1
00:00:02,400 --> 00:00:03,000
Speaker 1: Good morning.

2
00:00:03,120 --> 00:00:05,880
Speaker 2: I'm Brian Curtiz and I'm Doug Krisner. Here are the

3
00:00:05,920 --> 00:00:11,039
Speaker 2: stories we're following today. These days, markets are have really

4
00:00:11,080 --> 00:00:15,400
Speaker 2: become increasingly fixated on the sale of US treasuries. We

5
00:00:15,520 --> 00:00:18,919
Speaker 2: know that more government borrowing means greater supply for the

6
00:00:18,920 --> 00:00:22,200
Speaker 2: market to digest. And when it comes to the period

7
00:00:22,200 --> 00:00:25,280
Speaker 2: in which we find ourselves now with the Fed no

8
00:00:25,360 --> 00:00:29,040
Speaker 2: longer purchasing treasuries, there's a lot to become anxious about

9
00:00:29,360 --> 00:00:31,880
Speaker 2: when you're dealing with more supply. But maybe a sigh

10
00:00:31,920 --> 00:00:35,480
Speaker 2: of relief today after an auction of ten year treasuries

11
00:00:35,479 --> 00:00:38,200
Speaker 2: saw fairly strong demand at the longer end of the curve,

12
00:00:38,280 --> 00:00:41,240
Speaker 2: we had the two year losing about four bases points

13
00:00:41,440 --> 00:00:44,400
Speaker 2: to four forty one. As I mentioned earlier, that's where

14
00:00:44,440 --> 00:00:46,559
Speaker 2: we are now in the Tokyo session. And then when

15
00:00:46,560 --> 00:00:48,599
Speaker 2: you look at the equity market, quite the rally. The

16
00:00:48,640 --> 00:00:50,720
Speaker 2: S and P now at the highest level since August,

17
00:00:51,040 --> 00:00:52,960
Speaker 2: with a gain of around seven tenths of one percent.

18
00:00:53,000 --> 00:00:54,880
Speaker 2: The Dow picks up six tenths of one percent on

19
00:00:54,920 --> 00:00:57,959
Speaker 2: the day, Nasdaq comp higher by a little bit more

20
00:00:58,000 --> 00:00:59,240
Speaker 2: than one point one percent.

21
00:00:59,560 --> 00:01:02,480
Speaker 1: Brian, all right, thanks very much, Doug now it's time

22
00:01:02,520 --> 00:01:06,840
Speaker 1: for Global news. Israeli forces are engaged in heavy fighting

23
00:01:06,880 --> 00:01:09,800
Speaker 1: with Hamas in the Northern Gaza at the same time

24
00:01:09,959 --> 00:01:13,600
Speaker 1: that a hostage release is trying to be negotiated at

25
00:01:13,640 --> 00:01:15,400
Speaker 1: Baxter has that story and more from the nine to

26
00:01:15,440 --> 00:01:16,840
Speaker 1: sixty news room in San Francisco.

27
00:01:17,240 --> 00:01:20,200
Speaker 3: Yeah right, jar Brian Israel is saying that negotiations very

28
00:01:20,200 --> 00:01:22,960
Speaker 3: close to finding a way. USS it is confident a

29
00:01:23,040 --> 00:01:27,080
Speaker 3: release can happen soon. Israeli government spokesman Elin Lavell confirms

30
00:01:27,200 --> 00:01:28,560
Speaker 3: there is progress.

31
00:01:28,640 --> 00:01:31,120
Speaker 4: Israeli society is, of course sack with warr for the

32
00:01:31,120 --> 00:01:34,160
Speaker 4: fate of our two hundred and forty hostages, including thirty children.

33
00:01:34,360 --> 00:01:37,480
Speaker 4: I really do mean sick with worry. People aren't sleeping properly.

34
00:01:37,720 --> 00:01:39,600
Speaker 4: We're doing everything we can to bring them home.

35
00:01:39,800 --> 00:01:40,000
Speaker 5: Yeah.

36
00:01:40,040 --> 00:01:41,880
Speaker 3: One of the things that is apparently holding up the

37
00:01:41,920 --> 00:01:45,280
Speaker 3: hostage release is how to safely get them out. NSA

38
00:01:45,280 --> 00:01:49,160
Speaker 3: spokesman John Kirby says more humanitarian pauses are needed if

39
00:01:49,160 --> 00:01:49,760
Speaker 3: you're going.

