WEBVTT - Asia Stocks Higher on Fed Cut Bets

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio news. Welcome to the Daybreak

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<v Speaker 1>Asia podcast. I'm Dog Krisner. US Equities eked out another

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<v Speaker 1>game in the Wednesday session after a week reading on

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<v Speaker 1>private payrolls from ADP. The numbers helped to cement bets

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<v Speaker 1>of a FED rate cut next week. We also saw

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<v Speaker 1>a rotation out of information technology shares. Let's take a

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<v Speaker 1>closer look at what's happening in the Asia Pacific. Mark

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<v Speaker 1>Cranfield joins us from our studios in Singapore. Mark is

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<v Speaker 1>a Bloomberg Markets Live strategist. Mark, thank you so much

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<v Speaker 1>for being here. We're focused a lot on the FED

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<v Speaker 1>and the very high likelihood of a rate cut next week.

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<v Speaker 1>It's kind of interesting that in spite of market expectations

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<v Speaker 1>of that twenty five bases point rate cut, the dollar

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<v Speaker 1>is holding in relatively well against the majors. We were

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<v Speaker 1>a little weak today in New York, trading only by

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<v Speaker 1>around three tens of one percent. If you look at

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<v Speaker 1>the Bloomberg Dollars Spot Index, what are you seeing now

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<v Speaker 1>when you look at the currency markets.

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<v Speaker 2>That's really a function of the other side of the story.

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<v Speaker 2>So although the dollar story is becoming relatively clear in

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<v Speaker 2>the sense that we're expecting lower interest rates, but yields

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<v Speaker 2>are still relatively high on a global basis. We haven't

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<v Speaker 2>yet got a very strong theme in favor of the

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<v Speaker 2>other currents. You need the Euro and the yen especially

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<v Speaker 2>to have a story of their own why people want

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<v Speaker 2>to buy those currencies as an alternative to the US dollar.

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<v Speaker 2>It's emerging, but it isn't something that people are willing

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<v Speaker 2>to bet a lot of money on yet. Until that happens,

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<v Speaker 2>the dollar will be able to retain a reasonable level.

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<v Speaker 2>It probably it is probably going to be a drawn out,

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<v Speaker 2>like a slow motion action as we go into twenty

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<v Speaker 2>twenty six, with the expectations that they're going to be

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<v Speaker 2>further interest rate declines in the United States. Gradually the

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<v Speaker 2>yield differentials will narrow between the US and other countries.

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<v Speaker 2>It will undermine the US dollar. But the real kicker

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<v Speaker 2>will only come when people are really bullish, for example,

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<v Speaker 2>on Europe, when they see the potential for the European

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<v Speaker 2>Central Bank to maybe start turning towards higher interest rates,

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<v Speaker 2>when they see the European economies outperforming. When that kind

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<v Speaker 2>of confidence comes in, then the Euro's story in itself

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<v Speaker 2>becomes very clear, very tangible. People want to put money

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<v Speaker 2>into the Europe and it will mostly be at the

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<v Speaker 2>expense of the US dollar. We haven't yet fully reached

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<v Speaker 2>that point yet yet.

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<v Speaker 1>When we consider the end and the recent commands from BOJ,

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<v Speaker 1>Governor Will way to talking up the prospects of a

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<v Speaker 1>raid hike. I think right now money markets are implying

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<v Speaker 1>maybe eighty percent probability that the BOJ will raise its

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<v Speaker 1>policy rate on the nineteenth. Doesn't that do anything to

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<v Speaker 1>strengthen the currency.

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<v Speaker 2>The trouble with the end situation is that the Bank

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<v Speaker 2>of Japan, even if they read twenty five basis points,

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<v Speaker 2>which as you say, looks pretty much a done deal

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<v Speaker 2>now in December, they are still way below the neutral rate.

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<v Speaker 2>And if you look at the time gap. Since Governor

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<v Speaker 2>Luada came in, it has been changing policy, which is

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<v Speaker 2>a good thing, but we've had CPI running inflation levels

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<v Speaker 2>around three percent for a long time. The target rate,

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<v Speaker 2>if they raise it will go up to zero point

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<v Speaker 2>seventy five. That's still deeply negative real rates in Japan.

