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Speaker 1: This is Bloomberg Daybreak Asia for this Friday, March third

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Speaker 1: in Hong Kong, Thursday March second in New York, and

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Speaker 1: coming up today. Atlanta FED president Raphael Bostick says the

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Speaker 1: Central Bank could pause rate hikes sometime this summer. City

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Speaker 1: Group is cutting hundreds of jobs across the company, and

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Speaker 1: China ramps up its push for domestic chip production. B

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Speaker 1: Lincoln says he told lab Roth the US wants Russia

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Speaker 1: back in the Salt Agreement. China reacts to USA to Taiwan,

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Speaker 1: saying it undermines peace and stability. Concern about the congressional

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Speaker 1: TikTok legislation. I'm at Baxter with Global News. That's all

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Speaker 1: straight ahead on Bloomberg day Break Asia, the business news

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Speaker 1: you need to start your day in just one fifteen

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Speaker 1: minute podcast available on Apples, Spotify, the Bloomberg Business app,

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Speaker 1: and everywhere you get your podcasts. Good morning, I'm Deck

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Speaker 1: Prisoner and I'm Brian Curtis. Here are the stories we're

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Speaker 1: following today. Well after the bell chipmaker Broadcom gave a

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Speaker 1: rosy revenue forecast for the current quarter. Let's get the

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Speaker 1: story from Bloomberg's Charlie Pellet. Broadcom is one of the

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Speaker 1: world's biggest chip makers, and it indicates that companies are

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Speaker 1: still spending on corporate networking infrastructure. Broadcom said revenue in

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Speaker 1: the fiscal second quarter will be about eight point seven

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Speaker 1: billion dollars now that compares with an average annalists estimate

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Speaker 1: of eight point five eight billion. The outlook suggests Broadcom

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Speaker 1: continues to whether we're slowdown better than many of its

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Speaker 1: chip piers in New York. Charlie Pellet Bloomberg Daybreak Asia. Well,

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Speaker 1: let's stay with this theme of semiconductors now, because we

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Speaker 1: have Chinese Vice Premier Leah Huh saying that China needs

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Speaker 1: to mobilize national resources to develop a domestic microchip industry.

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Speaker 1: That story from Bloomberg's Evan Men. Leo. Huh said China

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Speaker 1: must focus on research and development, with companies and entrepreneurs

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Speaker 1: playing the key role. Comments come as Washington limits China's

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Speaker 1: imports are the most advanced semiconductors, and those spoke days

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Speaker 1: after President Shi Jingping urge the country to accelerate scientific

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Speaker 1: research to achieve self reliance. Meantime, China has pledged to

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Speaker 1: invest another one point nine billion dollars in the country's

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Speaker 1: biggest memory chips maker, Young Zi Memory Technologies in Hong Kong,

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Speaker 1: Amivan Mah Bloomberg day Break Asia. Meantime, the White House

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Speaker 1: and Congress are working to lessen the national security risk

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Speaker 1: from various Chinese social media apps. It's according to President

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Speaker 1: Biden's Commerce chief Gina Romando. She said that US senators

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Speaker 1: are thinking hard about the right way to protect security with.

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Speaker 1: What we're worried about is Chinese backed companies being on

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Speaker 1: tens of millions of American phones, including members of the military,

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Speaker 1: and privacy concerns, data concerns, misinformation concerns that doesn't just

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Speaker 1: apply to TikTok. Romando is among the top US officials

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Speaker 1: driving efforts to counter what they see as rising economic

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Speaker 1: and strategic threats from Beijing. Her department issued broad export

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Speaker 1: controls on chip making technology to China last year, and

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Speaker 1: she's now leading the way in a fifty two billion

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Speaker 1: dollar effort into the US semiconductor industry, which she frames

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Speaker 1: as a key national security resource. The US boutique firm

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Speaker 1: GQG Partners has invested one point eight seven billion dollars

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Speaker 1: in India's Adani Group. That story from Bloomberg's d of

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Speaker 1: El Jewelers. A statement from Adani says GQG boart shares

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Speaker 1: in four firms from an Adane family trust. The purchasers

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Speaker 1: were made at discounts ranging from four point two to

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Speaker 1: twelve point two percent of the latest closing prices. GQG

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Speaker 1: chairman Rajiv Jane said he had confidence in the Adani Group.

