Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Welcome to the Bloomberg day Break Asia podcast. I'm Doug Chrisner.
Speaker 2: On today's episode, we'll break down fourth quarter results from Amazon.
Speaker 2: We'll be talking with Aarun Sunderum, vice president of Equity
Speaker 2: Research at CFRA. Plus a preview of tomorrow's jobs report.
Speaker 2: We'll be talking with Keith Buchanan. He is a partner
Speaker 2: and senior portfolio manager at Globalt Investments. But we begin
Speaker 2: in the Lion City. Joining us now is Mary Nicolas.
Speaker 2: She's Bloomberg M Live strategist, joining from our studios in Singapore.
Speaker 2: I was reading your entry today in the M Live blog,
Speaker 2: and you're talking about how some Chinese e commerce stocks
Speaker 2: are under pressure here because they could be facing an
Speaker 2: additional levy this week. Can you explain what's going on here?
Speaker 1: Sure?
Speaker 3: So, earlier this week, when we had the Chinese tariffs,
Speaker 3: there a report that the US Postal Service was not
Speaker 3: going to accept any packages that was coming from China
Speaker 3: and Hong Kong. That was quickly reversed, but there is
Speaker 3: also reports saying that now these companies are going to
Speaker 3: have to pay an additional thirty percent levy for any
Speaker 3: packages coming into the US, So obviously there's going to
Speaker 3: be some pressure on e commerce. The news on the
Speaker 3: US postal service had already put some pressure on the
Speaker 3: e commerce. That aside, though, we saw Chinese stocks do
Speaker 3: absolutely well on the optimism surrounding AI and robotics, not
Speaker 3: only from deep Seek, but there was this other robotics
Speaker 3: dance actually that broke the Internet, just getting people excited
Speaker 3: about the wave and the future of robotics for China.
Speaker 3: But irrespective, it still puts pressure on a lot of
Speaker 3: the e commerce names and some of the bigger e
Speaker 3: commerce names.
Speaker 2: To what extent is the government in China right now
Speaker 2: involved in supporting the equity market. Is that part of
Speaker 2: the story when you look at the major benchmarks, that
Speaker 2: there is just something underneath the surface where Beijing is
Speaker 2: kind of lifting prices a little bit.
Speaker 3: Well there, I'm sure there's an element of it, because
Speaker 3: there was some sort of longer term plans of involving
Speaker 3: a lot of the mutual of of the pension funds
Speaker 3: and the lifers, et cetera. But I think there is
Speaker 3: this underlying excitement about AI and about tech, and that
Speaker 3: euphoria from deep Zeek is still really resonating among retail
Speaker 3: investors yesterday. The biggest the biggest supporters were robotics, and
Speaker 3: it was much of the much of it was focused
Speaker 3: on a lot of the smaller names. So that's why
Speaker 3: you didn't see huge games in the CSI three hundred
Speaker 3: or in the Shanghai composite, because of the fact that
Speaker 3: a lot of it was going to smaller software companies
Speaker 3: and smaller robotics companies. But I think if we see
Speaker 3: any sort of significant downdrafts in Chinese equities, I think
Speaker 3: you would see a lot of support coming in from
Speaker 3: the government side.
Speaker 2: Have you seen any high frequency data where the Chinese
Speaker 2: consumer is concerned? During the Lunar New Year holiday, do
Speaker 2: we know how well the spending was kind of helping
Speaker 2: to drive the economy.
Speaker 3: Yeah, so there were some reports that arrivals at the
Speaker 3: box office were really really strong. Travel was really strong
Speaker 3: as well, so it showed some sort of upside. But
Speaker 3: if you look underneath the hood and the per capita spending,
Speaker 3: it's still a little bit under what we saw in
Speaker 3: twenty nineteen, and that is still an issue because you
Speaker 3: don't see that there's a complete relaxation or a motivation
Speaker 3: to continue with spending the subsidies, the trade and subsidies
Speaker 3: that the government had provided the people where you can
Speaker 3: trade in some of your electronic goods for newer and
Speaker 3: more updated ones. That also showed some signs of resilience
Speaker 3: as well. So it's moving but very very slowly, and
Speaker 3: theyre's still underlying and underneath the hood, it's still confidence
Speaker 3: isn't as strong as you would expect.
