WEBVTT - COP28 Preview, Black Friday Spending, Zhongzi Probe

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<v Speaker 1>Good morning. I'm Brian Curtis.

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<v Speaker 2>And I'm Paul Allen. Here are the stories we have

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<v Speaker 2>following today.

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<v Speaker 3>Well, it's looking largely positive here in the early going,

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

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<v Speaker 3>Investor fears seem to be receding a little bit, and

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<v Speaker 3>we've course seen that over the past many weeks. US

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<v Speaker 3>talks finished flat on Friday in a shortened session, but

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<v Speaker 3>it was a fourth consecutive week of gains. The VICS

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<v Speaker 3>has dropped to the lowest level since early twenty twenty,

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<v Speaker 3>and news that you just heard there in our headline

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<v Speaker 3>that Black Friday shoppers had spent nearly ten billion dollars

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<v Speaker 3>online also adds a note of optimism. It's a positive

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<v Speaker 3>sign for retailers. They've actually been facing lackluster sales forecast

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<v Speaker 3>for the holiday season. Bloomberg Intelligence says that any recession

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<v Speaker 3>in the United States may be closer to ending rather

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<v Speaker 3>than beginning. The Conference board is leading index of ten

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<v Speaker 3>economic indicators has dropped to levels typically associated with recession,

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<v Speaker 3>and Bloomberg Intelligence says that that, taken with some other models,

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<v Speaker 3>suggests that the US economy has actually struggled with recession

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<v Speaker 3>since the middle of twenty twenty two. The US dollar

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<v Speaker 3>opened Monday morning trading here in Asia. Mixed inflation gauges

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<v Speaker 3>for the US and the eurozoner do out this week.

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<v Speaker 3>They'll be on Thursday. The inflation gauges may support an

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<v Speaker 3>end to rate hikes around the world. In a corporate note,

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<v Speaker 3>Origin Energies Board is thought to be unconvinced by a

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<v Speaker 3>revised takeover proposal made by Brookfield Asset Management and EIG

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<v Speaker 3>Global Partners. The Australian Financial Review says that directors are

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<v Speaker 3>leaning toward rejecting that new bid. Now it's time for

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<v Speaker 3>global news. Momentum is building to try to extend the

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<v Speaker 3>Israel Hamas truce beyond four days. At Baxter has the

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<v Speaker 3>story and the rest of the news from the nine

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<v Speaker 3>to sixty newsrom in San Francisco.

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

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<v Speaker 4>seventeen hostages in northern Gaza today in the third day

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<v Speaker 4>of swaps. Prime Minister of Cutter Altony on CBS has

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<v Speaker 4>heard on Bloomberg says he, along with Israel Hamas and

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<v Speaker 4>the US have established an office to try and continue

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<v Speaker 4>the flow of these releases.

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<v Speaker 5>All right now we aughtun them mided of the negotiation.

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<v Speaker 6>We would always keep the communication open with everyone, and.

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<v Speaker 4>That US President Joe Biden says he endorses a longer pause.

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<v Speaker 7>That's my goal, that's our goal, to keep this pause

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<v Speaker 7>going beyond tomorrow, so that we can continue to see

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<v Speaker 7>more hostages come out and serves more humanitary relief into

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<v Speaker 7>those and who in need in Gaza.

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<v Speaker 4>And n I, says Jake Sullivan on ABC Has Heard

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<v Speaker 4>On Bloomberg says Hamas has a big part to play

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<v Speaker 4>in the decision.

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<v Speaker 6>Hamas could choose on Tuesday, on Wednesday, on Thursday to

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<v Speaker 6>continue to release hostages, and then the pause would continue.

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<v Speaker 6>If the pause stops, the responsibility for that rests on

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<v Speaker 6>the shoulders of Hamas, not on the shoulders of Israel.

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<v Speaker 4>And Sullivan Tomas benefits, he says, from the deal as well.

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<v Speaker 4>Israeli Prime Minister Benjamin Thatt Yahoo said Israel is making

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<v Speaker 4>every effort to get all the hostages released now. One

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<v Speaker 4>of those released today as an American Israeli girl named

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<v Speaker 4>Abigail Edon. She is four years old.

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<v Speaker 7>She's in Israel now and so those who are now

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<v Speaker 7>rapping Abigail in love and care and the support of

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<v Speaker 7>services she needs. She's been through a terrible trauma.