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Speaker 1: He told Bloomberg his own company's edge is understanding better

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Speaker 1: than others how utilities operate. The four firms are A

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Speaker 1: Dane Ports, Adani Green Energy, A Dane Transmission, and the

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Speaker 1: flagship Adani Enterprises. The stakes taken in the various companies

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Speaker 1: range from two point five to four percent. Jane echoed

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Speaker 1: a line from Warren Buffett saying you have to be

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Speaker 1: greedy when people are fearful. The Adani Group said it

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Speaker 1: welcome the order in Hong Kong. I'm Annabel Ruler's Bloombog

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Speaker 1: Daybreak Asia Citygroup is cutting hundreds of jobs. That story

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Speaker 1: from Bloomberg's and Kate's. Bloomberg is reporting that City will

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Speaker 1: eliminate positions across the company, with the Wall Street Giants, investment,

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Speaker 1: banking and mortgage divisions among those affected. Sources say the

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Speaker 1: reductions are routine and amount to less than one percent

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Speaker 1: of city groups two hundred forty thousand person workforce. The

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Speaker 1: move comes just weeks after JP Morgan Chase laid off

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Speaker 1: hundreds of mortgage employees and Goldman Saxon January embarked on

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Speaker 1: one of its biggest rounds of job cuts ever with

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Speaker 1: plants to chop thousands of positions in Washington and Kate's

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Speaker 1: Bloomberg Daybreak Asia, I'm Brian Curtis along with Doug Christner

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Speaker 1: and a curious day in markets today. Doug, you mentioned

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Speaker 1: a lot there. Bounce off the two hundred day moving

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Speaker 1: average is one thing. Bosticks comments about a possible pause

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Speaker 1: this summer and CNBC's reporting of Dan Loebe taking a

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Speaker 1: purchase of shares in AMD also got a little bit

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Speaker 1: of attention. And then also just that yesterday stocks hit

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Speaker 1: a six week low. It was a surprising day. Yeah,

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Speaker 1: but I don't think you can underestimate to the degree

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Speaker 1: to which the American economy is facing inflationary pressure. More

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Speaker 1: worrisome than perhaps the data on first time jobless claims

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Speaker 1: unit labor cost in the fourth quarter, Brian rising at

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Speaker 1: an annual rate of three point two percent. That was

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Speaker 1: nearly three times the preliminary estimate. We have really yet

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Speaker 1: to see any softening in the labor market despite all

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Speaker 1: the aggressive tightening that we've had from the Fed, And

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Speaker 1: today Treasury Secretary Yellen was saying the Fed simply will

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Speaker 1: have to reduce the heat of the jobs market. Yeah,

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Speaker 1: it's really tough to say though, whether or not we'll

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Speaker 1: get a follow on. We had one month's data. It

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Speaker 1: seems like we'll get a follow on that inflation isn't

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Speaker 1: going down anytime soon. But you know, you'd want to

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Speaker 1: have more than one month. So I think that's why

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Speaker 1: some people are thinking, well, if the economy is this

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Speaker 1: strong as it apparently is, there's some question about that.

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Speaker 1: But until you get a second month, you know they're

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Speaker 1: not throwing in the towel. In fact, a rally today

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Speaker 1: really gets your attention as what is the market trying

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Speaker 1: to tell us. I wanted to mention as well the

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Speaker 1: Broadcom story. It adds to Nvidia's comments earlier, and that

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Speaker 1: also makes it interesting for a sector that had been troubled.

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Speaker 1: We had the socks up about one percent today. Yeah,

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Speaker 1: and also after the bell we heard from HP Enterprise

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Speaker 1: a strong forecast for the current quarter. So if you're

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Speaker 1: talking not only about semiconductors, but information technology more broadly,

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Speaker 1: some positivity. Yeah, all right, it's time now for global news.