Speaker 2: It's the final trading day of the week where you are,
Speaker 2: and I'm wondering if you look to next week, is
Speaker 2: there anything that we should be paying close attention to
Speaker 2: that may end up driving the market.
Speaker 3: Yeah. I think next week it's going to be about
Speaker 3: retail sales and CPI data out of the US. Today
Speaker 3: we have the labor market report, and that should give
Speaker 3: an indication of, you know, where risk assets are headed,
Speaker 3: because at the end of the day, even you know,
Speaker 3: trade noise aside this, still the drivers from the FED
Speaker 3: is still really strong. So where the Fed is heading
Speaker 3: and how the market perceives the Fed is heading because
Speaker 3: so far right now they're much more conservative than where
Speaker 3: the Fed is thinking. So market is looking for one
Speaker 3: to two rate cuts, where as the FED had told
Speaker 3: US that they were looking for two cuts in twenty
Speaker 3: twenty five, So the labor market report will be one,
Speaker 3: the second one will be CPI and where the direction
Speaker 3: of inflation is going. And then of course retail sales.
Speaker 3: Retail sales will not only be important in terms of
Speaker 3: showing the resilience of the US consumer, but also feed
Speaker 3: into the equity markets, and of course, you know the
Speaker 3: outlooks for a lot of the for equity. More generally,
Speaker 3: you and.
Speaker 2: I have talked a lot in the past about the
Speaker 2: strength of the US dollar, and I'm kind of surprised
Speaker 2: at the strength of the end this week. I mean,
Speaker 2: we're flirting with one fifty one. What's happening with the.
Speaker 3: En Yeah, it's it's had a really good run, and
Speaker 3: largely because we've heard little snippets from BOJ members talking
Speaker 3: about So for example, one of the BOJ members, Tamora,
Speaker 3: yesterday had commented about seeing rates at one percent, and
Speaker 3: he retraced and retraced some of those comments. But at
Speaker 3: the same time, if that's what the BOJ is thinking,
Speaker 3: and they're moving in that direction, and then of course
Speaker 3: you had wage earnings and they were really really strong today.
Speaker 3: Household spending was really strong. That's all pushing the narrative
Speaker 3: towards more rate hikes for the BA, and I think
Speaker 3: that's also increasing expectations from traders that they are coming.
Speaker 3: So if you look at pricing, not necessarily for the
Speaker 3: next meeting in March, but the following one on April
Speaker 3: thirty May, first, you're seeing expectations rise for a hike
Speaker 3: coming then, which was a lot sooner than people had
Speaker 3: projected because projections were more for July.
Speaker 2: Does that necessarily spell trouble for the Japanese equity market?
Speaker 3: Not necessarily, so it does for the big exporters, I
Speaker 3: would say, but we have seen a breakdown in the
Speaker 3: correlation between where the yen is headed and the directionality
Speaker 3: of the en and the equity markets. So I think
Speaker 3: some of the bigger names will suffer. But remember there's
Speaker 3: still a lot of importers within the Japanese equity markets
Speaker 3: who have been struggling as a result of a much
Speaker 3: weaker yen.
Speaker 2: So when you talk to analysts that focus on the
Speaker 2: Japanese equity market, are they highlighting certain industry groups or
Speaker 2: certain areas of the market that represent value right now?
Speaker 2: I mean you were talking about a move to shy
Speaker 2: away from anything that may have exposure to a stronger currency,
Speaker 2: those big multinational exporters. But I'm wondering whether there is
Speaker 2: value in some other pockets of the Japanese equity market.
