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Speaker 1: Good morning. I'm Brian Curtis.

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Speaker 2: And I'm Doug Krisner. Here are the stories we're following today.

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Speaker 1: Minneapolis Fed President Neil Kashkari saying that there has been

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Speaker 1: positive action on controlling inflation, but he thinks prices are

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Speaker 1: higher than policymakers are prepared to tolerate. Are we done

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Speaker 1: raising rates.

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Speaker 3: I'm not ready to say that we're done in terms

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Speaker 3: of cutting rates.

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Speaker 1: I think we're a long way away from cutting rates

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Speaker 1: because core inflation is.

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Speaker 3: Still around four percent.

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Speaker 4: It's still around twice of what our target is.

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Speaker 1: Beneficials have said that they're carefully assessing incoming data as

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Speaker 1: they craft policy. A report last week showed that inflation

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Speaker 1: continued to moderate in July, and today robust retail sales

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Speaker 1: data showed that US consumers continue to be resilient well.

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Speaker 2: Disappointing economic data from China is leading investment banks around

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Speaker 2: the world to cut their twenty twenty three growth forecast

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Speaker 2: for the country. Right at the top of the list,

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Speaker 2: it's JP Morgan Chase its full year economic growth forecast

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Speaker 2: for China from five percent to four point eight percent.

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Speaker 2: JP Morgan also shaving its GDP estimate for next year

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Speaker 2: now the firm's economists see in increasing drag on the

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Speaker 2: economy from the property sector that shouldn't come as a surprise.

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Speaker 2: JP Morgan also saying that China's moved to stop releasing

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Speaker 2: data on youth unemployment is quote disturbing. At the same time,

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Speaker 2: Barclays lowered its estiment for China's growth by about four

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Speaker 2: tenths of one percent to four and a half percent

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Speaker 2: this year, and Barclays cited faster than expected deterioration in

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Speaker 2: the real estate market Brian.

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Speaker 1: Meantime, Vanguard, Blackrock, and some other firms embracing for even

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Speaker 1: more scrutiny over their investments in China Bloomberg's and Kates

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Speaker 1: as that story.

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Speaker 5: More than two thousand US mutual and exchange traded funds

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Speaker 5: have two hundred and ninety four billion dollars invested across

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Speaker 5: Chinese stocks and bonds, though not all of that money

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Speaker 5: is under scrutiny. On Capital Hill lawmakers launcher probe over

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Speaker 5: investments in Chinese companies deemed to be national security threats,

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Speaker 5: and money managers are prepared for tighter oversight. Plus, the

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Speaker 5: Biden administration has signed an executive order limiting specific investments

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Speaker 5: in China and key technology industries in Washington and Kates

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Speaker 5: Bloomberg Day Break Asia Well.

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Speaker 2: China is said to be buying the most Iranian crude

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Speaker 2: oil in a decade. The story from Bloomberg's Juan Wong

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Speaker 2: in Hong Kong.

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Speaker 6: The world's biggest oil importer, will take about one and

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Speaker 6: a half million barrels a day of crude from Iran

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Speaker 6: this month. That's according to Dalla intelligence firm Kepler. Rise

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Speaker 6: and global prices are making the discount recruit more attractive.

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Speaker 6: Around's two main grades are set to be trading at

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Speaker 6: discounts of more than ten dollars a barrel to Brent,

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Speaker 6: and that's considerably cheaper than Russian varieties. Iran has been

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Speaker 6: ramping up oil exports this year as it becomes more

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Speaker 6: geopolitically assertive. Most of the shipments are heading to China.

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Speaker 6: In Hong Kong, Join Wang Bloomberg.

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Speaker 2: Day brig Asia.

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Speaker 1: China is calling Taiwan's Vice president launching a quote complete

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Speaker 1: troublemaker who brings the risk of a fierce war. China's

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Speaker 1: Taiwan Affairs Office issued a statement yesterday online. These were

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Speaker 1: based on comments from an exclusive interview that we presented

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Speaker 1: from Bloomberg BusinessWeek, China said that Lie's comments on maintaining

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Speaker 1: a peaceful status quote are quote totally a lie. China's

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Speaker 1: Foreign ministry has criticized the US repeatedly for arranging Li's

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Speaker 1: stopovers in the country. It said the visit seriously violates

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Speaker 1: the one China principle. Lai is currently visiting Paraguay, which

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Speaker 1: is one of the thirteen countries that Taiwan counts as

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Speaker 1: a diplomatic partner. Back in the US, shares of VinFast

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Speaker 1: Auto soaring in the Nasdaq trading debut. The Vietnamese ev

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Speaker 1: makers now valued at eighty five billion dollars. That's more

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Speaker 1: than Ford or GM or even Mercedes Benz. The company

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Speaker 1: went through a blank check deal, a spack deal valued

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Speaker 1: at some twenty three billion. We heard from VinFast CEO Leetway.