40
00:01:49,600 --> 00:01:52,200
Speaker 6: To secure the release of hostages, and we certainly hope

41
00:01:52,200 --> 00:01:54,320
Speaker 6: we're going to be able to do that soon. You

42
00:01:54,480 --> 00:01:56,040
Speaker 6: got to make sure they can get from where they

43
00:01:56,080 --> 00:01:59,960
Speaker 6: are to safety and do that as safely as power,

44
00:02:00,320 --> 00:02:02,200
Speaker 6: which means you're going to have to have at least

45
00:02:02,240 --> 00:02:04,560
Speaker 6: a temporary, localized stop in the fighting.

46
00:02:04,800 --> 00:02:07,800
Speaker 3: Yeah, that's something Israel's been hesitant to do. Kirby says

47
00:02:07,960 --> 00:02:10,280
Speaker 3: the Red Cross has not even been given access to

48
00:02:10,320 --> 00:02:14,320
Speaker 3: the hostages, and on Bloomberg's balance of power, retired Brigadier

49
00:02:14,320 --> 00:02:17,959
Speaker 3: General Mark Kimmitt says, make no doubt Israel could move

50
00:02:18,000 --> 00:02:20,320
Speaker 3: at any moment with special forces.

51
00:02:20,440 --> 00:02:23,399
Speaker 7: In fact, I think they're very much against any kind

52
00:02:23,400 --> 00:02:25,880
Speaker 7: of ceasefire or humanitarian.

53
00:02:25,240 --> 00:02:26,560
Speaker 8: Pause in the first instance.

54
00:02:26,680 --> 00:02:29,760
Speaker 9: This is something that's being pushed by Katar by Hamas

55
00:02:29,960 --> 00:02:31,560
Speaker 9: and candidate in the United States.

56
00:02:31,680 --> 00:02:34,760
Speaker 3: And moving to Ukraine, US Defense Secretary Lloyd Austin is

57
00:02:34,800 --> 00:02:38,520
Speaker 3: reassuring Ukraine today that more aid is coming. He says,

58
00:02:38,520 --> 00:02:40,280
Speaker 3: one hundred million dollars for now.

59
00:02:40,400 --> 00:02:49,560
Speaker 5: It'll provide additional artillery munitions, additional interceptors for air defense

60
00:02:51,000 --> 00:02:53,680
Speaker 5: in a number of anti tank weapons as well.

61
00:02:53,800 --> 00:02:57,240
Speaker 3: This as they head into a long cold winter. Prime

62
00:02:57,280 --> 00:03:00,720
Speaker 3: Minister Fumio Kisha Japan, calling on nor Carea to hall

63
00:03:00,760 --> 00:03:03,800
Speaker 3: as plans to launch a satellite after Japan received a

64
00:03:03,880 --> 00:03:06,480
Speaker 3: notice on fields where debris from a rocket may fall

65
00:03:06,520 --> 00:03:09,440
Speaker 3: at Sea. Kishud had told reporters that a launch would

66
00:03:09,440 --> 00:03:12,800
Speaker 3: be in violation of the UN Security Council resolutions. His

67
00:03:12,919 --> 00:03:15,440
Speaker 3: government would work with the US in South Korea to

68
00:03:15,520 --> 00:03:19,800
Speaker 3: deal with the matter. Hearing today unlimited gag order case

69
00:03:19,800 --> 00:03:23,080
Speaker 3: for Donald Trump and his election interference, a judge Patricia

70
00:03:23,160 --> 00:03:26,959
Speaker 3: Malett pressing Trump attorney John Sower, asking how to regulate

71
00:03:26,960 --> 00:03:30,360
Speaker 3: Trump outside of opening and breaking the law.

72
00:03:31,120 --> 00:03:33,800
Speaker 10: It seems incumbent upon you to be able to explain

73
00:03:33,880 --> 00:03:39,120
Speaker 10: to me what a court could do to protect the

74
00:03:39,120 --> 00:03:42,800
Speaker 10: integrity of criminal proceedings that isn't already covered by it

75
00:03:42,840 --> 00:03:43,920
Speaker 10: don't violate the law.

76
00:03:44,160 --> 00:03:47,560
Speaker 3: Meanwhile, the latest presidential polling come from NBC shows President

77
00:03:47,600 --> 00:03:51,360
Speaker 3: Biden at his lowest approval rating yet forty percent. Now

78
00:03:51,360 --> 00:03:53,800
Speaker 3: that puts Donald Trump ahead within the margin of air.

