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

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Speaker 2: And I'm Paul Allen. Here are the stories we have

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Speaker 2: following today.

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Speaker 3: Well, it's looking largely positive here in the early going,

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Speaker 3: and if you look at equity futures, they're edging higher.

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Speaker 3: Investor fears seem to be receding a little bit, and

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Speaker 3: we've course seen that over the past many weeks. US

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Speaker 3: talks finished flat on Friday in a shortened session, but

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Speaker 3: it was a fourth consecutive week of gains. The VICS

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Speaker 3: has dropped to the lowest level since early twenty twenty,

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Speaker 3: and news that you just heard there in our headline

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Speaker 3: that Black Friday shoppers had spent nearly ten billion dollars

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Speaker 3: online also adds a note of optimism. It's a positive

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Speaker 3: sign for retailers. They've actually been facing lackluster sales forecast

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Speaker 3: for the holiday season. Bloomberg Intelligence says that any recession

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Speaker 3: in the United States may be closer to ending rather

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Speaker 3: than beginning. The Conference board is leading index of ten

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Speaker 3: economic indicators has dropped to levels typically associated with recession,

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Speaker 3: and Bloomberg Intelligence says that that, taken with some other models,

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Speaker 3: suggests that the US economy has actually struggled with recession

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Speaker 3: since the middle of twenty twenty two. The US dollar

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Speaker 3: opened Monday morning trading here in Asia. Mixed inflation gauges

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Speaker 3: for the US and the eurozoner do out this week.

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Speaker 3: They'll be on Thursday. The inflation gauges may support an

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Speaker 3: end to rate hikes around the world. In a corporate note,

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Speaker 3: Origin Energies Board is thought to be unconvinced by a

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Speaker 3: revised takeover proposal made by Brookfield Asset Management and EIG

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Speaker 3: Global Partners. The Australian Financial Review says that directors are

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Speaker 3: leaning toward rejecting that new bid. Now it's time for

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Speaker 3: global news. Momentum is building to try to extend the

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Speaker 3: Israel Hamas truce beyond four days. At Baxter has the

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Speaker 3: story and the rest of the news from the nine

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Speaker 3: to sixty newsrom in San Francisco.

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Speaker 4: Yeah, that's exactly right, Brian. This after the release of

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Speaker 4: seventeen hostages in northern Gaza today in the third day

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Speaker 4: of swaps. Prime Minister of Cutter Altony on CBS has

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Speaker 4: heard on Bloomberg says he, along with Israel Hamas and

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Speaker 4: the US have established an office to try and continue

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Speaker 4: the flow of these releases.

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Speaker 5: All right now we aughtun them mided of the negotiation.

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Speaker 6: We would always keep the communication open with everyone, and.

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Speaker 4: That US President Joe Biden says he endorses a longer pause.

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Speaker 7: That's my goal, that's our goal, to keep this pause

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Speaker 7: going beyond tomorrow, so that we can continue to see

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Speaker 7: more hostages come out and serves more humanitary relief into

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Speaker 7: those and who in need in Gaza.

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Speaker 4: And n I, says Jake Sullivan on ABC Has Heard

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Speaker 4: On Bloomberg says Hamas has a big part to play

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Speaker 4: in the decision.

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Speaker 6: Hamas could choose on Tuesday, on Wednesday, on Thursday to

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Speaker 6: continue to release hostages, and then the pause would continue.

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Speaker 6: If the pause stops, the responsibility for that rests on

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Speaker 6: the shoulders of Hamas, not on the shoulders of Israel.

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Speaker 4: And Sullivan Tomas benefits, he says, from the deal as well.

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Speaker 4: Israeli Prime Minister Benjamin Thatt Yahoo said Israel is making

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Speaker 4: every effort to get all the hostages released now. One

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Speaker 4: of those released today as an American Israeli girl named

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Speaker 4: Abigail Edon. She is four years old.

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Speaker 7: She's in Israel now and so those who are now

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Speaker 7: rapping Abigail in love and care and the support of

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Speaker 7: services she needs. She's been through a terrible trauma.

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Speaker 4: Her parents were killed in the October seventh attacks. Negotiations

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Speaker 4: continue on future releases. I meanwhile, US Senator Chris Murphy

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Speaker 4: is saying that US lawmakers should consider conditioning future aid

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Speaker 4: to Israel based on its compliance with international humanitarian law.

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Speaker 8: Unacceptable and is unsustainable. I think there's both a moral

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Speaker 8: costs to this, many civilians, innocent civilians, children often losing

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Speaker 8: their life. But I think there's a strategic cost. Ultimately,

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Speaker 8: Hamas will get stronger, not weaker in the long run

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Speaker 8: if all of this civilian death allows them to recruit

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Speaker 8: more effectively, enablely inside Gaza.

