1 00:00:02,480 --> 00:00:06,840 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:09,680 --> 00:00:12,840 Speaker 2: This is the Bloomberg Daybreak Asia podcast. I'm Doug Krisner. 3 00:00:12,960 --> 00:00:15,440 Speaker 2: You can join Brian Curtis and myself for the stories 4 00:00:15,480 --> 00:00:18,560 Speaker 2: making news and moving markets in the APAC region. You 5 00:00:18,640 --> 00:00:21,480 Speaker 2: can subscribe to the show anywhere you get your podcast 6 00:00:21,560 --> 00:00:24,919 Speaker 2: and always on Bloomberg Radio, the Bloomberg Terminal, and the 7 00:00:24,960 --> 00:00:26,120 Speaker 2: Bloomberg Business App. 8 00:00:27,400 --> 00:00:30,160 Speaker 3: Joining us now on the program is Ed Ludlow, Bloomberg 9 00:00:30,240 --> 00:00:34,480 Speaker 3: Technology co host, to talk not only about Tesla's robotaxi launch, 10 00:00:34,560 --> 00:00:38,840 Speaker 3: but also AMD's results and developments and his impressions sitting 11 00:00:38,880 --> 00:00:42,279 Speaker 3: down with Lisa Sue, the CEO at AMD. So let 12 00:00:42,360 --> 00:00:45,920 Speaker 3: me start off first, Ed with Tesla. It's a little 13 00:00:45,960 --> 00:00:48,680 Speaker 3: bit sexy because it's Elon Musk and it's Tesla. So 14 00:00:48,920 --> 00:00:51,120 Speaker 3: how critical is this moment for both? 15 00:00:51,840 --> 00:00:55,080 Speaker 4: Goodness, good morning tents man. You know, it's really difficult 16 00:00:55,120 --> 00:00:57,800 Speaker 4: one because on the one hand, it is a story 17 00:00:57,840 --> 00:01:01,880 Speaker 4: that Elon Musk has been telling and promise for a decade, 18 00:01:02,680 --> 00:01:06,480 Speaker 4: and on the other anticipation and tension in the stock 19 00:01:06,560 --> 00:01:10,000 Speaker 4: from investors is so high. It's critical to a lot 20 00:01:10,040 --> 00:01:13,640 Speaker 4: of investors that they see evidence Tesla's future is not 21 00:01:13,800 --> 00:01:17,520 Speaker 4: as a business of selling electric vehicles direct to a consumer, 22 00:01:18,200 --> 00:01:20,720 Speaker 4: but it's a business where they operate this really big 23 00:01:20,840 --> 00:01:25,920 Speaker 4: fleet of cars that drive themselves. And the business model 24 00:01:26,240 --> 00:01:30,920 Speaker 4: is like Uber or Airbnb even which we can get into, 25 00:01:30,959 --> 00:01:34,399 Speaker 4: but it's a proprietary ride hailing app, and that might 26 00:01:34,440 --> 00:01:36,959 Speaker 4: be really confusing. I can really sympathize with some of 27 00:01:36,959 --> 00:01:38,920 Speaker 4: your listeners around the world right now saying hold on, 28 00:01:38,959 --> 00:01:41,039 Speaker 4: are we talking about Tesla here or something else? 29 00:01:41,840 --> 00:01:44,640 Speaker 2: So I can understand the vision. The question is how 30 00:01:44,680 --> 00:01:46,760 Speaker 2: expensive an endeavor is this? 31 00:01:47,280 --> 00:01:51,680 Speaker 4: Yeah, yeah, well there's two paths toward it, right. So 32 00:01:51,720 --> 00:01:54,600 Speaker 4: the basics of what we will see this evening my 33 00:01:54,800 --> 00:01:58,640 Speaker 4: time are the cyber cab, a purpose built robotaxi, a 34 00:01:58,720 --> 00:02:02,720 Speaker 4: vehicle that, according to my sources, has two seats kind 35 00:02:02,720 --> 00:02:05,400 Speaker 4: of funky doors that we call butterfly wings. They're like 36 00:02:05,480 --> 00:02:08,080 Speaker 4: you know those very expensive hyper cars that open upwards 37 00:02:08,400 --> 00:02:12,720 Speaker 4: and out, probably no steering wheel, and so that's part one. 38 00:02:12,840 --> 00:02:15,600 Speaker 4: They'll build those, and then they have to get regulatory 39 00:02:15,600 --> 00:02:18,560 Speaker 4: approval for them to work in the jurisdictions that they 40 00:02:18,560 --> 00:02:20,680 Speaker 4: want to put them in. The other paths the kind 41 00:02:20,680 --> 00:02:23,640 Speaker 4: of Airbnb bit. So think about how Airbnb works you 42 00:02:23,680 --> 00:02:26,480 Speaker 4: have a property, a house or an apartment. When you're 43 00:02:26,520 --> 00:02:28,560 Speaker 4: not using it, other people can use it and you 44 00:02:28,600 --> 00:02:31,280 Speaker 4: make money. What if you applied that to your existing 45 00:02:31,320 --> 00:02:34,560 Speaker 4: Tesla And that's I think how you must seize the 46 00:02:34,600 --> 00:02:37,920 Speaker 4: gap being bridged. As you guys know, Tesla has a 47 00:02:37,960 --> 00:02:42,160 Speaker 4: current software for self driving that can kind of drive 48 00:02:42,200 --> 00:02:45,920 Speaker 4: itself in consumer cars, and the option that he wants 49 00:02:45,960 --> 00:02:48,600 Speaker 4: to give owners of Testa vehicles is, if you're not 50 00:02:48,720 --> 00:02:51,480 Speaker 4: using it, put it on our platform and let it 51 00:02:51,600 --> 00:02:54,320 Speaker 4: leave your house and drive itself to a rider wherever 52 00:02:54,360 --> 00:02:56,480 Speaker 4: they may be, pick them up and take them wherever 53 00:02:56,520 --> 00:02:57,000 Speaker 4: they want to go. 54 00:02:57,680 --> 00:03:01,320 Speaker 3: Yeah, as we move to monetizing every seeing in life, 55 00:03:01,800 --> 00:03:05,760 Speaker 3: you know, gaffes ed have been a problem for Tesla, 56 00:03:05,840 --> 00:03:09,080 Speaker 3: and some of the earlier product reveals, it would seem 57 00:03:09,120 --> 00:03:12,280 Speaker 3: to be even more important here to hopefully avoid that, 58 00:03:12,520 --> 00:03:15,560 Speaker 3: given that we're talking about something that ultimate goodness might 59 00:03:15,880 --> 00:03:16,720 Speaker 3: have a human element. 