79
00:03:54,040 --> 00:03:57,200
Speaker 3: Bloomberg's Ginny Schanzano says this needs to be a warning

80
00:03:57,280 --> 00:04:00,960
Speaker 3: shot across the Biden bow not to be a believe.

81
00:04:01,080 --> 00:04:04,480
Speaker 7: The numbers do not hide from them. Tough love is

82
00:04:04,480 --> 00:04:07,720
Speaker 7: an important thing, and these are not good numbers, and

83
00:04:07,760 --> 00:04:10,640
Speaker 7: the White House knows that, and they do have time,

84
00:04:10,960 --> 00:04:15,520
Speaker 7: but they cannot ignore young people. Why have Democrats done

85
00:04:15,600 --> 00:04:19,240
Speaker 7: well in these specials because young people have gotten out

86
00:04:19,279 --> 00:04:20,680
Speaker 7: on the abortion issue.

87
00:04:20,800 --> 00:04:23,320
Speaker 3: The time to get fired up so important to watch,

88
00:04:23,560 --> 00:04:26,400
Speaker 3: she says, but no time to panic or to Claire Victory.

89
00:04:26,839 --> 00:04:29,000
Speaker 3: Global News twenty four hours a day and whenever you

90
00:04:29,040 --> 00:04:31,520
Speaker 3: want within Bloomberg News now in San Francisco.

91
00:04:31,640 --> 00:04:35,080
Speaker 1: I'm Ed Baxter. This is Bloomberg. Brian, all right, thanks

92
00:04:35,200 --> 00:04:37,000
Speaker 1: very much. Had the time six and a half minutes

93
00:04:37,040 --> 00:04:39,719
Speaker 1: past the hour. I'm Brian Curtis in Hong Kong, along

94
00:04:39,720 --> 00:04:42,000
Speaker 1: with Doug Prisner in New York, and Vonni Quinn will

95
00:04:42,080 --> 00:04:45,320
Speaker 1: join us in a few moments. Open Ai investors are

96
00:04:45,360 --> 00:04:48,359
Speaker 1: seeking the return of co founder Sam Altman to a

97
00:04:48,440 --> 00:04:52,560
Speaker 1: leadership role at the firm. We hear, Thrive Capital, Coleslaventures,

98
00:04:52,880 --> 00:04:56,279
Speaker 1: and Tiger Global Management are looking to secure their investment

99
00:04:56,480 --> 00:05:00,000
Speaker 1: after the open Ai board forced Altman out on front,

100
00:05:00,720 --> 00:05:03,800
Speaker 1: and Microsoft has signaled that he would not oppose such

101
00:05:03,800 --> 00:05:08,480
Speaker 1: an outcome. Microsoft shares surged two percent on news that

102
00:05:08,760 --> 00:05:12,039
Speaker 1: the company is hiring OpenAI co founder Sam Altman and

103
00:05:12,160 --> 00:05:16,599
Speaker 1: Greg Brockman. We heard from Microsoft CEO Sacha Nadella on

104
00:05:16,640 --> 00:05:17,560
Speaker 1: that hire he.

105
00:05:17,560 --> 00:05:19,920
Speaker 11: Would want to only work at Microsoft if he wants

106
00:05:19,960 --> 00:05:23,520
Speaker 11: to spend his full time time on really pursuing the mission,

107
00:05:23,600 --> 00:05:25,400
Speaker 11: just like how he were spending his time on open ai.

108
00:05:25,560 --> 00:05:28,960
Speaker 11: And so that's kind of the idea behind having him

109
00:05:29,040 --> 00:05:33,680
Speaker 11: lead this advanced research team around AI with Greg and others,

110
00:05:34,080 --> 00:05:36,039
Speaker 11: and you know, that's an exciting thing for us to

111
00:05:36,080 --> 00:05:36,640
Speaker 11: look forward to.

112
00:05:37,640 --> 00:05:42,000
Speaker 1: That's Microsoft CEO Satya Nadella, heard right here on Bloomberg. Meantime,

113
00:05:42,080 --> 00:05:45,479
Speaker 1: open AI's board replaced Sam Altman with Emmitt Sheer, the

114
00:05:45,560 --> 00:05:47,600
Speaker 1: former CEO of Twitch.

115
00:05:47,760 --> 00:05:51,160
Speaker 2: City Group, is cutting more than three hundred senior manager roles.