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<v Speaker 2>That's what undermines the Japanese currency, and nobody is expecting

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<v Speaker 2>that gap to be narrowed in a quick basis, so

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<v Speaker 2>even if they raise interest rates, And if you look

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<v Speaker 2>at how long the time difference between the hikes under Auada,

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<v Speaker 2>it's been many months. So we had one in January

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<v Speaker 2>this year, We're likely to get one in December. That

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<v Speaker 2>kind of time gap. If there's going to be another

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<v Speaker 2>hike in twenty twenty sex it might not be intil

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<v Speaker 2>the second.

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<v Speaker 1>Half of the year.

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<v Speaker 2>If traders see that, then they're fairly confident that the

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<v Speaker 2>end will underperform. We might see Dolly Yen go a

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<v Speaker 2>bit lower because of the US side as well. They're

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<v Speaker 2>going to be lowering interest rates, but it's not going

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<v Speaker 2>to be accelerating at a fast pace because the bank

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<v Speaker 2>is still nowhere near the neutral rate.

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<v Speaker 1>We've had a number of bond auctions for the Japanese

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<v Speaker 1>market in the last week. I think we have a

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<v Speaker 1>thirty year later today. How have things been performing. What's

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<v Speaker 1>the appetite for Jgb's been like.

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<v Speaker 2>Pretty mixed overall. As we approach the auctions, people are

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<v Speaker 2>tending to price in higher yields, giving a concession. As

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<v Speaker 2>it happens, the tenure went reasonably well this week. Actual

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<v Speaker 2>demand at the auction itself was quite decent, and yet

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<v Speaker 2>yesterday in the regular Bank of Japan operations, investors were

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<v Speaker 2>quite willing to sell short dated bonds aggressively back to

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<v Speaker 2>the central bank, so they're clearly expecting the interest rate

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<v Speaker 2>hike to come. Jgbs are being pushed low again today

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<v Speaker 2>head of the thirty year auction which is coming. Yields

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<v Speaker 2>are at record higher levels in the thirty year They

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<v Speaker 2>started selling these bonds only in nineteen ninety nine, and

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<v Speaker 2>this week we reached the highest levels we a scene.

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<v Speaker 2>So again they're pricing in a worst case scenario, so

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<v Speaker 2>the auction itself may go okay. In the background, the

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<v Speaker 2>big picture is that ten year yield is approaching the

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<v Speaker 2>two percent area. Now that is where we may see

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<v Speaker 2>some long term investors in Japan start to come in,

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<v Speaker 2>but we haven't reached it yet. In the meantime, the

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<v Speaker 2>whole Japanese curve is under pressure. That's roiling markets across

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<v Speaker 2>the world. Until we see whether or not there is

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<v Speaker 2>real genuine support for Japanese yields and the ten uere

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<v Speaker 2>around two percent, people would assume that the Japanese market

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<v Speaker 2>is the place to avoid.

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<v Speaker 1>I want to change gears. Talk a little bit about

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<v Speaker 1>what's been going on in South Korea today, notwithstanding where

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<v Speaker 1>I'm seeing the costs be down about nine tens of

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<v Speaker 1>one percent at the moment, but the South Korean equity

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<v Speaker 1>market overall has been outperforming so many markets in the

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<v Speaker 1>Asia Pacific, And in the last couple of days we

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<v Speaker 1>had that upward revision from the Bok on a third

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<v Speaker 1>quarter economic growth I think at one point thy percent

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<v Speaker 1>growth rate quarter on quarter, which seemed to be stunning.

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<v Speaker 1>What's happening here and is this kind of momentum likely

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<v Speaker 1>to continue?

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<v Speaker 3>Do?

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<v Speaker 2>You'd think probably getting a bit overdone in the short term.

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<v Speaker 2>But there are a few reasons why Koreas had an

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<v Speaker 2>exceptional year. And it is ironic that we're talking about

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<v Speaker 2>it now because it's a week to the year since

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<v Speaker 2>they had the military action when they imposed martial law

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<v Speaker 2>in Korea, and people thought, oh, that's the end of

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<v Speaker 2>a career, but that actually was a turning point. Since then,

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<v Speaker 2>they've got a new president, new policy is much more

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<v Speaker 2>aggressive intervention from the government that's helped to boost the economy.

