1 00:00:00,160 --> 00:00:06,840 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:09,640 --> 00:00:13,440 Speaker 2: This is the Bloomberg Daybreak Asia podcast. I'm Brian Curtis, 3 00:00:13,440 --> 00:00:16,159 Speaker 2: along with Doug Krisner. Join us each day for the 4 00:00:16,239 --> 00:00:19,600 Speaker 2: stories making news and moving markets in the Asia Pacific. 5 00:00:19,800 --> 00:00:22,239 Speaker 2: You can subscribe to the show anywhere you get your 6 00:00:22,280 --> 00:00:26,200 Speaker 2: podcasts and always on Bloomberg Radio, the Bloomberg Terminal, and 7 00:00:26,239 --> 00:00:27,600 Speaker 2: the Bloomberg Business App. 8 00:00:28,360 --> 00:00:31,080 Speaker 3: Onto our top story from the Bloomberg Terminal. The Biden 9 00:00:31,080 --> 00:00:36,920 Speaker 3: administration has discussed capping sales of advanced semiconductors from companies 10 00:00:37,000 --> 00:00:40,839 Speaker 3: like Nvidia and other major chip firms on a country 11 00:00:40,880 --> 00:00:44,360 Speaker 3: specific basis. We are told to aim is to limit 12 00:00:44,400 --> 00:00:49,200 Speaker 3: some nations capabilities from gathering these sophisticated AI chips. Let's 13 00:00:49,240 --> 00:00:52,200 Speaker 3: take a closer look now with Bloomberg's Anabel Droolers, who 14 00:00:52,280 --> 00:00:55,880 Speaker 3: joins us from Sydney. Annabel one of our tech reporters. 15 00:00:55,880 --> 00:00:57,680 Speaker 3: Good of you to make time. I'm sure it's busy 16 00:00:57,720 --> 00:01:00,360 Speaker 3: for you. Can you help me understand what we know 17 00:01:00,440 --> 00:01:01,280 Speaker 3: so far about this? 18 00:01:02,520 --> 00:01:02,720 Speaker 4: Thanks? 19 00:01:02,760 --> 00:01:02,920 Speaker 5: Star. 20 00:01:03,040 --> 00:01:04,399 Speaker 4: Yeah, I think we just need to look at sort 21 00:01:04,400 --> 00:01:06,640 Speaker 4: of the broader context and the framework around this. So 22 00:01:06,720 --> 00:01:08,960 Speaker 4: the US or the Commerce Department in the US has 23 00:01:08,959 --> 00:01:12,600 Speaker 4: a framework called the Validated End User Program, that's the 24 00:01:13,400 --> 00:01:17,400 Speaker 4: VEU program rather for short. Now, this is a mechanism 25 00:01:17,400 --> 00:01:20,360 Speaker 4: that essentially allows the US government to track the transfer 26 00:01:20,400 --> 00:01:24,160 Speaker 4: of export control technologies to places like China and India, 27 00:01:24,560 --> 00:01:27,319 Speaker 4: and last month that was actually expanded to include data centers. 28 00:01:27,360 --> 00:01:30,360 Speaker 4: Of course, AI data centers are a particular focus right now, 29 00:01:30,360 --> 00:01:33,520 Speaker 4: and there's so much activity going around those now. The 30 00:01:33,600 --> 00:01:36,920 Speaker 4: reporting today is looking at how the VEU framework could 31 00:01:36,920 --> 00:01:40,200 Speaker 4: be used to restrict shipments of AI chips to places 32 00:01:40,480 --> 00:01:43,240 Speaker 4: like the Middle East. The Middle East, we know it's 33 00:01:43,240 --> 00:01:46,119 Speaker 4: a region that not only wants to invest more into 34 00:01:46,160 --> 00:01:49,600 Speaker 4: AI cloud facilities, it also has really deep pockets to 35 00:01:49,680 --> 00:01:52,880 Speaker 4: fund them. And so there's that concern that perhaps around 36 00:01:53,000 --> 00:01:55,560 Speaker 4: that growing relationship we see with the Middle East and 37 00:01:55,680 --> 00:01:59,520 Speaker 4: China in particular, that the sort of export restrictions that 38 00:01:59,520 --> 00:02:02,920 Speaker 4: are already in place to limit Beijing's technological ambitions in 39 00:02:02,960 --> 00:02:07,840 Speaker 4: this area could be sort of circumvented through third party countries. 40 00:02:08,320 --> 00:02:11,000 Speaker 2: So is this targeted at the countries or the companies, 41 00:02:11,080 --> 00:02:13,399 Speaker 2: because I think in our story we say that this 42 00:02:13,440 --> 00:02:17,680 Speaker 2: could include asking companies, say in the Middle East, to 43 00:02:17,880 --> 00:02:19,320 Speaker 2: reduce their ties with China. 44 00:02:20,400 --> 00:02:23,399 Speaker 4: That is sort of one of the ways that export 45 00:02:23,720 --> 00:02:27,480 Speaker 4: licenses can be used as a point of leverage, because 46 00:02:28,560 --> 00:02:30,720 Speaker 4: if you do want those chips, for instance, yes, the 47 00:02:30,840 --> 00:02:33,880 Speaker 4: US can use the VEU program to say to a 48 00:02:33,919 --> 00:02:36,480 Speaker 4: certain company in the Middle East, look, you can only 49 00:02:36,520 --> 00:02:38,800 Speaker 4: have these chips if you're prepared to sort of cut 50 00:02:38,840 --> 00:02:42,120 Speaker 4: ties in a way with China. It's a very difficult 51 00:02:42,160 --> 00:02:44,880 Speaker 4: thing to enforce though, and it's also that question of 52 00:02:44,919 --> 00:02:47,720 Speaker 4: how would companies respond themselves, because we've already seen those 53 00:02:47,720 --> 00:02:50,880 Speaker 4: export restrictions on companies like Nvidia for instance, and they 54 00:02:50,919 --> 00:02:54,320 Speaker 4: also partially responded, yes, by limiting the most advanced technology, 55 00:02:54,480 --> 00:02:57,560 Speaker 4: but they still redesign certain chips to continue exporting to 56 00:02:57,639 --> 00:02:59,320 Speaker 4: places like China as well. 57 00:03:00,160 --> 00:03:03,359 Speaker 3: That's my question is about, you know, kind of transparency 58 00:03:03,560 --> 00:03:06,120 Speaker 3: tracking this and enforcement this has got to be very 59 00:03:06,160 --> 00:03:06,919 Speaker 3: difficult to do. 60 00:03:08,120 --> 00:03:11,440 Speaker 4: Yeah, and that's certainly sort of one of the arguments 61 00:03:11,480 --> 00:03:14,280 Speaker 4: I guess against it, because people would say that if 62 00:03:14,320 --> 00:03:17,280 Speaker 4: you are going to continue to restrict China, then you're 63 00:03:17,320 --> 00:03:20,079 Speaker 4: just simply as well going to still allow certain shipments 64 00:03:20,120 --> 00:03:22,120 