60 00:03:17,960 --> 00:03:20,760 Speaker 4: Yeah, I mean, so, let's say, for example, they do 61 00:03:20,880 --> 00:03:24,200 Speaker 4: unveil a purpose built robotaxi and there are a few 62 00:03:24,240 --> 00:03:28,000 Speaker 4: thousand people on the Warner Brothers movie lot just down 63 00:03:28,000 --> 00:03:30,440 Speaker 4: the road from where I am now, and they get 64 00:03:30,480 --> 00:03:33,520 Speaker 4: in the vehicle. Well point number one why are they 65 00:03:33,520 --> 00:03:36,680 Speaker 4: doing it at Warner Brothers. Warner Brothers is private property, 66 00:03:36,840 --> 00:03:40,280 Speaker 4: so they don't need permits or regulatory approval because it's 67 00:03:40,320 --> 00:03:45,520 Speaker 4: private property, not public roads. But you'd think you'd think, 68 00:03:45,560 --> 00:03:48,800 Speaker 4: guys by this stage, that they wouldn't let people demo 69 00:03:48,960 --> 00:03:52,520 Speaker 4: the tech if it didn't work. And as you guys know, 70 00:03:52,920 --> 00:03:55,840 Speaker 4: you know my sourcing in the company. The people that 71 00:03:55,880 --> 00:03:58,560 Speaker 4: I speak to, I think they're very excited about this. 72 00:03:58,720 --> 00:04:01,240 Speaker 4: They think that they've got something that they'll show that 73 00:04:01,320 --> 00:04:05,800 Speaker 4: we'll move move Tesla forward tonight. But it's right to 74 00:04:05,840 --> 00:04:09,240 Speaker 4: have skepticism because Elon Musk has been telling us that 75 00:04:09,400 --> 00:04:13,160 Speaker 4: next year will be the year for a decade and 76 00:04:13,200 --> 00:04:14,000 Speaker 4: we're yet to see it. 77 00:04:14,360 --> 00:04:16,719 Speaker 2: So it's either that or the reason that their warner 78 00:04:17,240 --> 00:04:19,720 Speaker 2: is because it's the land of fantasy. Let's hope that 79 00:04:19,720 --> 00:04:20,640 Speaker 2: that's not the case. 80 00:04:21,839 --> 00:04:22,320 Speaker 1: Good one. 81 00:04:22,400 --> 00:04:24,800 Speaker 2: Yeah, can we pivot to AMD. What did you learn 82 00:04:24,839 --> 00:04:27,440 Speaker 2: today conversation with Lisa Sue. 83 00:04:27,760 --> 00:04:31,839 Speaker 4: Gosh that you know, the the Wall Street fever around 84 00:04:31,920 --> 00:04:36,360 Speaker 4: AI and Chips is still kind of super intense. AMD 85 00:04:36,760 --> 00:04:39,839 Speaker 4: the market accepts is a really good number two player 86 00:04:39,920 --> 00:04:42,839 Speaker 4: behind in video, where we also accept in video just 87 00:04:42,920 --> 00:04:47,039 Speaker 4: is dominating the market for very high performance GPUs that 88 00:04:47,080 --> 00:04:50,280 Speaker 4: go in data centers, simple as that. So what AMD 89 00:04:50,440 --> 00:04:54,720 Speaker 4: brought out was their latest one. It has some outperformance 90 00:04:55,240 --> 00:04:57,880 Speaker 4: relative to the H one hundred, and you may have 91 00:04:57,880 --> 00:05:00,400 Speaker 4: discussed the H one hundred on your show before. That 92 00:05:00,600 --> 00:05:03,440 Speaker 4: is in Vidia's old one. So it's kind of like 93 00:05:03,560 --> 00:05:06,839 Speaker 4: inch by inch they're racing each other in video is 94 00:05:06,920 --> 00:05:09,240 Speaker 4: well past the H one hundred. It has two new 95 00:05:09,279 --> 00:05:12,840 Speaker 4: generations past it, and AMDs trying to catch up, and 96 00:05:12,920 --> 00:05:17,760 Speaker 4: investors are setting the bar really high. And I think 97 00:05:17,839 --> 00:05:20,400 Speaker 4: that the reason the stock closed down four percent is 98 00:05:20,400 --> 00:05:24,320 Speaker 4: that Lisa Sue probably didn't say enough about right now 99 00:05:24,560 --> 00:05:27,679 Speaker 4: which customers are paying her money for her latest stuff. 100 00:05:28,480 --> 00:05:32,200 Speaker 3: Yeah, yeah, I mean we talked about the gap between 101 00:05:32,240 --> 00:05:35,000 Speaker 3: the two that in Nvidia's business is like twenty five 102 00:05:35,080 --> 00:05:39,200 Speaker 3: times what AMD has in mus good mass types of 103 00:05:39,680 --> 00:05:43,240 Speaker 3: accelerated chips. But she also did talk about the overall 104 00:05:43,279 --> 00:05:46,119 Speaker 3: market for such chips, and so this brings in really 105 00:05:46,400 --> 00:05:49,240 Speaker 3: investors to you know, the whole space. I think she 106 00:05:49,360 --> 00:05:52,559 Speaker 3: talked about how before she talked about four hundred billion 107 00:05:52,560 --> 00:05:55,880 Speaker 3: in twenty twenty seven, now half a trillion, five hundred 108 00:05:55,880 --> 00:05:57,280 Speaker 3: billion in twenty twenty eight. 109 00:05:57,720 --> 00:06:02,280 Speaker 4: Yes, yes, so for context, she is talking about the 110 00:06:02,320 --> 00:06:06,839 Speaker 4: market specifically for AI accelerators, chips that are used to 111 00:06:06,920 --> 00:06:11,560 Speaker 4: either train large language models or foundation models, or for 112 00:06:11,640 --> 00:06:14,800 Speaker 4: what we call inference, which is the use of the 113 00:06:14,800 --> 00:06:18,720 Speaker 4: model to make a decision. Right, And five hundred billion 114 00:06:18,760 --> 00:06:22,520 Speaker 4: dollars by twenty twenty eight is a big number. And 115 00:06:22,600 --> 00:06:27,920 Speaker 4: for context, the entirety of the semiconductor industry in calendar 116 00:06:27,920 --> 00:06:30,159 Speaker 4: twenty three in terms of sales was about five hundred 117 00:06:30,200 --> 00:06:32,760 Speaker 4: and fifty billion. So you can see the direction that 118 00:06:32,800 --> 00:06:36,560 Speaker 4: we're headed. But again, twenty twenty eight, like, come on, 119 00:06:36,640 --> 00:06:39,360 Speaker 4: that's four years from now. Tell me how you're booking 120 00:06:39,400 --> 00:06:41,400 Speaker 4: revenue four months from now, and I might, you know, 121 00:06:41,600 --> 00:06:44,440 Speaker 4: be a bit more excited about the trajectory of the stock. 122 00:06:44,880 --> 00:06:48,159 Speaker 2: So we know that in Video uses TSMC to produce 123 00:06:48,240 --> 00:06:51,400 Speaker 2: its chips. Correct, what does AM do AMD do on 124 00:06:51,440 --> 00:06:52,480 Speaker 2: the production side? 125 00:06:53,440 --> 00:06:55,440 Speaker 4: Surprise, surprise, they also use TSMC. 126 00:06:55,600 --> 00:06:57,600 Speaker 2: Oh really, they don't make their own. 127 00:06:58,320 --> 00:07:01,800 Speaker 4: No, So you know, again this is the really crucial 128 00:07:01,839 --> 00:07:06,880 Speaker 4: thing about covering the semiconductor industry. We call them chip makers. 129 00:07:07,160 --> 00:07:12,560 Speaker 4: They are not They are chip designers essentially, And TSMC 130 00:07:12,720 --> 00:07:16,240 Speaker 4: is the chip maker. Samsung is a chip maker, and 131 00:07:16,280 --> 00:07:19,960 Speaker 4: in this country Intel and to a smaller extent, global foundries. 132 00:07:20,160 --> 00:07:22,160 Speaker 4: And I asked Lisa Sue it was a bit of 133 00:07:22,160 --> 00:07:24,040 Speaker 4: a loaded question, but it came from one of our 134 00:07:24,080 --> 00:07:27,239 Speaker 4: audience members, which is have you talked to Intel about 135 00:07:27,360 --> 00:07:29,960 Speaker 4: using some of their foundry business in the United States. 