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Speaker 5: Now.

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Speaker 4: Murphy on Cnnsvilian death toll must stop. China's Health Commission

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Speaker 4: says a combination of pathogens is causing a surge in

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Speaker 4: acute respiratory infections across the country. It says influenza is

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Speaker 4: one of the main causes of the spike in cases,

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Speaker 4: and the hopes that this announcement of the statement will

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Speaker 4: cause a lowering of concern that it is some kind

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Speaker 4: of mystery novel virus. Global News twenty four hours a

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Speaker 4: day and whenever you want it with Bloomberg News now

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Speaker 4: in San Francisco. I'm Ed Baxter, and this is Bloomberg.

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Speaker 3: All right, Blad, and thanks very much the time six

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Speaker 3: minutes past the hour. Let's take a look now at

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Speaker 3: some of the top business stories of the hour. COP

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Speaker 3: twenty eight, the UN's latest climate change conference, will kickoff

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Speaker 3: later this week in Dubai. Its negotiators are hoping that

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Speaker 3: it can kickstart carbon trading to bring down the cost

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Speaker 3: of fighting global warning. Let's get more from Bloomberg Nathan Hager.

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Speaker 9: More than one hundred and ninety nations are gathering to

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Speaker 9: discuss us the rules for a new UN overseen emissions market.

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Speaker 9: It would let holders of carbon credits compensate for their

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Speaker 9: own pollution by investing in projects aimed at cutting emissions elsewhere.

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Speaker 9: The goal is to provide more investor certainty. There is

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Speaker 9: concern that existing voluntary projects do little or nothing to

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Speaker 9: curb climate change. COP twenty eight begins on Thursday and

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Speaker 9: runs through December twelfth. Nathan Hager Bloomberg.

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Speaker 2: Radio sources tell Bloomberg that Middle Eastern wealth funds are

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Speaker 2: facing greater scrutiny on US deals from the Biden administration.

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Speaker 2: It's part of a broader pushback on andaites perceived to

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Speaker 2: have close ties with Beijing. We've got more from Bloomberg's

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Speaker 2: Charlie Palette.

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Speaker 10: Sources say the Committee on Foreign Investment in the US

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Speaker 10: is reviewing several multi billion dollar deals this year on

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Speaker 10: concerns they could pose national security risks. Officials and President

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Speaker 10: Biden's cabinet are said to be currently reviewing more than

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Speaker 10: half a dozen acquisitions, including deals from Abu Dhabi Investment

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Speaker 10: Authority on Saudi Arabia's public investment fund. While the US

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Speaker 10: remains a preferred investment destination for the region's largest wealth funds,

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Speaker 10: China has emerged as an increasingly attractive jurisdiction. Charlie Pellett

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Speaker 10: Bloomberg Radio.

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Speaker 3: Black Friday Shopper has spent a record nine point eight

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Speaker 3: billion dollars online in the United States. Bloomberg's Denise Pellegreney

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Speaker 3: has the story.

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Speaker 11: Adobe Analytics says demand for electronics, smartwatch as, TVs, and

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Speaker 11: audio equipment helped boost the day's online sales by seven

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Speaker 11: and a half percent compared with last year, as consumers

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Speaker 11: expanded budgets, with more of those buy now, pay later options. Separately,

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Speaker 11: Salesforce says US Black Friday online sales grew nine percent

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Speaker 11: year on your It cited popularity of footwear, sporting goods, health,

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Speaker 11: and beauty. It's still not clear, though, if this wall

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Speaker 11: translate into better than expected holiday season sales overall, since

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Speaker 11: some consumers have indicated they do plan to snag margins

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Speaker 11: by shopping early this year. Denise Pellegreni Bloomberg Radio.

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Speaker 2: China has opened probes and the money management business of

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Speaker 2: Jean Xi Enterprise Group. Bloomberg Zevon Man has more from

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Speaker 2: Hong Kong.

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Speaker 12: The investigation comes days after Jong Ju revealed a shortfall

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Speaker 12: of thirty six billion dollars on its balance sheet. Chinese

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Speaker 12: police said in a statement on we Chat they took

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Speaker 12: criminal measures against multiple suspects. The legal terminology was similar

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Speaker 12: to the case of Evergrand chairman Hui Kayen. Evergance said

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Speaker 12: in September that Huai was suspected of committing crimes. Those

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Speaker 12: affected by Jon Ju's troubles are likely to be wealthy

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Speaker 12: individuals related to the group's founder, chie Juquin. One of

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Speaker 12: the suspects identified by police is surnamed Schieh in Hong Kong.

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Speaker 12: I'm Yvonne Mann Bloomberg Radio.