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<v Speaker 2>Korean companies have proved themselves to be right at the

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<v Speaker 2>forefront of the AI boom and other parts of the

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<v Speaker 2>tech sector as well, and they've been keeping the currency

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<v Speaker 2>relatively cheap as well. So from an investor's point of view,

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<v Speaker 2>they know that exporters have an edge because the currency

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<v Speaker 2>is helping them. They see the government doing the right

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<v Speaker 2>moves and that's helped the Koreans, which are coming from

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<v Speaker 2>a low base, that's helped them to be some of

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<v Speaker 2>the best performers in Asia this year. They are starting

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<v Speaker 2>to get a little bit expensive relative to the rest

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<v Speaker 2>of Asia at this stage, so it will need some

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<v Speaker 2>new drivers. We or may not see those as we

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<v Speaker 2>go into twenty twenty six, but based on where we

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<v Speaker 2>are now, unless we see some new developments in tech

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<v Speaker 2>which really support Korean companies, we've probably seen the best

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<v Speaker 2>that we're going to see in the Korean markets for

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<v Speaker 2>a while.

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<v Speaker 1>So have the US tariffs imposed on South Korea? Have

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<v Speaker 1>they provided any kind of limitation here? Or have South

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<v Speaker 1>Korean exporters been able to overcome them and kind of

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<v Speaker 1>build those tariffs into their price structure in a way

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<v Speaker 1>that has not been dad fremantle.

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<v Speaker 2>They've found lots of ways around it, but the tariff

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<v Speaker 2>is a relative game within Asia, and the only person

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<v Speaker 2>that really seems to be outstandingly as a loser at

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<v Speaker 2>the moment is India. Everybody else has renegotiate thanks to

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<v Speaker 2>China and the way that China have stood up to

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<v Speaker 2>the United States on the tariffs to a certain extent,

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<v Speaker 2>that has helped everybody else be able to make adjustments.

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<v Speaker 2>At the moment, India is the outlier from that point

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<v Speaker 2>of view, even though it's not really hurting their stock

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<v Speaker 2>market too much. The currency is collapsing though, so everything.

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<v Speaker 2>If you look across whether Koreas being compared to Taiwan,

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<v Speaker 2>it's being compared to Hong Kong, to China, it's pretty

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<v Speaker 2>much in the same ballpark as all of those. So

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<v Speaker 2>it's not winning or losing to a greater or lesser degree.

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<v Speaker 2>So from that point of view, there's a kind of

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<v Speaker 2>a neutrality about how tariffs are being played out in Asia.

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<v Speaker 1>Mark, Before I let you go, I have to get

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<v Speaker 1>your take on China. Next week we get the inflation data,

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<v Speaker 1>and we know the economy in China right now is

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<v Speaker 1>mired heavily in this deflationary trap. I think it may

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<v Speaker 1>be concerning some people more than others. Beijing seems to

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<v Speaker 1>be a little lax in addressing it, though can you

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<v Speaker 1>make sense of that.

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<v Speaker 2>It's a big complicated picture. They probably have already done

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<v Speaker 2>a lot of stimus issues. They probably don't want to

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<v Speaker 2>be seen to be the only person providing help to

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<v Speaker 2>the economy. They'd like to see the stock market take

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<v Speaker 2>care of itself. More private investment coming as well. It's

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<v Speaker 2>likely that there will be more government support to market.

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<v Speaker 2>You may have to wait till an early part of

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<v Speaker 2>next year before we see that, but clearly they've done

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<v Speaker 2>so much they want to stand back a bit and

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<v Speaker 2>see how does that really play out. So far, it's

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<v Speaker 2>been a little bit underwhelming, but it is early stages

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<v Speaker 2>and they will get help if the rest of the

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<v Speaker 2>world economy continues to do okay, China will benefit as well.