136 00:07:30,120 --> 00:07:32,320 Speaker 4: She didn't really answer, but what she is looking at 137 00:07:32,600 --> 00:07:35,760 Speaker 4: at least is her options in the US, because that's 138 00:07:35,840 --> 00:07:36,800 Speaker 4: also the direction of. 139 00:07:36,760 --> 00:07:41,720 Speaker 3: Travel right outside of the AI accelerators. In terms of 140 00:07:42,400 --> 00:07:46,160 Speaker 3: really looking at the broader market, Lisa su has cut 141 00:07:46,200 --> 00:07:49,000 Speaker 3: into Intel's business a lot for data centers, right, for 142 00:07:49,080 --> 00:07:50,320 Speaker 3: those types of chips. 143 00:07:50,760 --> 00:07:58,040 Speaker 4: Yeah, yeah, data centers require all kinds of chips, principally CPUs. 144 00:07:58,080 --> 00:08:00,960 Speaker 4: For every GPU you have, you have many CPUs, and 145 00:08:01,000 --> 00:08:02,840 Speaker 4: they have a product for that, a new generation they 146 00:08:02,840 --> 00:08:07,440 Speaker 4: announced today. I would also remind you guys, AMD does 147 00:08:07,480 --> 00:08:10,480 Speaker 4: other stuff. They have great PC chips and gaming chips, 148 00:08:10,640 --> 00:08:14,240 Speaker 4: and they have really overtaken Intel, and they had a 149 00:08:14,240 --> 00:08:15,960 Speaker 4: lot to shout about on that front. Two. But it's 150 00:08:16,000 --> 00:08:17,520 Speaker 4: not a needle mover for the stock. 151 00:08:18,120 --> 00:08:18,320 Speaker 1: Yeah. 152 00:08:18,360 --> 00:08:20,200 Speaker 3: I think she told you that they have thirty four 153 00:08:20,280 --> 00:08:24,440 Speaker 3: percent of the market for servers at the moment. Anyway, 154 00:08:24,480 --> 00:08:27,120 Speaker 3: out of time now ed thank you so much. Ed Ludlow, 155 00:08:27,160 --> 00:08:37,960 Speaker 3: Bloomberg News. Joining us in our studios in Singapore is 156 00:08:37,960 --> 00:08:42,160 Speaker 3: Mary Nicola, Bloomberg m Live Strategists. So, Mary, the economic 157 00:08:42,240 --> 00:08:44,600 Speaker 3: data that we got, the jobless claims and the slightly 158 00:08:44,600 --> 00:08:48,160 Speaker 3: hotter than expected inflation data noise or signal? 159 00:08:49,320 --> 00:08:52,439 Speaker 5: I think. I still think it's noise because a lot 160 00:08:52,440 --> 00:08:55,640 Speaker 5: of what we've seen underlying that the employment rate is 161 00:08:55,679 --> 00:09:00,160 Speaker 5: doing is pretty strong. The labor market is still pretty robust. 162 00:09:00,360 --> 00:09:02,440 Speaker 5: And then if we look at the consumer, which is 163 00:09:02,480 --> 00:09:06,120 Speaker 5: absolutely critical for the US economy, they're still still doing 164 00:09:06,200 --> 00:09:10,240 Speaker 5: really well as well. So it's still and every data 165 00:09:10,320 --> 00:09:13,600 Speaker 5: point we can't be overly reactive. We still have to 166 00:09:13,640 --> 00:09:15,439 Speaker 5: take a step back and look at the bigger picture. 167 00:09:15,440 --> 00:09:16,960 Speaker 5: And the bigger picture is still strong. 168 00:09:17,240 --> 00:09:17,440 Speaker 6: Yeah. 169 00:09:17,520 --> 00:09:19,720 Speaker 2: Speaking of the consumer, we're going to get to data 170 00:09:19,720 --> 00:09:22,760 Speaker 2: from the University of Michigan tomorrow. I mean, do you 171 00:09:22,840 --> 00:09:24,800 Speaker 2: think that there is a risk here that we see 172 00:09:25,960 --> 00:09:29,160 Speaker 2: a hot reading that the consumers are feeling pretty positive 173 00:09:29,200 --> 00:09:30,520 Speaker 2: about the American economy? 174 00:09:31,240 --> 00:09:34,560 Speaker 5: I don't know. I find the University of Michigan one 175 00:09:34,640 --> 00:09:38,160 Speaker 5: a little bit skeptical because it's very dependent on oil prices. 176 00:09:38,200 --> 00:09:40,120 Speaker 5: So tell me where oil prices are, and I'll tell 177 00:09:40,160 --> 00:09:43,520 Speaker 5: you where the University of Michigan goes. So I don't 178 00:09:43,520 --> 00:09:46,760 Speaker 5: think it's as indicative as let's say, retail sales. I 179 00:09:46,760 --> 00:09:49,360 Speaker 5: think retail sales is a much better indicator of where 180 00:09:49,360 --> 00:09:54,800 Speaker 5: the consumer is heading. So if we're looking at those readings, 181 00:09:54,960 --> 00:09:58,240 Speaker 5: we're in a much stronger position for the US consumer. 182 00:09:59,320 --> 00:10:01,400 Speaker 3: So let's take a get China, because you do have 183 00:10:01,440 --> 00:10:05,000 Speaker 3: this Ministry of Finance briefing tomorrow morning. You know, it 184 00:10:05,160 --> 00:10:08,040 Speaker 3: kind of feels like this is getting towards a make 185 00:10:08,160 --> 00:10:11,640 Speaker 3: or break kind of moment, at least in terms of 186 00:10:11,679 --> 00:10:15,640 Speaker 3: investor attitudes. Investors were pretty shaky this week on whether 187 00:10:15,679 --> 00:10:18,280 Speaker 3: or not they believe that China really wants to see 188 00:10:18,320 --> 00:10:22,080 Speaker 3: this thing through. Mary, So are you expecting what are 189 00:10:22,080 --> 00:10:25,080 Speaker 3: you expecting tomorrow? Are you expecting good news from markets 190 00:10:25,200 --> 00:10:26,360 Speaker 3: or more disappointment? 191 00:10:26,960 --> 00:10:28,800 Speaker 5: You know, I think you put it well Brian and 192 00:10:28,840 --> 00:10:31,680 Speaker 5: saying that it's a make or break moment, because we 193 00:10:31,679 --> 00:10:34,800 Speaker 5: were very excited, the market was very excited about what 194 00:10:34,960 --> 00:10:37,440 Speaker 5: was coming through in terms of they were actually going 195 00:10:37,480 --> 00:10:40,080 Speaker 5: to put a floor on growth. And I still think 196 00:10:40,120 --> 00:10:42,760 Speaker 5: that there is that incentive and it's still coming there. 197 00:10:42,960 --> 00:10:46,360 Speaker 5: The key thing, though, is what we're missing is the 198 00:10:46,400 --> 00:10:50,680 Speaker 5: clarity on the policy detail. So we need a clear path, 199 00:10:50,760 --> 00:10:54,160 Speaker 5: a trajectory of what's coming next and what's happening. And 200 00:10:54,280 --> 00:10:57,200 Speaker 5: also the main thing, especially what's going to fuel this 201 00:10:57,320 --> 00:11:00,319 Speaker 5: rally is what's happening on the consumption side. We keep 202 00:11:00,360 --> 00:11:03,920 Speaker 5: seeing reforms on supply side, which is likely to come 203 00:11:03,960 --> 00:11:07,280 Speaker 5: through and they're likely to emphasize it, so accelerating some 204 00:11:07,320 --> 00:11:10,720 Speaker 5: of the infrastructure projects the fiscal budget, but we really 205 00:11:10,760 --> 00:11:14,040 Speaker 5: need something on the consumer and that is going to 206 00:11:14,040 --> 00:11:18,800 Speaker 5: be the real breaking point of seeing in the housing market, 207 00:11:18,880 --> 00:11:20,880 Speaker 5: of seeing China just flourish. 