Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along
Speaker 1: with Jonathan Farrell and Lisa Abramowitz. Join us each day
Speaker 1: for insight from the best an economics, geopolitics, finance and investment.
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Speaker 2: Joining us now is Marvin low Cydney, Global macro strategist
Speaker 2: over Stay Street. Marvin, good morning to you, Sarah. It's
Speaker 2: wonderful to have you with us on the program. To
Speaker 2: kick off the trade in week CPI a little bit
Speaker 2: later this week, we get retail sales as well, Marvin,
Speaker 2: once we get to Friday, what do you expect that
Speaker 2: data to look like?
Speaker 3: Yeah, I mean, I think we're going to get a
Speaker 3: continuation of the positive trends with the with the core data.
Speaker 3: You know, certainly PCE raises the risk that it might
Speaker 3: be a little bit of an upside surprise, but you know,
Speaker 3: kind of having said that, given where we were, it's
Speaker 3: not right.
Speaker 4: I think we're moving in the right direction.
Speaker 3: The consumer remains strong, so they're kind of continues that
Speaker 3: the challenge that the FED has in terms of in
Speaker 3: terms of a strong consumer and it making it harder
Speaker 3: to get towards those inflation goals.
Speaker 1: I look, Marvin at the idea of taking strategy or
Speaker 1: economics and having a.
Speaker 5: Conviction and belief.
Speaker 1: I love your phrase painfully neutral. I mean, there we
Speaker 1: are treading water here. Do you have conviction where you
Speaker 1: can be in the market. Are you convicted to a
Speaker 1: correction or do you got a gloom bear.
Speaker 5: Market out front?
Speaker 4: Yeah?
Speaker 3: I mean, you know, we need a conviction when we
Speaker 3: approach our portfolio selecting process ultimately in terms of playing
Speaker 3: the market.
Speaker 4: With regard to the choppiness around.
Speaker 3: That conviction, I think it makes it to a certain
Speaker 3: degree harder because certainly we're going to have volatility in
Speaker 3: the market, but it's going to create opportunities if we
Speaker 3: believe in ultimately that conviction. You know, I do think
Speaker 3: that the recession versus remain out there, and the higher
Speaker 3: for longer conversation becomes a harder landing, particularly when we
Speaker 3: look at kind of some of the spending headwinds that
Speaker 3: begin to come into the market next year, and then
Speaker 3: you know, again, opportunities around that.
Speaker 1: First study I did this morning, Marvin was a Bloomberg
Speaker 1: financial conditions index. I went back way back, oh six
Speaker 1: oh five, eleven ratios folded in there. I believe it's
Speaker 1: a toxic brow And the answer is, we are accommodative.
Speaker 1: We are Are we painfully accommodative for central banks like
Speaker 1: you're painfully neutral?
Speaker 3: Well, you know, I think I think we've got the
Speaker 3: policy diversions that's starting to emerge globally and it's making
Speaker 3: these conversations interesting for us in the macro space. But
Speaker 3: it's really showing the challenges that all the different central
Speaker 3: banks have.
Speaker 4: It's hard to say that the.
Speaker 3: US is incredibly restrictive, just given where the economy is performing,
Speaker 3: where you see that transmission mechanism making its way much
Speaker 3: more readily into the European economies and certainly the economies
Speaker 3: around the Antipodean.
Speaker 4: So you know, you do have kind of these.
Speaker 3: These divergences, which is really the challenge that we have
Speaker 3: going into the end of the year and thinking about
Speaker 3: policy going.
Speaker 6: Into next year, and then understanding also the inter relationship
Speaker 6: between some of these divergencies. I think of the Bank
Speaker 6: of Japan over the weekend raising the possibility of understanding
Speaker 6: the need to abandon negative yields and even move away
Speaker 6: from yield curve control as soon as later this year.
Speaker 6: This is a new kind of time frame. Does that
Speaker 6: shift your understanding of where.
Speaker 4: US yields should be given?
Speaker 6: Yeah, there is this divergence, but there's inter relationship between
Speaker 6: these global markets.