Speaker 3: So there's a lot of excitement on Japanese financials because
Speaker 3: they're going to be one of the big beneficiaries from
Speaker 3: a rate hike. So financials have been doing well, They've
Speaker 3: actually surprised to the upside. Consumer discretionary have also surprised
Speaker 3: to the upside. That could continue as well, and earnings
Speaker 3: overall has been very much broad based, so there could
Speaker 3: be Probably the main pockets that will outperform are probably financials,
Speaker 3: but at the same time, the others have plenty of
Speaker 3: room to catch up.
Speaker 2: Mary will leave it there, Thank you so much. I
Speaker 2: hope you have a good weekend in Singapore. That is
Speaker 2: Bloomberg m Live strategist Mary Nicola joining us here on
Speaker 2: the Daybreak Asia podcast. Welcome back to the Daybreak Asia
Speaker 2: podcast time Doug Krisner. After the battle, we heard from
Speaker 2: Amazon and the company issued a revenue forecast for the
Speaker 2: current quarter below estimates. For a closer look, I'm joined
Speaker 2: by Arun Sundrum, Vice President of Equity Research at CFRA
Speaker 2: A run Thank you so much for making time to
Speaker 2: chat with us. I understand that you just jumped off
Speaker 2: the earnings called. What did you learn?
Speaker 1: Yeah?
Speaker 4: Yeah, I think one of the big takeaways from the
Speaker 4: earnings call is that this this capex cycle that we
Speaker 4: started to see this past year, that's going to continue
Speaker 4: into US in twenty five. I don't think that's that
Speaker 4: much of a surprise, given that all the big tech
Speaker 4: firms and have announced a pretty sizeable acceleration in capex spending.
Speaker 4: But Amazon did announce that they're expecting probably about one
Speaker 4: hundred and five billion, one hundred and ten billion dollars
Speaker 4: of capex in twenty twenty five. The consensus going into
Speaker 4: the year was eighty five billion, so it's about twenty
Speaker 4: and twenty five percent higher than the street expectation. So
Speaker 4: clearly big tech is still investing in specificly investing in AI,
Speaker 4: and that's that's going to continue.
Speaker 2: What do we know about demand for these services and
Speaker 2: whether or not there's going to be a return on investment?
Speaker 4: Yeah, I mean, I don't think Amazon, as well as
Speaker 4: a lot of analysts investors, are overly worried about the return.
Speaker 4: I say that because one, I mean this past year
Speaker 4: in twenty twenty four, the margins aws have been quite
Speaker 4: attractive despite the fact that they've been ramping up CAPEC
Speaker 4: spending there. And Amazon also has I think a proven
Speaker 4: track record to generating returns on their investment. So I think,
Speaker 4: you know, it'll take time for you know, to fully
Speaker 4: see the full ROI se on these investments. I think
Speaker 4: we'll likely see some headwinds in twenty twenty five, just
Speaker 4: given how much extra CAPEX are spending, but I think
Speaker 4: by twenty twenty six, twenty twenty seven, we should see
Speaker 4: something better returns you know, of the of those investments.
Speaker 2: So how is the market for cloud computing changing right now?
Speaker 2: Is it a lot less competitive and more concentrated? How
Speaker 2: would you evaluate it?
Speaker 4: No, I would say it's it's still very de bandside
Speaker 4: is still very strong, you know. I think all the
Speaker 4: big tech players, the hyper scalers have announced that right now,
Speaker 4: you know, their their demand is exceeding supply. So there's
Speaker 4: supply chain issues throughout the industry and Amazon included. You know,
Speaker 4: I think it's going to take probably at least half
Speaker 4: a year to a full year for supply to catch up.
Speaker 4: With demand. That's why these companies are investing so heavily.
Speaker 4: But there's clearly a lot of demand for AI. I
Speaker 4: think the recent news with deep sea coming out of China,
Speaker 4: there's been a lot of jitter in the market regarding that.
