 65 00:03:45,320 --> 00:03:48,200 Speaker 3: get the money. The US government, which is good for 66 00:03:48,280 --> 00:03:51,360 Speaker 3: taxpayers like me, has said yeah, yeah, here's you know, 67 00:03:51,440 --> 00:03:53,960 Speaker 3: eight billion dollars that will set aside for you, but 68 00:03:54,120 --> 00:03:56,440 Speaker 3: you have to do certain things before we give you 69 00:03:56,520 --> 00:03:57,040 Speaker 3: that money. 70 00:03:57,520 --> 00:03:59,400 Speaker 4: So that's still a work in progress. Right. 71 00:03:59,480 --> 00:04:01,960 Speaker 3: It's got some the local grants from places like Ohio 72 00:04:02,200 --> 00:04:05,520 Speaker 3: and Arizona, but the federal money has not been handed 73 00:04:05,520 --> 00:04:06,000 Speaker 3: over yet. 74 00:04:07,400 --> 00:04:09,560 Speaker 2: So I'm curious what this means that. You know, we 75 00:04:09,680 --> 00:04:13,680 Speaker 2: mentioned the Germany and the Poland plants who be postponed, 76 00:04:14,120 --> 00:04:16,640 Speaker 2: and that will help on the cost side. The Malaysia 77 00:04:16,680 --> 00:04:21,800 Speaker 2: plant goes continues, but you know, may maybe postpone. The 78 00:04:21,800 --> 00:04:26,440 Speaker 2: actual usage maybe postponed. Does does Intel lose anything by 79 00:04:27,279 --> 00:04:28,039 Speaker 2: moving slowly? 80 00:04:28,080 --> 00:04:29,240 Speaker 4: Now on the Germany and. 81 00:04:29,200 --> 00:04:34,440 Speaker 3: Poland plants, Yes and no, right, I mean in Europe 82 00:04:34,040 --> 00:04:37,480 Speaker 3: they were set to get a lot more state money 83 00:04:38,360 --> 00:04:42,560 Speaker 3: and obviously this decision to postpone throws that into. 84 00:04:43,920 --> 00:04:45,520 Speaker 4: Debate whether they'll ever get that. 85 00:04:46,160 --> 00:04:50,200 Speaker 3: But at the same time, these things are not cheap, right, 86 00:04:50,279 --> 00:04:51,720 Speaker 3: as soon as you build one, as soon as you 87 00:04:51,760 --> 00:04:55,039 Speaker 3: put that equipment in there, you've got twenty thirty billion 88 00:04:55,080 --> 00:04:58,840 Speaker 3: dollars of capex that within five years will be obsolete. 89 00:04:58,880 --> 00:05:00,560 Speaker 3: So if you're going to do that, then you have 90 00:05:00,640 --> 00:05:02,280 Speaker 3: to be ready and you have to be sure you're 91 00:05:02,279 --> 00:05:05,440 Speaker 3: going to fill it. So in that sense, it's a 92 00:05:05,440 --> 00:05:09,599 Speaker 3: prudent move to move, you know, sort of moss ball 93 00:05:09,720 --> 00:05:12,120 Speaker 3: these ideas, So you're keeping the option open, but at 94 00:05:12,120 --> 00:05:16,599 Speaker 3: the same time you're not risking that massive cash strain. 95 00:05:16,960 --> 00:05:19,359 Speaker 1: So the news on Intel making this custom chip for 96 00:05:19,400 --> 00:05:22,800 Speaker 1: AWS for use in AI computing, that was just one 97 00:05:22,880 --> 00:05:26,640 Speaker 1: story involving Intel today. Bring us up to speed on 98 00:05:26,720 --> 00:05:30,960 Speaker 1: where this company is with respect to building chips for 99 00:05:31,120 --> 00:05:32,880 Speaker 1: the Pentagon for the US military. 100 00:05:33,520 --> 00:05:35,800 Speaker 3: Yeah, I mean that was another piece of positive news. 101 00:05:35,920 --> 00:05:38,720 Speaker 3: There's some money being set aside for what's called the 102 00:05:39,200 --> 00:05:43,440 Speaker 3: Trusted Foundry type operation, where the US government is reserving 103 00:05:44,320 --> 00:05:47,960 Speaker 3: capacity in a factory or multiple factories that it will 104 00:05:48,000 --> 00:05:50,919 Speaker 3: be for the exclusive uses of military type chips. 105 00:05:50,960 --> 00:05:53,200 Speaker 4: Obviously there's a national security thing. There. 