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Speaker 3: In a potential huge shakeup of the ev industry, battery

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Speaker 3: giants are now investing more of their money on new

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Speaker 3: sodium based technology. Bloomberg's Joan Wong has the story from

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Speaker 3: Hong Kong.

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Speaker 13: Sodium has the potential to make inroads into energy storage

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Speaker 13: and electric via calls, and it could be a game changer.

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Speaker 13: We hear China's BYD signed a deal to build a

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Speaker 13: one point four billion dollars sodium im battery plant last week.

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Speaker 13: Sweden's north Volt also said it made a breakthrough, and

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Speaker 13: China catl set back in April that its sodium batteries

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Speaker 13: would be used in some vehicles from this year. Sodium

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Speaker 13: is cheaper and far more abundant than lysium. The shift

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Speaker 13: from lithium to sodium could mark a big shick up

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Speaker 13: in the industry. For now, experts say the space looks

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Speaker 13: to be dominated by Chinese producers in Hong Kong, joined

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Speaker 13: Wong Bloomberg Radio.

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Speaker 2: Australia's government will introduce legislation this week to facilitate a

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Speaker 2: plan to revamp of the Reserve Bank, and the bill

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Speaker 2: follows an independent review of the Reserve Bank of Australia

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Speaker 2: in May, and that made about fifty one. Well, it

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Speaker 2: did make fifty one recommendations for change. They include the

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Speaker 2: confirmation of a dual policy mandate and repealing the Treasurer's

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Speaker 2: ability to overrule the bank's monetary policy decisions. The legislation

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Speaker 2: will also contain provisions to set up again evenance board

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Speaker 2: to oversee the abi's management. And of course there's a

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Speaker 2: Bipolitan support for this ivohole.

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Speaker 3: Let's say good morning to James Abate, Managing director and

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Speaker 3: CIO of Center Asset Management. James, thank you very much

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Speaker 3: for joining us on a Sunday there. I want to

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Speaker 3: get your take on that Bloomberg intelligence call that I

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Speaker 3: mentioned a few moments ago about any recession in the

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Speaker 3: United States, Well, it might be closer to ending rather

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Speaker 3: than beginning. The essential point seems to be that at

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Speaker 3: different times over the past fifteen months or so, different

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Speaker 3: sectors have actually been troubled and have been in a

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Speaker 3: state of recession, and that now we may be getting

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Speaker 3: toward the end. Does your view differ from that?

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Speaker 5: Right? I mean, we've talked about rolling your session through

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Speaker 5: the US economy. Now over the last several times have

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Speaker 5: had the pleasure to speak with you, and you know,

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Speaker 5: one of the things that we talked about as an

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Speaker 5: unexpected scenario that could basically impact markets in twenty twenty

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Speaker 5: three at the start of the year was that perhaps

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Speaker 5: the most telegraph recession in history just doesn't happen. And

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Speaker 5: part of that was the fact that when we looked

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Speaker 5: at top down indicators and economist strategists who typically rely

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Speaker 5: upon those top down indicators like the yield curve, inversions,

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Speaker 5: the ism numbers, leading economic indicators, housing construction, et cetera,

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Speaker 5: et cetera, we're all pointing to recession. But the thing

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Speaker 5: that we cautioned people to look at why recession may

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Speaker 5: not be in the cards at that point in time

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Speaker 5: is if you look at indicators from a bottom up perspective,

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Speaker 5: leverage ratios weren't excessive asset efficiency, which was really a

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Speaker 5: very important point. We hadn't had an undisciplined capital spending

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Speaker 5: cycle leading up to twenty twenty three, which was unprecedented

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Speaker 5: in most industries. And even though we've had interest rate

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Speaker 5: events stalled earnings, we haven't had a credit event which

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Speaker 5: has basically tipped the economy into a full bone recession.

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Speaker 5: And ironically, I must say now that everyone is on

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Speaker 5: the boat where we're probably leaning towards no landing. We're

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Speaker 5: starting to see bottom up indicators that are indicating that

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Speaker 5: perhaps a shallow recession or outright recession is perhaps more

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Speaker 5: probable now than it was at the beginning of twenty

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Speaker 5: twenty three.

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Speaker 2: So where does this leave you in terms of right

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Speaker 2: cut expectations in twenty twenty four.