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<v Speaker 1>Okay, great stuff, Mark, always a pleasure, Thank you so

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<v Speaker 1>very much. Mark Cranfield, Bloomberg Markets Live Strategist, joining from

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<v Speaker 1>Singapore here on the Daybreak Asia podcast. Welcome back to

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<v Speaker 1>the Detbreak Asia podcast. I'm deg Prisner. Financial markets are

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<v Speaker 1>widely expecting the Fed to lower interest rates next week.

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<v Speaker 1>Even so, policymakers, i think it's fair to say, have

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<v Speaker 1>been torn as they attempt balance the slowdown that we

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<v Speaker 1>have seen in the American labor market with still elevated inflation. Today,

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<v Speaker 1>the ISM reported activity among services expanded at a slightly

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<v Speaker 1>faster pace in the month of November. Perhaps more importantly,

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<v Speaker 1>the index of prices paid for services and materials showed

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<v Speaker 1>the slowest growth in seven months. Now, that could suggest

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<v Speaker 1>some easing in inflationary pressures. Now, on Friday markets, we'll

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<v Speaker 1>get a delayed reading on the Fed's preferred measure of inflation.

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<v Speaker 1>The PCE. Economists are projecting a third straight increase in

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<v Speaker 1>the core PCE by two tenths of one percent. If so,

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<v Speaker 1>that would keep the year over year figure hovering just

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<v Speaker 1>around three percent, and it would suggest that inflationary pressures

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<v Speaker 1>are stable yet still sticky. Let's bring Adam Turnquist into

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<v Speaker 1>the conversation. Adam is chief technical strategist at LPL Financial. Adam,

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<v Speaker 1>thank you so much for taking time to chat with us.

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<v Speaker 1>What did you make of this ISM print, particularly on

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<v Speaker 1>the prices paid side.

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<v Speaker 3>Well, it certainly came at a good time after the

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<v Speaker 3>ADP report, because the market was trading a little bit

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<v Speaker 3>lower on that news than the ISM came out.

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<v Speaker 4>We'll call it save the day, at least for price action. Today.

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<v Speaker 3>You had As you mentioned, the price is paid component

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<v Speaker 3>coming down, new orders holding above fifty a little bit

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<v Speaker 3>slower than last month, but still in positive territory or

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<v Speaker 3>expansionary territory. And then employment ticked up month over month,

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<v Speaker 3>another good sign that I think helped offset some of

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<v Speaker 3>the weakness that we've seen in the labor market data.

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<v Speaker 1>There was a very interesting report to my mind in

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<v Speaker 1>the FT today talking about the Treasury Department soliciting feedback

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<v Speaker 1>on the nomination the potential nomination here of Kevin Hassett

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<v Speaker 1>as FED chair. Other candidates were also evaluated in this

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<v Speaker 1>one on one conversation format with a number of executives

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<v Speaker 1>at major Wall Street firms and big players in the bondmark.

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<v Speaker 1>I need to point out a number. We're worried about

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<v Speaker 1>Hasset's alignment with Trump, and they said that Hasset could

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<v Speaker 1>agitate for indiscriminate rate cuts even if inflation continues to

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<v Speaker 1>run above that two percent target. It's there right now,

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<v Speaker 1>but I'm wondering whether we still need to consider this

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<v Speaker 1>idea of FED independence. Is that something that concerns you?

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<v Speaker 4>It could for right now.

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<v Speaker 3>I don't think it's part of the conversation in a

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<v Speaker 3>big way, it's maybe on the back burner when you

0:12:30.360 --> 0:12:32.400
<v Speaker 3>look at the market reaction to some of the news

0:12:32.440 --> 0:12:35.560
<v Speaker 3>and just the betting markets. When you look at the

0:12:35.679 --> 0:12:38.760
<v Speaker 3>Kevin Hasset odds of getting the nod for the FED chair,

0:12:38.960 --> 0:12:41.480
<v Speaker 3>the market seems to like that. I know, Kevin Hassets

0:12:41.480 --> 0:12:44.480
<v Speaker 3>mentioned it himself to the media, and that goes back

0:12:44.520 --> 0:12:47.480
<v Speaker 3>to your point about him being too closely aligned with

0:12:47.520 --> 0:12:50.720
<v Speaker 3>maybe the president or the president's objectives. But at the

0:12:50.800 --> 0:12:54.840
<v Speaker 3>end of the day, it's still the Fed, right, There's

0:12:54.880 --> 0:12:59.000
<v Speaker 3>policies in place that protect one member from completely running

0:12:59.040 --> 0:13:02.720
<v Speaker 3>the table in terms of where monetary policy goes. It's

0:13:02.720 --> 0:13:04.920
<v Speaker 3>really going to take him to convince the other members

0:13:04.960 --> 0:13:08.960
<v Speaker 3>to lean more dubbish. If that is the case next year, how.