Speaker 4: In Amazon's perspective, this is just going to accelerate the
Speaker 4: adoption of AI. If AI is cheaper, more companies are
Speaker 4: going to adopt AI, and more companies probably gonna spend
Speaker 4: more on AI, and Amazon, being the largest cloud provider,
Speaker 4: should be a direct beneficiarya of that. So their a
Speaker 4: w's business is very large. Today Amazon is the leading
Speaker 4: leading market share in that of that business, but that's
Speaker 4: likely going to going to see continued growth over the
Speaker 4: over the next you know, foreseeable future.
Speaker 2: I'm looking at an item right now related to Amazon
Speaker 2: on the Bloomberg terminal and Andy Jase, the CEO, was
Speaker 2: talking about insufficient electricity. This seems to echo some of
Speaker 2: the concern that we heard from Microsoft. How does Amazon
Speaker 2: propose to solve this problem the power that's required to
Speaker 2: drive a lot of these data centers.
Speaker 4: Yeah, so they're even investing in their own power infrastructure themselves,
Speaker 4: and they're partnering with other companies. Clearly, over the next
Speaker 4: you say, five to ten years, it's going to be
Speaker 4: a massive demand for energy and that is a concern
Speaker 4: throughout throughout the industry. So I expect, you know, to
Speaker 4: see continued investments in that space from the hyperscalers, Microsoft, Google, Amazon.
Speaker 4: I think they'll start to also invest in energy infrastructure.
Speaker 2: So when you create these data centers, do you think
Speaker 2: it would behoove a company like Amazon to create a
Speaker 2: little bit more geographic distribution, not to have them concentrated
Speaker 2: in certain regions, to kind of help address this problem
Speaker 2: with power.
Speaker 4: Yeah, I mean, right now, a lot of these data centers.
Speaker 4: So I live in the Washington, DC metro area, and
Speaker 4: Northern Virginia is like the hub for for data centers.
Speaker 4: A lot of Amazon data centers are here. But right now,
Speaker 4: you know, Amazon's not a ws is not just expanding
Speaker 4: in the United States, They're also expanding around the world.
Speaker 4: You know, I think Amazon just recently announced I believe
Speaker 4: it's Thailand that's going to be another data center hub
Speaker 4: for the for the Asia market. So I do expect
Speaker 4: over the next you know, you know, five to ten years,
Speaker 4: we'll start to see more countries as essentially hubs for
Speaker 4: for data centers. As you know, AWS expands throughout the world.
Speaker 2: What do we know about the rest of Amazon's businesses?
Speaker 2: How well are they performing right now?
Speaker 1: Yeah?
Speaker 4: So, I mean the biggest businesses is their e commerce
Speaker 4: business that you know had a phenomenal quarter. That's not
Speaker 4: a surprise given that you know, overall the holiday spending
Speaker 4: in the US was really strong this past year. Uh,
Speaker 4: that business is on fire. Their their advertising business has
Speaker 4: slowed down a little bit. You know, right now, Amazon
Speaker 4: generates most of their ad revenue from their e commerce business.
Speaker 4: Only they're their video ads business or Prime Video. They
Speaker 4: just introduced ads to Prime Video this past year, so
Speaker 4: that's still a very portion of their overall advertising business.
Speaker 4: I think there's some excitement right now that in twenty
Speaker 4: twenty five we could see better monetization of Prime video ads,
Speaker 4: especially as Amazon rolls out more live sports in their
Speaker 4: own content. So that video ads business should see some
Speaker 4: strong growth over the next few years. And we're hopeful
Speaker 4: that that advertising business, that growth in that advertising business
Speaker 4: will reaccelerate because, like I said, last few quarters we
Speaker 4: did see some deceleration in the ad business.
Speaker 2: I'm curious as to whether the company on the call
Speaker 2: addressed the issue of tariffs, particularly those that have been
Speaker 2: put on China recently. Is that perhaps a benefit to
Speaker 2: this company?
Speaker 4: Yeah, so they didn't talk about it much on the call.
Speaker 4: I think it was a little bit baked into their outlooks.