116
00:05:51,400 --> 00:05:54,919
Speaker 2: This is part of CEO Jane Fraser's effort to simplify

117
00:05:55,000 --> 00:05:58,679
Speaker 2: the firm's operations. Bloomberg's Jenny Soarraine tells us these cuts

118
00:05:58,680 --> 00:06:01,520
Speaker 2: are just the beginning of an another round of restructuring.

119
00:06:01,760 --> 00:06:04,880
Speaker 12: It's basically going kind of line by line or layer

120
00:06:04,880 --> 00:06:08,160
Speaker 12: by layer of the bank and rejiggering the entire organization

121
00:06:08,240 --> 00:06:11,240
Speaker 12: to look like what Jane's executive management team looks like.

122
00:06:11,360 --> 00:06:13,240
Speaker 12: And so, you know, she got rid of their two

123
00:06:13,279 --> 00:06:15,680
Speaker 12: main operating units. They used to have the institutional business

124
00:06:15,680 --> 00:06:18,000
Speaker 12: and a consumer business, and now they have kind of

125
00:06:18,040 --> 00:06:21,799
Speaker 12: five core businesses. Instead, she got rid of the regional heads,

126
00:06:21,839 --> 00:06:24,000
Speaker 12: and so you're going to see just like the rest

127
00:06:24,040 --> 00:06:26,440
Speaker 12: of the company start to look a lot more like that.

128
00:06:26,440 --> 00:06:29,120
Speaker 2: That is Bloomberg's Jenny's Sarrain. By the way, even before

129
00:06:29,160 --> 00:06:32,799
Speaker 2: the restructuring began, City Group racked up about six hundred

130
00:06:32,800 --> 00:06:36,320
Speaker 2: and fifty million dollars in severn charges as part of

131
00:06:36,320 --> 00:06:39,599
Speaker 2: cutting seven thousand positions in the first nine months of

132
00:06:39,640 --> 00:06:41,320
Speaker 2: the year, Brian, the.

133
00:06:41,360 --> 00:06:44,440
Speaker 1: US Justice Department is seeking more than four billion dollars

134
00:06:44,480 --> 00:06:47,440
Speaker 1: from Binance Holdings. This would be part of a proposed

135
00:06:47,520 --> 00:06:52,000
Speaker 1: resolution of an investigation into the world's largest cryptocurrency exchange.

136
00:06:52,200 --> 00:06:56,040
Speaker 1: Bloomberg Shanali Bassak has more on the Doja investigation.

137
00:06:56,600 --> 00:06:59,080
Speaker 8: Now, this is a year's long pro by the Justice

138
00:06:59,120 --> 00:07:04,000
Speaker 8: Department into Finance to look at alleged money laundering, bank fraud,

139
00:07:04,320 --> 00:07:07,760
Speaker 8: sanctions violations, and this would create an end to that

140
00:07:07,920 --> 00:07:10,640
Speaker 8: saga for Binance versus the Justice Department.

141
00:07:11,640 --> 00:07:15,440
Speaker 1: That's Bloomberg san Ali Bassak. We heard that an announcement

142
00:07:15,480 --> 00:07:17,360
Speaker 1: could come as soon as the end of the month,

143
00:07:17,720 --> 00:07:20,760
Speaker 1: though the situation where we also here remains fluid.

144
00:07:21,120 --> 00:07:24,240
Speaker 2: Well after the bell in the US, Zoom Video Communications

145
00:07:24,280 --> 00:07:28,440
Speaker 2: reported better than expected revenue thanks to strong enterprise sales.

146
00:07:28,880 --> 00:07:31,120
Speaker 2: The story from Bloomberg's Charlie Pellett.

147
00:07:30,960 --> 00:07:33,120
Speaker 13: It is a sign the company is holding its own

148
00:07:33,160 --> 00:07:37,560
Speaker 13: in a competitive market for business collaboration software. Fiscal third

149
00:07:37,640 --> 00:07:40,960
Speaker 13: quarter sales increased three point two percent to about one

150
00:07:41,000 --> 00:07:44,800
Speaker 13: point one four billion dollars. Analyst on average estimated one

151
00:07:44,840 --> 00:07:48,200
Speaker 13: point one two billion, according to data compound by Bloomberg,

152
00:07:48,560 --> 00:07:52,840
Speaker 13: the company whose Signature video software became the essential communications

153
00:07:52,880 --> 00:07:56,400
Speaker 13: tool for home bound Americans during the pandemic, has turned

154
00:07:56,440 --> 00:08:00,800
Speaker 13: its focus to business customers in New York. Charlie Pellet,

155
00:08:00,800 --> 00:08:01,720
Speaker 13: Bloomberg Radio.