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Speaker 5: I think that's the issue because right you know, this

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Speaker 5: week we'll get the PCE number, which is the Fed's

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Speaker 5: most favorite indicator in terms of inflation and expectations, and

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Speaker 5: expectations either that will come in around three and a

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Speaker 5: half percent. I think you have to look at other

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Speaker 5: central banks, right you look at South Korea, which is

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Speaker 5: a heavily export and cyclical driven. It's been the pathfinder

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Speaker 5: for other central banks and they were early to start tightening,

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Speaker 5: and now they're in this what we call hawkish hold

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Speaker 5: bade so to an extent where investors are pivoting or

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Speaker 5: expecting the FED to pivot to some type of easing

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Speaker 5: type of policy. We think it's actually going to be

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Speaker 5: a rather sluggish environment in terms of the FED basically

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Speaker 5: pivoting from its rather restrictive policy at least in terms

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Speaker 5: of recent history to an outright easing. So the market

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Speaker 5: may be getting ahead of itself. And with the VIX

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Speaker 5: index below thirteen, this is probably a very good time too,

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Speaker 5: you know, because of cost efficiency to stay hedged with

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Speaker 5: inequity portfolios.

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Speaker 3: It's been a rough period for small caps and they've

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Speaker 3: only just recently caught a bid.

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Speaker 1: And some people might say that.

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Speaker 3: That supports the early view that you had, which is

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Speaker 3: that perhaps we've already cleared some of the recession. But

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Speaker 3: I'm really interested in what you said right at the

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Speaker 3: end about seeing some new conditions that tell you that

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Speaker 3: maybe we're actually going to.

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Speaker 1: Get shallow recession. What all those conditions, The.

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Speaker 5: Main ones is that when we look at operating profit

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Speaker 5: margins and the aggregate for the SMP five HUND on

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Speaker 5: an equal weighted basis, and this basically eliminates the impact

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Speaker 5: from the Magnificent seven or the largest companies, they remain

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Speaker 5: high and they're rolling over and we haven't seen yet

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Speaker 5: a reversion back to anywhere close to a normalized profit

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Speaker 5: type of environment. Second act efficiency, which was the thing

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Speaker 5: that we really hung our hat on in the beginning

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Speaker 5: of the year, which was excellent at that point in time,

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Speaker 5: we're starting to see utilization rates starting to roll over,

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Speaker 5: capital spending starting to increase, and a lot of other dynamics. Thirdly,

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Speaker 5: the thing that we're seeing is that many companies were

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Speaker 5: very prudent in locking in low interest rates when they

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Speaker 5: had the opportunity and have not felt the impact of

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Speaker 5: the rise of the federal funds rate over the past

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Speaker 5: couple of years. Now, as you started to see credits

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Speaker 5: start to roll over, you're starting to see that interest costs.

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Speaker 5: When you strip out the most you know, the largest

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Speaker 5: companies that are cash rips like Appable, Microsoft, et cetera,

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Speaker 5: their their interest rate, their interest costs are starting to

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Speaker 5: go up as well. So any kind of environment, you know,

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Speaker 5: indicates some type of you know, stress.

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Speaker 3: I would say that that seems like stress for the

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Speaker 3: stock market, but not the economy.

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Speaker 5: Well, I think you need to remember that, you know,

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Speaker 5: even looking back at you know, the recession of two

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Speaker 5: thousand and one two thousand and two is very shallow,

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Speaker 5: but you still had a profound rerating in the market.

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Speaker 5: And again this is the issue. We've had the impact

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Speaker 5: of interest rate risk, we've had the impact of stagnation

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Speaker 5: of earnings, we haven't yet had changes in risk premiums

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Speaker 5: or credit premiums, and they're still at historical lows. So

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Speaker 5: to the extent that we get at you know, continuation

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Speaker 5: of you know, perhaps stagnation of earnings, you don't get

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Speaker 5: the leverage of people are expecting in terms of you know,

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Speaker 5: profit margin expansion visa v sales growth. You still have

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Speaker 5: many geopolitical risks, you know, we have got, you know,

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Speaker 5: all the domestic risks that we have here in the

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Speaker 5: United States entering into the elections of twenty twenty four.

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Speaker 5: There are many things that can shake investor confidence. And remember,

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Speaker 5: you know, stock markets are three dimensional. It's it's not

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Speaker 5: only earnings and risk free rates, but it's also expectations

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Speaker 5: or appetites for risk, and that could change on a dime.

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Speaker 1: So just reef in twenty seconds.

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Speaker 3: It seems like you're suggesting that the stock market's gotten

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Speaker 3: a little ahead of itself.

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Speaker 5: Now, well, well, I think what we have is an

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Speaker 5: environment where again we've had the S and P five

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Speaker 5: hundred go back to its highs. We're entering environment that is,

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Speaker 5: you know, riddled with uncertainty. I say, it's still cost

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Speaker 5: to fish to stay hedged in equity portfolios. Yeah, given

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Speaker 5: all those risks.

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Speaker 3: This is Bloomberg Daybreak Asia, your morning brief on the

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Speaker 3: story's making news from Hong Kong to Singapore and Wall Street.

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