Speaker 4: Yeah, I mean that's significant.
Speaker 3: You know, the view that Japan is finally in a
Speaker 3: position to make a longer term decision reversing something that
Speaker 3: has been you know, a decades long policy is significant
Speaker 3: within the global landscape, particularly when you look at it
Speaker 3: from the US perspective and they are participation in the
Speaker 3: trade market. You know that that's a conversation that we
Speaker 3: started to have in early August, which now comes to
Speaker 3: the forefront again.
Speaker 4: If they're not as accommodator for sure.
Speaker 6: Morgan Stanley came out and said that they actually have
Speaker 6: conviction that yields are going to come down and to
Speaker 6: remain bullish on US bonds. How much do you push
Speaker 6: back against that? How much do you feel like the
Speaker 6: stickiness that we're seeing in yields is going to be
Speaker 6: really the new normal?
Speaker 5: Yeah?
Speaker 3: I mean I wouldn't be playing a significant decrease in
Speaker 3: yields at this point in time.
Speaker 4: You know, I do think again a recession is going
Speaker 4: to drive that type of conversation.
Speaker 3: But you know again that that painfully neutral type of
Speaker 3: view kind of having said that, where valuations are, I
Speaker 3: don't mind the income quite frankly, and I still think
Speaker 3: that you could think about curve steepeners, but you know,
Speaker 3: you need to do it more tactically than just looking
Speaker 3: at a two s tens perspective. You got to look
Speaker 3: at how long this thing might take and whether or
Speaker 3: not out of five to thirties.
Speaker 4: View makes more sense.
Speaker 3: But you know, just simply simply owning treasuries in an
Speaker 3: environment where inflation is below that yield is a decent return.
Speaker 7: Do you saying pick up the front end, Maffin or
Speaker 7: you sank them out?
Speaker 4: I like, I like, I like the belly more. I
Speaker 4: like the belly more.
Speaker 2: Okay, So the five to seven year portion of the curve, Yeah,
Speaker 2: does the same apply to credit because we had a
Speaker 2: lot of credit issuance last week and the bulk of
Speaker 2: that was quite short term stuff, Marv, And I just
Speaker 2: wonder what kind of signal you take away from that issuance?
Speaker 4: Yeah, I mean, it's it's opportunistic for sure.
Speaker 3: You know, the fact that the liquidity is in the
Speaker 3: market is ultimately concerned corporations are taking advantage of that.
Speaker 3: I still think that credit is a challenge if the
Speaker 3: short end becomes a risk. You know, certainly high yield
Speaker 3: has a greater risk associated with that. Really, kind of
Speaker 3: getting past the choppiness that might evolve over the next
Speaker 3: two to three years is something to be cognizant of.
Speaker 2: Marvin, Thank you, sir for the update from State Street.
Speaker 2: Marvin Low, thank you very much.
Speaker 4: So.
Speaker 1: Rajapa joins us now ahead of US right strategy, it's
Speaker 1: sock Gen here on the forty seven narratives that were
Speaker 1: out there, you have to pick a narrative this weekend
Speaker 1: to go with on Monday, which is the sock Gen
Speaker 1: narrative right now.
Speaker 5: On what rates will do, I.
Speaker 8: Think for the most part it's going to be wait
Speaker 8: and see at least for this week ahead of f
Speaker 8: MC next week. Broadly speaking, if you look at the
Speaker 8: price action that we've seen in the bond market, the
Speaker 8: funand seems to be very anchored to FED expectations. The
Speaker 8: Fed's going to pause at the September meeting whether they
Speaker 8: hike again in November is yet to be seen, but
Speaker 8: the data that we get this week will kind of
Speaker 8: guide the dots for next week as well as set
Speaker 8: the trend for what potentially the Fed could be doing
Speaker 8: in November and beyond. So, and that's sort of context
Speaker 8: range bond markets for the next week or so. We
Speaker 8: did get a ton of corporate supply that's been pushing
Speaker 8: TENA yields higher. We could probably see a little bit
Speaker 8: more of that momentum, but really you're going to need
Speaker 8: more data to direct the markets from your.