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Speaker 7: We had been working on the US listing for like

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Speaker 7: two years and we're very happy that we met it.

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Speaker 5: Today.

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Speaker 7: Binfast has become a publicly listed companies in the US.

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Speaker 7: It's not just a it's not a marketing. It's just

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Speaker 7: a milestone that we want to achieve as on path

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Speaker 7: of becoming a global company.

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Speaker 1: Vin Fast merged with Plank Check Company, Black Spade acquisition,

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Speaker 1: and vin Fast plans to begin operations at it's North

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Speaker 1: Carolina factory in twenty twenty five. Well, markets are a

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Speaker 1: little bit confused here, Doug, and you can kind of

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Speaker 1: understand it. The two biggest data points that we saw

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Speaker 1: in the past twenty four hours stronger US retail sales

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Speaker 1: and China's weak numbers. They would seem to be at

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Speaker 1: odds and telling very different stories. And the other thing

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Speaker 1: is that investors are grappling with this dilemma. The consensus

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Speaker 1: at the moment is that earnings are projected higher next

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Speaker 1: year and rates lower. If that's in question, well then

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Speaker 1: the multiples are too high, and you'll see the kind

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Speaker 1: of selling we saw today.

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Speaker 2: That may have been playing out a bit in the

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Speaker 2: treasury market. This sense of division that you described Brian

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Speaker 2: players in the bond market seem to be shortening duration

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Speaker 2: a bit today, So we had to push up in

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Speaker 2: long rates with the tenure rising about two basis points.

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Speaker 2: So remember the kind of inverse relationship between prices and yields,

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Speaker 2: So prices down today, moving more to the short end,

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Speaker 2: prices up and the yield down about a basis point

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Speaker 2: to four ninety five. So I think that's consistent to

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Speaker 2: what you're saying. And let's remember with cash, Kari is

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Speaker 2: kind of alluding to, right, that we're not in a

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Speaker 2: position here to talk about lower interest rates anytime soon.

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Speaker 1: And now it's time for Global news. US President Joe

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Speaker 1: Biden says he will visit Maui soon. At Baxter has

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Speaker 1: Global News from him nine to sixty News from in

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Speaker 1: San Francisco. Ed.

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Speaker 8: Yeah, right, Brian. He's been under fire by people from

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Speaker 8: the island and Republicans on the main line for not

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Speaker 8: being visible enough on securing help during the island's population.

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Speaker 4: Want to be sure we don't disrupt the Ongonger recovery effort.

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Speaker 8: Yeah, he says it has been active and spoken to

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Speaker 8: Governor Josh Green on multiple accounts.

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Speaker 4: Almost five hundred federal personnelment deployed de Maui. Tell communities

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Speaker 4: and survivors get back on their feet. FEMA search and

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Speaker 4: rescue teams are sifting through the ashes in that five

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Speaker 4: mile area.

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Speaker 8: Yeah, he says he and his wife Jill will visit soon.

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Speaker 8: As for the burned out area, Governor Green says there

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Speaker 8: are multiple environmental problems going on there now.

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Speaker 9: There is asbestos in the air down there, and they're

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Speaker 9: heavy metals, and we're getting environmental assessments as rapidly as

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Speaker 9: we can from Department of Health, and EPA is here.

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Speaker 8: And Green says we have an experience in what happened

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Speaker 8: at the nine to eleven sites and have learned from it.

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Speaker 8: Hopefully the death toll now stands at least ninety nine,

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Speaker 8: but surely we'll climb. The state says we'll begin releasing

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Speaker 8: identities of those bodies recovered soon. Georgia indictment against Donald

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Speaker 8: Trump is far more rich, far reaching, and potentially damaging

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Speaker 8: than any of the other three. The most problematic for

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Speaker 8: Trump is the racketeering. The central count in the indictment,

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Speaker 8: now including one hundred and sixty one specific acts in

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Speaker 8: the further ince of a conspiracy. The cab County is

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Speaker 8: just north of Fulton, and former District Attorney Gwen keys

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Speaker 8: Fleming says the use of the Rico statute makes it

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Speaker 8: very severe.