208 00:11:21,040 --> 00:11:24,000 Speaker 2: We've seen enormous volatility in the equity trade. What's your 209 00:11:24,040 --> 00:11:27,120 Speaker 2: sense of how the price action has been behaving and 210 00:11:27,160 --> 00:11:30,560 Speaker 2: what it tells us about the durability and whether there 211 00:11:30,640 --> 00:11:32,400 Speaker 2: is a floor in the stock market. 212 00:11:32,960 --> 00:11:35,600 Speaker 5: Yeah, it's been absolutely crazy. I think is one way 213 00:11:35,600 --> 00:11:41,520 Speaker 5: to say is that investors have been whipsawed immensely because 214 00:11:41,559 --> 00:11:45,600 Speaker 5: of the fact that everything has been very dependent on 215 00:11:46,200 --> 00:11:49,000 Speaker 5: what the sentiment is out there. And of course we 216 00:11:49,040 --> 00:11:52,480 Speaker 5: can't forget that most people, most investors out there were 217 00:11:52,640 --> 00:11:55,760 Speaker 5: very underweight China and they've long been underweight China. So 218 00:11:55,800 --> 00:11:58,880 Speaker 5: when you see these crazy moves. Obviously there's a lot 219 00:11:58,880 --> 00:12:02,720 Speaker 5: of shortcovering coming through, So I think what happens is 220 00:12:02,720 --> 00:12:05,360 Speaker 5: we're going to see a lot of whip sawing, especially 221 00:12:05,400 --> 00:12:08,480 Speaker 5: until we get that policy direction than that policy clarity. 222 00:12:08,720 --> 00:12:12,120 Speaker 5: So unfortunately, the main thing is just expect more volatility. 223 00:12:13,280 --> 00:12:16,720 Speaker 3: Bloomberg Economics put it pretty well, saying the PBOC is 224 00:12:16,800 --> 00:12:19,800 Speaker 3: kind of a good example. They did provide more clarity, 225 00:12:19,880 --> 00:12:23,000 Speaker 3: they gave you some forward guidance, and now they've been 226 00:12:23,040 --> 00:12:26,959 Speaker 3: rolling out details, for instance, this equity swap facility. We're 227 00:12:27,000 --> 00:12:30,560 Speaker 3: getting even more information this morning as a funneled through 228 00:12:30,559 --> 00:12:35,280 Speaker 3: the Financial news about the duration, how long the maturity 229 00:12:35,280 --> 00:12:37,240 Speaker 3: will be, and it'll be one year and can be 230 00:12:37,440 --> 00:12:41,240 Speaker 3: extendable anyway. Back to the point, Bloomberg Economics says that 231 00:12:41,360 --> 00:12:43,800 Speaker 3: you know, this is a good example of how to 232 00:12:43,880 --> 00:12:47,400 Speaker 3: give forward guidance and then deliver. And then we'll see 233 00:12:47,400 --> 00:12:50,120 Speaker 3: if the Ministry of Finance carries through. And if you 234 00:12:50,200 --> 00:12:52,480 Speaker 3: look at what the NDRC does, you know, those who 235 00:12:52,480 --> 00:12:55,360 Speaker 3: are sort of like the old style apparatchecks there and 236 00:12:55,440 --> 00:12:58,160 Speaker 3: what they need now is kind of cutting edge market 237 00:12:58,640 --> 00:13:01,200 Speaker 3: market educated people. Yeah. 238 00:13:01,240 --> 00:13:05,079 Speaker 5: Absolutely, but the thing is it's still everything's being drip feeded, 239 00:13:05,280 --> 00:13:08,200 Speaker 5: and that's the problem. So if you just came out 240 00:13:08,240 --> 00:13:10,440 Speaker 5: like the if the NDRC had just come out in 241 00:13:10,480 --> 00:13:15,440 Speaker 5: line with expectations and said here's the plan again similar 242 00:13:15,480 --> 00:13:18,080 Speaker 5: to what the PBOC has done, which is say, you know, 243 00:13:18,160 --> 00:13:22,960 Speaker 5: we're going to make we're going to ensure that policy 244 00:13:23,040 --> 00:13:25,600 Speaker 5: is ultra loose. We're going to ensure that there's going 245 00:13:25,640 --> 00:13:29,480 Speaker 5: to be some sort of equity stability facility. So we 246 00:13:29,600 --> 00:13:33,199 Speaker 5: just it's a matter of detail and providing those details 247 00:13:33,240 --> 00:13:35,920 Speaker 5: that gives that comfort to investors that this is just 248 00:13:36,040 --> 00:13:37,360 Speaker 5: not another false dawn. 249 00:13:37,640 --> 00:13:42,000 Speaker 2: So let's talk very briefly about Bank of Korea as expected, 250 00:13:42,240 --> 00:13:45,120 Speaker 2: the bokay cutting its benchmark rate twenty five basis points. 251 00:13:45,120 --> 00:13:47,360 Speaker 2: What does this mean really for the South Korean economy. 252 00:13:48,120 --> 00:13:50,160 Speaker 5: I think in general we were looking that it was 253 00:13:50,280 --> 00:13:53,640 Speaker 5: it was expected because of the fact that inflation was 254 00:13:53,679 --> 00:13:58,440 Speaker 5: coming off quite aggressively. We saw that inflation had dipped 255 00:13:58,480 --> 00:14:02,559 Speaker 5: actually below their two percent target. The key thing though, 256 00:14:02,679 --> 00:14:06,040 Speaker 5: is they'll likely take on a more cautious approach just 257 00:14:06,120 --> 00:14:08,319 Speaker 5: because of the financial stability risks. 258 00:14:08,400 --> 00:14:08,800 Speaker 6: We have to. 259 00:14:08,880 --> 00:14:12,280 Speaker 5: We can't forget how high household debt is in Korea, 260 00:14:12,440 --> 00:14:16,160 Speaker 5: and that's still wigs on the concerns and the applicability 261 00:14:16,240 --> 00:14:19,960 Speaker 5: of how they move policy and what direction they're going 262 00:14:20,000 --> 00:14:23,000 Speaker 5: to move policy in. But obviously it's what the FED 263 00:14:23,080 --> 00:14:26,560 Speaker 5: has done has given leeway for central banks within this 264 00:14:26,640 --> 00:14:29,880 Speaker 5: region to start cutting grace and the confidence to do so, 265 00:14:30,200 --> 00:14:34,400 Speaker 5: especially something like the Korean wand isn't as under depreciation 266 00:14:34,480 --> 00:14:36,480 Speaker 5: pressure as let's say it was a few months ago. 267 00:14:37,240 --> 00:14:39,640 Speaker 3: And what's interesting is that with central banks on the 268 00:14:39,720 --> 00:14:44,200 Speaker 3: move now and cutting interest rates, you have valuations in 269 00:14:44,280 --> 00:14:48,040 Speaker 3: the non US global markets that are way way lower 270 00:14:48,040 --> 00:14:51,200 Speaker 3: than the US. So can we make the step to 271 00:14:51,240 --> 00:14:54,840 Speaker 3: say that it looks like non US equity assets can 272 00:14:54,880 --> 00:14:57,200 Speaker 3: outperform here in this coming period. 