Speaker 4: One of the reasons the stock is down right now
Speaker 4: is because of the weaker than expected outlook, and I
Speaker 4: think it's due to you know, tariff headwinds is one
Speaker 4: and also the stronger US dollars is another sizable headwind.
Speaker 4: But yeah, regarding tariff, you know, I think tariffs are
Speaker 4: a bad word in retail. But you know, the silver
Speaker 4: lining is that tariffs impact everyone. It's not it's not
Speaker 4: you know, single singling, one retailer out. So typically when
Speaker 4: you see tariffs like this, you tend to see the
Speaker 4: larger retailers, you know, oper form and find ways to
Speaker 4: better navigate through tariffs. So, you know, I'm expecting Amazon
Speaker 4: as well as you know, Walmart, Target, you know these
Speaker 4: I think these retailers will be able to better navigate
Speaker 4: and work through these tariffs. Then maybe some of the
Speaker 4: smaller retailers. And you have to remember, I mean this
Speaker 4: is not their first go around with tariffs. You know,
Speaker 4: these companies experience the trade war with China back in
Speaker 4: twenty eighteen, twenty nineteen, So overall, I think the industry
Speaker 4: is better prepared for tariffs this time this time around
Speaker 4: than you know, compared to back back in twenty eighteen,
Speaker 4: twenty nineteen.
Speaker 2: Run. We'll leave it there. Thank you so much for
Speaker 2: being with us. Aarun Sundrum, a vice president of equity
Speaker 2: research at cfr A joining us here on the Daybreak
Speaker 2: Asia podcast. Tomorrow's US jobs report will be the focal
Speaker 2: point for markets and the Fed as well. Joining me
Speaker 2: now for a preview is Keith Cannon. He is senior
Speaker 2: portfolio manager and partner at Global To Investments, joining us
Speaker 2: from Atlanta. If you look at the consensus estimate right now, Keith,
Speaker 2: when we're looking for non farm payrolls to rise by
Speaker 2: around one hundred and seventy three thousand, that doesn't sound
Speaker 2: like a lot. What do you think it says if
Speaker 2: that were to come to pass, what would it say
Speaker 2: about the labor market?
Speaker 5: Oh dog, and thanks again for having me. We've done
Speaker 5: a lot of work around you know, what's going on
Speaker 5: in the labor market from a perspective of we're seeing
Speaker 5: on the margin softness that hasn't really materialized into.
Speaker 1: The AUGORICM numbers.
Speaker 5: If we do hit one seven as come the sweet
Speaker 5: spot we have been, you know, the course of the
Speaker 5: last year or so if you look on a full
Speaker 5: week trailing basis, So that's kind of powerful the course.
Speaker 5: Anything shy of that, we feel like we'll ride on
Speaker 5: markets and probably reinstitute some expectations of a more aggressive fad.
Speaker 5: And also on the alternative, as we've seen a couple
Speaker 5: of beasts that were hired and expected for the past
Speaker 5: several months, anything much higher than two hundred to ten
Speaker 5: could bring into question whether or not the inflation will
Speaker 5: be taming. Of course, that it's going to come back
Speaker 5: to what wage both does within the report, but also
Speaker 5: just what stands the FED has and becoming more hawkish
Speaker 5: and if their hawkishness is more warranted given a very
Speaker 5: tight level market, which they've communicated over the last couple
Speaker 5: of years.
Speaker 2: How do you define an aggressive FED? Is that a
Speaker 2: FED that stays higher for longer or is that a
Speaker 2: FED that potentially could hike rates?
Speaker 5: Well, that's so the potential for a rate hike we
Speaker 5: really are starting to creep into some of vir expectations,
Speaker 5: not necessarily the odds on bet at this point, but
Speaker 5: we're noticing the rhetoric tilt a little from from the
Speaker 5: Federal Reserve VERET. They say very concerned with the re
Speaker 5: emergence of inflation, as they have been over the course
Speaker 5: of this tightening cycle, and they don't want to be
Speaker 5: too early in that three three and a half percent
Speaker 5: inflation and become the new norm.