Speaker 6: On what's your takets about? Drew on the implication from
Speaker 6: the latest missive over in Japan about potentially ending yield
Speaker 6: curve control as well as negative yielding policy sometime in
Speaker 6: the near future and having a better sense of when
Speaker 6: that would be appropriate by the end of this year.
Speaker 6: Does that change your outlook for US yields given the
Speaker 6: incredible buyer base that we've seen coming from Japan.
Speaker 8: Absolutely, I think that we've seen a pretty decent change
Speaker 8: in the trend and momentum in yields in August. Granted
Speaker 8: it's a quiet month, but we had the Fitch down grades,
Speaker 8: you had the change in the YCC policy that's definitely
Speaker 8: putting some pressure on yields, not just in the US
Speaker 8: but also globally. But we'll have to kind of see
Speaker 8: how things play out because at the same time, while
Speaker 8: they're adjusting policy, you're also looking at a broader snowdown Europe. Know,
Speaker 8: you're starting to see a slowdown in growth there. In
Speaker 8: the fourth quarter of this year, we'll probably see that
Speaker 8: the US economy will also start to come under pressure
Speaker 8: as the consumers start to pull back a little bit.
Speaker 8: We've seen a summer splurge. Consumers have been extraordinarily resilient,
Speaker 8: but you know, with student lot moratoriums expiring, saving straights
Speaker 8: starting to decline, delinquency starting to go up, I think
Speaker 8: that you're going to see a lot more pressure on
Speaker 8: the consumer in the fourth quarter of this year, and
Speaker 8: that again is something that could probably keep a lid
Speaker 8: on the rising years in the US.
Speaker 6: Does that give you more conviction to buy in the
Speaker 6: government bond space and less conviction to buy on the
Speaker 6: credit side of things that might be more affected by
Speaker 6: the weakness.
Speaker 8: That seems to be where you would want to put
Speaker 8: your money in. If you think that there's going to
Speaker 8: be a meaningful slowdown in growth in twenty twenty four.
Speaker 8: We've always had a recession in twenty twenty four. We're
Speaker 8: moving perhaps away from a recession in the early part
Speaker 8: to more the mid part of the year. But you know,
Speaker 8: so if the recession is still very much in the cards,
Speaker 8: and if that were to play out, I think you
Speaker 8: should start seeing a moderation in yields or the sell
Speaker 8: off in years we've seen.
Speaker 5: At the back end.
Speaker 1: It's about v I got to buy a bullet piece
Speaker 1: on the curve, which maturity, full faith and credit right
Speaker 1: now is most attractive for price.
Speaker 5: Up yield down.
Speaker 8: The front end is definitely very attractive. The market, in
Speaker 8: my view, is fully priced in for high for longer
Speaker 8: from the Fed, So we're basically pressing for the Fed
Speaker 8: on hold until perhaps the second second half of nets
Speaker 8: year and only modest cuts after that point on. So
Speaker 8: in this sort of context, it probably feels that the
Speaker 8: place you want to be is the very front end,
Speaker 8: because if the market, if the economy does start to
Speaker 8: slow down, the FED starts to pivot towards easy or
Speaker 8: easier policy, then you're going to see the front and start.
Speaker 2: To rally as it's going to catch up and get
Speaker 2: the view from Selkschen Sabato a jape there joining us
Speaker 2: around a table. Christina Hoop, a chief Global market strategist
Speaker 2: at Invesco. Christina, good morning to you.
Speaker 9: Good morning.
Speaker 2: We also need to talk about union disputes UAW, the
Speaker 2: Detroit Big Three. Can you tell me from your perspective,
Speaker 2: is that just a headline risk we're reading in the
Speaker 2: papers right now. Is that a symptom of a broader, stronger,
Speaker 2: hot labor market in America that's going to lead to
Speaker 2: higher cost for some of these companies.