Speaker 4: of places to China. We had reporting where you can 65 00:03:22,200 --> 00:03:25,799 Speaker 4: still get that most advanced technology in places like shen 66 00:03:25,880 --> 00:03:28,800 Speaker 4: Jen for instance, and At the same time, China continues 67 00:03:28,840 --> 00:03:32,320 Speaker 4: to develop its own advanced chips in the background, and 68 00:03:32,360 --> 00:03:34,480 Speaker 4: so that also becomes a concern as well. If you 69 00:03:34,560 --> 00:03:37,800 Speaker 4: totally turn off the tap, then ultimately China still continues 70 00:03:37,840 --> 00:03:40,400 Speaker 4: to progress, even if there maybe a decade behind. They 71 00:03:40,400 --> 00:03:42,760 Speaker 4: could catch up at a later point and you've sort 72 00:03:42,760 --> 00:03:46,960 Speaker 4: of had that dichotomy or duopoly that you've created in 73 00:03:46,960 --> 00:03:47,480 Speaker 4: the system. 74 00:03:48,600 --> 00:03:52,160 Speaker 2: So I understand from our story that these deliberations are 75 00:03:53,000 --> 00:03:55,960 Speaker 2: in the early stages and there are talks underway, and 76 00:03:56,000 --> 00:04:01,160 Speaker 2: almost everybody involved, the brew of Industry and Security, VideA, AMD, 77 00:04:01,960 --> 00:04:05,280 Speaker 2: other companies, Intel, they've all declined to comment. Is there 78 00:04:05,320 --> 00:04:08,240 Speaker 2: some sort of catalyst that we might see where this 79 00:04:08,440 --> 00:04:09,600 Speaker 2: kind of comes to the fore? 80 00:04:10,000 --> 00:04:10,280 Speaker 6: Does it? 81 00:04:10,600 --> 00:04:12,720 Speaker 2: Is this something that we may not hear much about 82 00:04:12,760 --> 00:04:14,120 Speaker 2: for say a year. 83 00:04:16,080 --> 00:04:19,280 Speaker 4: No timing that we've had so far. Really, I mean, 84 00:04:19,279 --> 00:04:21,880 Speaker 4: what we understand from sources is the deliberations that are 85 00:04:21,920 --> 00:04:24,839 Speaker 4: in the early stages here they could remain fluid. We 86 00:04:24,920 --> 00:04:27,600 Speaker 4: have seen the US and the Middle East or the 87 00:04:27,720 --> 00:04:31,080 Speaker 4: UE rather putting out a joint statement on artificial intelligence. 88 00:04:31,360 --> 00:04:34,520 Speaker 4: So they are at least talking about the use of 89 00:04:34,760 --> 00:04:39,560 Speaker 4: AI technology saying that there's tremendous potential for AI of 90 00:04:39,680 --> 00:04:42,159 Speaker 4: AI rather for good, and that there are the challenges 91 00:04:42,200 --> 00:04:43,960 Speaker 4: and risk, But in terms of the timing for this 92 00:04:44,080 --> 00:04:46,840 Speaker 4: or the potential catalyst, I really can't give any comment 93 00:04:46,880 --> 00:04:47,719 Speaker 4: on that one in particular. 94 00:04:47,800 --> 00:04:50,400 Speaker 3: Ye, And it's interesting. I recall a Bloomberg article a 95 00:04:50,440 --> 00:04:53,760 Speaker 3: couple of weeks ago talking about the possibility that maybe 96 00:04:53,880 --> 00:04:57,799 Speaker 3: some countries in the Middle East could begin to host 97 00:04:57,920 --> 00:05:01,599 Speaker 3: construction of some new chip found Do we know any 98 00:05:01,640 --> 00:05:03,159 Speaker 3: more about that? 99 00:05:03,160 --> 00:05:07,039 Speaker 4: That was some reporting yeah, around TSMC in particular, and 100 00:05:07,080 --> 00:05:08,960 Speaker 4: we know of course, And actually last week I was 101 00:05:09,000 --> 00:05:11,760 Speaker 4: talking with Taiwan's tech minister that there are a number 102 00:05:11,800 --> 00:05:14,240 Speaker 4: of countries that are all regions as well, that are 103 00:05:14,279 --> 00:05:20,719 Speaker 4: trying to win over the major tech companies to establish 104 00:05:20,760 --> 00:05:22,400 Speaker 4: their bases. That we know the Middle East as well, 105 00:05:22,440 --> 00:05:25,240 Speaker 4: it's got very deep pockets and they have very deep ambitions. 106 00:05:25,240 --> 00:05:27,799 Speaker 4: That've been one of the real front runners in trying 107 00:05:27,800 --> 00:05:31,800 Speaker 4: to grow AI technology. But TSMC, for its part, has 108 00:05:31,920 --> 00:05:34,640 Speaker 4: denied that speculation. They came back and said that they 109 00:05:34,680 --> 00:05:37,680 Speaker 4: didn't have any further investment plans into this region in particular. 110 00:05:38,240 --> 00:05:40,360 Speaker 4: But certainly, yeah, of course it's something to track. 111 00:05:40,520 --> 00:05:42,680 Speaker 3: It's been too long. Thanks for making time to chat 112 00:05:42,720 --> 00:05:45,839 Speaker 3: with us. Annabel drulers there from our studios in Sydney. 113 00:05:45,839 --> 00:05:49,559 Speaker 3: Annabel is a Bloomberg tech reporter normally based in Hong Kong, 114 00:05:49,920 --> 00:05:51,320 Speaker 3: joining us here on a daybreak. 115 00:05:51,320 --> 00:06:04,640 Speaker 2: Ashiap Vanessa Chen had evasion fixed income in investment directing 116 00:06:04,680 --> 00:06:08,680 Speaker 2: at Fidelity International with this live in our studios. So 117 00:06:08,720 --> 00:06:11,840 Speaker 2: we had this Sischen report talking about six trillion you on. 118 00:06:11,880 --> 00:06:14,520 Speaker 2: That's basically two trillion you on which we knew was 119 00:06:14,520 --> 00:06:19,800 Speaker 2: coming in this next year spread out over another three years. 