Speaker 1: I think they still want to remain to keep pressure and.
Speaker 5: As long as the inflation rate is below the fair
Speaker 5: funds rate, that continues to be the case of restricted
Speaker 5: policy remained in place. I think they want to keep
Speaker 5: it restrictive as long as they can continue to see progress.
Speaker 5: But a tight living mark kind of leads to that
Speaker 5: progress diminishing in a way. They will make us more
Speaker 5: concern with a fair staying higher for longer, and again
Speaker 5: if it remains much tighter, possibly highs being priced into
Speaker 5: what we expect from the Fed to do over the
Speaker 5: next twelve months.
Speaker 1: So it's a very pivotal point right now in the
Speaker 1: Fed side.
Speaker 2: One of our colleagues here at Bloomberg had a very
Speaker 2: interesting conversation today with Treasury Secretary Besson and one of
Speaker 2: the things that he's stressed was that the Trump administration
Speaker 2: is not really focused on whether the FED will cut
Speaker 2: its policy rate. The focus for the administration is instead
Speaker 2: on achieving a lower tenure treasury yield. How does that
Speaker 2: square with your expectations of what we may see from
Speaker 2: the Trump administration, I.
Speaker 1: Think, and that was a fascinating interview.
Speaker 5: Couple of ways to get the tenure treasure rate lower,
Speaker 5: whether inflation expectations come down, or growth expectations come down,
Speaker 5: or some combination of the ball and both of those scenarios.
Speaker 1: From a policy standpoint, there is.
Speaker 5: A very delicate balance as to how we achieved those
Speaker 5: and with race being you know, inflation being where it is,
Speaker 5: that's really not anything that any any central bank or
Speaker 5: any government can fix in one fell swoop.
Speaker 1: So the focus on the tenure makes it makes it feel.
Speaker 5: A lot less month to month and quarter to quarter
Speaker 5: meeting the meeting from the fast standpoint, so there's some
Speaker 5: relief from that regard, but we've seen the tenure take
Speaker 5: on the mind of its own. It's not anything that
Speaker 5: any one entity or federal reserve can can really control.
Speaker 5: So you know, we're that interview was really perked our
Speaker 5: ears up to see what they're communicating as a focus
Speaker 5: is going to be almost to pivot away from what
Speaker 5: they think the market is thinking, which is more shorter terminature.
Speaker 2: The other thing that the Treasury Secretary addressed in that
Speaker 2: interview was a strong US dollar policy under the Trump administration.
Speaker 2: Bessin said it was completely intact.
Speaker 1: Now.
Speaker 2: I know you look at the earnings and the quality
Speaker 2: of earnings for the big multinationals in particular. So the
Speaker 2: question is whether the dollar is going to be a
Speaker 2: significant headwind here going forward.
Speaker 5: Just every economics textbook tells you that that is the case.
Speaker 5: When a stronger dollar affect international and global companies there
Speaker 5: and their overseas operations. It depends on the mixture of
Speaker 5: how we get to a stronger dollar. If we are
Speaker 5: talking about you know, inflation really aiding that path, or
Speaker 5: tariffs kind of pushing pushing the dollar higher. There's so
Speaker 5: many ways to get to a stronger dollar from where
Speaker 5: we are now, and it's really hard to say, you know,
Speaker 5: whether or not you know in the national marketplace would
Speaker 5: be better off or worse off with a stronger dollars.
Speaker 5: Two almost done a wrong because there's.
Speaker 1: So many pathways to get there, we're not.
Speaker 5: As concerned with the absolute level over the next twelve
Speaker 5: months mrgus I would necessarily in the path to get there,
Speaker 5: so you know, the quarter to quarter earnings and what
Speaker 5: we can pick up from these corporations. Then their plans
Speaker 5: for capital working capital expenditures going forward is going to
Speaker 5: play a role in that as well, So you know,
Speaker 5: we're less concerned about the absolute level of the dollar
Speaker 5: and more concerned with the path to get there and
Speaker 5: whether it's geopolitical driven or here. Strength here in the
Speaker 5: US without the rest of the world into a session
Speaker 5: is also important as well.