106 00:05:53,480 --> 00:05:55,960 Speaker 3: There a lot of debates backwards and forwards about whether 107 00:05:56,040 --> 00:05:58,000 Speaker 3: this should be Intel, whether it should be a number 108 00:05:58,000 --> 00:06:01,840 Speaker 3: of companies, or we got today was affirmation of news 109 00:06:01,839 --> 00:06:04,200 Speaker 3: that we actually broke last week that it didn't it 110 00:06:04,240 --> 00:06:07,080 Speaker 3: will indeed be Intel and now the major beneficiary of that. 111 00:06:07,160 --> 00:06:09,440 Speaker 4: So that's a big help. Ian. 112 00:06:09,520 --> 00:06:12,000 Speaker 2: I want to ask you kind of a lofty question here. 113 00:06:12,520 --> 00:06:15,400 Speaker 2: Just just after reading Chip War by Chris Miller. Both 114 00:06:15,440 --> 00:06:17,120 Speaker 2: Doug and I read the book and loved it and 115 00:06:17,800 --> 00:06:22,000 Speaker 2: you know, I think you know this move by Intel 116 00:06:22,200 --> 00:06:25,680 Speaker 2: into trying to bring home production and to stand on 117 00:06:25,720 --> 00:06:28,800 Speaker 2: its own on the global stage as a sort of 118 00:06:28,839 --> 00:06:32,440 Speaker 2: barometer for American manufacturing. Is there a lot at stake 119 00:06:32,480 --> 00:06:35,040 Speaker 2: here or is this just one company? And you know, 120 00:06:35,800 --> 00:06:36,880 Speaker 2: every company is different. 121 00:06:38,240 --> 00:06:42,000 Speaker 3: I would separate the two that the issue for Intel 122 00:06:42,000 --> 00:06:44,560 Speaker 3: as a company is we all think of Intel as 123 00:06:44,600 --> 00:06:48,760 Speaker 3: this omnipotent force in the chip industry and in technology, 124 00:06:50,120 --> 00:06:52,400 Speaker 3: and it's trying to get back to that. If it 125 00:06:52,480 --> 00:06:55,720 Speaker 3: was just an ordinary company that kind of did okay 126 00:06:55,760 --> 00:06:58,600 Speaker 3: in some years and and others, we'd have different standards. 127 00:06:59,000 --> 00:07:01,320 Speaker 3: Intel has held to the standards, said it will get 128 00:07:01,320 --> 00:07:04,560 Speaker 3: back to them, and that is clearly harder than anybody 129 00:07:04,640 --> 00:07:06,840 Speaker 3: had imagined. So that's why people are looking at them. 130 00:07:06,880 --> 00:07:10,360 Speaker 3: In terms of bringing manufacturing to this country. Intel would 131 00:07:10,400 --> 00:07:12,440 Speaker 3: be the champion if you wanted a local company to 132 00:07:12,440 --> 00:07:16,640 Speaker 3: do it. But guess what, TSMC, Samsung they're building here too, 133 00:07:17,120 --> 00:07:20,000 Speaker 3: and they're not having anything like the amount of problems, 134 00:07:20,040 --> 00:07:23,320 Speaker 3: if indeed no problems at all in TSMC's case. So 135 00:07:23,400 --> 00:07:27,160 Speaker 3: if you want high in manufacturing here, of course Intel 136 00:07:27,640 --> 00:07:29,680 Speaker 3: should be the first look. But that's very much a 137 00:07:29,720 --> 00:07:32,080 Speaker 3: backward look right, Intel has to prove itself again. 138 00:07:33,480 --> 00:07:36,520 Speaker 2: Yeah, we've seen power in this industry shift a lot 139 00:07:36,560 --> 00:07:39,640 Speaker 2: over the past sixty years, and it seems like it 140 00:07:39,640 --> 00:07:42,840 Speaker 2: has definitely shifted. Listening to Jensen Wong talk about TSMC 141 00:07:42,960 --> 00:07:46,000 Speaker 2: the other day was unbelievable the praise that he was 142 00:07:46,040 --> 00:07:51,160 Speaker 2: giving to their manufacturing processes. All right, Ian, thank you 143 00:07:51,160 --> 00:07:53,200 Speaker 2: so much for joining us here in king Bloomberg News 144 00:07:53,320 --> 00:08:04,800 Speaker 2: US Semiconductor Reportal Michael Dyer, Investment Director Equities at Multi 145 00:08:04,840 --> 00:08:08,440 Speaker 2: Asset at MNG Investments. Michael, thanks very much for coming 146 00:08:08,480 --> 00:08:11,520 Speaker 2: into our studios here in Hong Kong. You wonder a 147 00:08:11,560 --> 00:08:15,360 Speaker 2: little about a cautious FED and whether or not they 148 00:08:15,880 --> 00:08:18,040 Speaker 2: send a little bit of a message to investors. You 149 00:08:18,120 --> 00:08:20,840 Speaker 2: might worry investors with a fifty basis point gut. I 150 00:08:20,840 --> 00:08:23,200 Speaker 2: know they've tried to prepare the ground a little bit, 151 00:08:23,720 --> 00:08:26,400 Speaker 2: but your thoughts on whether fifty might speak a few people. 