Speaker 9: Well, I would argue that it's more likely the latter,
Speaker 9: and that's because we saw Walmart's announcement last week about
Speaker 9: lower wages for new employees. I think actually, because the
Speaker 9: labor market has eased a bit, it's tight, but it's
Speaker 9: not as tight that what we're seeing with the UAW
Speaker 9: is probably more of a rear view mirror issue than
Speaker 9: what we have ahead of us in terms of what
Speaker 9: I expect to be moderating wage growth.
Speaker 1: You I have a shingle from Cornell, which is somewhat argue,
Speaker 1: the number one labor economics program in the country. Good
Speaker 1: morning everyone from Northwestern as well. This is not Walter
Speaker 1: Ruther's uaw is it to explain to us right now
Speaker 1: your view, Christine, with all your study at Cornell and
Speaker 1: the atomization of the American labor economy, is it legit
Speaker 1: or can there be a reunionization?
Speaker 9: Well, there certainly can be areas, and we've seen moves
Speaker 9: in different industries towards more unionization. But the reality is
Speaker 9: that that is a function of the tightness of the
Speaker 9: labor market, and directionally the labor market is getting less tight,
Speaker 9: and so I would anticipate we see less of this
Speaker 9: activity in the future. This was a very unique environment
Speaker 9: that we've lived in in the last few years, and
Speaker 9: it really has opened the door to the potential for unionization.
Speaker 9: But I think going forward it will be very specif
Speaker 9: industries where we see this.
Speaker 6: Happening rear view, Mirrord. To me, that's fascinating the idea
Speaker 6: that you're saying that this is not going to be
Speaker 6: what we're going to see going forward. And so from
Speaker 6: your vantage point, what does that mean in terms of
Speaker 6: the last mile of inflation that we were talking about
Speaker 6: and how quickly, oh we can get back to the
Speaker 6: two percent, how much conviction you can have to go
Speaker 6: back into longer term bonds, Well, the.
Speaker 9: Last mile is going to be hard, but I do
Speaker 9: believe that we are very much on that disinflationary trend.
Speaker 9: Not every data point is going to support that narrative,
Speaker 9: but that will be the case. And actually I'll point
Speaker 9: to something that came out last week. The Chicago Fed
Speaker 9: economists put out a note utilizing their model. They anticipate
Speaker 9: will get close to the Fed's target by the middle
Speaker 9: of twenty twenty four without a recession. Now, my opinion
Speaker 9: is it'll be a bumpy landing, but it won't be
Speaker 9: an actual recession.
Speaker 6: So there are two schools of thought with this, and
Speaker 6: it's really highlighted by the Morgan Stanley view of things
Speaker 6: and then the sort of Jim Bianco view of things.
Speaker 6: Increasingly the JP Morgan view of things. As they ratchet
Speaker 6: up some of their yield forecasts that when we go
Speaker 6: back to something more normal, bonds will maybe have lower
Speaker 6: yields than they have now, but not significantly. Morgan Stanley
Speaker 6: is the loan bul right, they're going out there. Matt Hornbach,
Speaker 6: who is a friend of the show, has said no,
Speaker 6: he still has conviction by now this is the time
Speaker 6: to do it. Are you in agreement with that.
Speaker 9: Well, I would argue it is so hard to market
Speaker 9: time so that it makes sense to at least start
Speaker 9: to increase exposure now, even if one is not sure
Speaker 9: that we've actually hit the peak. I think this is
Speaker 9: a time to be starting to increase allocations.
Speaker 10: The vector.
Speaker 5: We brought this up a couple times a day. I'm
Speaker 5: not going to let it up.
Speaker 1: I think it's so important and timely to October sixth,
Speaker 1: and that is the vector of three month annualized non
Speaker 1: farm payrolls.
Speaker 5: Wow, is that moving in a strident direction south.
Speaker 1: Can you frame a negative non firm payroll statistic?