156
00:08:02,480 --> 00:08:05,320
Speaker 1: The federal government is making a big commitment to boost

157
00:08:05,320 --> 00:08:09,440
Speaker 1: the US chip packaging industry. More from Bloomberg's Tom Busby.

158
00:08:09,840 --> 00:08:13,520
Speaker 9: The US Commerce Department is launching a three billion dollar program,

159
00:08:13,560 --> 00:08:16,840
Speaker 9: the first major research and development investment from the twenty

160
00:08:16,920 --> 00:08:20,360
Speaker 9: twenty two Chips and Science Act, to boost the domestic

161
00:08:20,640 --> 00:08:23,760
Speaker 9: chip packaging industry. That's the process of putting together individual

162
00:08:23,880 --> 00:08:27,600
Speaker 9: chips for use in cars, phones, even nuclear missiles, an

163
00:08:27,640 --> 00:08:30,480
Speaker 9: area that's now dominated by Asia. The US, in fact,

164
00:08:30,520 --> 00:08:33,400
Speaker 9: has just three percent of the world's packaging capacity compared

165
00:08:33,440 --> 00:08:36,920
Speaker 9: to thirty eight percent in China alone, which Washington says

166
00:08:36,960 --> 00:08:40,880
Speaker 9: could leave the US vulnerable. Tom Busby Bloomberg Radio.

167
00:08:41,040 --> 00:08:43,559
Speaker 2: Regulators in China are said to be drafting a list

168
00:08:43,679 --> 00:08:47,400
Speaker 2: of fifty property developers eligible for some new financing. The

169
00:08:47,400 --> 00:08:49,560
Speaker 2: story from Bloomberg zivon Men in Hong Kong.

170
00:08:49,800 --> 00:08:53,800
Speaker 14: The so called whitelist is intended to guide financial institutions

171
00:08:53,840 --> 00:08:56,880
Speaker 14: as they waste support for the industry. Sources say the

172
00:08:56,880 --> 00:08:59,880
Speaker 14: funding will be made available through bank loans, debt and

173
00:09:00,160 --> 00:09:05,000
Speaker 14: equity financing. The whitelist includes both private and state owned developers,

174
00:09:05,320 --> 00:09:09,120
Speaker 14: as sources say, Chinawonka, Season and Long For are among

175
00:09:09,160 --> 00:09:12,840
Speaker 14: the companies named. The list expands on previous rosters that

176
00:09:12,960 --> 00:09:17,440
Speaker 14: only focused on systemically important state back firms. This latest

177
00:09:17,480 --> 00:09:21,439
Speaker 14: move suggests Beijing's concerns about the property sector have increased

178
00:09:21,559 --> 00:09:26,120
Speaker 14: following record defaults in Hong Kong. I'm von Mann Bloomberg Radio.

179
00:09:27,040 --> 00:09:29,280
Speaker 2: This is day Break Asia. We're twelve minutes past the

180
00:09:29,320 --> 00:09:31,600
Speaker 2: hour at the moment. I'm Doug Krisner along with Vonnie

181
00:09:31,679 --> 00:09:34,680
Speaker 2: Quinn in the Bloomberg Interactive Broker studio in New York,

182
00:09:34,720 --> 00:09:37,520
Speaker 2: and our guest is Jay Hatfield. He is the CIO

183
00:09:37,679 --> 00:09:41,120
Speaker 2: at Infrastructure Capital Management. Nice of you to drop by,

184
00:09:41,160 --> 00:09:43,480
Speaker 2: Thanks so much. Let's talk a little bit about the

185
00:09:43,559 --> 00:09:46,360
Speaker 2: interest rate environment to begin with, the market seems to

186
00:09:46,400 --> 00:09:49,520
Speaker 2: be convinced not only that the FED is through raising

187
00:09:49,559 --> 00:09:51,720
Speaker 2: interest rates, but we're going to see some rate cuts

188
00:09:51,760 --> 00:09:54,560
Speaker 2: by mid next year. You think that's misguided thinking.

189
00:09:55,679 --> 00:09:58,000
Speaker 15: Thanks Doug and Bonnie for having me on. First of all,

190
00:09:59,160 --> 00:10:02,600
Speaker 15: we don't think FED is likely to cut anytime soon.