152 00:08:27,040 --> 00:08:30,080 Speaker 5: I think, coming into a week ago that was the 153 00:08:30,160 --> 00:08:33,360 Speaker 5: case that equity markets had certainly not started to think 154 00:08:33,400 --> 00:08:37,480 Speaker 5: about a fifty basis points cut. Seeing futures markets rally 155 00:08:37,480 --> 00:08:39,400 Speaker 5: to where they are now, maybe it's in their sphere 156 00:08:39,400 --> 00:08:42,199 Speaker 5: of influence, but the bomb market and the equity markets 157 00:08:42,200 --> 00:08:44,360 Speaker 5: certainly seemed to be set up for different courses of 158 00:08:44,400 --> 00:08:46,920 Speaker 5: policy from here. The bomb market very much saying that 159 00:08:46,960 --> 00:08:48,800 Speaker 5: the FED is behind the curve, and the equity market 160 00:08:48,800 --> 00:08:51,880 Speaker 5: ready to sort of enjoy increasing gains. So let's feel 161 00:08:51,880 --> 00:08:54,440 Speaker 5: like there's some unresolved issues as we move through this week. 162 00:08:54,880 --> 00:08:57,800 Speaker 1: So in terms of the overall view on the American economy, 163 00:08:57,800 --> 00:08:59,920 Speaker 1: do you think the FED has been able to engineer 164 00:09:00,160 --> 00:09:00,800 Speaker 1: soft landing. 165 00:09:02,480 --> 00:09:04,440 Speaker 5: I think it's too soon to say. We try and 166 00:09:04,440 --> 00:09:07,880 Speaker 5: avoid making too much of a forecast in going into 167 00:09:07,880 --> 00:09:12,400 Speaker 5: twenty twenty five. Instead, we're very much valuation lead investors. 168 00:09:12,400 --> 00:09:14,800 Speaker 5: So looking back over the past few months, you know, 169 00:09:14,920 --> 00:09:17,600 Speaker 5: April was really the time to put the trade on 170 00:09:17,720 --> 00:09:19,760 Speaker 5: to look at the two year and the five year 171 00:09:19,800 --> 00:09:21,840 Speaker 5: part of the curve. And now we're more interested in 172 00:09:21,840 --> 00:09:23,920 Speaker 5: the long end of the curve because the threat does 173 00:09:23,920 --> 00:09:26,280 Speaker 5: seem to be that, you know, if this hire for 174 00:09:26,360 --> 00:09:29,199 Speaker 5: longer has played through there are these variable lags, then 175 00:09:29,520 --> 00:09:31,560 Speaker 5: we do get a bit of a slow down there, 176 00:09:31,600 --> 00:09:34,160 Speaker 5: and the longer end of the curve isn't pricing that. 177 00:09:34,240 --> 00:09:36,160 Speaker 5: So we don't have a forecast, but I would say 178 00:09:36,160 --> 00:09:39,360 Speaker 5: we're set up for a more cautious look into the 179 00:09:39,360 --> 00:09:40,920 Speaker 5: rest of twenty four and into twenty five. 180 00:09:41,920 --> 00:09:45,440 Speaker 2: One of the interesting developments of late with this idea 181 00:09:45,440 --> 00:09:47,760 Speaker 2: of sliding from twenty five to fifty basis points, is 182 00:09:47,800 --> 00:09:51,280 Speaker 2: that you've had breadth in the market advance, and you've 183 00:09:51,320 --> 00:09:54,320 Speaker 2: seen quite a pretty strong rally here of late. 184 00:09:54,800 --> 00:09:55,240 Speaker 4: A lot of. 185 00:09:55,200 --> 00:09:58,720 Speaker 2: Companies that you know are not among the top tech company, 186 00:09:58,760 --> 00:10:01,840 Speaker 2: not among the the twenty biggest companies in the world, 187 00:10:01,840 --> 00:10:04,280 Speaker 2: that have benefited so much of le Do you buy 188 00:10:04,320 --> 00:10:06,240 Speaker 2: that line that this is going to be much better 189 00:10:06,280 --> 00:10:08,040 Speaker 2: for them? I think the thinking is it will lower 190 00:10:08,080 --> 00:10:10,679 Speaker 2: their costs and runnings haven't been then great without it. 191 00:10:11,880 --> 00:10:14,120 Speaker 5: I think the sentiment coming into this has really been 192 00:10:14,160 --> 00:10:18,040 Speaker 5: the equity markets have shown a willingness to take on 193 00:10:18,200 --> 00:10:22,040 Speaker 5: risk and bounce back, whereas the fundamental scene they may 194 00:10:22,080 --> 00:10:25,760 Speaker 5: be more challenged. So I would say that we are 195 00:10:26,080 --> 00:10:30,280 Speaker 5: more cautious on equities. Within that we only really talk 196 00:10:30,320 --> 00:10:34,079 Speaker 5: about the headline industries here. We're big pitch and macro, 197 00:10:34,320 --> 00:10:37,480 Speaker 5: so we're looking at that as being preferring the rest 198 00:10:37,480 --> 00:10:39,280 Speaker 5: of the world to the US. 199 00:10:40,120 --> 00:10:41,840 Speaker 1: So I'd like to get your view on China. We 200 00:10:41,880 --> 00:10:47,199 Speaker 1: had the monthly activity data recently both industrial production, retail 201 00:10:47,280 --> 00:10:50,000 Speaker 1: sales a little disappointing. I mean there was positivity there. 