Speaker 2: You mentioned tariffs there, Keith, and what the conventional wisdom
Speaker 2: has been that this really has the potential to drive
Speaker 2: inflation higher. Tariff policy I'm referring to best during this
Speaker 2: interview said that there could be a small one time
Speaker 2: price adjustment as a result of these tariffs. How do
Speaker 2: you view tariff policy as it relates to inflation.
Speaker 5: There's typically of one one adjustment if the market is
Speaker 5: convinced that there's one set of tariffs. If they're in
Speaker 5: the market things, this is one of potentially many or
Speaker 5: several or more than one. After this, then there's not
Speaker 5: one adjustment the market continues to pursue that equilibrium where
Speaker 5: the tariffs kind of between multiinational corporation as far as
Speaker 5: nations in there in the Southern Bank. So if the
Speaker 5: expectation is for more trash down the road, there won't
Speaker 5: be one adjustment.
Speaker 1: If there is clear communication.
Speaker 5: And clarity around the tariff policy and that there's one
Speaker 5: and it's one of them for sure, then that's the
Speaker 5: case for one adjustment. Problem is I think that that
Speaker 5: is opposite of what the typical negotiation is that we've
Speaker 5: seen on part of this administration in this administration as
Speaker 5: well as the last time up.
Speaker 1: So I think those two are at play.
Speaker 5: When negotiates well doesn't typically set the markets up to
Speaker 5: trade well from expectations of inflation and how the market
Speaker 5: adjust the tariffs. So those too are odds right now.
Speaker 5: We're interested to see which.
Speaker 1: One whins battle.
Speaker 5: Going forward of whether the marketing space terastic, can continue
Speaker 5: to increase or we can price in wind fail school
Speaker 5: and less inflation over time.
Speaker 2: So what is the level of confidence that you have
Speaker 2: right now that there will be a successful negotiation on
Speaker 2: the trade front to the extent that there will not
Speaker 2: be an increase in the tariff that has been applied
Speaker 2: on China and that the US will not apply tariffs
Speaker 2: on Mexico and Canada.
Speaker 5: We don't think this anyway unless you're somehow plugged into
Speaker 5: the inner workings of these negotiations to have a lot
Speaker 5: of certainty better than a coin flip certainty of any
Speaker 5: path forward when it comes to our negotiations with China
Speaker 5: and the terraff polities between the two nations. So, I
Speaker 5: think the lack of confidence and the lack of certainty
Speaker 5: is a healthy check on how we view.
Speaker 1: The world markets.
Speaker 5: And we're comfortable being uncertain until we have more clarity
Speaker 5: and more certainty coming out to the public as far
Speaker 5: as how those negotiations are going. So we're comfortably uncomfortable
Speaker 5: with our less than fifty percent certainty.
Speaker 1: On where things land.
Speaker 5: And because anything beyond that, we feel like an over
Speaker 5: confidence is, which is where you get in trouble.
Speaker 2: All right, we'll leave it there. Good stuff, Keith, Thank
Speaker 2: you so much. Keith Buchanan there. He is senior portfolio
Speaker 2: manager also a partner at Globalt Investments. Joining us from
Speaker 2: Atlanta here on the Daybreak Asia podcast. Thanks for listening
Speaker 2: to today's episode of the Bloomberg Daybreak Asia Edition podcast.
Speaker 2: Each weekday, we look at the story shaping markets, finance,
Speaker 2: and geopolitics in the Asia Pacific. You can find us
Speaker 2: on Apple, Spotify, the Bloomberg Podcast YouTube channel, or anywhere
Speaker 2: else you listen. Join us again tomorrow for insight on
Speaker 2: the market moves from Hong Kong to Singapore and Australia.
Speaker 2: I'm Doug Prisoner and this is Bloomberg