273 00:14:59,000 --> 00:15:01,240 Speaker 5: I don't think they can help form the US because 274 00:15:01,280 --> 00:15:04,240 Speaker 5: I think really the US still has that exceptionalism. And 275 00:15:04,280 --> 00:15:07,280 Speaker 5: then if you're going to see earnings coming through, and 276 00:15:07,360 --> 00:15:10,400 Speaker 5: the bar this quarter is very low, so if they 277 00:15:10,520 --> 00:15:15,160 Speaker 5: just beat just slightly, you still have some fuel to 278 00:15:15,200 --> 00:15:17,720 Speaker 5: this rally in the US in the US market, But 279 00:15:17,880 --> 00:15:21,760 Speaker 5: absolutely you don't see demand destruction in the US which 280 00:15:21,840 --> 00:15:26,960 Speaker 5: is going to support overall equities, especially within this region. 281 00:15:27,240 --> 00:15:30,680 Speaker 5: So you do have the growth engine from the US 282 00:15:30,800 --> 00:15:35,280 Speaker 5: coming through, especially because we're lacking the growth engine from China. Right, 283 00:15:35,360 --> 00:15:37,960 Speaker 5: So there is that push, and then on top of that, 284 00:15:38,000 --> 00:15:41,240 Speaker 5: you've got global liquidity and it's coming through and it's 285 00:15:41,280 --> 00:15:44,040 Speaker 5: ample not only from the US but from the ECB. 286 00:15:44,240 --> 00:15:45,960 Speaker 3: She's just trying to sell you, now you're selling me. 287 00:15:47,760 --> 00:15:49,960 Speaker 2: It's going to be very interesting to see how earnings 288 00:15:49,960 --> 00:15:51,920 Speaker 2: factor into all of this. I mean, the big banks 289 00:15:52,000 --> 00:15:55,720 Speaker 2: kick things off tomorrow. We've got JP Morgan, Wells Fargo. 290 00:15:55,840 --> 00:15:59,640 Speaker 2: So the banks, if they perform well, and I think 291 00:15:59,720 --> 00:16:02,000 Speaker 2: it's trading volume, is going to be something to key 292 00:16:02,000 --> 00:16:04,520 Speaker 2: in when you're looking at the money center banks. If 293 00:16:04,560 --> 00:16:06,840 Speaker 2: they perform well and get us on the right foot, 294 00:16:06,880 --> 00:16:09,280 Speaker 2: that maybe maybe the equity market in the state still 295 00:16:09,320 --> 00:16:11,480 Speaker 2: has some legs. Is that a fair statement? 296 00:16:11,840 --> 00:16:15,840 Speaker 5: Very absolutely? Yeah, absolutely, We just need equities to continue 297 00:16:15,880 --> 00:16:17,080 Speaker 5: their stellar performance. 298 00:16:24,040 --> 00:16:26,560 Speaker 3: Well, let's get to our guests, Selena Ling, chief economist, 299 00:16:26,920 --> 00:16:30,840 Speaker 3: head of Global Markets, Research and Strategy at OCBC, to 300 00:16:30,920 --> 00:16:33,520 Speaker 3: take a closer look at markets. Well, We've got a 301 00:16:33,560 --> 00:16:35,640 Speaker 3: lot of questions for you on China, but I want 302 00:16:35,640 --> 00:16:38,040 Speaker 3: to start off with the data in the US first, 303 00:16:38,080 --> 00:16:40,480 Speaker 3: and we can slide into that in a few moments. 304 00:16:41,360 --> 00:16:44,520 Speaker 3: The data seems to tell slightly different stories there and 305 00:16:44,560 --> 00:16:46,720 Speaker 3: given that we had the strikes and we had the 306 00:16:47,360 --> 00:16:51,880 Speaker 3: storm in particular, Helene, are you looking at this data 307 00:16:51,920 --> 00:16:55,400 Speaker 3: as more noise than signal or something that we really 308 00:16:55,480 --> 00:16:56,360 Speaker 3: need to be mindful of. 309 00:16:57,920 --> 00:17:00,880 Speaker 1: Well, we have always expected that the last of this 310 00:17:01,000 --> 00:17:03,000 Speaker 1: inflation is going to be bumping, So I think the 311 00:17:03,040 --> 00:17:06,520 Speaker 1: September call inflation number does kind of like reinforce that 312 00:17:06,600 --> 00:17:09,520 Speaker 1: kind of story. So the issue here really is that 313 00:17:09,600 --> 00:17:13,760 Speaker 1: the FAT is still probably fairly convinced that inflation, although 314 00:17:13,800 --> 00:17:16,040 Speaker 1: it's bumpy in the short term, is still headed lower 315 00:17:16,160 --> 00:17:19,040 Speaker 1: in the medium term out into twenty twenty five. The 316 00:17:19,119 --> 00:17:21,399 Speaker 1: question is whether they are having second thoughts about, you know, 317 00:17:21,480 --> 00:17:25,520 Speaker 1: having done that fifty basis points jumbo cut earlier and 318 00:17:25,560 --> 00:17:29,400 Speaker 1: what is the way forward? So market expectations of aggressive 319 00:17:29,480 --> 00:17:32,040 Speaker 1: rate cuts going forward and have kind of been part back. 320 00:17:32,359 --> 00:17:34,879 Speaker 1: In fact, if you look at the recent FAT speakers 321 00:17:34,920 --> 00:17:38,399 Speaker 1: William Goilsby, Barking, et cetera, they all suggest that the 322 00:17:38,480 --> 00:17:43,120 Speaker 1: latest inflation number per se should not interrupt this inflation process. 323 00:17:43,440 --> 00:17:45,840 Speaker 1: But the question, of course is like what boss Stick hinted, 324 00:17:46,119 --> 00:17:50,639 Speaker 1: would they actually consider skipping a meeting if the data 325 00:17:50,640 --> 00:17:53,600 Speaker 1: suggests that it is appropriate? So base case right now, 326 00:17:53,640 --> 00:17:55,520 Speaker 1: I think is that probably they will still cut twenty 327 00:17:55,520 --> 00:17:58,520 Speaker 1: five business points in November and another twenty five in December. 328 00:17:59,200 --> 00:18:01,680 Speaker 1: I don't think this one month of data per se 329 00:18:01,880 --> 00:18:05,040 Speaker 1: is going to change this infliction story altogether. 