Speaker 9: Well, what I can. I don't have a lot of
Speaker 9: negative things to say right now about the state of
Speaker 9: the labor market. What we have is labor force participation increasing,
Speaker 9: and we have wage growth moderating. That's what I need
Speaker 9: to see. Those are the two most important data points
Speaker 9: within the Job's report in my opinion. Also, if we
Speaker 9: look at jolts and we see the number of job openings,
Speaker 9: they've gone down significantly, all pointing in the right direction
Speaker 9: to maybe not a soft landing, maybe a bumpy landing,
Speaker 9: but one in which we see a moderation in wage growth,
Speaker 9: one in which we see a moderation and inflation going forward.
Speaker 2: Doug cast writes in race is an important question about
Speaker 2: the Detroit three. Let me throw it out you, Christina.
Speaker 2: If I can deglobalization, doesn't it just give these workers
Speaker 2: in Detroit more power, more leverage of their employers.
Speaker 9: Well, one could argue that deglobalization has an impact act
Speaker 9: and serves to boost inflation in a variety of different ways,
Speaker 9: including potentially this way. But the counterbalance, of course is
Speaker 9: technological innovation. So could we get to an environment in
Speaker 9: which we're a bit above the Fed's target in terms
Speaker 9: of inflation for the medium term. Yes, but I think
Speaker 9: the Fed's willing to tolerate that because we also saw
Speaker 9: inflation below target for some time.
Speaker 7: Christina Hooper and Invesco.
Speaker 1: John this is one of my most important conversations over
Speaker 1: the last twelve months. Gentaloni at IMF meetings was stunning.
Speaker 5: How cute he was.
Speaker 2: Let's start that conversation right now with Po Gentiloni, the
Speaker 2: EU Economy Commissioner for the European Commission Commissioner. Want for
Speaker 2: to catch up with you once again, Sarah's been a
Speaker 2: number of months. We've got the new forecast from the
Speaker 2: Commission in front of us right here. Can we start
Speaker 2: with stagflation? Is that the risk for you, sir, from
Speaker 2: your personal assessment or is that the reality?
Speaker 11: I think it's too soon to say that we are
Speaker 11: in a stagflation framework. What is clear, I think is
Speaker 11: first that we avoided recession, which was not obvious only
Speaker 11: eight nine months ago. Please consider that, of course the
Speaker 11: Russian war against Ukraine is for the EU an economic issue,
Speaker 11: not only a geopolitical threat. So we address these issues.
Speaker 11: We avoided recession. But indeed growth is zloing. This morning
Speaker 11: we present the forecast, and the forecast is for twenty
Speaker 11: three of growth of zero point eight percent.
Speaker 10: Is this something.
Speaker 11: Of long duration where our estimate is that we will
Speaker 11: have probably a rebound already next year.
Speaker 10: So this is why I would not call it.
Speaker 11: Abruptly tlagflation. It's a moment of easing growth for sure.
Speaker 1: Commissioner Christine Lagard, in a speech in New York in April,
Speaker 1: talked about a need for capital reform, market reform in Europe.
Speaker 1: Obviously there's a primal scream of fiscal reform in Europe
Speaker 1: which you've lived. Is former Prime Minister of Italy. How
Speaker 1: urgent is reform given the war and given the present
Speaker 1: monetary crisis within Europe, I.
Speaker 10: Think it's urgent.
Speaker 11: We also, of course should take into account the fact
Speaker 11: that we are entering in the period where we will have.
Speaker 10: European elections.
Speaker 11: So this is a challenge, a mid term challenge, not
Speaker 11: something that we can solve tomorrow. What we have to
Speaker 11: address now, I mean tomorrow, is the difficulty to find
Speaker 11: the right balance between supporting investments and.
Speaker 10: Addressing inflation.
Speaker 11: We have the privilege and the opportunity to do so
Speaker 11: for the first time in the EU story, having behind
Speaker 11: us a strong, strong, strong tool of common funding, allowing
Speaker 11: also to weaker fiscally member states to invest and to spend.
Speaker 10: This is the main challenge ahead of us.
Speaker 11: But I fully agree with Christine Lagard that we need
Speaker 11: capital markets reform to re gain our competitivity in the
Speaker 11: global markets.