0:13:08.800 --> 0:13:11.120
<v Speaker 1>Many more rate cuts are you expecting? I mean, if

0:13:11.160 --> 0:13:14.720
<v Speaker 1>we do indeed get twenty five basis points in easing

0:13:15.840 --> 0:13:18.000
<v Speaker 1>next week on the tenth, I mean, are you expecting

0:13:18.040 --> 0:13:20.120
<v Speaker 1>a lot more in the way of Fed rate cuts?

0:13:21.880 --> 0:13:24.480
<v Speaker 3>So the easy question, or the easy part of that question,

0:13:24.559 --> 0:13:27.160
<v Speaker 3>next next week I think is a done deal, especially

0:13:27.200 --> 0:13:30.280
<v Speaker 3>after the ADAP report, but even before that, very high

0:13:30.320 --> 0:13:32.840
<v Speaker 3>odds and the FED funds futures market for a rate

0:13:32.880 --> 0:13:35.439
<v Speaker 3>cut it's really going to boil down to the commentary

0:13:35.520 --> 0:13:39.199
<v Speaker 3>and the summary of economic projections. The labor market clearly

0:13:39.600 --> 0:13:43.120
<v Speaker 3>trendy lower, we'll call it stall speed. That's probably front

0:13:43.120 --> 0:13:45.000
<v Speaker 3>and center on the Fed's mind and keeping them up

0:13:45.040 --> 0:13:47.040
<v Speaker 3>at night. But I do think we have to be

0:13:47.120 --> 0:13:50.839
<v Speaker 3>cognizant of inflation. Right we have commodities moving higher and

0:13:50.880 --> 0:13:53.920
<v Speaker 3>in fact, the Bloomberg Commodity Index breaking out to new

0:13:54.000 --> 0:13:57.360
<v Speaker 3>multi year highs. Think of that as an input cost

0:13:57.440 --> 0:14:00.400
<v Speaker 3>and a leading indicator for inflation. I think it could

0:14:00.440 --> 0:14:04.840
<v Speaker 3>complicate the overall inflation story for the FED and potentially

0:14:04.920 --> 0:14:07.720
<v Speaker 3>leave the FED in a tough position next year. We

0:14:07.760 --> 0:14:11.160
<v Speaker 3>do think the rate cutting cycle will continue. I think

0:14:11.280 --> 0:14:14.560
<v Speaker 3>maybe on a nearturn basis, though the market expectations are

0:14:14.559 --> 0:14:16.480
<v Speaker 3>getting a little a bit of ahead of themselves in

0:14:16.559 --> 0:14:19.000
<v Speaker 3>terms of what to expect next week from the Fed

0:14:19.040 --> 0:14:21.040
<v Speaker 3>in terms of how dubblish they're going to come out.

0:14:21.280 --> 0:14:23.680
<v Speaker 1>So where does that leave you? Then that thinking, where

0:14:23.720 --> 0:14:27.080
<v Speaker 1>does that lead you in terms of evaluating opportunities in

0:14:27.120 --> 0:14:27.920
<v Speaker 1>the equity market.

0:14:29.360 --> 0:14:32.680
<v Speaker 3>So for the equity market, we're bullish going into twenty

0:14:32.720 --> 0:14:35.000
<v Speaker 3>twenty six. We do think there could be some near

0:14:35.120 --> 0:14:38.560
<v Speaker 3>term volatility, especially With this latest pullback and some of

0:14:38.560 --> 0:14:41.960
<v Speaker 3>the leadership trends that we've seen take place over the

0:14:42.040 --> 0:14:44.600
<v Speaker 3>last month, the market has turned a little bit more defensive.