202 00:10:50,760 --> 00:10:53,040 Speaker 1: The latest readings that we have seen when it comes 203 00:10:53,120 --> 00:10:56,840 Speaker 1: to government figures on inflation show this economy is still 204 00:10:56,880 --> 00:11:01,720 Speaker 1: struggling with deflation. Is is China a market that you 205 00:11:01,760 --> 00:11:03,960 Speaker 1: want to dabble in right now or the risks simply 206 00:11:03,960 --> 00:11:04,439 Speaker 1: too great. 207 00:11:05,800 --> 00:11:07,960 Speaker 5: China's been a market that we've been active in for 208 00:11:08,000 --> 00:11:09,760 Speaker 5: the past couple of years, and it's really been one 209 00:11:09,760 --> 00:11:14,120 Speaker 5: where being a traaring has been fruitful. So being willing 210 00:11:14,160 --> 00:11:16,679 Speaker 5: to step in when sentiment is as low and valuations 211 00:11:16,679 --> 00:11:19,560 Speaker 5: as cheap, such as you know late January, has been rewarded. 212 00:11:19,800 --> 00:11:22,240 Speaker 5: And perhaps taking profits in the sort of April to 213 00:11:22,280 --> 00:11:24,920 Speaker 5: May space when things have felt better has been the 214 00:11:25,240 --> 00:11:27,200 Speaker 5: way to trade it. And the reason for that really 215 00:11:27,280 --> 00:11:29,400 Speaker 5: is that I think every client that we speak to 216 00:11:29,679 --> 00:11:31,640 Speaker 5: wants to know if China's turned the corner. So while 217 00:11:31,640 --> 00:11:37,160 Speaker 5: everyone's waiting for the turnaround story the data to look better, 218 00:11:37,480 --> 00:11:41,240 Speaker 5: there's these tactical opportunities. A sentiment really fluctuates around a lot, 219 00:11:41,400 --> 00:11:43,400 Speaker 5: so the data over the weekend and the day trail 220 00:11:43,480 --> 00:11:46,319 Speaker 5: yesterday is further confirmation that, you know, China does have 221 00:11:46,360 --> 00:11:49,880 Speaker 5: some material headwinds. You know, these deflationary challenges don't go 222 00:11:49,880 --> 00:11:54,440 Speaker 5: away overnight. The policy response has been somewhat underwhelming to 223 00:11:54,520 --> 00:11:57,920 Speaker 5: international investors. But within that, you know that the markets, 224 00:11:58,000 --> 00:12:00,840 Speaker 5: you know, Hong Kong particularly, still trade on a single 225 00:12:00,840 --> 00:12:03,120 Speaker 5: digit multiple, and that's attractive. Gives you some of the 226 00:12:03,200 --> 00:12:05,600 Speaker 5: level of margin of safety going in there. If you 227 00:12:05,600 --> 00:12:10,160 Speaker 5: can pair that up with finding the guts or the 228 00:12:10,200 --> 00:12:13,439 Speaker 5: intestinal fortitude to make those trades when it feels difficult. 229 00:12:14,000 --> 00:12:18,840 Speaker 2: Yeah, yeah, it's valuation helps a lot. So you're not 230 00:12:18,960 --> 00:12:21,320 Speaker 2: really that fond of equities, although you know you're sort 231 00:12:21,320 --> 00:12:24,160 Speaker 2: of picking and choosing in China, it seems like you're 232 00:12:24,559 --> 00:12:26,520 Speaker 2: a little bit more interested in the bond market at 233 00:12:26,520 --> 00:12:29,760 Speaker 2: the moment. So if we look more broadly at fixed income, 234 00:12:30,400 --> 00:12:34,840 Speaker 2: is it sovereigns, is it credit? And inside credit? I mean, 235 00:12:34,920 --> 00:12:37,520 Speaker 2: would you be you know, looking at high yield or 236 00:12:37,559 --> 00:12:38,480 Speaker 2: investment grade? 