330 00:18:05,680 --> 00:18:08,440 Speaker 2: Do you have a sense of the terminal rate where 331 00:18:08,480 --> 00:18:09,560 Speaker 2: this may end up? 332 00:18:11,640 --> 00:18:14,520 Speaker 1: Well, I think if you look at the dots plot, 333 00:18:14,960 --> 00:18:18,720 Speaker 1: you know it's quite clear they do think that there 334 00:18:18,760 --> 00:18:22,919 Speaker 1: is more room to cut. Probably terminal rate could be 335 00:18:23,000 --> 00:18:26,560 Speaker 1: around tree slightly over three percent, three and a half 336 00:18:26,560 --> 00:18:29,240 Speaker 1: percent kind of range. The question, of course, is how 337 00:18:29,280 --> 00:18:31,920 Speaker 1: fast it gets there. So if we get a couple 338 00:18:32,040 --> 00:18:34,840 Speaker 1: more months of stronger than expected labor markets, you know, 339 00:18:34,960 --> 00:18:38,639 Speaker 1: stronger than expected co inflation numbers, then you know they 340 00:18:38,680 --> 00:18:40,520 Speaker 1: we actually decide to slow down the pace a little 341 00:18:40,560 --> 00:18:41,280 Speaker 1: bit going forward. 342 00:18:42,560 --> 00:18:44,960 Speaker 3: So let's move to China because we have this Ministry 343 00:18:44,960 --> 00:18:48,720 Speaker 3: of Finance announcement tomorrow on a Saturday morning, a little 344 00:18:48,800 --> 00:18:52,520 Speaker 3: unusual although it is a working day in China because 345 00:18:52,600 --> 00:18:57,200 Speaker 3: of the way the holiday fill. Nonetheless, the markets won't 346 00:18:57,200 --> 00:18:59,920 Speaker 3: be opened, so people will have a chance to think 347 00:19:00,119 --> 00:19:05,080 Speaker 3: before they act in market. Bloomberg Economics is expecting a 348 00:19:05,160 --> 00:19:07,920 Speaker 3: pull forward a lot of the stimulus from next year, 349 00:19:07,920 --> 00:19:10,280 Speaker 3: a lot of the fiscal spending from next year into 350 00:19:10,280 --> 00:19:10,640 Speaker 3: this year. 351 00:19:10,640 --> 00:19:13,879 Speaker 1: How do you see it, Well, certainly how it hopes 352 00:19:13,920 --> 00:19:18,280 Speaker 1: for the mof announcement tomorrow. So the speculated size of 353 00:19:18,320 --> 00:19:21,840 Speaker 1: this policy stimus is writing into trillions of yen. So 354 00:19:22,000 --> 00:19:24,280 Speaker 1: you know, some people say two, some people say five 355 00:19:24,440 --> 00:19:27,399 Speaker 1: or more. So I think rather than just focus on 356 00:19:27,400 --> 00:19:30,520 Speaker 1: the headline number, per see, what is really critical is 357 00:19:30,560 --> 00:19:32,960 Speaker 1: that is this going to be fresh stimulus, is it 358 00:19:33,240 --> 00:19:35,520 Speaker 1: just a frontloading of the stimulus that was meant to 359 00:19:35,560 --> 00:19:37,840 Speaker 1: come next year, And whether it's actually going to be 360 00:19:37,880 --> 00:19:42,680 Speaker 1: targeted as apporting consumption, especially for the more vulnerable segments 361 00:19:42,720 --> 00:19:45,280 Speaker 1: of the population such as the old and the aged 362 00:19:46,720 --> 00:19:51,359 Speaker 1: and the poor, rather than going into infrastructure investments, which 363 00:19:51,359 --> 00:19:54,720 Speaker 1: had been the model of the past. So I mean, remember, 364 00:19:55,040 --> 00:19:59,280 Speaker 1: consumption has a lot more multiply effects compared to just infrastructure. 365 00:20:00,000 --> 00:20:01,639 Speaker 1: And I think in particular, you know, if that's going 366 00:20:01,680 --> 00:20:05,480 Speaker 1: to be additional fresh funding for local governments, then obviously 367 00:20:05,480 --> 00:20:07,920 Speaker 1: that could kind of accelerate the ability of the letter 368 00:20:07,960 --> 00:20:10,320 Speaker 1: to actually execute policy stimulus. 369 00:20:10,600 --> 00:20:13,959 Speaker 2: So I'm sorry. So if we can agree that the 370 00:20:14,000 --> 00:20:17,240 Speaker 2: real problem is the lack of positive sentiment in China, 371 00:20:17,480 --> 00:20:20,280 Speaker 2: is higher equity market does it go a long way 372 00:20:20,320 --> 00:20:21,960 Speaker 2: to addressing that that ill. 373 00:20:23,359 --> 00:20:26,880 Speaker 1: Well, there are three components to you know, driving the 374 00:20:26,920 --> 00:20:30,320 Speaker 1: animal spirits or consumer sentiments, right, so equity market is 375 00:20:30,320 --> 00:20:32,480 Speaker 1: one or property market is one. The other one, of 376 00:20:32,520 --> 00:20:35,520 Speaker 1: course is income expectations. So a lot of these policy 377 00:20:35,520 --> 00:20:38,320 Speaker 1: measures that happen now so far actually do help to 378 00:20:38,359 --> 00:20:42,199 Speaker 1: stabilize the property market corrections. They have contributed to an 379 00:20:42,200 --> 00:20:45,600 Speaker 1: equity market rally, So these are positive factors. But the 380 00:20:45,680 --> 00:20:48,840 Speaker 1: last part, which is really the income expectations, so job 381 00:20:49,040 --> 00:20:52,960 Speaker 1: you know, market is still soft in China, then that 382 00:20:53,000 --> 00:20:55,640 Speaker 1: would be the weakest leg in the whole equation. 383 00:20:56,960 --> 00:20:59,960 Speaker 3: It seems like the issue for the Ministry of Finance, 384 00:21:00,040 --> 00:21:02,879 Speaker 3: who will be to try to sustain some of the 385 00:21:02,920 --> 00:21:06,840 Speaker 3: positive sentiment from the market rally without getting it you know, 386 00:21:06,920 --> 00:21:11,040 Speaker 3: too far. They don't want irrational exuberance. Do you think 387 00:21:11,080 --> 00:21:13,520 Speaker 3: they have the nuance and the skill to do so? 388 00:21:15,119 --> 00:21:17,240 Speaker 1: Well? That is certainly true because I mean if you 389 00:21:17,240 --> 00:21:19,720 Speaker 1: look at how the Chinese equity market rally had pitted 390 00:21:19,800 --> 00:21:22,600 Speaker 1: up this week after coming back from the Golden Qualities, 391 00:21:23,080 --> 00:21:26,560 Speaker 1: so we're seeing this continued injection of policy stimulus that 392 00:21:26,800 --> 00:21:29,639 Speaker 1: generally should be supportive. But I think the policy makers 393 00:21:29,640 --> 00:21:33,639 Speaker 1: would rather see a slow and gradual pace of rally 394 00:21:33,680 --> 00:21:37,040 Speaker 1: in the Chinese equity market than a Boomba styleor scenario. 395 00:21:37,440 --> 00:21:41,040 Speaker 1: So to me, expectations management is actually the key. They 396 00:21:41,040 --> 00:21:43,520 Speaker 1: don't want to have market disappointment. I mean, if you 397 00:21:43,520 --> 00:21:47,720 Speaker 1: see what happened after the NBROC announcement earlier this week, 398 00:21:47,960 --> 00:21:50,959 Speaker 1: obviously it was a little bit underwhelming. Market was disappointed. 