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Speaker 10: The case in Georgia is very unique and distinct from

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Speaker 10: some of the other charges, either in New York or federally,

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Speaker 10: largely because of the inability to obtain an immediate pardon

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Speaker 10: if there is a conviction.

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Speaker 8: And Fleming says the Georgia pardon laws also require completion

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Speaker 8: of a full sentence before a pardon can be granted.

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Speaker 8: As well.

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Speaker 10: The Rico statute at least has a mandatory minimum of

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Speaker 10: five years. Some of the other charges have or Rico

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Speaker 10: has a maximum twenty years. Other charges range from one

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Speaker 10: to ten years. As I recall, so it really these

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Speaker 10: are serious charges.

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Speaker 8: And Fulton County DA Fani Willis has ordered all nineteen

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Speaker 8: defendants to surrender by August twenty fifth, says she wants

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Speaker 8: to try them together within the six months. They're eighteen

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Speaker 8: others charged in Bloomberg's Wendy Benjaminson says she would not

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Speaker 8: be surprised if the plan was to get one of

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Speaker 8: them or more to flip.

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Speaker 3: They are now facing prison time in Georgia State prison,

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Speaker 3: not you know, club fed or anything. And it is

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Speaker 3: the idea is that, yes, that one of them will

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Speaker 3: look at the charges and say do I really want

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Speaker 3: to go to prison for Donald Trump?

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Speaker 8: And Trump says, you'll hold a news conference on Monday.

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Speaker 8: Hong Kong resident departures have climbed to their highest level

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Speaker 8: since COVID. This outflow shows the region as far from

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Speaker 8: regaining its mantle as the business hub and tourist destination

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Speaker 8: in Asia. Global news powered by more than twenty seven

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Speaker 8: hundred journalists and analysts in over one hundred twenty country

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Speaker 8: in San Francisco, I'm at Baxter and this is Bloomberg.

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Speaker 1: This is Bloomberg Daybreak Asia. I'm Bran Curtis in Hong

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Speaker 1: Kong along with Vonnie Quinn in New York, and Aaron

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Speaker 1: Gibbs joins a senior partner and CIO at Main Street

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Speaker 1: Asset Management. Aaron, great to have you with us in

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Speaker 1: our studios there in New York. So you probably heard

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Speaker 1: me mention that consensus here is that earnings will be

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Speaker 1: ratcheted higher next year and rates are projected to be lower.

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Speaker 1: And I said, if that's in question, do you think

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Speaker 1: both of those are in question? Or either? Or if so,

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Speaker 1: which one?

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Speaker 11: Now? I agree with that. I think it's really about

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Speaker 11: the timing, and I think it's what ANALYSTA really doing

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Speaker 11: is pushing everything farther down the road. So originally we've

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Speaker 11: been saying in the first half of the year, and

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Speaker 11: now it's sort of being pushed back to Okay, most

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Speaker 11: of this is going to happen in the second half

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Speaker 11: of the year. So I think the hope is still there,

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Speaker 11: but it's just getting more and more delay. We haven't

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Speaker 11: Wall Street hasn't quite digest that it may not even

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Speaker 11: be until twenty twenty five.

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Speaker 12: Are we suddenly confused again as to what the Fed

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Speaker 12: is going to do next?

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Speaker 11: I think, well, partially because we're also just getting conflicting

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Speaker 11: news within our own no neck on global versus what's

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Speaker 11: happening in the US, and certainly it is quite hard

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Speaker 11: to digest. And I think that's interesting just what's been

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Speaker 11: happening in the marketplace, whether you're looking at what's happening

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Speaker 11: and how people are shifting in treasuries, what's going on

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Speaker 11: in the equity markets. But we haven't seen a real

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Speaker 11: spike in the VIX. Some of the fear gauges, a

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Speaker 11: lot of those are still very stable and at lows.

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Speaker 11: And so even though we've seen these sell offs for

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Speaker 11: the past five days, in a big sell off today,

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Speaker 11: the VIX has been relatively low, and so I think

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Speaker 11: that's sort of indicative of people not really seeing some

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Speaker 11: good signs, seeing some negative signs, and not really ready

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Speaker 11: to completely pull the trigger across the board and be

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Speaker 11: completely pull out of the equity markets within the US.