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<v Speaker 4>Her parents were killed in the October seventh attacks. Negotiations

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<v Speaker 4>continue on future releases. I meanwhile, US Senator Chris Murphy

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<v Speaker 4>is saying that US lawmakers should consider conditioning future aid

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<v Speaker 4>to Israel based on its compliance with international humanitarian law.

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<v Speaker 8>Unacceptable and is unsustainable. I think there's both a moral

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<v Speaker 8>costs to this, many civilians, innocent civilians, children often losing

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

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<v Speaker 8>Hamas will get stronger, not weaker in the long run

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<v Speaker 8>if all of this civilian death allows them to recruit

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<v Speaker 8>more effectively, enablely inside Gaza.

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<v Speaker 5>Now.

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<v Speaker 4>Murphy on Cnnsvilian death toll must stop. China's Health Commission

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<v Speaker 4>says a combination of pathogens is causing a surge in

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<v Speaker 4>acute respiratory infections across the country. It says influenza is

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<v Speaker 4>one of the main causes of the spike in cases,

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<v Speaker 4>and the hopes that this announcement of the statement will

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<v Speaker 4>cause a lowering of concern that it is some kind

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<v Speaker 4>of mystery novel virus. Global News twenty four hours a

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<v Speaker 4>day and whenever you want it with Bloomberg News now

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

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<v Speaker 3>All right, Blad, and thanks very much the time six

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<v Speaker 3>minutes past the hour. Let's take a look now at

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<v Speaker 3>some of the top business stories of the hour. COP

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<v Speaker 3>twenty eight, the UN's latest climate change conference, will kickoff

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<v Speaker 3>later this week in Dubai. Its negotiators are hoping that

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<v Speaker 3>it can kickstart carbon trading to bring down the cost

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

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<v Speaker 9>More than one hundred and ninety nations are gathering to

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<v Speaker 9>discuss us the rules for a new UN overseen emissions market.

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<v Speaker 9>It would let holders of carbon credits compensate for their

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<v Speaker 9>own pollution by investing in projects aimed at cutting emissions elsewhere.

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<v Speaker 9>The goal is to provide more investor certainty. There is

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<v Speaker 9>concern that existing voluntary projects do little or nothing to

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<v Speaker 9>curb climate change. COP twenty eight begins on Thursday and

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<v Speaker 9>runs through December twelfth. Nathan Hager Bloomberg.

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<v Speaker 2>Radio sources tell Bloomberg that Middle Eastern wealth funds are

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<v Speaker 2>facing greater scrutiny on US deals from the Biden administration.

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<v Speaker 2>It's part of a broader pushback on andaites perceived to

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

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<v Speaker 2>Charlie Palette.

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<v Speaker 10>Sources say the Committee on Foreign Investment in the US

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<v Speaker 10>is reviewing several multi billion dollar deals this year on

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<v Speaker 10>concerns they could pose national security risks. Officials and President

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<v Speaker 10>Biden's cabinet are said to be currently reviewing more than

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<v Speaker 10>half a dozen acquisitions, including deals from Abu Dhabi Investment

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<v Speaker 10>Authority on Saudi Arabia's public investment fund. While the US

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

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<v Speaker 10>China has emerged as an increasingly attractive jurisdiction. Charlie Pellett

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<v Speaker 10>Bloomberg Radio.

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<v Speaker 3>Black Friday Shopper has spent a record nine point eight

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<v Speaker 3>billion dollars online in the United States. Bloomberg's Denise Pellegreney

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<v Speaker 3>has the story.

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<v Speaker 11>Adobe Analytics says demand for electronics, smartwatch as, TVs, and

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<v Speaker 11>audio equipment helped boost the day's online sales by seven

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<v Speaker 11>and a half percent compared with last year, as consumers

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

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<v Speaker 11>Salesforce says US Black Friday online sales grew nine percent

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<v Speaker 11>year on your It cited popularity of footwear, sporting goods, health,

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

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<v Speaker 11>translate into better than expected holiday season sales overall, since

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<v Speaker 11>some consumers have indicated they do plan to snag margins

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<v Speaker 11>by shopping early this year. Denise Pellegreni Bloomberg Radio.

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<v Speaker 2>China has opened probes and the money management business of

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<v Speaker 2>Jean Xi Enterprise Group. Bloomberg Zevon Man has more from

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<v Speaker 2>Hong Kong.