120 00:06:20,440 --> 00:06:22,760 Speaker 2: Some investors may turn up their nose a little bit 121 00:06:22,760 --> 00:06:25,160 Speaker 2: to this, Vanessa, and that the feeling might be the 122 00:06:25,560 --> 00:06:29,080 Speaker 2: economy needs stimulus now, not three years down the road. 123 00:06:29,080 --> 00:06:30,920 Speaker 2: But what are your thoughts on this? 124 00:06:31,640 --> 00:06:36,200 Speaker 7: I think the most important message that throughout the past 125 00:06:36,279 --> 00:06:39,560 Speaker 7: couple of weeks from the Chinese goffman or the regulators 126 00:06:40,080 --> 00:06:44,719 Speaker 7: is that the intention and the willingness to provide policy 127 00:06:44,760 --> 00:06:49,720 Speaker 7: support or if you call it, stimulus, in order to 128 00:06:49,760 --> 00:06:52,960 Speaker 7: continue to growth trajectory of the country. And I think 129 00:06:53,000 --> 00:06:59,200 Speaker 7: that's probably a fairly well planned and well orchestraed policy 130 00:06:59,240 --> 00:07:01,640 Speaker 7: to have come through. We've seen the rate cuts that 131 00:07:02,000 --> 00:07:05,240 Speaker 7: provide liquidity in the market, and there's also the capital 132 00:07:05,360 --> 00:07:08,280 Speaker 7: market policies that's really trying to drive a little bit 133 00:07:08,279 --> 00:07:11,960 Speaker 7: more wealth effect into the economy and the subsequently focusing 134 00:07:11,960 --> 00:07:15,360 Speaker 7: on the property sectors as well. And the MF meeting 135 00:07:15,440 --> 00:07:19,440 Speaker 7: over the weekend does help to address some of the 136 00:07:19,520 --> 00:07:21,720 Speaker 7: kind of question marks in a lot of investors' mind 137 00:07:21,960 --> 00:07:27,160 Speaker 7: related to local government, physcal health, as well as policies 138 00:07:27,200 --> 00:07:31,640 Speaker 7: that will potentially help to recapitalize some of the large 139 00:07:31,720 --> 00:07:33,160 Speaker 7: state on commercial banks as well. 140 00:07:33,280 --> 00:07:36,840 Speaker 3: So take us inside the fixed income markets in China 141 00:07:36,920 --> 00:07:40,800 Speaker 3: right now, help us understand the market response to a 142 00:07:40,800 --> 00:07:44,000 Speaker 3: lot of these policies that have been rolled out. Is 143 00:07:44,040 --> 00:07:47,880 Speaker 3: the market right now generally positive? What is it debating 144 00:07:47,920 --> 00:07:48,440 Speaker 3: at the moment? 145 00:07:49,320 --> 00:07:49,480 Speaker 1: Yeah? 146 00:07:49,520 --> 00:07:52,800 Speaker 7: I think first of all, in China, there's a lot 147 00:07:52,880 --> 00:07:58,120 Speaker 7: of wealth that's been locked into something called wealth management products, 148 00:07:58,320 --> 00:08:00,520 Speaker 7: and a lot of this historically, maybe before the past 149 00:08:00,520 --> 00:08:05,680 Speaker 7: couple of years, have been allocating to the China onshore 150 00:08:06,000 --> 00:08:09,000 Speaker 7: bonds because of the liquidity, because of the high quality 151 00:08:09,240 --> 00:08:13,120 Speaker 7: nature of it, and given the capital markets policy that's 152 00:08:13,160 --> 00:08:16,040 Speaker 7: being provided, there's a lot of if you would, unwinding 153 00:08:16,080 --> 00:08:18,880 Speaker 7: of some of these wealth management products, which means that 154 00:08:18,960 --> 00:08:21,840 Speaker 7: there's a little bit more pressure on some of the 155 00:08:21,920 --> 00:08:24,880 Speaker 7: bonds at this juncture where we see some of the 156 00:08:24,880 --> 00:08:29,480 Speaker 7: corporate bonds spread widening, whilst there's a little bit more 157 00:08:29,560 --> 00:08:32,559 Speaker 7: kind of flows moving into the equity market. And then 158 00:08:32,600 --> 00:08:36,760 Speaker 7: on the other hand, some of the policy narratives that's 159 00:08:36,800 --> 00:08:41,600 Speaker 7: provided by mof more on the potential additional ded quotas, 160 00:08:41,840 --> 00:08:46,840 Speaker 7: potential special bonds issuances or even ultralong bond issuances means 161 00:08:46,840 --> 00:08:49,600 Speaker 7: that they're potentially a little bit more supply coming through 162 00:08:49,920 --> 00:08:52,640 Speaker 7: and that also tilted a little bit in terms of 163 00:08:52,720 --> 00:08:54,559 Speaker 7: the supply and de amount balances when it comes to 164 00:08:54,640 --> 00:08:57,800 Speaker 7: the bond market. However, if you look in slight longer term, 165 00:08:57,960 --> 00:09:01,240 Speaker 7: given the fact that Chinese government is likely to have 166 00:09:01,320 --> 00:09:04,720 Speaker 7: a bit more easing policy when it comes to monetary size, 167 00:09:04,800 --> 00:09:07,680 Speaker 7: we do think that the China ownsobombs continue to be 168 00:09:07,760 --> 00:09:11,160 Speaker 7: offering value, particularly on the liquidity side as well. 169 00:09:11,320 --> 00:09:14,800 Speaker 2: So we understand that revd up fiscal spending is what 170 00:09:15,000 --> 00:09:19,559 Speaker 2: investors and economists are most excited about now. It's kind 171 00:09:19,559 --> 00:09:22,360 Speaker 2: of like the PBOC actions cutting interest rates and the 172 00:09:22,360 --> 00:09:26,080 Speaker 2: triple are and such is way in the rear view mirror. 173 00:09:26,360 --> 00:09:28,280 Speaker 2: So there's a lot writing on this and some people 174 00:09:28,280 --> 00:09:29,640 Speaker 2: have come on and said, well, we just have to 175 00:09:29,679 --> 00:09:32,839 Speaker 2: be patient because we'll have the Standing Committee of the 176 00:09:32,920 --> 00:09:35,960 Speaker 2: National People's Congress that will have to approve this. So 177 00:09:36,000 --> 00:09:38,720 Speaker 2: you can't really confirm it now if you're the Ministry 178 00:09:38,720 --> 00:09:41,040 Speaker 2: of Finance until it gets approved by the legislature. But 179 00:09:41,440 --> 00:09:45,440 Speaker 2: in China, you know, when the party tells the NPC 180 00:09:45,760 --> 00:09:48,560 Speaker 2: to jump, it jumps. So is this going to happen 181 00:09:48,679 --> 00:09:48,880 Speaker 2: or not? 182 00:09:50,120 --> 00:09:50,320 Speaker 1: Yeah. 183 00:09:50,360 --> 00:09:52,520 Speaker 7: I think the which kind of come back to what 184 00:09:52,600 --> 00:09:54,480 Speaker 7: I was the opening part of it is the intention 185 00:09:54,559 --> 00:09:58,120 Speaker 7: and the willingness and coming out over the weekend to 186 00:09:58,280 --> 00:10:03,319 Speaker 7: kind of I guess reinforces. So the message that earlier 187 00:10:03,360 --> 00:10:07,360 Speaker 7: on late of September have been provided is important, is 188 00:10:07,440 --> 00:10:10,800 Speaker 7: to give the market enough signaling that yes, they're aware 189 00:10:10,840 --> 00:10:14,840 Speaker 7: of the situation of the economy, they are on the 