237 00:12:39,160 --> 00:12:41,160 Speaker 5: For us, it's really been the case the last few 238 00:12:41,240 --> 00:12:44,000 Speaker 5: years of where the big swings in emotion and markets 239 00:12:44,040 --> 00:12:45,800 Speaker 5: have really come in the bond market. You know, like 240 00:12:45,880 --> 00:12:47,920 Speaker 5: we've seen people run from one side to the other 241 00:12:48,040 --> 00:12:51,520 Speaker 5: several times and you get these points such as April, 242 00:12:51,520 --> 00:12:54,040 Speaker 5: as I mentioned, after the CPI came in hot in 243 00:12:54,080 --> 00:12:57,000 Speaker 5: the US where everyone was back to thinking about twenty 244 00:12:57,120 --> 00:12:59,640 Speaker 5: twenty two again and maybe race even to go higher. 245 00:13:00,040 --> 00:13:01,920 Speaker 5: So that's where we feel you get good odds, good 246 00:13:01,920 --> 00:13:05,360 Speaker 5: asymmetry in entering these positions. Today is one of those 247 00:13:05,400 --> 00:13:08,400 Speaker 5: markets where everyone's fixated on what's going to happen on Wednesday. 248 00:13:08,400 --> 00:13:10,760 Speaker 5: With the FED, it's too close to cool. I'm not 249 00:13:10,760 --> 00:13:13,920 Speaker 5: even sure that the FMC members quite know what the 250 00:13:13,960 --> 00:13:15,880 Speaker 5: results going to be even now, maybe not until they 251 00:13:16,000 --> 00:13:19,120 Speaker 5: drive to the meeting. So placing your chips on that 252 00:13:19,200 --> 00:13:23,559 Speaker 5: right now as a small point feels like it's destined 253 00:13:23,600 --> 00:13:25,040 Speaker 5: to try and be a hero with that one, and 254 00:13:25,080 --> 00:13:28,080 Speaker 5: you know it's probably not good odds. So government bonds 255 00:13:28,120 --> 00:13:30,120 Speaker 5: have come a long way, so we feel there's more 256 00:13:30,160 --> 00:13:32,800 Speaker 5: to do there, but it's more in the long end 257 00:13:32,840 --> 00:13:34,840 Speaker 5: of the curve. Sorry, just on your credit point, we 258 00:13:34,880 --> 00:13:36,600 Speaker 5: don't have a lot of risk in credit right now. 259 00:13:37,000 --> 00:13:39,360 Speaker 5: Years look attractive, but spreads are very tight. 260 00:13:40,600 --> 00:13:42,480 Speaker 1: Maybe we can talk a little bit about Japan. The 261 00:13:42,920 --> 00:13:46,400 Speaker 1: dynamics between the FED and the BOJ created an enormous 262 00:13:46,440 --> 00:13:49,880 Speaker 1: amount of volatility in the end within the last several weeks, 263 00:13:49,920 --> 00:13:52,240 Speaker 1: and right now, I mean we're looking at a one 264 00:13:52,360 --> 00:13:55,760 Speaker 1: forty handle, which seems somewhat hard to believe. The velocity 265 00:13:55,800 --> 00:13:59,319 Speaker 1: of change, how this is accelerated has just been kind 266 00:13:59,360 --> 00:14:02,400 Speaker 1: of amazing to watch. What is your view first on 267 00:14:02,480 --> 00:14:05,200 Speaker 1: the currency? I mean, are we to kind of accept 268 00:14:05,600 --> 00:14:07,880 Speaker 1: yen volatility for a while longer? 269 00:14:08,960 --> 00:14:09,200 Speaker 4: Yeah? 270 00:14:09,200 --> 00:14:11,160 Speaker 5: I mean August was fun, wasn't it. I mean we 271 00:14:11,360 --> 00:14:14,760 Speaker 5: saw quite the moves in markets, and they certainly as 272 00:14:14,760 --> 00:14:18,000 Speaker 5: a tactical multi asset investor, that was interesting for us. 273 00:14:18,120 --> 00:14:20,080 Speaker 5: I think what happened there was there was a lot 274 00:14:20,120 --> 00:14:23,720 Speaker 5: of sentiment build up and then people got caught off side. 275 00:14:24,120 --> 00:14:26,960 Speaker 5: The end has continued to power higher, and that really 276 00:14:27,040 --> 00:14:29,360 Speaker 5: does look like it is rates driven. So as those 277 00:14:29,400 --> 00:14:32,720 Speaker 5: thread futures have moved in towards fifty basis points, yend strengthened. 278 00:14:33,080 --> 00:14:35,440 Speaker 5: So if we do get fifty basis points on Wednesday, 279 00:14:35,480 --> 00:14:37,080 Speaker 5: that sort of moves past and maybe we see it 280 00:14:37,120 --> 00:14:40,800 Speaker 5: flattening out of that yen volatility a little bit. On 281 00:14:40,880 --> 00:14:43,960 Speaker 5: the twenty thirty of view, the yen is still competitive 282 00:14:44,080 --> 00:14:47,160 Speaker 5: versus it has been. The Japanese economy is still attempting 283 00:14:47,240 --> 00:14:50,000 Speaker 5: to reflate, So I think on a fundamental view, over 284 00:14:50,480 --> 00:14:52,720 Speaker 5: five year period. You can still be positive on the 285 00:14:52,840 --> 00:14:54,760 Speaker 5: en but it does feel like those interest rate moves 286 00:14:54,800 --> 00:14:58,040 Speaker 5: are more or less in the price for what is expected. 