191
00:10:03,480 --> 00:10:06,640
Speaker 15: They're always about a year to eighteen months behind the curve.

192
00:10:07,160 --> 00:10:08,960
Speaker 15: They shouldn't have raised rates as much as they did.

193
00:10:09,000 --> 00:10:11,240
Speaker 15: But what we do think, and the reason we have

194
00:10:11,280 --> 00:10:13,880
Speaker 15: a bullish target for next year of five thousand on

195
00:10:13,920 --> 00:10:16,360
Speaker 15: the S and P is eighteen and a half times

196
00:10:16,480 --> 00:10:19,840
Speaker 15: two thousand and twenty five earnings, is that we think

197
00:10:19,880 --> 00:10:22,440
Speaker 15: the ECB is going to be forced to cut rates.

198
00:10:23,520 --> 00:10:25,520
Speaker 15: If you look at the data, really Europe isn't a

199
00:10:25,559 --> 00:10:29,640
Speaker 15: recession right now. They had negative growth last quarter. All

200
00:10:29,720 --> 00:10:33,280
Speaker 15: of the data points to that worsening, and you can

201
00:10:33,480 --> 00:10:38,040
Speaker 15: get the equivalent of the Atlanta Feds GDP now on

202
00:10:38,080 --> 00:10:43,240
Speaker 15: the internet. There's actually some Fed officials that do provide

203
00:10:43,240 --> 00:10:46,760
Speaker 15: that on the internet, and that's reading negative one point

204
00:10:46,840 --> 00:10:50,800
Speaker 15: two percent annualized so far as quarter. So that's what

205
00:10:50,840 --> 00:10:53,880
Speaker 15: we think is required to get the next leg of

206
00:10:53,920 --> 00:10:57,720
Speaker 15: a rally going, and we do think US investors tend

207
00:10:57,720 --> 00:11:02,000
Speaker 15: to focus way too much on US factors alone when

208
00:11:02,000 --> 00:11:04,120
Speaker 15: it's really a global bond market, not so much a

209
00:11:04,160 --> 00:11:07,080
Speaker 15: global stock market, but a global bond market because all

210
00:11:07,120 --> 00:11:10,360
Speaker 15: the default risk is relatively low, and so these bonds

211
00:11:10,360 --> 00:11:14,079
Speaker 15: are relatively fungible, and so it's important to look at

212
00:11:14,160 --> 00:11:18,600
Speaker 15: global conditions and global money supply to predict our interest rates.

213
00:11:18,920 --> 00:11:21,000
Speaker 6: Well, you had said the rise in rates, which saw

214
00:11:21,120 --> 00:11:24,239
Speaker 6: you know, rates above five oh two at one point.

215
00:11:24,040 --> 00:11:25,720
Speaker 14: Just a couple of weeks ago, was behind the weakness

216
00:11:25,760 --> 00:11:26,320
Speaker 14: and equities.

217
00:11:26,559 --> 00:11:29,559
Speaker 1: So are we dependent on rates staying lower now for

218
00:11:29,640 --> 00:11:30,840
Speaker 1: this strength in equities?

219
00:11:31,720 --> 00:11:35,840
Speaker 15: We think so. Our models show that every forty basis

220
00:11:35,880 --> 00:11:40,520
Speaker 15: point move in the tenure treasury costs you one SMP multiple,

221
00:11:40,760 --> 00:11:44,880
Speaker 15: and that's a pretty standard model. And so really right now,

222
00:11:45,280 --> 00:11:47,240
Speaker 15: you know, we had a forty five hundred target on

223
00:11:47,320 --> 00:11:51,120
Speaker 15: the SMP, but that assumed the lower rates. So the

224
00:11:51,160 --> 00:11:54,679
Speaker 15: market is arguably overvalued now. I think there's a lot

225
00:11:54,679 --> 00:11:59,320
Speaker 15: of AI enthusiasm. Will see Nvidia does tomorrow, but there's

226
00:11:59,360 --> 00:12:02,840
Speaker 15: a strong argument that we're overvalued here. So to get

227
00:12:03,000 --> 00:12:05,000
Speaker 15: the five thousand next year, we think we need to

228
00:12:05,040 --> 00:12:08,200
Speaker 15: get well below four percent to support that kind of multiple.