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<v Speaker 12>The investigation comes days after Jong Ju revealed a shortfall

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<v Speaker 12>of thirty six billion dollars on its balance sheet. Chinese

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<v Speaker 12>police said in a statement on we Chat they took

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<v Speaker 12>criminal measures against multiple suspects. The legal terminology was similar

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<v Speaker 12>to the case of Evergrand chairman Hui Kayen. Evergance said

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<v Speaker 12>in September that Huai was suspected of committing crimes. Those

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<v Speaker 12>affected by Jon Ju's troubles are likely to be wealthy

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

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<v Speaker 12>the suspects identified by police is surnamed Schieh in Hong Kong.

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<v Speaker 12>I'm Yvonne Mann Bloomberg Radio.

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<v Speaker 3>In a potential huge shakeup of the ev industry, battery

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<v Speaker 3>giants are now investing more of their money on new

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<v Speaker 3>sodium based technology. Bloomberg's Joan Wong has the story from

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<v Speaker 3>Hong Kong.

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<v Speaker 13>Sodium has the potential to make inroads into energy storage

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<v Speaker 13>and electric via calls, and it could be a game changer.

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<v Speaker 13>We hear China's BYD signed a deal to build a

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<v Speaker 13>one point four billion dollars sodium im battery plant last week.

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<v Speaker 13>Sweden's north Volt also said it made a breakthrough, and

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<v Speaker 13>China catl set back in April that its sodium batteries

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<v Speaker 13>would be used in some vehicles from this year. Sodium

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<v Speaker 13>is cheaper and far more abundant than lysium. The shift

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<v Speaker 13>from lithium to sodium could mark a big shick up

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<v Speaker 13>in the industry. For now, experts say the space looks

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<v Speaker 13>to be dominated by Chinese producers in Hong Kong, joined

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<v Speaker 13>Wong Bloomberg Radio.

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<v Speaker 2>Australia's government will introduce legislation this week to facilitate a

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<v Speaker 2>plan to revamp of the Reserve Bank, and the bill

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<v Speaker 2>follows an independent review of the Reserve Bank of Australia

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<v Speaker 2>in May, and that made about fifty one. Well, it

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<v Speaker 2>did make fifty one recommendations for change. They include the

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<v Speaker 2>confirmation of a dual policy mandate and repealing the Treasurer's

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<v Speaker 2>ability to overrule the bank's monetary policy decisions. The legislation

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<v Speaker 2>will also contain provisions to set up again evenance board

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<v Speaker 2>to oversee the abi's management. And of course there's a

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<v Speaker 2>Bipolitan support for this ivohole.

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<v Speaker 3>Let's say good morning to James Abate, Managing director and

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<v Speaker 3>CIO of Center Asset Management. James, thank you very much

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<v Speaker 3>for joining us on a Sunday there. I want to

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<v Speaker 3>get your take on that Bloomberg intelligence call that I

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<v Speaker 3>mentioned a few moments ago about any recession in the

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<v Speaker 3>United States, Well, it might be closer to ending rather

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<v Speaker 3>than beginning. The essential point seems to be that at

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<v Speaker 3>different times over the past fifteen months or so, different

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<v Speaker 3>sectors have actually been troubled and have been in a

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<v Speaker 3>state of recession, and that now we may be getting

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<v Speaker 3>toward the end. Does your view differ from that?

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

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<v Speaker 5>the US economy. Now over the last several times have

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<v Speaker 5>had the pleasure to speak with you, and you know,

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<v Speaker 5>one of the things that we talked about as an

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<v Speaker 5>unexpected scenario that could basically impact markets in twenty twenty

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<v Speaker 5>three at the start of the year was that perhaps

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<v Speaker 5>the most telegraph recession in history just doesn't happen. And

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<v Speaker 5>part of that was the fact that when we looked

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<v Speaker 5>at top down indicators and economist strategists who typically rely

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<v Speaker 5>upon those top down indicators like the yield curve, inversions,

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<v Speaker 5>the ism numbers, leading economic indicators, housing construction, et cetera,

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

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<v Speaker 5>that we cautioned people to look at why recession may

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<v Speaker 5>not be in the cards at that point in time

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<v Speaker 5>is if you look at indicators from a bottom up perspective,

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<v Speaker 5>leverage ratios weren't excessive asset efficiency, which was really a

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<v Speaker 5>very important point. We hadn't had an undisciplined capital spending

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<v Speaker 5>cycle leading up to twenty twenty three, which was unprecedented

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<v Speaker 5>in most industries. And even though we've had interest rate

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<v Speaker 5>events stalled earnings, we haven't had a credit event which

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<v Speaker 5>has basically tipped the economy into a full bone recession.