287 00:14:58,640 --> 00:15:01,400 Speaker 2: So if the FED does get moving here and has 288 00:15:01,400 --> 00:15:03,640 Speaker 2: a little flourish with it, can the dollar become a 289 00:15:03,720 --> 00:15:05,000 Speaker 2: kind of kerry currency. 290 00:15:05,920 --> 00:15:08,280 Speaker 5: Ah, that's a good question. I mean, I think there's 291 00:15:08,280 --> 00:15:11,000 Speaker 5: a lot of stays strong for the time being. I 292 00:15:11,000 --> 00:15:13,400 Speaker 5: think there's too much of the reserve currency nature of it, 293 00:15:13,480 --> 00:15:15,160 Speaker 5: but we have seen it weaken off a little bit 294 00:15:15,960 --> 00:15:18,440 Speaker 5: from here that the yeend actually still looks like a 295 00:15:18,680 --> 00:15:21,280 Speaker 5: attractive funding currency is part of a diversified basket, so 296 00:15:21,280 --> 00:15:23,560 Speaker 5: I wouldn't necessarily rule that off the table despite the 297 00:15:23,960 --> 00:15:25,600 Speaker 5: spot appreciation that we've seen. 298 00:15:25,920 --> 00:15:29,240 Speaker 1: Best opportunity very quickly, Michael, that you are seeing across 299 00:15:29,320 --> 00:15:30,800 Speaker 1: the APAC right now is what. 300 00:15:32,280 --> 00:15:36,120 Speaker 5: In APAC. I think China is something we're looking at. 301 00:15:36,120 --> 00:15:38,320 Speaker 5: We've taken a little bit of capital away from that, 302 00:15:38,360 --> 00:15:40,680 Speaker 5: but we're seeing how the sentiment evolves. And again, if 303 00:15:40,720 --> 00:15:42,960 Speaker 5: we get a better entry point where things feel depressed, 304 00:15:42,960 --> 00:15:45,600 Speaker 5: I think we could see us adding to that and 305 00:15:45,680 --> 00:15:48,000 Speaker 5: Japan on the long run. You know, the structural coase 306 00:15:48,120 --> 00:15:50,320 Speaker 5: is still very much intact, but we've seen maybe a 307 00:15:50,320 --> 00:15:52,480 Speaker 5: slightly better entry point over the past few weeks. 308 00:15:52,800 --> 00:15:54,960 Speaker 2: All right, Michael, thank you very much for coming into 309 00:15:55,040 --> 00:15:57,640 Speaker 2: our studios here, sitting down with us at the table. 310 00:15:57,680 --> 00:16:03,200 Speaker 2: Michael Dyer, Investment Director, Equity and multi Asset at MG Investments. 311 00:16:10,080 --> 00:16:12,520 Speaker 1: So let's take a closer look at the attempt on 312 00:16:12,960 --> 00:16:16,560 Speaker 1: Donald Trump's life and other assassination attempt. Joining us now, 313 00:16:16,600 --> 00:16:20,440 Speaker 1: Bill Ferries, Bloomberg Senior Editor. He's with us from our 314 00:16:20,520 --> 00:16:24,080 Speaker 1: studios in Singapore. Does it surprise you, Bill that the 315 00:16:24,080 --> 00:16:27,200 Speaker 1: former president is trying to capitalize on this event? 316 00:16:29,080 --> 00:16:32,520 Speaker 6: No, not at all. Listen, after that first assassination attempt, 317 00:16:32,520 --> 00:16:34,720 Speaker 6: and it's hard to believe we're talking about too now, 318 00:16:34,800 --> 00:16:39,480 Speaker 6: but after that first one, you saw the president get 319 00:16:39,480 --> 00:16:42,600 Speaker 6: a bump in the polls. There was there was a 320 00:16:42,680 --> 00:16:45,800 Speaker 6: lot of people had, you know, sympathy, and what came 321 00:16:45,840 --> 00:16:49,560 Speaker 6: at a time when when Joe Biden's campaign was basically imploding, 322 00:16:50,880 --> 00:16:54,400 Speaker 6: and you know, the past week or so leading into 323 00:16:54,560 --> 00:16:57,720 Speaker 6: this second assassination attempt had been a really rough one 324 00:16:57,760 --> 00:17:00,360 Speaker 6: for the former president. It was coming off off that 325 00:17:00,560 --> 00:17:05,040 Speaker 6: debate with Kamala Harris Tuesday last week that didn't go 326 00:17:05,200 --> 00:17:08,320 Speaker 6: particularly well