190 00:10:14,880 --> 00:10:19,559 Speaker 7: path of willingness and continue the intention of providing additional 191 00:10:19,880 --> 00:10:23,200 Speaker 7: support to the economy. I think there were some debate 192 00:10:23,200 --> 00:10:25,880 Speaker 7: about whether there was a number and all that, but 193 00:10:26,480 --> 00:10:31,319 Speaker 7: I think overall the policy maker probably wanted to retain 194 00:10:31,360 --> 00:10:34,280 Speaker 7: a little bit more flexibility and options as and when 195 00:10:34,960 --> 00:10:38,359 Speaker 7: the economy is needed. There will certainly be policy support, 196 00:10:38,440 --> 00:10:41,920 Speaker 7: particularly on the fiscal side. More targeted, more specific in 197 00:10:42,040 --> 00:10:44,200 Speaker 7: order to provide a little bit of a kick for 198 00:10:44,240 --> 00:10:45,160 Speaker 7: the economy as well. 199 00:10:45,320 --> 00:10:48,960 Speaker 3: Venessa, I'm curious, how are you observing the behavior of 200 00:10:49,040 --> 00:10:51,800 Speaker 3: foreign investors right now given everything that we're talking about. 201 00:10:51,880 --> 00:10:55,360 Speaker 3: Is there appetite for foreign investors to become involved or 202 00:10:55,400 --> 00:10:57,280 Speaker 3: are they kind of at this point taking a step 203 00:10:57,320 --> 00:11:00,440 Speaker 3: back and just waiting for a little bit more maybe 204 00:11:00,480 --> 00:11:01,600 Speaker 3: some of the dust to settle. 205 00:11:02,200 --> 00:11:04,480 Speaker 7: Yeah. I think one of the interesting is very interesting 206 00:11:04,559 --> 00:11:08,839 Speaker 7: questions because given my background as a fixed income specialist, 207 00:11:09,400 --> 00:11:13,480 Speaker 7: we've been looking at the China CGB market China government 208 00:11:13,440 --> 00:11:16,439 Speaker 7: bonds market for a long time and we've been sharing 209 00:11:16,480 --> 00:11:19,600 Speaker 7: with a lot of investors that is a market where 210 00:11:19,640 --> 00:11:25,840 Speaker 7: you can potentially get diversification benefits and low correlations compared 211 00:11:25,840 --> 00:11:30,680 Speaker 7: to the Europe or US denominated asset class. And what 212 00:11:30,720 --> 00:11:33,520 Speaker 7: we've seen is for the past couple of months, there 213 00:11:33,600 --> 00:11:37,520 Speaker 7: is a graduate pickup in terms of foreign investors participation 214 00:11:37,600 --> 00:11:41,640 Speaker 7: in the on shore CGB markets. Lesser though on the 215 00:11:41,640 --> 00:11:45,000 Speaker 7: broader credit space, but probably more to capture some of 216 00:11:45,000 --> 00:11:48,080 Speaker 7: the diversification benefits. So I would say on the fixing 217 00:11:48,080 --> 00:11:50,480 Speaker 7: income side, there's gradually kind of coming back in terms 218 00:11:50,520 --> 00:11:52,680 Speaker 7: of foreign investor participation in the market. 219 00:11:53,440 --> 00:11:55,920 Speaker 2: Vanessa, thanks so much for joining us here on Bloomberg 220 00:11:56,000 --> 00:12:00,480 Speaker 2: Daybreak Asia. Vanessa Chan at Evasion Fixed Income Investment Directing 221 00:12:00,880 --> 00:12:11,920 Speaker 2: at Fidelity International. Joining us now is Joy Young, head 222 00:12:11,960 --> 00:12:17,079 Speaker 2: of index product management and marketing at market Vector Indexes. Joey, 223 00:12:17,120 --> 00:12:20,840 Speaker 2: thanks very much for coming on the program. We appreciate 224 00:12:20,880 --> 00:12:23,920 Speaker 2: it so here. Of late in the past court in 225 00:12:23,960 --> 00:12:27,720 Speaker 2: the third quarter, we had breadth in the market, and 226 00:12:27,760 --> 00:12:30,120 Speaker 2: that's something that you know, we hadn't seen in a while. 227 00:12:30,320 --> 00:12:33,480 Speaker 2: It had been pretty much all the Magnificent seven and 228 00:12:33,559 --> 00:12:37,240 Speaker 2: a clutch of other stocks. So I'm wondering since those 229 00:12:37,320 --> 00:12:39,560 Speaker 2: markets in the other four are those stocks in the 230 00:12:39,559 --> 00:12:42,600 Speaker 2: other four hundred and ninety three for a lot of 231 00:12:42,640 --> 00:12:45,320 Speaker 2: the past year or two that were kind of still 232 00:12:45,320 --> 00:12:49,400 Speaker 2: in a bear market from twenty twenty two. So for them, 233 00:12:49,559 --> 00:12:51,719 Speaker 2: this is like the beginning of something. This is the 234 00:12:51,760 --> 00:12:54,680 Speaker 2: beginning of a bull market. Is that something that you 235 00:12:54,760 --> 00:12:57,360 Speaker 2: think continues or do you think this money will all 236 00:12:57,440 --> 00:13:00,240 Speaker 2: rush back into the videos of the world Again. 237 00:13:01,160 --> 00:13:04,360 Speaker 1: Hi, Brian, Thanks. I think this is going to be 238 00:13:04,400 --> 00:13:08,640 Speaker 1: exciting week as we see third quarter earnings reporting and 239 00:13:08,720 --> 00:13:11,320 Speaker 1: as you said, we're finally beginning to see kind of 240 00:13:11,320 --> 00:13:17,680 Speaker 1: this broader market lift across you know, outside of the 241 00:13:17,679 --> 00:13:21,440 Speaker 1: big tech stocks. But yeah, we're nearing the end of 242 00:13:21,480 --> 00:13:24,920 Speaker 1: the year, and I think it's because I think finally 243 00:13:25,000 --> 00:13:28,199 Speaker 1: we're getting some kind of reprieve out of just focusing 244 00:13:28,240 --> 00:13:32,320 Speaker 1: on inflation and labor data, and we're finally focusing back 245 00:13:32,400 --> 00:13:35,320 Speaker 1: on fundamentals and we're seeing this week, we're seeing the 246 00:13:35,320 --> 00:13:38,400 Speaker 1: banks get lifted, you know, so we're seeing some good 247 00:13:38,440 --> 00:13:43,680 Speaker 1: earnings reports and expectations on earnings outside of just AI 248 00:13:43,960 --> 00:13:46,800 Speaker 1: and technology. So I think that's going to be exciting. 249 00:13:46,840 --> 00:13:48,920 Speaker 1: And we're seeing you know, the S and P as 250 00:13:48,960 --> 00:13:52,360 Speaker 1: well as the down jows industrial hit all times high. 251 00:13:53,000 --> 00:13:56,600 Speaker 1: So I think that's you know, we're heading into another 252 00:13:56,679 --> 00:13:58,800 Speaker 1: strong market quarter. 