229
00:12:08,280 --> 00:12:10,920
Speaker 2: So if you're talking about recession in Europe and I'm

230
00:12:10,920 --> 00:12:15,480
Speaker 2: looking at US multinationals that are exposed to the European market,

231
00:12:15,720 --> 00:12:19,720
Speaker 2: wouldn't those companies take a hit necessarily through their top

232
00:12:19,760 --> 00:12:22,560
Speaker 2: line if Europe goes into a recession.

233
00:12:22,960 --> 00:12:25,880
Speaker 15: That definitely would be a negative. But we do think

234
00:12:26,160 --> 00:12:31,199
Speaker 15: that most companies in the United States will be able

235
00:12:31,240 --> 00:12:35,080
Speaker 15: to weather to their earnings will be resilient relative to

236
00:12:35,200 --> 00:12:38,199
Speaker 15: that hit. And it's important to keep in mind that

237
00:12:38,640 --> 00:12:41,360
Speaker 15: a lot of earnings come not so much from maintaining

238
00:12:41,480 --> 00:12:47,960
Speaker 15: sales or increasing sales, but from reinvesting retained earnings. So

239
00:12:48,000 --> 00:12:51,240
Speaker 15: it's really it's not so much any McDonald's like having

240
00:12:51,280 --> 00:12:53,320
Speaker 15: a huge increase in sales. It's really building the new

241
00:12:53,360 --> 00:12:56,840
Speaker 15: McDonald's and or buying back shares. So we think that

242
00:12:56,920 --> 00:12:59,199
Speaker 15: the companies will be able to manage through that from

243
00:12:59,280 --> 00:13:04,400
Speaker 15: a margin perspect and then those reinvestment of retained earnings

244
00:13:04,440 --> 00:13:07,360
Speaker 15: and depreciation will drive earnings higher. And that's why we

245
00:13:07,400 --> 00:13:10,800
Speaker 15: think most strategists tend to be too negative because they

246
00:13:10,840 --> 00:13:14,400
Speaker 15: don't realize the deck is stacked in the favor of

247
00:13:14,480 --> 00:13:15,240
Speaker 15: these companies.

248
00:13:16,920 --> 00:13:19,800
Speaker 4: Jay it looks like you're mostly invested in rots and

249
00:13:19,960 --> 00:13:20,400
Speaker 4: master of the.

250
00:13:20,559 --> 00:13:21,560
Speaker 2: Partnerships and so on.

251
00:13:22,920 --> 00:13:25,000
Speaker 4: Some investors have raised concerns that there might.

252
00:13:24,920 --> 00:13:26,959
Speaker 14: Be corners of those markets that are a little fragile.

253
00:13:27,040 --> 00:13:30,160
Speaker 15: What are your results, Well, there's no doubt that the

254
00:13:30,200 --> 00:13:34,040
Speaker 15: office market is very, very weak. But it's important to

255
00:13:34,080 --> 00:13:37,920
Speaker 15: make a couple of distinctions. The first is between A

256
00:13:38,280 --> 00:13:40,480
Speaker 15: and B and C office buildings, Like we're in an

257
00:13:40,480 --> 00:13:43,760
Speaker 15: A office building in Manhattan. This building is going to

258
00:13:43,760 --> 00:13:46,840
Speaker 15: be very, very valuable going forward, but if you look

259
00:13:46,840 --> 00:13:49,400
Speaker 15: at a lot of other nearby buildings, they're just not

260
00:13:49,600 --> 00:13:52,320
Speaker 15: up to that level. And then the second distinctions are

261
00:13:52,400 --> 00:13:55,080
Speaker 15: rots are not buildings, So roats are pretty under levered,

262
00:13:55,559 --> 00:13:57,800
Speaker 15: they have higher quality assets, they almost all have A

263
00:13:58,360 --> 00:14:00,960
Speaker 15: So we think those companies were over shorted. They're definitely

264
00:14:01,000 --> 00:14:04,920
Speaker 15: work shorted, and people are too negative on those. And

265
00:14:04,960 --> 00:14:09,560
Speaker 15: we do believe that AI will propel more demand for

266
00:14:09,800 --> 00:14:12,760
Speaker 15: office space, particularly and of course Bay Area and other

267
00:14:12,840 --> 00:14:15,760
Speaker 15: tech centers. So we are bullish about that, and we

268
00:14:16,440 --> 00:14:21,200
Speaker 15: have non consensus, you know, positions and views on companies

269
00:14:21,240 --> 00:14:25,680
Speaker 15: like Boston Properties that have trophy properties well located. In fact,

270
00:14:25,800 --> 00:14:28,320
Speaker 15: Boston Properties have sold one of their life sciences buildings

271
00:14:28,680 --> 00:14:31,640
Speaker 15: that are very low cap particularly given current interst rates.