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Speaker 1: It is interesting to contrast these strong retail sales numbers

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Speaker 1: in the US with the weak numbers overall that we

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Speaker 1: got out of China, and so I'm interested in your

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Speaker 1: thoughts on that. We're also running a piece on the

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Speaker 1: Terminal that talks about how the deflation in China may

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Speaker 1: not be such a bad thing. If it exports deflation,

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Speaker 1: it'll help the central banks in their job absolutely.

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Speaker 11: You know, we know that that can have a big impact,

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Speaker 11: particularly on the commodity side and energy, and certainly, even

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Speaker 11: though we love to t about core x food and energy,

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Speaker 11: that does make a big impact. And so I think

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Speaker 11: that would be very helpful, and that's something that the

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Speaker 11: FED would certainly look at. On the other side, the

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Speaker 11: US consumer and their ability to still be willing to spend.

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Speaker 11: You know, we know that it's at a certain point

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Speaker 11: that is going to have to wear out. You know,

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Speaker 11: we know that cash reserves are going down. We know

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Speaker 11: that just the higher interest rates and just the outlook

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Speaker 11: from corporations has been significantly revised down. We're seeing less

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Speaker 11: m and a activity higher bankruptcies. So we're seeing weakening

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Speaker 11: already within the corporate arena. So while the US consumer

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Speaker 11: still feels very confident that that fear again just not

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Speaker 11: seeing the Vixen index, but the consumers shifting their behavior

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Speaker 11: could follow.

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Speaker 12: Can I just say, you're extraordinarily brave because you have

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Speaker 12: picks that are very short term one to two months,

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Speaker 12: so go us tell Maren sure.

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Speaker 11: So, look, I want to be able to trade this.

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Speaker 11: We have seen a real shift. It's been about a

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Speaker 11: four week shift from those megacap technologies into something that's

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Speaker 11: a little more defensive and let's use it, you know,

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Speaker 11: while it's there. So some of my picks are energy.

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Speaker 11: I think actually today the energy sector was down about

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Speaker 11: two and a half percent. I actually think this is

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Speaker 11: a good place to come in, you know, buy on

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Speaker 11: sort of that negative news because the energy trend overall

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Speaker 11: is still up and very strong. So I think you

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Speaker 11: could get you another few weeks out of that. Another thing,

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Speaker 11: while we're going on the defensive, that has been outperforming

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Speaker 11: just in the past again in the past two weeks,

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Speaker 11: and it's just a new trend is healthcare, particularly managed healthcare,

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Speaker 11: and a high quality company that's just a safe bet

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Speaker 11: to get into. One of my favorites is United Healthcare. Ooh,

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Speaker 11: this is trading so much. It's peroting at about a

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Speaker 11: fifteen percent discount to a lot of its peers.

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Speaker 7: You know, decent.

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Speaker 11: Outlook for twenty twenty four, even better for twenty twenty five.

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Speaker 11: So I think, as long as we're seeing this sort

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Speaker 11: of counter trend, defensive trend, which might continue for again

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Speaker 11: about one to two months, United Healthcare very safe bet

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Speaker 11: very little downside, and already breaking through resistance on the upside.

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Speaker 11: So I think an easy play if you want something

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Speaker 11: to while we're in this sort of I don't know

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Speaker 11: what to do mode.

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Speaker 1: Yeah, you and h was bulletproof last year and everything

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Speaker 1: was stumbling. It had pretty good run and then completely

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Speaker 1: out of favor of the early part of this year.

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Speaker 1: So we know that mean reversion tree do happen. And

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Speaker 1: you're suggesting it'll go back the other direction, it's already started.

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Speaker 1: That give me a mean reversion trade you like with

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Speaker 1: China in mind, you know.

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Speaker 11: I'm not as familiar with China. I've I'm a little

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Speaker 11: more conservative, So I think, you know, it would really

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Speaker 11: have to be looking at across Asia, and I would say,

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Speaker 11: you know, we've seen a little bit of Japan sort

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Speaker 11: of holding that support, and so if we're in that

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Speaker 11: defensive you might be able to get a week or

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Speaker 11: two on the up side, just as we sort of

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Speaker 11: go more risk off.

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