253 00:13:59,200 --> 00:14:02,000 Speaker 3: Yeah, today it's forty sixth the record of the year 254 00:14:02,040 --> 00:14:04,320 Speaker 3: at fifty eight to fifty nine. Do we make it 255 00:14:04,320 --> 00:14:06,200 Speaker 3: to six grand by the end of the year, do 256 00:14:06,240 --> 00:14:06,560 Speaker 3: you think? 257 00:14:07,600 --> 00:14:10,840 Speaker 1: I mean, at this momentum, it's looking likely. But I think, 258 00:14:10,880 --> 00:14:14,920 Speaker 1: you know, there's still a lot of uncertainty in the market, 259 00:14:15,040 --> 00:14:18,720 Speaker 1: especially with you know, we're now you know, watching the election, 260 00:14:19,560 --> 00:14:22,960 Speaker 1: geopolitical risks are picking up. So you know, what we're 261 00:14:23,000 --> 00:14:27,160 Speaker 1: seeing is gold which had also been trending up along 262 00:14:27,240 --> 00:14:30,320 Speaker 1: with markets, which is quite unusual. Has now kind of 263 00:14:30,600 --> 00:14:34,080 Speaker 1: like flattened a little bit. I think people are being cautious. 264 00:14:34,200 --> 00:14:37,240 Speaker 1: They're really waiting to see the next bit of news 265 00:14:37,280 --> 00:14:38,200 Speaker 1: come out. 266 00:14:38,600 --> 00:14:41,320 Speaker 2: Yeah, that's a very good point, because not only is 267 00:14:41,400 --> 00:14:44,800 Speaker 2: gold up near record highs, but you have the VIX 268 00:14:44,880 --> 00:14:48,240 Speaker 2: at twenty when stocks are at an all time high. That's 269 00:14:48,280 --> 00:14:50,720 Speaker 2: a little unusual. I guess it just means that people 270 00:14:50,760 --> 00:14:53,720 Speaker 2: are really hedged because they're long and they want to 271 00:14:53,840 --> 00:14:57,640 Speaker 2: stay long. But there must be an interesting story behind that. 272 00:14:58,520 --> 00:15:00,600 Speaker 1: Yeah, exactly, And I think this is you know, it's 273 00:15:00,640 --> 00:15:02,880 Speaker 1: quite unusual to see both go up at the same 274 00:15:02,960 --> 00:15:04,960 Speaker 1: time when we're seeing that. You know, these are two 275 00:15:05,040 --> 00:15:09,520 Speaker 1: asset classes that should be you know, uncorrelated. But as 276 00:15:09,560 --> 00:15:12,400 Speaker 1: you said, you know, we're in unusual territory right now 277 00:15:12,440 --> 00:15:16,280 Speaker 1: where we have this very strong market. But again it 278 00:15:16,520 --> 00:15:20,440 Speaker 1: had been narrowly led up till now, and people don't 279 00:15:20,440 --> 00:15:22,760 Speaker 1: want to miss out. But at the same time, you know, 280 00:15:22,800 --> 00:15:25,920 Speaker 1: we're seeing all of these risks cropping up, whether it's 281 00:15:25,960 --> 00:15:30,840 Speaker 1: around you know, global geopolitical tensions, trade wars, elections, you know, 282 00:15:30,920 --> 00:15:34,800 Speaker 1: even these you know, China markets resurfacing, and I think 283 00:15:34,800 --> 00:15:38,720 Speaker 1: people are really trying to hedge the downside events and 284 00:15:38,800 --> 00:15:42,480 Speaker 1: really trying to diversify to make sure their positioned for 285 00:15:42,880 --> 00:15:44,240 Speaker 1: you know, different outcomes. 286 00:15:44,560 --> 00:15:47,240 Speaker 3: Do you think there's the risk that we face fewer 287 00:15:47,440 --> 00:15:50,400 Speaker 3: right cuts from the FED or less easing maybe that's 288 00:15:50,400 --> 00:15:56,200 Speaker 3: another way of putting it. 289 00:15:55,000 --> 00:15:58,760 Speaker 1: It's really hard at this point because I think we 290 00:15:58,920 --> 00:16:03,119 Speaker 1: saw last week, you know, one data point, whereas previously 291 00:16:03,160 --> 00:16:06,800 Speaker 1: we're seeing this small incremental trend back to you know, 292 00:16:07,280 --> 00:16:11,560 Speaker 1: lower inflation and control on the labor market. But you know, 293 00:16:12,240 --> 00:16:14,200 Speaker 1: who knows what's going to show up in the next 294 00:16:14,240 --> 00:16:16,680 Speaker 1: economic data. You know, was that a blip? Where is 295 00:16:16,720 --> 00:16:21,120 Speaker 1: this you know, really an indication that you know, inflation 296 00:16:21,240 --> 00:16:23,840 Speaker 1: is out of control, which will really surprise I think 297 00:16:23,880 --> 00:16:26,720 Speaker 1: what people have been pricing in. 298 00:16:27,360 --> 00:16:29,680 Speaker 2: We we just had a flash across the terminal that 299 00:16:29,720 --> 00:16:33,000 Speaker 2: the US government is weighing capping in Nvidia and a 300 00:16:33,200 --> 00:16:37,600 Speaker 2: m d AI chip sales to some countries around the world. 301 00:16:38,240 --> 00:16:41,000 Speaker 2: We don't have many details on this, but you know, 302 00:16:41,280 --> 00:16:44,800 Speaker 2: are US regulators becoming China in the sense that there 303 00:16:44,960 --> 00:16:49,880 Speaker 2: is almost this obsession with security now and you know, 304 00:16:49,920 --> 00:16:55,400 Speaker 2: looking away from from from markets and from company and capitalism, 305 00:16:55,440 --> 00:16:57,280 Speaker 2: I mean, which is US is known for. 306 00:16:59,320 --> 00:17:02,680 Speaker 1: But what we're we're also seeing is this increasing escalation 307 00:17:02,760 --> 00:17:05,600 Speaker 1: of trade wars, you know, So you know, we're seeing 308 00:17:05,760 --> 00:17:09,680 Speaker 1: China with its over capacity flooding the markets, and we're 309 00:17:09,720 --> 00:17:12,720 Speaker 1: seeing you know, not just US markets, but markets around 310 00:17:12,880 --> 00:17:16,120 Speaker 1: you know, governments around the world trying to protect protect 311 00:17:16,119 --> 00:17:20,719 Speaker 1: their local industries and really maintain some kind of competitiveness. 312 00:17:21,119 --> 00:17:24,160 Speaker 1: So I think this is just you know, the progression 313 00:17:24,440 --> 00:17:31,679 Speaker 1: of what we're seeing around protectionism and escalating trade wars. 314 00:17:31,720 --> 00:17:35,400 Speaker 1: So I don't you know, this isn't you know, unexpected. 