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Speaker 1: US Secretary of State Anthony Blanklin says he was very

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Speaker 1: direct in his short meeting with Russian foreign ministers Sergei

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Speaker 1: Lavrov at Baxter has Global News from a nine to

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Speaker 1: sixty News in San Francisco. Ed. Yeah, that's right, Brian,

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Speaker 1: the Secretary says, simply direct. I urged Russia to reverse

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Speaker 1: it's irresponsible decision and return to implementing the New Star Treaty,

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Speaker 1: which places verifiable limits on the nuclear arsenals of the

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Speaker 1: United States and the Russian Federation. And in the ten

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Speaker 1: minute meet on the sidelines of the G twenty, Blincoln

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Speaker 1: says they also talk China, as China and Russia are

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Speaker 1: the only two nations to vote against the resolution to

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Speaker 1: and the war in Ukraine. Blincoln takes that as a

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Speaker 1: sort of win. When you have eighteen of the twenty

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Speaker 1: agreed on what needs to be done and committed to

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Speaker 1: working together to do it again, that is affective multilateralism

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Speaker 1: in action. Blincoln believes in a few months, G twenty

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Speaker 1: will find a way to put into action the consensus

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Speaker 1: reached by the foreign ministers this week regarding Ukraine. China's

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Speaker 1: responded to the US announcement. The US has pledged an

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Speaker 1: additional six hundred nineteen million dollars and F sixteen munitions

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Speaker 1: and other supplies to Taiwan. Shinwa reports the move seriously

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Speaker 1: violates the one A principle and the three China US

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Speaker 1: joint communic case. Meanwhile, Taiwan's Defense Ministry says more Chinese

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Speaker 1: fighters jets flew again yesterday in the southwestern part of

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Speaker 1: the island and defense identification zone. Some concern has been

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Speaker 1: expressed today regarding the TikTok bill introduced in Congress today.

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Speaker 1: On Bloomberg's Balance of Power, Representative Gregory Meeks says, it

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Speaker 1: seems well, it just seems too broad and that it

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Speaker 1: will hurt American companies, American companies that would be subject

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Speaker 1: to being sanctioned by this bill. So so Bloomberg's Washington

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Speaker 1: DC Bureau chief Peggy Collins talk with Commerce Secretary Gina

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Speaker 1: Romando today and says, well, the Commerce has a number

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Speaker 1: of concerns. It's not just TikTok that they have. Some

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Speaker 1: concerns about at the intersection of national security and privacy.

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Speaker 1: So but he did also mention that they are working

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Speaker 1: and planning to work more with Congress to come up

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Speaker 1: with a strategy to deal with some of these question

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Speaker 1: and Ramando is also talking about going to China this

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Speaker 1: year to talk technology ambitions and trade in general. I'm

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Speaker 1: going to India next week, I'll be going to Africa.

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Speaker 1: There after, I'm going to go to Brazil. So I'm

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Speaker 1: certainly going to be sending my team over probably even

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Speaker 1: this spring. We're trying to work that out, and yes,

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Speaker 1: I think probably I would. Meanwhile, she says a Biden

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Speaker 1: administration is focused on having those ties but looking at

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Speaker 1: US interests, and the White House is saying today it

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Speaker 1: is deeply concerned about reports of Iranian schoolgirls being poisoned.

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Speaker 1: White House spokesman Rare Admiral John Kirby says, well, they

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Speaker 1: don't really know at this point. What's going on is

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Speaker 1: we don't know right now what caused those ailments. We

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Speaker 1: see reports that the Iranian government are investigating it. That's

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Speaker 1: the right course of action. We want those investigations to

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Speaker 1: be thorough and complete, and we want to be transparent.

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Speaker 1: Kirby says, a little girl's going to school should not

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Speaker 1: have to worry about being poisoned. Glove News powered by

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Speaker 1: more than twenty seven hundred journalists and analysts and over

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Speaker 1: one hundred and twenty countries. In San Francisco, I'm at

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Speaker 1: Baxter and this is Bloomberg. This is Bloomberg day Breakasia.

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Speaker 1: I'm Brian Curtis here in Hong Kong, alongside Rishad Salamat

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Speaker 1: and Christner of course on the markets, with Ed keeping

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Speaker 1: us up to date on news. Let's get to our guest,

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Speaker 1: George Ball Chairman Sanders Morris. Harris, George, Ernie's estimates are

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Speaker 1: coming down, interest rates are still going up. Inflation is

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Speaker 1: pretty sticky, margins are getting hit. Doesn't seem like a

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Speaker 1: very good environment for risk assets. Your thoughts on what

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Speaker 1: to do next? History I think is instructive. History is

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Speaker 1: not productive or predictive. I'm afraid there's a great old

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Speaker 1: country's on I was looking for love in all the

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Speaker 1: wrong places, and I think that's very true of the

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Speaker 1: markets today. There's an obsession, a singular obsession, guessing of

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Speaker 1: what the Fed may do next, when it'll do it,

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Speaker 1: until what extent will it do it. Today's rally, I

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Speaker 1: think was fueled by a not a belief, but really

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Speaker 1: an acceptance that the FED is going to keep rates

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Speaker 1: high for a long time. It's going to raise rates

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Speaker 1: in March, in May, maybe one time after that, but

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Speaker 1: rates aren't going to go down for a long long time.