0:14:45.040 --> 0:14:46.920
<v Speaker 4>There's been some risk aversion in.

0:14:47.600 --> 0:14:52.360
<v Speaker 3>Overall retail participation in US equities. That's a new development

0:14:52.400 --> 0:14:55.040
<v Speaker 3>we haven't seen in seven months. So on a near term.

0:14:54.960 --> 0:14:59.000
<v Speaker 4>Basis, we'll call it mildly cautious if we can go there.

0:14:59.360 --> 0:15:02.240
<v Speaker 3>But I think the playbook for next year is really

0:15:02.240 --> 0:15:04.600
<v Speaker 3>going to be by the dip, the bull market will continue.

0:15:04.920 --> 0:15:08.000
<v Speaker 3>We have our base case no recession. We think there'll

0:15:08.000 --> 0:15:11.080
<v Speaker 3>be stimulative measures from the One Big Beautiful Bill Act

0:15:11.120 --> 0:15:14.040
<v Speaker 3>that will support not only Corporate America but also the

0:15:14.040 --> 0:15:17.720
<v Speaker 3>lower end of the consumer with some of these tax

0:15:17.760 --> 0:15:21.800
<v Speaker 3>incentives and higher rebate checks coming in the first half.

0:15:22.000 --> 0:15:26.440
<v Speaker 3>We also have our expectation for continued cutting from the Fed,

0:15:26.480 --> 0:15:29.080
<v Speaker 3>although maybe two to three rate cuts next year's is

0:15:29.120 --> 0:15:32.520
<v Speaker 3>probably probably the most likely scenario as it stands now,

0:15:33.040 --> 0:15:35.560
<v Speaker 3>and look at Corporate America's doing quite well. We learned

0:15:35.560 --> 0:15:38.200
<v Speaker 3>how resilient they are in the wake of higher effective

0:15:38.280 --> 0:15:41.880
<v Speaker 3>teriff rates. Earning's power remains strong. The AI team we

0:15:41.960 --> 0:15:44.440
<v Speaker 3>think will continue, so a pretty good backdrop as we

0:15:44.440 --> 0:15:46.080
<v Speaker 3>look ahead to twenty twenty six.

0:15:46.000 --> 0:15:49.160
<v Speaker 1>To what extent do you expect the AI theme to continue.

0:15:49.200 --> 0:15:51.480
<v Speaker 1>I mean, we're three years into this right now, and

0:15:51.560 --> 0:15:53.960
<v Speaker 1>it seems as though there is no end in sight.

0:15:54.360 --> 0:15:57.560
<v Speaker 1>There have been maybe a few moments, particularly in the

0:15:57.560 --> 0:16:00.520
<v Speaker 1>month of November, some naval gazing that allow the market

0:16:00.560 --> 0:16:03.920
<v Speaker 1>to consider the fact that some of these evaluations are stretched.

0:16:04.480 --> 0:16:07.480
<v Speaker 1>But are you still optimistic that the momentum here is

0:16:07.520 --> 0:16:09.200
<v Speaker 1>positive for the foreseeable future?

0:16:10.640 --> 0:16:11.320
<v Speaker 4>Yeah? Absolutely.

0:16:11.360 --> 0:16:14.000
<v Speaker 3>When you look at the capex spending rates among the

0:16:14.080 --> 0:16:18.440
<v Speaker 3>hyperscalers that's continuing to grow over twenty percent on a

0:16:18.480 --> 0:16:22.080
<v Speaker 3>compounded annual growth rate, we don't really see that slowing

0:16:22.120 --> 0:16:25.080
<v Speaker 3>down in this AI arms race. I think the big

0:16:25.120 --> 0:16:27.640
<v Speaker 3>story for next year it's going to be a show

0:16:27.680 --> 0:16:30.280
<v Speaker 3>me story. Right when you think about the return on investment.

0:16:30.520 --> 0:16:33.840
<v Speaker 3>We started to see that when Meta reported earnings. There's

0:16:33.920 --> 0:16:37.080
<v Speaker 3>more scrutiny because a lot of the hyperscalers they've been

0:16:37.680 --> 0:16:40.160
<v Speaker 3>blowing through their free cash flow and now they've turned

0:16:40.160 --> 0:16:41.560
<v Speaker 3>to the debt market in a big way.