315 00:17:35,520 --> 00:17:37,960 Speaker 1: I don't know what other course of action, you know, 316 00:17:39,480 --> 00:17:43,359 Speaker 1: kind of these trade wars have placed governments into joy very. 317 00:17:43,280 --> 00:17:46,760 Speaker 3: Quickly, thirty seconds or so. A big surprise for the 318 00:17:46,880 --> 00:17:49,960 Speaker 3: Chinese markets. Do you think that we're seeing this kind 319 00:17:49,960 --> 00:17:51,920 Speaker 3: of stimulus come in. Do you think we make new 320 00:17:51,960 --> 00:17:57,720 Speaker 3: highs or at least see a meaningful recovery in Chinese equities. 321 00:17:58,680 --> 00:18:02,000 Speaker 1: It certainly was a big pri is based on market reactions. 322 00:18:02,119 --> 00:18:04,680 Speaker 1: But I think what we saw, you know, especially over 323 00:18:04,720 --> 00:18:08,439 Speaker 1: the weekend, was the details are still forthcoming, So I 324 00:18:08,480 --> 00:18:11,040 Speaker 1: think it's going to be you know, buy on the rumors, 325 00:18:11,119 --> 00:18:13,520 Speaker 1: sell on the news. Because you know, as you know, 326 00:18:13,560 --> 00:18:16,560 Speaker 1: we see more and more detail, we'll see the repricing, 327 00:18:17,080 --> 00:18:17,440 Speaker 1: all right. 328 00:18:17,440 --> 00:18:20,439 Speaker 2: Joy, thank you. Joe Young joining us here from Market 329 00:18:20,520 --> 00:18:22,200 Speaker 2: vector Indexes. 330 00:18:28,359 --> 00:18:28,520 Speaker 1: Well. 331 00:18:28,560 --> 00:18:31,760 Speaker 2: Joining us now is David Aspell, co CIO at Mount 332 00:18:31,840 --> 00:18:36,159 Speaker 2: Lucas Asset Management. David, back in August, we had a 333 00:18:36,280 --> 00:18:40,480 Speaker 2: growth scare and markets got a little bit rattled. I'm 334 00:18:40,520 --> 00:18:43,720 Speaker 2: curious are we having another growth scare now, but one 335 00:18:43,800 --> 00:18:46,959 Speaker 2: that is to the upside. Witness the more than fifty 336 00:18:47,000 --> 00:18:49,520 Speaker 2: basis point jump in the tenure yield since the last 337 00:18:49,600 --> 00:18:52,080 Speaker 2: FED meeting and all. That's really just to ask you 338 00:18:52,680 --> 00:18:56,640 Speaker 2: when do higher yields actually spook the market rather than 339 00:18:56,840 --> 00:18:57,359 Speaker 2: fuel it? 340 00:18:59,000 --> 00:19:02,320 Speaker 5: Hi, Yeah, thanks for having me on. Yeah, it's a 341 00:19:02,359 --> 00:19:05,040 Speaker 5: great question. I think you're right. The path of the 342 00:19:05,080 --> 00:19:10,040 Speaker 5: FED pricing has swung back somewhat over the past maybe 343 00:19:10,119 --> 00:19:12,280 Speaker 5: over the past month or so, and you know, over 344 00:19:12,320 --> 00:19:14,560 Speaker 5: the summer in July and August, we did start to 345 00:19:14,600 --> 00:19:19,760 Speaker 5: see unemployment data start to make the market nervous and 346 00:19:19,800 --> 00:19:22,480 Speaker 5: think we were going to start pricing fifty basis points 347 00:19:22,480 --> 00:19:25,159 Speaker 5: in September and then two more fifty basis point cuts, 348 00:19:25,760 --> 00:19:29,199 Speaker 5: and then since we've had the unemployment data, you know, 349 00:19:29,800 --> 00:19:30,440 Speaker 5: just passed. 350 00:19:31,320 --> 00:19:34,280 Speaker 6: It looked as if that calms. 351 00:19:33,880 --> 00:19:37,240 Speaker 5: Some nerves some and we've allowed on years to float 352 00:19:37,280 --> 00:19:40,399 Speaker 5: back up again, so we're not quite pricing panicky anymore 353 00:19:40,440 --> 00:19:42,680 Speaker 5: panicky yield cuts from the FED. 354 00:19:43,119 --> 00:19:45,560 Speaker 3: I know that you'll focus a lot on the macro, 355 00:19:45,680 --> 00:19:48,160 Speaker 3: but I'm just wondering if you have a sense of earnings. 356 00:19:48,200 --> 00:19:50,520 Speaker 3: The season is just now under way. We heard from 357 00:19:50,520 --> 00:19:52,840 Speaker 3: the big banks at the end of last week, or 358 00:19:52,880 --> 00:19:55,639 Speaker 3: at least two more on tap this week, we'll hear 359 00:19:55,640 --> 00:19:59,080 Speaker 3: from Bank of America, City Goldman, and Morgan Stanley. How 360 00:19:59,080 --> 00:20:02,479 Speaker 3: do you think the market is going to kind of 361 00:20:02,480 --> 00:20:05,359 Speaker 3: digest what we're likely to get in the days and 362 00:20:05,400 --> 00:20:06,040 Speaker 3: weeks ahead. 363 00:20:07,040 --> 00:20:07,880 Speaker 6: Yeah, when it. 364 00:20:07,800 --> 00:20:09,720 Speaker 5: Comes to earnings, I feel like we're at a point where, 365 00:20:09,920 --> 00:20:11,959 Speaker 5: you know, you just want to keep it fairly simple 366 00:20:12,000 --> 00:20:13,560 Speaker 5: and that good news is good news. 367 00:20:14,119 --> 00:20:14,760 Speaker 6: It seems as. 368 00:20:14,680 --> 00:20:18,600 Speaker 5: If earning expectations have come down a fair amount, but 369 00:20:18,720 --> 00:20:22,000 Speaker 5: companies are doing well, you know, pretty much wherever I 370 00:20:22,040 --> 00:20:24,719 Speaker 5: look when I listen to conference calls, and I hear 371 00:20:24,760 --> 00:20:27,920 Speaker 5: them on some of the conferences, So I think, I 372 00:20:27,960 --> 00:20:30,160 Speaker 5: don't think we're in a world where that we've seen 373 00:20:30,200 --> 00:20:32,640 Speaker 5: over the past couple of years, where good news has 374 00:20:33,160 --> 00:20:35,240 Speaker 5: caused people to freak out because it would lead to 375 00:20:35,320 --> 00:20:38,119 Speaker 5: more interest rate hikes, which the market can't do with. 376 00:20:38,280 --> 00:20:41,000 Speaker 5: I think it's a case of at this point that 377 00:20:41,080 --> 00:20:42,919 Speaker 5: good earnings is good for the stock market. 