for the former president and a lot of 327 00:17:08,320 --> 00:17:12,879 Speaker 6: the political discussion since then had been focused on whether 328 00:17:13,359 --> 00:17:17,840 Speaker 6: immigrants in Ohio were eating people's pets or not, not 329 00:17:18,040 --> 00:17:22,960 Speaker 6: really a winning issue for the Republicans. So this latest 330 00:17:23,000 --> 00:17:27,639 Speaker 6: news out of Florida is essentially a chance for the 331 00:17:27,640 --> 00:17:31,240 Speaker 6: Trump campaign to kind of turn the page, start new 332 00:17:31,320 --> 00:17:34,080 Speaker 6: with seven weeks to go, literally seven weeks from today, 333 00:17:34,600 --> 00:17:37,280 Speaker 6: and try to focus on issues that are a little 334 00:17:37,280 --> 00:17:39,679 Speaker 6: more important to voters. And they're going to do that 335 00:17:39,760 --> 00:17:44,080 Speaker 6: by attacking the Harris campaign, and I would assume by 336 00:17:44,200 --> 00:17:46,240 Speaker 6: starting to focus on things like the economy. 337 00:17:47,480 --> 00:17:51,040 Speaker 2: Assassination attempts are not really all that common. It's a 338 00:17:51,080 --> 00:17:54,040 Speaker 2: little surprising we've had a couple here just of late. 339 00:17:54,440 --> 00:17:56,040 Speaker 2: Prior to that, it seemed like we've gone through a 340 00:17:56,080 --> 00:17:58,920 Speaker 2: fairly long period. I remember thinking just on a walk 341 00:17:59,000 --> 00:18:02,560 Speaker 2: recently that you know that we we'd move beyond that 342 00:18:02,680 --> 00:18:06,639 Speaker 2: in the world, obviously more so in the United States 343 00:18:06,680 --> 00:18:09,920 Speaker 2: because you have had assassinations elsewhere, But kind of belaboring 344 00:18:09,920 --> 00:18:12,320 Speaker 2: the point, what's changed. Why are we seeing this now? Bill? 345 00:18:13,320 --> 00:18:16,640 Speaker 6: You know, I think it's there's been this process over 346 00:18:16,920 --> 00:18:20,040 Speaker 6: over maybe the last decade where the political rhetoric has 347 00:18:20,040 --> 00:18:25,680 Speaker 6: become more heated. People's views of politics have have become 348 00:18:26,040 --> 00:18:26,720 Speaker 6: more hardened. 349 00:18:27,280 --> 00:18:27,399 Speaker 4: Uh. 350 00:18:27,440 --> 00:18:29,280 Speaker 6: You know, I think you see that in a lot 351 00:18:29,320 --> 00:18:32,080 Speaker 6: of you know, even families, see that within within their 352 00:18:32,119 --> 00:18:36,040 Speaker 6: own family, but within communities. Between red states and blue states, 353 00:18:36,080 --> 00:18:38,359 Speaker 6: you know, people's views are are a lot more fixed, 354 00:18:38,400 --> 00:18:41,960 Speaker 6: and they're a lot more strident. Uh. There doesn't seem 355 00:18:42,000 --> 00:18:44,840 Speaker 6: to be quite as much. Uh, there's not quite as 356 00:18:44,920 --> 00:18:48,119 Speaker 6: much vote. There aren't quite as many voters who you know, 357 00:18:48,280 --> 00:18:51,800 Speaker 6: sometimes are with Democrats and sometimes with Republicans. People are 358 00:18:51,840 --> 00:18:54,800 Speaker 6: are sticking to their sides now, so uh. And I 359 00:18:54,800 --> 00:18:58,360 Speaker 6: think the online you know, the Twitter wars, the social 360 00:18:58,400 --> 00:19:02,360 Speaker 6: media wars, feeds into some of that. So, you know, 361 00:19:02,400 --> 00:19:05,040 Speaker 6: you often have people who get worked up about it 362 00:19:05,119 --> 00:19:10,240 Speaker 6: and go, you know, much too far with their political 363 00:19:10,520 --> 00:19:11,480 Speaker 6: political actions. 364 00:19:11,840 --> 00:19:14,879 Speaker 1: With yesterday's event, I was struck by the fact that, Okay, 365 00:19:14,920 --> 00:19:17,399 Speaker 1: it was mid July that the first attempt was made, 366 00:19:17,480 --> 00:19:20,800 Speaker 1: Yesterday made the second. It was nineteen seventy five when 367 00:19:21,240 --> 00:19:25,880 Speaker 1: Gerald Ford survived two assassination attempts in California. Brian probably 368 00:19:25,920 --> 00:19:29,040 Speaker 1: remembers this. I think he was in southern California at 369 00:19:29,040 --> 00:19:32,080 Speaker 1: the time. At that time, I don't think that there 370 00:19:32,160 --> 00:19:34,680 Speaker 1: was much in the way of criticism on the Secret Service. 