272
00:14:31,880 --> 00:14:34,040
Speaker 15: So we think that that's a good non consensus call

273
00:14:34,120 --> 00:14:35,160
Speaker 15: for twenty four.

274
00:14:35,160 --> 00:14:37,640
Speaker 2: It's hard to believe that we're talking about Black Friday

275
00:14:37,680 --> 00:14:40,080
Speaker 2: at the end of this week. Give me your sense

276
00:14:40,160 --> 00:14:42,520
Speaker 2: of the American consumer right now.

277
00:14:44,720 --> 00:14:46,880
Speaker 15: I think what a lot of investors don't realize is

278
00:14:46,920 --> 00:14:52,120
Speaker 15: that consumer is always very resilient. Everybody says, oh, it's

279
00:14:52,120 --> 00:14:55,360
Speaker 15: two thirds of spending, so that's all that drives economy,

280
00:14:55,400 --> 00:14:59,880
Speaker 15: but really happens and what's the volatile component is investment.

281
00:15:00,440 --> 00:15:05,120
Speaker 15: So every recession except one of the last nine recessions

282
00:15:05,240 --> 00:15:09,000
Speaker 15: was caused by a significant drop in housing, which causes

283
00:15:09,080 --> 00:15:12,800
Speaker 15: layoffs and then causes consumers to cut back. So the

284
00:15:12,840 --> 00:15:16,800
Speaker 15: consumer is normally resilient. And we think that people they

285
00:15:16,880 --> 00:15:19,280
Speaker 15: like to talk about student loans because as a political element,

286
00:15:19,560 --> 00:15:24,120
Speaker 15: but they don't care about gasoline. Gasoline is plummeted partly

287
00:15:24,160 --> 00:15:26,800
Speaker 15: because the oil prices are lower, but you can look

288
00:15:26,840 --> 00:15:29,800
Speaker 15: it up on a terminal CRCK. The margins are very low.

289
00:15:30,520 --> 00:15:33,960
Speaker 15: So we are going to print very cool headline inflation

290
00:15:34,640 --> 00:15:37,080
Speaker 15: for not just next month, but also the following month.

291
00:15:37,440 --> 00:15:39,840
Speaker 15: Because of the lags of the reporting and also from

292
00:15:39,840 --> 00:15:43,920
Speaker 15: wholesale to retail, so we think it's positive for retail

293
00:15:43,960 --> 00:15:45,240
Speaker 15: sales that gasoline is down.

294
00:15:47,840 --> 00:15:50,640
Speaker 1: This is Bloomberg Daybreak Asia, your morning brief on the

295
00:15:50,720 --> 00:15:54,360
Speaker 1: story's making news from Hong Kong to Singapore and Wall Street.

296
00:15:54,400 --> 00:15:58,400
Speaker 2: Look for us on your podcast feed every day, on Apple, Spotify,

297
00:15:58,640 --> 00:16:00,560
Speaker 2: and anywhere else you get your podcast.

298
00:16:00,680 --> 00:16:03,240
Speaker 1: You can also listen live each day on Bloomberg eleven

299
00:16:03,280 --> 00:16:05,680
Speaker 1: three to zero in New York, Bloomberg ninety nine to

300
00:16:05,680 --> 00:16:08,880
Speaker 1: one in Washington, Bloomberg one oh sixty one in Boston,

301
00:16:09,200 --> 00:16:11,640
Speaker 1: and Bloomberg nine sixty in San Francisco.

302
00:16:11,720 --> 00:16:14,600
Speaker 2: Our flagship New York station is also available on your

303
00:16:14,640 --> 00:16:19,800
Speaker 2: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty plus.

304
00:16:20,000 --> 00:16:23,800
Speaker 1: Listen coast to coast on the Bloomberg Business app, Sirius XM,

305
00:16:24,120 --> 00:16:29,040
Speaker 1: the iHeartRadio app, and on Bloomberg dot Com. I'm Brian Curtis.

306
00:16:28,720 --> 00:16:31,160
Speaker 2: And I'm Doug Chrisner. Join us again tomorrow for all

307
00:16:31,200 --> 00:16:33,680
Speaker 2: the news you need to start your day right here

308
00:16:33,760 --> 00:16:35,160
Speaker 2: on Bloomberg day Break Asia.