378 00:20:44,480 --> 00:20:46,760 Speaker 2: One of the things we've seen of late is the 379 00:20:46,960 --> 00:20:50,239 Speaker 2: megacap tech stocks getting a bid again after kind of 380 00:20:50,280 --> 00:20:54,640 Speaker 2: sitting out the past three months or so. Microsoft and Nvidio, 381 00:20:54,720 --> 00:20:57,919 Speaker 2: they really did struggle since June. I'm wondering now in 382 00:20:57,960 --> 00:21:00,600 Speaker 2: this period ahead, because in these past three months you 383 00:21:00,680 --> 00:21:03,760 Speaker 2: had this really nice spread in markets, which a lot 384 00:21:03,760 --> 00:21:07,240 Speaker 2: of people championed, and I'm wondering whether or not, you know, 385 00:21:07,280 --> 00:21:09,159 Speaker 2: we swing back the other direction now, or do you 386 00:21:09,200 --> 00:21:11,439 Speaker 2: think that this recent period continues. 387 00:21:13,040 --> 00:21:14,840 Speaker 5: Yeah, I think I know people do like to see 388 00:21:14,840 --> 00:21:17,960 Speaker 5: an equity market broaden out. I don't, to be honest, 389 00:21:18,200 --> 00:21:20,560 Speaker 5: I think I'm in the opposite camp that generally, what 390 00:21:20,600 --> 00:21:22,800 Speaker 5: you want in a good, strong market is for the 391 00:21:22,920 --> 00:21:26,600 Speaker 5: leaders to do well, and that's companies like Nvidio and 392 00:21:26,680 --> 00:21:29,760 Speaker 5: Microsoft and you know, the hyperscalers as they're called, and 393 00:21:30,480 --> 00:21:32,840 Speaker 5: you know it can broaden out to others. Is fine, 394 00:21:32,840 --> 00:21:34,119 Speaker 5: but I think what you don't want to see is 395 00:21:35,119 --> 00:21:38,399 Speaker 5: the big ones starting to fall and then getting a 396 00:21:38,520 --> 00:21:41,520 Speaker 5: move into the smaller caps only. I think generally having 397 00:21:42,040 --> 00:21:44,000 Speaker 5: the big ones do well is very healthy. 398 00:21:44,480 --> 00:21:47,240 Speaker 3: David, maybe we can turn our attention to China next. 399 00:21:47,400 --> 00:21:50,919 Speaker 3: We've seen a lot of stimulus kind of unleashed in 400 00:21:51,040 --> 00:21:54,159 Speaker 3: various stages, more and more details coming out. Do you 401 00:21:54,200 --> 00:21:56,760 Speaker 3: think this is going to move the needle in a 402 00:21:56,800 --> 00:22:00,200 Speaker 3: meaningful way for the global economy beyond China itself. 403 00:22:00,760 --> 00:22:05,480 Speaker 6: Well beyond China itself. Yes, I would have thought so. 404 00:22:05,560 --> 00:22:07,040 Speaker 5: I mean, as I look at it, I mean, you've 405 00:22:07,080 --> 00:22:10,440 Speaker 5: seen a very fast and large rally in China equity 406 00:22:10,440 --> 00:22:14,480 Speaker 5: as the government has clearly changed courses. I see the 407 00:22:14,520 --> 00:22:18,000 Speaker 5: actions do look like they're large, and it seems like 408 00:22:18,040 --> 00:22:20,679 Speaker 5: there's more coming, and that a little bit like the 409 00:22:20,720 --> 00:22:21,639 Speaker 5: COVID restrictions. 410 00:22:21,680 --> 00:22:23,840 Speaker 6: You know, they were on and then they were off. 411 00:22:23,920 --> 00:22:26,159 Speaker 5: You know, they turned very quickly when they want to, 412 00:22:26,680 --> 00:22:29,040 Speaker 5: and I think. 413 00:22:28,040 --> 00:22:28,840 Speaker 6: That's what they're signaling. 414 00:22:28,920 --> 00:22:32,679 Speaker 5: It takes a while for the economic these stimulus measures 415 00:22:32,720 --> 00:22:35,000 Speaker 5: to have an impact, but the equity market is front 416 00:22:35,040 --> 00:22:37,679 Speaker 5: running that because I think it believes that it is 417 00:22:37,720 --> 00:22:40,600 Speaker 5: coming and it is going to be large, and you know, 418 00:22:40,920 --> 00:22:42,960 Speaker 5: does it help the rest of the global economy. I mean, 419 00:22:43,760 --> 00:22:45,199 Speaker 5: I would have thought served at the margin. I mean 420 00:22:45,240 --> 00:22:47,400 Speaker 5: it coming out of the two thousand and eight two 421 00:22:47,400 --> 00:22:49,840 Speaker 5: thousand and nine period, China unleased a lot of stimulu 422 00:22:49,920 --> 00:22:51,840 Speaker 5: sen and the rest of the world was very weak, 423 00:22:51,880 --> 00:22:54,399 Speaker 5: and it was certainly one of the things that helped. 424 00:22:55,840 --> 00:22:59,160 Speaker 2: If China does start to improve in terms of turning 425 00:22:59,200 --> 00:23:02,840 Speaker 2: its economy, and we just had this Taishin report saying 426 00:23:02,880 --> 00:23:05,720 Speaker 2: that the stimulus would not only be the two trillion 427 00:23:06,080 --> 00:23:09,560 Speaker 2: that we had talked about before the Chinese Finance Ministry 428 00:23:09,680 --> 00:23:12,960 Speaker 2: had the briefing on Saturday, but now multiply that times three, 429 00:23:13,040 --> 00:23:15,679 Speaker 2: so it would be six trillion or some eight hundred 430 00:23:15,680 --> 00:23:19,560 Speaker 2: and forty billion dollars worth of of you know, ultra 431 00:23:19,640 --> 00:23:23,760 Speaker 2: long government bonds. Anyway, if China does respond well and 432 00:23:23,800 --> 00:23:25,960 Speaker 2: the economy gets going, in the US seems to be, 433 00:23:26,119 --> 00:23:28,679 Speaker 2: you know, going from strength to strength at the moment, 434 00:23:29,400 --> 00:23:33,600 Speaker 2: could you see a global broadening out of stock appeal, 435 00:23:34,640 --> 00:23:36,680 Speaker 2: which we haven't really had for a while. 436 00:23:37,760 --> 00:23:39,200 Speaker 6: Yeah, I think so. I mean, you're right. 