371 00:19:35,200 --> 00:19:39,000 Speaker 1: Different story these days, particularly in the incident that happened 372 00:19:39,000 --> 00:19:42,960 Speaker 1: in July and Butler, Pennsylvania. How do you feel the 373 00:19:43,040 --> 00:19:45,359 Speaker 1: Secret Service has been able to deal with this? What 374 00:19:45,480 --> 00:19:48,360 Speaker 1: do we know about what we have heard from from 375 00:19:48,480 --> 00:19:51,200 Speaker 1: Secret Service authorities? Bill Well? 376 00:19:51,240 --> 00:19:54,600 Speaker 6: According to the Secret Service, they did ramp up security 377 00:19:54,640 --> 00:19:58,520 Speaker 6: for the former president in the aftermath of that first attempt, 378 00:19:58,600 --> 00:20:01,639 Speaker 6: where they were widely criticiz Eyes for, you know, leaving 379 00:20:01,680 --> 00:20:04,800 Speaker 6: the roof of that building with a direct line of 380 00:20:04,880 --> 00:20:09,480 Speaker 6: sight of the stage unprotected. This time, you know, the 381 00:20:09,520 --> 00:20:12,440 Speaker 6: initial reports are that, you know, the Secret Service agent 382 00:20:12,480 --> 00:20:15,359 Speaker 6: who was one hole ahead of Donald Trump on the 383 00:20:15,359 --> 00:20:19,280 Speaker 6: golf course did a great job spotting a rifle coming 384 00:20:19,280 --> 00:20:22,800 Speaker 6: through the fence and directing fire that way may have 385 00:20:22,920 --> 00:20:26,560 Speaker 6: prevented a tragedy, but there's still going to be some 386 00:20:26,680 --> 00:20:29,320 Speaker 6: very hard questions about how the gunman was able to 387 00:20:29,400 --> 00:20:33,479 Speaker 6: apparently camp out on that fence line for about twelve 388 00:20:33,480 --> 00:20:38,119 Speaker 6: hours ahead of time with an AK forty seven type 389 00:20:38,240 --> 00:20:41,480 Speaker 6: rifle and not be detected. We're learning now The New 390 00:20:41,560 --> 00:20:44,160 Speaker 6: York Times is just reporting that the Secret Service says 391 00:20:44,400 --> 00:20:47,600 Speaker 6: it didn't scout out the perimeter of the golf course 392 00:20:47,680 --> 00:20:51,680 Speaker 6: before Trump went out to play. There's I think going 393 00:20:51,720 --> 00:20:54,639 Speaker 6: to be almost inevitably a focus on whether the Secret 394 00:20:54,720 --> 00:20:58,600 Speaker 6: Service needs some more financial resources, whether they need more 395 00:20:58,640 --> 00:21:01,840 Speaker 6: agents out there, and and I wouldn't be surprised if 396 00:21:02,119 --> 00:21:06,520 Speaker 6: the security perimeter around both Donald Trump and Kamala Harris 397 00:21:06,680 --> 00:21:08,040 Speaker 6: gets built up even more. 398 00:21:08,640 --> 00:21:11,240 Speaker 1: Bill, thank you for making time for us. I'm sure 399 00:21:11,240 --> 00:21:12,920 Speaker 1: you've got a lot on your plate there at the 400 00:21:12,960 --> 00:21:17,760 Speaker 1: Bloomberg News offices in Singapore. Bill Ferries, Bloomberg Senior Editor, 401 00:21:18,160 --> 00:21:21,160 Speaker 1: as we try to get the latest on this assassination 402 00:21:21,240 --> 00:21:23,720 Speaker 1: attempt that he occurred over the weekend here in the US. 403 00:21:23,800 --> 00:21:27,720 Speaker 1: That would be US Sunday on a golf course very 404 00:21:27,760 --> 00:21:32,840 Speaker 1: near by Donald Trump's marl Lago property in southern Florida. 405 00:21:35,840 --> 00:21:39,240 Speaker 2: This is the Bloomberg Daybreak Asia podcast, bringing to the 406 00:21:39,320 --> 00:21:42,800 Speaker 2: stories making news and moving markets in the Asia Pacific. 407 00:21:43,040 --> 00:21:46,160 Speaker 2: Visit the Bloomberg Podcast channel on YouTube to get more 408 00:21:46,200 --> 00:21:50,040 Speaker 2: episodes of this and other shows from Bloomberg. Subscribe to 409 00:21:50,040 --> 00:21:53,840 Speaker 2: the podcast on Apple, Spotify, or anywhere else you listen 410 00:21:54,119 --> 00:21:57,359 Speaker 2: and always on Bloomberg Radio, the Bloomberg Terminal, and the 411 00:21:57,359 --> 00:21:58,560 Speaker 2: Bloomberg Business app.