Speaker 6: Given the fact that you talked about this challenge between
Speaker 6: inflation and slowing growth, right now, has the balance of
Speaker 6: those two risks shifted for you and actually become more
Speaker 6: important to see growth and that investment and all sorts
Speaker 6: of roots of something stronger rather than being that much
Speaker 6: more aggressive in fighting inflation.
Speaker 10: Well, inflation.
Speaker 11: In the forecast we presented this morning, we have growth
Speaker 11: easing momentum, but also inflation declining.
Speaker 10: And so you are right that we are in this
Speaker 10: narrow path between these two things.
Speaker 11: I don't think it's easy now to say, okay, we
Speaker 11: want the challenge with inflation, so that as concentrate on
Speaker 11: spending and investments. I think we are near to the
Speaker 11: peak of interest rates, that the decisions will be taken
Speaker 11: of course by the ECB and not by the European Commission.
Speaker 10: On Interest Rates.
Speaker 11: At the same time, please preserve the good investments. Can
Speaker 11: we do this also in countries without deep financial pockets? Fortunately, yes,
Speaker 11: because we have the eurobonds, this common funding, and this
Speaker 11: is the opportunity we shouldn't miss in the coming months.
Speaker 2: Does that mean you see more potentially, more easy, potentially
Speaker 2: the ability to raise more money PLO? Is that what
Speaker 2: you see further down the line you can come together
Speaker 2: and is she more dere.
Speaker 11: Oh? I see the existing programs that at least until
Speaker 11: twenty twenty six will disburse to member states still more
Speaker 11: than six hundred billion euros of common money.
Speaker 2: Commissioner, we have to leave it there. It was great
Speaker 2: to see you earlier this year in DC, and we
Speaker 2: hope to do it again early next year. Parlo Gentiloni,
Speaker 2: the the Economic Commissioner for the EU Commission.
Speaker 5: Joining us right now, Mandy saying we've got to go
Speaker 5: right to this. It's so important.
Speaker 1: Senior Apple analysts for Bloomberg Intelligence as well, and also
Speaker 1: surveillance tennis expert. Let's digress here, rip up the script
Speaker 1: right now. I could hear people in buildings cheering. That
Speaker 1: was one hell of a final men's tournament.
Speaker 12: Wasn't it. It was? Especially the second set was epic.
Speaker 12: I mean, you don't see those kind of six years old.
Speaker 2: It felt like he was faltering at one point, and
Speaker 2: I've seen this a million times with Novak. It looks
Speaker 2: like he's lost his legs. His fake second set looked
Speaker 2: like he was aging. I was ready to say Novak's
Speaker 2: got old, and then Novak got young again. Meant that
Speaker 2: was kind of the way when the second set.
Speaker 12: The fatigua you know in the response and uh love.
Speaker 12: I mean, the guy is clearly a lot we'll argue
Speaker 12: about it, but he is the goat when it comes
Speaker 12: to the slams, and probably no one can beat his record.
Speaker 1: When he comes off. When he comes off the court,
Speaker 1: he doesn't go I'm going to Disneyland. He goes, I'm
Speaker 1: going to Cooper Tino to buy whatever the new toy is.
Speaker 1: How is this week going to go for Apple? I mean,
Speaker 1: away from the modem news, you got to thumb up
Speaker 1: on all this soare for mister cook andall.
Speaker 12: I think with Apple, you have to think about the
Speaker 12: features they're going to introduce in the phone. And it's
Speaker 12: not a guarantee that we will have a big upgrade cycle.
Speaker 12: That's why these events are so important because time and
Speaker 12: again we have seen the big upgrades come when they
Speaker 12: introduce new features, whether it's a camera or something else
Speaker 12: in the phone. And there has to be that element
Speaker 12: that's going to rush people to you know, upgrade their iPhones.
Speaker 12: And it's not a guarantee.
Speaker 2: Well, this is a problem because they've been able to
Speaker 2: dress up poor unit growth with higher average selling prices.