437 00:23:39,240 --> 00:23:41,560 Speaker 5: I mean, the Chinese economy is some you know, one 438 00:23:41,600 --> 00:23:44,760 Speaker 5: hundred and thirty trillion yuan and they've got say a 439 00:23:44,880 --> 00:23:47,880 Speaker 5: three four five percent hole in GDP that they need 440 00:23:47,920 --> 00:23:50,080 Speaker 5: to fill if they want to hit hit their growth 441 00:23:50,119 --> 00:23:52,280 Speaker 5: targets because the private sector has been very weak and 442 00:23:52,280 --> 00:23:55,479 Speaker 5: they need to short circuit this this dynamic. You know, 443 00:23:55,520 --> 00:23:57,520 Speaker 5: you can cut rates, which they've done, and they've cut 444 00:23:57,520 --> 00:24:00,880 Speaker 5: reserve requirements, and they're doing things the mortgage side which 445 00:24:00,920 --> 00:24:05,919 Speaker 5: are very helpful. But having direct fiscal stimulus it is 446 00:24:05,960 --> 00:24:07,879 Speaker 5: also very powerful on what they're doing. You know, if 447 00:24:07,880 --> 00:24:11,320 Speaker 5: it's one hundred and thirty trillion yuan economy, either they 448 00:24:11,359 --> 00:24:13,280 Speaker 5: want to plug a three or four five percent hole 449 00:24:13,320 --> 00:24:16,640 Speaker 5: that gets you four five, six, maybe a little larger 450 00:24:16,720 --> 00:24:21,120 Speaker 5: in a trillion yuan of local debt limit increases or 451 00:24:21,720 --> 00:24:25,280 Speaker 5: further fiscal stimulus that's going to go onto the central bank, 452 00:24:26,119 --> 00:24:28,440 Speaker 5: onto the central government balance sheet. 453 00:24:28,760 --> 00:24:30,040 Speaker 6: Does it broaden out? Does it work? 454 00:24:30,080 --> 00:24:33,680 Speaker 5: You know, I think it does. Yeah, I think it doesn't. Yeah, 455 00:24:33,680 --> 00:24:36,320 Speaker 5: it will be very interesting to see to see it move. 456 00:24:36,359 --> 00:24:38,680 Speaker 5: But they're large numbers that they seem like they're very 457 00:24:39,119 --> 00:24:41,680 Speaker 5: they're very clear what they're going to do, and they're 458 00:24:41,680 --> 00:24:45,800 Speaker 5: doing doing growth, monetary and fiscal stimulus at the same time. 459 00:24:46,200 --> 00:24:48,959 Speaker 5: And I think it's powerful. Yeah, I think it's very powerful. 460 00:24:49,000 --> 00:24:50,520 Speaker 5: I think it will help the rest of the world 461 00:24:50,600 --> 00:24:50,920 Speaker 5: as well. 462 00:24:51,200 --> 00:24:54,000 Speaker 3: So for China, Japan is a major trading partner. We 463 00:24:54,040 --> 00:24:58,600 Speaker 3: know that. To what extent will Japan specifically be a beneficiary? 464 00:24:58,600 --> 00:25:00,800 Speaker 3: Can you imagine certain ways at this unfold? 465 00:25:06,000 --> 00:25:07,920 Speaker 6: Yeah, I mean I'm for Japan itself. 466 00:25:07,960 --> 00:25:10,359 Speaker 5: I mean I think I don't know if there's a 467 00:25:10,400 --> 00:25:15,720 Speaker 5: particularly large amount of direct carryover from the two of them. 468 00:25:15,840 --> 00:25:19,040 Speaker 5: You know, I think generally Japan has, due to some 469 00:25:19,080 --> 00:25:23,439 Speaker 5: demographic differences, has some issues in running its economy at 470 00:25:23,960 --> 00:25:26,080 Speaker 5: a level that is, you know, like the rest of 471 00:25:26,119 --> 00:25:28,240 Speaker 5: the Western world. You know, they have the US has 472 00:25:28,240 --> 00:25:29,320 Speaker 5: got a structurally. 473 00:25:28,960 --> 00:25:31,360 Speaker 6: Higher level of rates than Japan does. 474 00:25:31,400 --> 00:25:34,359 Speaker 5: And you know, will a rising tide of the global 475 00:25:34,359 --> 00:25:37,280 Speaker 5: economy help to lift the neutral rate estimates for Japan? 476 00:25:37,560 --> 00:25:40,080 Speaker 5: You know, maybe, yeah, I could see it. Maybe Japan's 477 00:25:40,080 --> 00:25:42,439 Speaker 5: at one one and a half percent neutral rate, and 478 00:25:42,520 --> 00:25:44,359 Speaker 5: maybe that they can be near the top of that. 479 00:25:44,400 --> 00:25:47,720 Speaker 5: But the demographics there may make it so hard for 480 00:25:47,760 --> 00:25:50,000 Speaker 5: them to do really well for a long period of time. 481 00:25:50,600 --> 00:25:52,399 Speaker 2: Well, let's flip it around a little bit and say, 482 00:25:53,040 --> 00:25:56,000 Speaker 2: if you know, if you had your druthers, you know, 483 00:25:56,040 --> 00:25:58,720 Speaker 2: where would you put your money first? What's the best 484 00:25:58,760 --> 00:26:00,920 Speaker 2: looking investment an idea at the moment? 485 00:26:02,480 --> 00:26:06,439 Speaker 5: Well, well, we are positions in China, you know, in 486 00:26:06,480 --> 00:26:09,840 Speaker 5: the Chinese equity market. Certainly we caught the bulk of 487 00:26:09,880 --> 00:26:12,439 Speaker 5: the rally through some options, and you know, some of 488 00:26:12,440 --> 00:26:15,760 Speaker 5: the companies are still incredibly cheap. I mean, I don't 489 00:26:15,800 --> 00:26:17,439 Speaker 5: want to say this is like the two thousand and 490 00:26:17,520 --> 00:26:20,520 Speaker 5: nine moment coming out of you know, for the US 491 00:26:20,640 --> 00:26:24,159 Speaker 5: coming out of the financial crisis, or you know, just 492 00:26:24,160 --> 00:26:27,439 Speaker 5: a period just after Europe in twenty twelve, but you know, 493 00:26:27,480 --> 00:26:29,520 Speaker 5: it really might be. I mean, if they're very serious 494 00:26:29,520 --> 00:26:33,359 Speaker 5: about doing it. The equities are incredibly cheap, and they 495 00:26:33,400 --> 00:26:34,280 Speaker 5: seem like they are. 496 00:26:34,960 --> 00:26:36,200 Speaker 6: They are serious and. 497 00:26:36,160 --> 00:26:39,400 Speaker 5: They're doing things that are very targeted. So Chinese equities, 498 00:26:39,400 --> 00:26:41,240 Speaker 5: the Asian equities a look cheap to us. 499 00:26:41,920 --> 00:26:43,919 Speaker 2: All Right, David, thank you very much for joining us. 500 00:26:43,960 --> 00:26:47,480 Speaker 2: David Aspell Co c Iowa Mount Lucas Asset Management. 501 00:26:50,080 --> 00:26:53,040 Speaker 3: This has been the Bloomberg Daybreak Asia podcast, bringing you 502 00:26:53,080 --> 00:26:56,200 Speaker 3: the stories making news and moving markets in the Asia Pacific. 503 00:26:56,720 --> 00:26:59,679 Speaker 3: Visit the Bloomberg Podcast channel on YouTube to get more 504 00:26:59,720 --> 00:27:03,359 Speaker 3: app episodes of this and other shows from Bloomberg. Subscribe 505 00:27:03,400 --> 00:27:07,280 Speaker 3: to the podcast on Apple, Spotify, or anywhere else you listen, 506 00:27:07,400 --> 00:27:10,480 Speaker 3: and always on Bloomberg radio, the Bloomberg terminal and the 507 00:27:10,480 --> 00:27:11,560 Speaker 3: Bloomberg Business app.