399 00:21:52,520 --> 00:21:55,280 Speaker 2: If you had to bet right now on the effectiveness 400 00:21:55,320 --> 00:21:58,560 Speaker 2: of everything that we know in terms of the stimulus 401 00:21:58,680 --> 00:22:00,840 Speaker 2: package that's been unveiled, do you think it's going to 402 00:22:00,880 --> 00:22:02,000 Speaker 2: succeed very quickly? 403 00:22:03,400 --> 00:22:06,479 Speaker 1: I think it definitely has stopped some positive sentiments on 404 00:22:06,520 --> 00:22:09,240 Speaker 1: the ground as far as the property market and the 405 00:22:09,280 --> 00:22:13,879 Speaker 1: equity market is concerned. Market has run ahead. Property market, 406 00:22:13,920 --> 00:22:15,200 Speaker 1: Matt a bit slower. 407 00:22:15,480 --> 00:22:18,520 Speaker 3: All right, Selena, thanks very much. Selena Ling, chief economist 408 00:22:18,680 --> 00:22:28,760 Speaker 3: at OCBC with the Sauso market strategist, mim in Low, 409 00:22:29,000 --> 00:22:32,600 Speaker 3: Bloomberg TV China correspondent and someone that we can talk 410 00:22:32,640 --> 00:22:35,040 Speaker 3: with about what we might get from the Ministry of 411 00:22:35,080 --> 00:22:39,160 Speaker 3: Finance tomorrow morning. So there's a lot of expectation on 412 00:22:39,200 --> 00:22:42,159 Speaker 3: this min men, and I note from the China Today 413 00:22:42,240 --> 00:22:47,440 Speaker 3: column they think that investors may well wind up being disappointed. 414 00:22:47,840 --> 00:22:50,080 Speaker 3: I don't need you to speculate on that so much. 415 00:22:50,119 --> 00:22:53,760 Speaker 3: But what might we be getting tomorrow from the mof. 416 00:22:54,040 --> 00:22:58,200 Speaker 6: Yeah, so, market expectations are really high right now. Bloomberg 417 00:22:58,280 --> 00:23:02,359 Speaker 6: had done a poll of twenty three market participants and 418 00:23:02,440 --> 00:23:04,840 Speaker 6: the consensus now is that the government is going to 419 00:23:04,960 --> 00:23:08,719 Speaker 6: roll out a two trillion UINE fiscal stimulus, although there 420 00:23:08,760 --> 00:23:12,480 Speaker 6: are four participants expecting something above three trillion UIN. But 421 00:23:12,560 --> 00:23:15,440 Speaker 6: our Bloomberg Economics team believes that there is not going 422 00:23:15,480 --> 00:23:18,440 Speaker 6: to be any fresh stimulus at all. So pretty divergent 423 00:23:18,560 --> 00:23:20,920 Speaker 6: views out there. And I also have to remind you 424 00:23:21,000 --> 00:23:23,560 Speaker 6: that the reason why China today that Peace had said 425 00:23:23,560 --> 00:23:28,440 Speaker 6: that expectations are overblown is because any sort of revision 426 00:23:28,480 --> 00:23:31,640 Speaker 6: to the fiscal budget deficit to GDP ratio, as well 427 00:23:31,680 --> 00:23:35,680 Speaker 6: as issuance of additional bonds on top of this year's quota, 428 00:23:36,080 --> 00:23:38,960 Speaker 6: that will have to be approved by the legislature, which 429 00:23:38,960 --> 00:23:42,480 Speaker 6: is why we think that perhaps a more appropriate time 430 00:23:42,560 --> 00:23:44,879 Speaker 6: for new fiscal measures to be announced would be after 431 00:23:44,960 --> 00:23:48,720 Speaker 6: the NPC Standing Committee meeting in end October. 432 00:23:48,960 --> 00:23:50,880 Speaker 2: So what do we know about how this is going 433 00:23:50,920 --> 00:23:52,400 Speaker 2: to be focused or targeted? 434 00:23:53,320 --> 00:23:56,720 Speaker 6: Yeah, so we are looking for forward guidance from the 435 00:23:56,800 --> 00:23:59,119 Speaker 6: ministry even if we don't get that number. But of 436 00:23:59,160 --> 00:24:02,120 Speaker 6: course more important then the scale of the fiscal stimulus 437 00:24:02,680 --> 00:24:06,200 Speaker 6: is the content of it. What is the funding going 438 00:24:06,240 --> 00:24:08,240 Speaker 6: to be focused on. Is it going to be targeted 439 00:24:08,280 --> 00:24:12,280 Speaker 6: at boosting consumption? That's what investors really want to see, 440 00:24:12,440 --> 00:24:17,280 Speaker 6: as opposed to the usual infrastructure investment or supply side 441 00:24:17,320 --> 00:24:21,119 Speaker 6: policies that you know is China's old Playbok. So investors 442 00:24:21,160 --> 00:24:25,399 Speaker 6: are looking out for consumption vouchers, perhaps an expansion of 443 00:24:25,440 --> 00:24:30,200 Speaker 6: that existing equipment upgrading program, and perhaps direct cash handouts 444 00:24:30,240 --> 00:24:32,720 Speaker 6: to certain sectors of the population like the elderly and 445 00:24:32,760 --> 00:24:36,479 Speaker 6: the poor, support for families with children, for example. And 446 00:24:36,760 --> 00:24:39,399 Speaker 6: if the bulk of that money is going to be 447 00:24:40,280 --> 00:24:43,800 Speaker 6: helping to boast a local government financing, for instance, by 448 00:24:43,840 --> 00:24:47,399 Speaker 6: swapping out a local government hidden debt with bonds of 449 00:24:47,520 --> 00:24:50,359 Speaker 6: lower interest rates, no more is saying that, then that 450 00:24:50,520 --> 00:24:53,920 Speaker 6: shouldn't even be considered an incremental fiscal stimilus at all. 451 00:24:55,040 --> 00:24:57,080 Speaker 3: We talked a little bit about how the Ministry of 452 00:24:57,080 --> 00:25:00,280 Speaker 3: Finance will likely want to keep a little bit of 453 00:25:00,320 --> 00:25:02,920 Speaker 3: momentum in terms of sentiment, but just not go too 454 00:25:02,960 --> 00:25:07,080 Speaker 3: far and actually the way that Bloomberg Economics described it, 455 00:25:07,200 --> 00:25:10,120 Speaker 3: pulling forward from next year some of this bond issuance 456 00:25:10,119 --> 00:25:15,160 Speaker 3: and some of this deficit spending. It also suggested that 457 00:25:15,160 --> 00:25:18,160 Speaker 3: that that they would later, you know, into next year, 458 00:25:18,200 --> 00:25:22,160 Speaker 3: like you said, which brings in the NPC have scope 459 00:25:22,359 --> 00:25:26,760 Speaker 3: for adding to it. So it's potentially an ad but 460 00:25:26,800 --> 00:25:29,960 Speaker 3: it's down the road. Is that the kind of nuance 461 00:25:30,280 --> 00:25:33,919 Speaker 3: that investors can handle with the MOF or is it 462 00:25:34,000 --> 00:25:34,680 Speaker 3: more likely. 