0:16:41.600 --> 0:16:43.520
<v Speaker 4>So you're adding debt to the balance sheet.

0:16:43.560 --> 0:16:47.360
<v Speaker 3>That brings in added risk, added volatility, and of course

0:16:47.400 --> 0:16:51.480
<v Speaker 3>added scrutiny. In terms of what's the actual return on

0:16:51.520 --> 0:16:53.120
<v Speaker 3>all of this spending. I think that's going to be

0:16:53.160 --> 0:16:54.160
<v Speaker 3>the big story next year.

0:16:54.600 --> 0:16:57.600
<v Speaker 1>Are you tempted to look for opportunities offshore right now?

0:16:57.640 --> 0:17:00.880
<v Speaker 1>If you're concerned about devaluation and maybe there's a question

0:17:01.000 --> 0:17:04.120
<v Speaker 1>mark about the degree to which the American economy can

0:17:04.760 --> 0:17:07.320
<v Speaker 1>still grow and drive a lot of these corporate earnings.

0:17:07.560 --> 0:17:09.919
<v Speaker 1>Are you tempted maybe to look at a place like

0:17:10.600 --> 0:17:12.840
<v Speaker 1>Europe or even markets in Asia.

0:17:15.119 --> 0:17:17.000
<v Speaker 4>The emerging markets look really strong.

0:17:17.040 --> 0:17:19.639
<v Speaker 3>They've had a surprising year in terms of out performance

0:17:19.720 --> 0:17:22.679
<v Speaker 3>even in international developed so a lot of countries in

0:17:22.720 --> 0:17:26.120
<v Speaker 3>Europe have done quite well, especially on a relative basis.

0:17:26.160 --> 0:17:28.840
<v Speaker 3>I think the big question is going to be the

0:17:28.960 --> 0:17:32.240
<v Speaker 3>dollar on that trade or investment. The dollars still in

0:17:32.280 --> 0:17:34.600
<v Speaker 3>this what we call a secular up trend. If we

0:17:34.680 --> 0:17:37.479
<v Speaker 3>start to see the dollar index roll over, that's our

0:17:37.560 --> 0:17:40.000
<v Speaker 3>queue to start kicking the tires on some of these

0:17:40.040 --> 0:17:43.360
<v Speaker 3>I would say emerging market countries. Look at Brazil, look

0:17:43.359 --> 0:17:46.520
<v Speaker 3>at Mexico, and some countries in Latin America. There's some

0:17:46.640 --> 0:17:49.320
<v Speaker 3>other countries in the Asian part of the world that

0:17:49.359 --> 0:17:52.440
<v Speaker 3>have done quite well. We think those trends could accelerate

0:17:52.520 --> 0:17:55.040
<v Speaker 3>especially if the dollar breaks down a little bit.

0:17:55.040 --> 0:17:57.920
<v Speaker 1>Here, Adam, always a pleasure. Thank you so very much.

0:17:57.960 --> 0:18:00.960
<v Speaker 1>Adam turnquiz there. He is the chief tech strategist at

0:18:01.080 --> 0:18:04.240
<v Speaker 1>LPL Financial. Joining us here on the Daybreak Asia Podcast.

0:18:06.200 --> 0:18:09.560
<v Speaker 1>Thanks for listening to today's episode of the Bloomberg Daybreak

0:18:09.720 --> 0:18:13.080
<v Speaker 1>Asia Edition podcast. Each weekday, we look at the story

0:18:13.160 --> 0:18:17.520
<v Speaker 1>shaping markets, finance, and geopolitics in the Asia Pacific. You

0:18:17.560 --> 0:18:21.639
<v Speaker 1>can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel,

0:18:21.760 --> 0:18:24.760
<v Speaker 1>or anywhere else you listen. Join us again tomorrow for

0:18:24.920 --> 0:18:28.399
<v Speaker 1>insight on the market moves from Hong Kong to Singapore

0:18:28.800 --> 0:18:32.560
<v Speaker 1>and Australia. I'm Doug Chrisner, and this is Bloomberg