Speaker 2: So if there isn't a big upgrade where they're going
Speaker 2: to get the higher sp from.
Speaker 12: And that's never a good strategy to you know, extract
Speaker 12: more in terms of making people pay more because you
Speaker 12: reduce your install base. I mean, look right now, Apples
Speaker 12: install base isn't growing now for them to take market share,
Speaker 12: they really need that new phone that everyone is excited about.
Speaker 12: And they are one company that hasn't talked about generative
Speaker 12: AI or large anglid models. You would argue a lot
Speaker 12: of the inferencing for those generative AI has to be
Speaker 12: done on Apple phones. They haven't even mentioned a word
Speaker 12: about large anglid models or generative AI on any of
Speaker 12: their calls.
Speaker 6: So what's at stake in terms of the new creations
Speaker 6: in this new iPhone?
Speaker 12: Right?
Speaker 6: What could they really move the needle with? Is it
Speaker 6: that much better of a camera We've done that before.
Speaker 6: Is it just a faster kind of charging device?
Speaker 10: Eh?
Speaker 12: Okay, what could it be? Well, so they've shown their
Speaker 12: Vision Pro demo, and clearly spatial computing is where the
Speaker 12: next leg of computing is going to grow. I mean,
Speaker 12: I'm not betting on meadow wars, but clearly there's an
Speaker 12: argument to be made that similar to variables, you could
Speaker 12: get a big pop in terms of you know, the
Speaker 12: vision Pro devices and how it really expands the Apple ecosystem.
Speaker 12: In the end, it's about the Apple ecosystem and the
Speaker 12: vertical integration that they've been able to do. Over the
Speaker 12: last two decades.
Speaker 6: So in other words, you're saying that instead of having
Speaker 6: a laptop or a basic computer, we're going to put
Speaker 6: on goggles and have our phones and be able to
Speaker 6: walk around and be in a computer.
Speaker 12: You could argue that is the future, but that's not imminent, like,
Speaker 12: it's not near term. It's all about what is it
Speaker 12: that they can do in terms of expanding the scope
Speaker 12: of your iPhone to really tailor it to the next
Speaker 12: leg of computing. And that's why I bring in the
Speaker 12: generative AI aspect because Qualcom has argued you are going
Speaker 12: to run your large anguige model on your phone, You're
Speaker 12: not going to do it on your cloud. That's what
Speaker 12: inferencing is all about. And Apple hasn't mentioned anything around it.
Speaker 12: So this event is quite important for Smart German's territory.
Speaker 1: But let's channel man deep thing right now. Is there
Speaker 1: any discussion about what happens after cook? Is there like
Speaker 1: a succession or an envelope in a desk, or like
Speaker 1: like how long does he keep this going?
Speaker 12: I mean really, right now, they're at a crossroads where
Speaker 12: supply chain diversification is paramount for investors and until they
Speaker 12: fix this in terms of Apple actually diversifying their supply chains.
Speaker 12: Tim Cook is the guy to you know, make to
Speaker 12: facilitate that.
Speaker 7: Is this buzz about Huawei's new phone legit? Do you
Speaker 7: appreciate that? Bus Well?
Speaker 12: I think it's very hard for Huawei to embed the
Speaker 12: latest leading a note chip because look, China government has
Speaker 12: thrown a lot of money in terms of building semiconductor manufacturing,
Speaker 12: but for them to get all the pieces right chip, packaging, assembly, everything,
Speaker 12: it's very hard. And we know semiconductor manufacturing is very iterative.
Speaker 12: That's why TSMC is finding it hard to replicate their
Speaker 12: fab outside of time on. So I have my doubts
Speaker 12: in terms of the phone being as good as an
Speaker 12: iPhone or.
Speaker 2: Even if it's not as good, Yes, say it's three
Speaker 2: years back. Let's say it's like the iPhone twelve.
Speaker 7: Whatever.
Speaker 2: Are we missing the mood of a country shifting away
Speaker 2: from Apple, That's what I'm trying to identify. And if
Speaker 2: there is a mood shift, does it really matter whether
Speaker 2: it's the equivalent of the iPhone twelve?