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<v Speaker 5>And ironically, I must say now that everyone is on

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<v Speaker 5>the boat where we're probably leaning towards no landing. We're

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<v Speaker 5>starting to see bottom up indicators that are indicating that

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<v Speaker 5>perhaps a shallow recession or outright recession is perhaps more

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<v Speaker 5>probable now than it was at the beginning of twenty

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<v Speaker 5>twenty three.

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<v Speaker 2>So where does this leave you in terms of right

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<v Speaker 2>cut expectations in twenty twenty four.

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<v Speaker 5>I think that's the issue because right you know, this

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<v Speaker 5>week we'll get the PCE number, which is the Fed's

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<v Speaker 5>most favorite indicator in terms of inflation and expectations, and

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<v Speaker 5>expectations either that will come in around three and a

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<v Speaker 5>half percent. I think you have to look at other

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<v Speaker 5>central banks, right you look at South Korea, which is

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<v Speaker 5>a heavily export and cyclical driven. It's been the pathfinder

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<v Speaker 5>for other central banks and they were early to start tightening,

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<v Speaker 5>and now they're in this what we call hawkish hold

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<v Speaker 5>bade so to an extent where investors are pivoting or

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<v Speaker 5>expecting the FED to pivot to some type of easing

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<v Speaker 5>type of policy. We think it's actually going to be

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<v Speaker 5>a rather sluggish environment in terms of the FED basically

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<v Speaker 5>pivoting from its rather restrictive policy at least in terms

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<v Speaker 5>of recent history to an outright easing. So the market

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<v Speaker 5>may be getting ahead of itself. And with the VIX

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<v Speaker 5>index below thirteen, this is probably a very good time too,

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<v Speaker 5>you know, because of cost efficiency to stay hedged with

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<v Speaker 5>inequity portfolios.

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<v Speaker 3>It's been a rough period for small caps and they've

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<v Speaker 3>only just recently caught a bid.

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<v Speaker 1>And some people might say that.

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<v Speaker 3>That supports the early view that you had, which is

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<v Speaker 3>that perhaps we've already cleared some of the recession. But

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<v Speaker 3>I'm really interested in what you said right at the

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<v Speaker 3>end about seeing some new conditions that tell you that

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<v Speaker 3>maybe we're actually going to.

0:12:59.679 --> 0:13:03.120
<v Speaker 1>Get shallow recession. What all those conditions, The.

0:13:03.640 --> 0:13:06.480
<v Speaker 5>Main ones is that when we look at operating profit

0:13:06.600 --> 0:13:10.200
<v Speaker 5>margins and the aggregate for the SMP five HUND on

0:13:10.240 --> 0:13:15.600
<v Speaker 5>an equal weighted basis, and this basically eliminates the impact

0:13:15.640 --> 0:13:19.040
<v Speaker 5>from the Magnificent seven or the largest companies, they remain

0:13:19.240 --> 0:13:24.600
<v Speaker 5>high and they're rolling over and we haven't seen yet

0:13:24.679 --> 0:13:30.680
<v Speaker 5>a reversion back to anywhere close to a normalized profit

0:13:30.800 --> 0:13:34.760
<v Speaker 5>type of environment. Second act efficiency, which was the thing

0:13:34.840 --> 0:13:37.160
<v Speaker 5>that we really hung our hat on in the beginning

0:13:37.240 --> 0:13:40.000
<v Speaker 5>of the year, which was excellent at that point in time,

0:13:40.480 --> 0:13:44.120
<v Speaker 5>we're starting to see utilization rates starting to roll over,

0:13:44.520 --> 0:13:50.240
<v Speaker 5>capital spending starting to increase, and a lot of other dynamics. Thirdly,

0:13:50.760 --> 0:13:53.480
<v Speaker 5>the thing that we're seeing is that many companies were

0:13:53.600 --> 0:13:57.800
<v Speaker 5>very prudent in locking in low interest rates when they

0:13:57.840 --> 0:14:00.680
<v Speaker 5>had the opportunity and have not felt the impact of

0:14:00.720 --> 0:14:03.520
<v Speaker 5>the rise of the federal funds rate over the past

0:14:03.520 --> 0:14:06.400
<v Speaker 5>couple of years. Now, as you started to see credits

0:14:06.400 --> 0:14:10.120
<v Speaker 5>start to roll over, you're starting to see that interest costs.