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Speaker 1: And kilnically that's all right. Businesses can deal with that.

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Speaker 1: And I think that the Bostec fueled three hundred point

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Speaker 1: rally today was basically investors saying, all right, we know

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Speaker 1: what it's going to be like for the next few

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Speaker 1: years in terms of monetary policy. We can live with that.

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Speaker 1: And the bull instinct, the risk on instinct, took over.

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Speaker 1: So tell me something here, George, I mean, does it

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Speaker 1: I mean, aren't we just going back to the old normal?

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Speaker 1: I mean with rates let's say five presenter thereabouts. And

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Speaker 1: you know the thing is, by going out there, do

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Speaker 1: we now perhaps get in time, perhaps in a few

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Speaker 1: months time, start seeing um. You know, it working in

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Speaker 1: the sense that you know, the tide's going out and

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Speaker 1: we're going to find out who's naked, You find out

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Speaker 1: what the scum is when when when the pond is drained,

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Speaker 1: and that is going to happen. Looking back, by the

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Speaker 1: way to the extreme tightening back in the Vulcar era,

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Speaker 1: that's exactly what took place. Now today you have Fed

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Speaker 1: rates at a level where goods inflation is really coming

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Speaker 1: down very rapidly. Service wage inflation takes much longer to tame.

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Speaker 1: The expectations trail on for much much longer. But I

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Speaker 1: think the Fed sees that if they keep things where

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Speaker 1: they are plus the two or possibly three increases, everybody

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Speaker 1: expects that inflation will get back down two retard their

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Speaker 1: two percent goal. There will be casualties along the way. Yeah,

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Speaker 1: I was gonna say, let's talk about the casualties possibly.

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Speaker 1: You remember back in two thousand and four, we had

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Speaker 1: that time when the Fed raised interest rates for seventeen

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Speaker 1: consecutive meetings of twenty five basis points. It took us

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Speaker 1: up to five and a quarter percent and finished in

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Speaker 1: two thousand and six. And it wasn't too long after

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Speaker 1: that the tide pulled out and we saw what was

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Speaker 1: happening in the housing market. I'm not suggesting that that's

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Speaker 1: going to happen again, or that we'll get a banking crisis,

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Speaker 1: but can you speculate or think about what maybe will

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Speaker 1: be exposed by these very high levels of interest rates

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Speaker 1: in a very quick period of time. When I wake

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Speaker 1: up at three o'clock in the morning, like like every

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Speaker 1: middle aged or elderly mail, I worry unfortunately stole by

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Speaker 1: thunder by saying the housing market and lenders to the

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Speaker 1: housing markets UH could be in a very difficult position.

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Speaker 1: There is the possibility, although I think it fairly low,

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Speaker 1: that cirtterm commercial markets could could freeze up again, and

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Speaker 1: that that for the highly levered companies and for the

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Speaker 1: high yield risk type of companies could could be catastrophic.

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Speaker 1: And I think for some of the RI and RI

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Speaker 1: light companies that are that are lenders to the office market,

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Speaker 1: UH workers are not going back to the office in

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Speaker 1: any great number anytime soon. There will be excess space

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Speaker 1: and you're going to see some devastation quite possibly in

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Speaker 1: that sector as well. Georgie, you are you pullish on

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Speaker 1: bunds once again after a long pause. No, I haven't

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Speaker 1: light bonds, gentlemen once again, prefer bonds. U. It's very simple.

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Speaker 1: A for a nearly five percent four point eight percent

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Speaker 1: yield on to your treasury is a very warm, comfortable

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Speaker 1: of blanket and if you just sleep under that blanket

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Speaker 1: for two years, you're going to be all right. So bonds,

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Speaker 1: particularly the shorter duration bonds, I think, have a great

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Speaker 1: deal of the lure right now compared to almost anything else,

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Speaker 1: certainly compared to riskier bods. This is Bloomberg Daybreak Asia,

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