Speaker 12: But why would consumers want a phone that's equivalent to
Speaker 12: iPhone twelve? As a consumer Chinese consumer, you want your
Speaker 12: hands on the latest gadget, and we know they're very
Speaker 12: savvy with all their app used.
Speaker 2: If I wanted a better phone, wouldn't I just get
Speaker 2: a Samsung. There's a reason I buy this, and it's
Speaker 2: not just because it's a decent phone. The Samsung is
Speaker 2: arguably a better phone, as a better camera has done
Speaker 2: for ages, But I don't buy the Samsung. The reason
Speaker 2: I buy this beyond the technology that it has. I've
Speaker 2: had it for a long long time. I'm a part
Speaker 2: of the ecosystem. It's really really sticky. But also at
Speaker 2: the same time, there's some brand recognition associated with this
Speaker 2: even here in the United States, and I'm wondering whether
Speaker 2: that's changed in China, whether that's really the brand you
Speaker 2: want to carry anymore.
Speaker 12: I don't think so. I think you're going to see
Speaker 12: a rush to upgrade, especially from Chinese consumers, before there
Speaker 12: is an explicit ban, let's say. And in my opinion,
Speaker 12: everyone gravitates towards the perceived attractiveness of Apple, and it's
Speaker 12: because of the ecosystem. It's a software, it's everything that's
Speaker 12: vertically integrated about an Apple ecosystem.
Speaker 6: So how does the ambassador of Tim Cook address some
Speaker 6: of the concerns that have been expressed in share prices,
Speaker 6: if expressed by analysts at this launch or even in
Speaker 6: the next couple of weeks. If he wants to maintain
Speaker 6: that kind of enthusiasm within China, will also maybe shifting
Speaker 6: and diversifying some of.
Speaker 2: That risk well.
Speaker 12: So they clearly have to work with the Chinese government,
Speaker 12: and so far Apple has done a pretty good job.
Speaker 12: I mean, there is no other mega tech company that
Speaker 12: has twenty percent revenue exposure to the Chinese and market,
Speaker 12: and so to give Apple credit, they have been able
Speaker 12: to work through the issues. But clearly I think from
Speaker 12: a China perspective, they want that local company Huawei to
Speaker 12: start making the phones, and that's why they're investing so much.
Speaker 1: This is on American We got to change from Apple
Speaker 1: over the Pumpkin. I mean this is a design. I
Speaker 1: saw this like three were times this weekend.
Speaker 5: You know how we rush it.
Speaker 1: We get Christmas decorations out like November one. Meg Turrell
Speaker 1: over at CNN with a action photo out on Twitter.
Speaker 5: Thank you Meg. Their medical correspondent Pumpkins.
Speaker 1: Now, it's fifty days to Halloween, John, you buy the
Speaker 1: orb right now.
Speaker 5: It's not going to make it carved a run car.
Speaker 7: It's an American illness, isn't it.
Speaker 5: It's what Lisa help me here? When should we be
Speaker 5: buying the.
Speaker 7: I'm all with you.
Speaker 6: In terms of early decorations, pumpkins are just it's fall
Speaker 6: and they grow in fall, so they are harvesting pumpkins.
Speaker 12: But also this is like a pre Halloween prochise, sort of.
Speaker 6: Like celebrating fall. And I can get behind the idea
Speaker 6: of that because you can see the leaves starting to
Speaker 6: change when you go, you know, outside of the city.
Speaker 6: So I'm just saying I have that last year. I
Speaker 6: just I do agree though that pulling out, you know,
Speaker 6: the Easter bunny after Christmas is sort of crazy.
Speaker 7: January one, Yeah, January.
Speaker 6: One, all of a sudden, those like marshmallow.
Speaker 5: It's funny buying roses. You don't want to buyer it's.
Speaker 2: Expensive now you want to buy them a day offtend
Speaker 2: Thank you.
Speaker 7: I keep seeing bloomberget satogens.
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