0:14:10.600 --> 0:14:13.720
<v Speaker 5>When you strip out the most you know, the largest

0:14:13.720 --> 0:14:16.440
<v Speaker 5>companies that are cash rips like Appable, Microsoft, et cetera,

0:14:16.880 --> 0:14:20.000
<v Speaker 5>their their interest rate, their interest costs are starting to

0:14:20.040 --> 0:14:23.560
<v Speaker 5>go up as well. So any kind of environment, you know,

0:14:23.640 --> 0:14:26.160
<v Speaker 5>indicates some type of you know, stress.

0:14:27.440 --> 0:14:29.880
<v Speaker 3>I would say that that seems like stress for the

0:14:29.880 --> 0:14:31.479
<v Speaker 3>stock market, but not the economy.

0:14:32.680 --> 0:14:35.160
<v Speaker 5>Well, I think you need to remember that, you know,

0:14:35.280 --> 0:14:38.360
<v Speaker 5>even looking back at you know, the recession of two

0:14:38.400 --> 0:14:40.800
<v Speaker 5>thousand and one two thousand and two is very shallow,

0:14:41.400 --> 0:14:45.080
<v Speaker 5>but you still had a profound rerating in the market.

0:14:45.320 --> 0:14:48.160
<v Speaker 5>And again this is the issue. We've had the impact

0:14:48.240 --> 0:14:50.680
<v Speaker 5>of interest rate risk, we've had the impact of stagnation

0:14:50.760 --> 0:14:54.880
<v Speaker 5>of earnings, we haven't yet had changes in risk premiums

0:14:55.280 --> 0:14:58.840
<v Speaker 5>or credit premiums, and they're still at historical lows. So

0:14:58.920 --> 0:15:01.800
<v Speaker 5>to the extent that we get at you know, continuation

0:15:02.040 --> 0:15:05.480
<v Speaker 5>of you know, perhaps stagnation of earnings, you don't get

0:15:05.480 --> 0:15:08.680
<v Speaker 5>the leverage of people are expecting in terms of you know,

0:15:08.840 --> 0:15:13.520
<v Speaker 5>profit margin expansion visa v sales growth. You still have

0:15:13.640 --> 0:15:17.840
<v Speaker 5>many geopolitical risks, you know, we have got, you know,

0:15:17.920 --> 0:15:20.000
<v Speaker 5>all the domestic risks that we have here in the

0:15:20.080 --> 0:15:23.360
<v Speaker 5>United States entering into the elections of twenty twenty four.

0:15:23.640 --> 0:15:27.520
<v Speaker 5>There are many things that can shake investor confidence. And remember,

0:15:27.720 --> 0:15:30.440
<v Speaker 5>you know, stock markets are three dimensional. It's it's not

0:15:30.480 --> 0:15:33.840
<v Speaker 5>only earnings and risk free rates, but it's also expectations

0:15:33.880 --> 0:15:37.280
<v Speaker 5>or appetites for risk, and that could change on a dime.

0:15:37.960 --> 0:15:39.600
<v Speaker 1>So just reef in twenty seconds.

0:15:39.640 --> 0:15:42.440
<v Speaker 3>It seems like you're suggesting that the stock market's gotten

0:15:42.440 --> 0:15:43.360
<v Speaker 3>a little ahead of itself.

0:15:43.360 --> 0:15:45.880
<v Speaker 5>Now, well, well, I think what we have is an

0:15:45.960 --> 0:15:49.640
<v Speaker 5>environment where again we've had the S and P five

0:15:49.680 --> 0:15:54.280
<v Speaker 5>hundred go back to its highs. We're entering environment that is,

0:15:55.080 --> 0:15:59.680
<v Speaker 5>you know, riddled with uncertainty. I say, it's still cost

0:15:59.720 --> 0:16:02.600
<v Speaker 5>to fish to stay hedged in equity portfolios. Yeah, given

0:16:02.640 --> 0:16:04.480
<v Speaker 5>all those risks.

0:16:05.480 --> 0:16:08.320
<v Speaker 3>This is Bloomberg Daybreak Asia, your morning brief on the

0:16:08.440 --> 0:16:12.080
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0:16:12.440 --> 0:16:16.040
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