463 00:25:34,520 --> 00:25:37,040 Speaker 6: To be disappointment. Yeah, there are a few factors at 464 00:25:37,080 --> 00:25:40,720 Speaker 6: play here. So many analysts are expecting this, any sort 465 00:25:40,720 --> 00:25:43,879 Speaker 6: of fiscal package to be a multi year thing, and 466 00:25:43,960 --> 00:25:47,600 Speaker 6: Bloomberg Economics is saying that because fiscal spending has been 467 00:25:47,600 --> 00:25:50,840 Speaker 6: a drag this year, they haven't even finished spending the 468 00:25:50,840 --> 00:25:53,760 Speaker 6: budget for this year, only fifty five percent has been spent. 469 00:25:53,920 --> 00:25:58,640 Speaker 6: So the MOF briefing tomorrow might focus on disbursing the 470 00:25:58,760 --> 00:26:02,760 Speaker 6: existing unsped and allocations, which is still eighteen point four 471 00:26:02,800 --> 00:26:05,920 Speaker 6: trillion UNS, so quite a sizable amount there. And as 472 00:26:05,920 --> 00:26:09,800 Speaker 6: you said, advance issuance of next year's quota of local 473 00:26:09,800 --> 00:26:12,880 Speaker 6: government special bonds and special sovereign bonds that could happen, 474 00:26:12,920 --> 00:26:15,399 Speaker 6: which means it shifts forward the timeline. It means that 475 00:26:15,520 --> 00:26:18,680 Speaker 6: fund raising and planning for related projects can start this year, 476 00:26:18,760 --> 00:26:21,320 Speaker 6: but then spending will likely still take place next year 477 00:26:21,359 --> 00:26:24,040 Speaker 6: because we're already in mid October, not much time left. 478 00:26:25,080 --> 00:26:25,399 Speaker 3: Yeah. 479 00:26:25,600 --> 00:26:28,919 Speaker 6: And also there's also the aspect of the US elections, 480 00:26:28,920 --> 00:26:31,359 Speaker 6: and so some economists that I've been speaking to say 481 00:26:31,680 --> 00:26:35,320 Speaker 6: that China may want to reserve some fiscal firepower for 482 00:26:35,600 --> 00:26:38,919 Speaker 6: a potential Trump administration. If there is sixty percent tariffs 483 00:26:38,960 --> 00:26:41,720 Speaker 6: on Chinese goods, then they want to reserve some space 484 00:26:41,760 --> 00:26:43,520 Speaker 6: for more fiscal policy next year. 485 00:26:43,800 --> 00:26:47,919 Speaker 2: I was reading a column from opinion columnist Mohammad al Arian, 486 00:26:48,000 --> 00:26:51,320 Speaker 2: and he credited a friend with a couple of points. 487 00:26:51,359 --> 00:26:55,960 Speaker 2: So one, China cannot fix its micro problems with macro tools, 488 00:26:56,160 --> 00:27:00,640 Speaker 2: that's one. And second that required micro tools will need 489 00:27:00,720 --> 00:27:04,080 Speaker 2: time not only for formulation but impact. So the question 490 00:27:04,200 --> 00:27:07,080 Speaker 2: is whether or not markets can be really patient in 491 00:27:07,119 --> 00:27:10,840 Speaker 2: this environment, or whether there is the demand right now 492 00:27:10,840 --> 00:27:13,600 Speaker 2: to see results and let's get to the next level. 493 00:27:13,800 --> 00:27:15,840 Speaker 2: Do you think that's pretty accurate? 494 00:27:16,960 --> 00:27:17,200 Speaker 4: Yeah? 495 00:27:17,240 --> 00:27:19,080 Speaker 6: I think so. I mean, if you look at market 496 00:27:19,080 --> 00:27:22,240 Speaker 6: action yesterday, the CSI three hundred was flipping between gains 497 00:27:22,240 --> 00:27:24,720 Speaker 6: and losses. I feel that investors really don't know what 498 00:27:24,880 --> 00:27:29,639 Speaker 6: to expect, and expectations are extremely high, especially after the 499 00:27:29,680 --> 00:27:32,200 Speaker 6: Parlet Bureau meeting where the government signal that they're going 500 00:27:32,240 --> 00:27:34,919 Speaker 6: to put the whole weight behind the economy. That's just 501 00:27:35,280 --> 00:27:39,120 Speaker 6: you know, drumed up expectations very much. And I think 502 00:27:39,160 --> 00:27:42,960 Speaker 6: clock Tower, that's one of the clock Tower Group, their 503 00:27:43,000 --> 00:27:46,320 Speaker 6: analyst is saying that they're expecting even if the mof 504 00:27:46,320 --> 00:27:49,560 Speaker 6: press briefing disappoint investors tomorrow and if there is a 505 00:27:49,600 --> 00:27:51,719 Speaker 6: seal of a five to ten percent in the markets, 506 00:27:51,720 --> 00:27:55,000 Speaker 6: they're going to view this as a prime buying opportunity. 507 00:27:55,240 --> 00:27:58,760 Speaker 6: They're expecting that market peaks in May will now act 508 00:27:58,800 --> 00:28:02,120 Speaker 6: as a solid flow for this current news cycle because 509 00:28:02,160 --> 00:28:06,280 Speaker 6: they said the entire backdrop, the policy backdrop and sentiment 510 00:28:06,359 --> 00:28:08,840 Speaker 6: is really quite different now from what it was several 511 00:28:08,880 --> 00:28:09,399 Speaker 6: months ago. 512 00:28:09,800 --> 00:28:12,040 Speaker 3: Just in twenty seconds is so, I just note that 513 00:28:12,119 --> 00:28:15,199 Speaker 3: something has moved. China will address market concern in a 514 00:28:15,240 --> 00:28:18,080 Speaker 3: timely manner, as from the chief of the NDRC. So 515 00:28:18,280 --> 00:28:20,760 Speaker 3: they're very much aware that the market was really disappointed 516 00:28:20,800 --> 00:28:23,359 Speaker 3: with what they got, so at least they're showing the 517 00:28:23,400 --> 00:28:27,600 Speaker 3: intention of addressing some of these concerns. Twenty seconds. 518 00:28:28,160 --> 00:28:31,359 Speaker 6: Yeah, it looks like the government is really signaling to 519 00:28:32,160 --> 00:28:34,600 Speaker 6: local officials to listen to the voice of the market, 520 00:28:34,600 --> 00:28:37,520 Speaker 6: because we also had Premier League. He seeking opinions from 521 00:28:37,560 --> 00:28:40,400 Speaker 6: academics and experts as well, to listen to the voice 522 00:28:40,400 --> 00:28:42,480 Speaker 6: of the market before formulating policies. 523 00:28:43,200 --> 00:28:46,120 Speaker 3: All right, minmen, excellent stuff as usual. Thank you very much, 524 00:28:46,200 --> 00:28:48,440 Speaker 3: Mimme and Low Bloomberg TV China corresponded. 525 00:28:51,320 --> 00:28:54,240 Speaker 2: This has been the Bloomberg Daybreak Asia podcast, bringing you 526 00:28:54,320 --> 00:28:57,440 Speaker 2: the stories making news and moving markets in the Asia Pacific. 527 00:28:57,920 --> 00:29:00,760 Speaker 2: Visit the Bloomberg Podcast channel on you YouTube to get 528 00:29:00,840 --> 00:29:04,600 Speaker 2: more episodes of this and other shows from Bloomberg. 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