WEBVTT - Examining China's Recent Tech Rally

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>Welcome to the Bloomberg Daybreak Asia podcast. I'm Doug Chrisner.

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<v Speaker 2>In the last US session, we had a rally in

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<v Speaker 2>chip makers, led by Intel. Those shares jumped sixteen percent

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<v Speaker 2>on reports that Intel could be broken up in a

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<v Speaker 2>deal involving TSMC and Broadcom. And in a moment we'll

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<v Speaker 2>take a look at the price action in the States

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<v Speaker 2>with Jim Thorn. He is chief market strategist at Wellington

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<v Speaker 2>Alta's Private wealth. But let's begin in Hong Kong. Joining

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<v Speaker 2>us now is Jason Lu. He is head of APAC

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<v Speaker 2>Equity and Derivative Strategy at BNP Periba. Jason, thanks for

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<v Speaker 2>joining us. I'd like to start with the story on

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<v Speaker 2>what we saw yesterday in Chinese tech stocks. According to

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<v Speaker 2>what I was reading, much of this move higher was

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<v Speaker 2>tied to President Chi Jinping's public meeting with some leaders

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<v Speaker 2>of big tech in China. What do you make of

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<v Speaker 2>what's been happening?

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<v Speaker 3>Sure, thanks for having me on. Certainly yesterday's rally, it's

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<v Speaker 3>quite impressive, especially on the back of already a very

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<v Speaker 3>strong rally. So I think what we need to do

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<v Speaker 3>is perhaps take a look back at what has happened

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<v Speaker 3>over the past week, because I think all of these

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<v Speaker 3>are a little bit interconnected. You could argue that everything

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<v Speaker 3>started around deepsey our one model, because they originally announced

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<v Speaker 3>a V three back in December, but with lesser kind

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<v Speaker 3>of global popularity. So I think the success of deep

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<v Speaker 3>cr Run has fundamentally changed investor perception on Chinese equity

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<v Speaker 3>and tech in particular, where there's now an understanding that

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<v Speaker 3>Chinese tech company can be competent globally and perhaps operating

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<v Speaker 3>at a much lower cost than the global peers. I

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<v Speaker 3>think the President She's meeting it's also a continuation of

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<v Speaker 3>that thing because previously President She held a similar meeting

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<v Speaker 3>with a high level private enterpainse As entrepreneurs back in

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<v Speaker 3>twenty eighteen, and some local observer attributed this to the

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<v Speaker 3>rally that we have seen subsequently in the market. And

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<v Speaker 3>so the way we interpret the latest situation is that

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<v Speaker 3>I think the policy makers in China have also realized

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<v Speaker 3>the power or the breakthrough that some of these recent

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<v Speaker 3>technology announcement has came through, and it greatly increased the

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<v Speaker 3>confidence in the market. And so I think President She's

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<v Speaker 3>meeting together with several high level officials further confirmed that

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<v Speaker 3>the Chinese policy makers are now very much embracing these

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<v Speaker 3>technological breakthrough and so we should anticipate further policy support

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<v Speaker 3>for the private enterprise, and that perhaps, like you said,

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<v Speaker 3>contributed to the further rally that we've seen yesterday.

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<v Speaker 2>I'm trying to understand whether or not the enthusiasm is

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<v Speaker 2>more tied to artificial intelligence and by extension, cloud computing.

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<v Speaker 2>Maybe we can put that under the umbrella of software

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<v Speaker 2>more so than on the hardware side. Do you think

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<v Speaker 2>that's fair.

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<v Speaker 3>I think at this stage the rally, certainly investors are

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<v Speaker 3>becoming more selective on how they are positioning. We have

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<v Speaker 3>seen a similar transition like in the US. You may

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<v Speaker 3>recall that when the CHGPT phenomenon first started, I think

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<v Speaker 3>most investors were solely focusing on the hardware side of

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<v Speaker 3>things because there's just so much demand on AI data

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<v Speaker 3>center and now we're gradually moving to software. So what

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<v Speaker 3>is happening in China at the moment is this very

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<v Speaker 3>condensed version of what we experience in US and to

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<v Speaker 3>some extend in Europe over the past one to two years.

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<v Speaker 3>I think if some of you who have experienced these

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<v Speaker 3>new Chinese AI, you would notice that there's still a

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<v Speaker 3>little bit of that bottleneck when it comes to processing speeds.

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<v Speaker 3>So perhaps the cloud computing has been raised to a

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<v Speaker 3>higher urgency because they desperately need more bandwidth to handle

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<v Speaker 3>this surprising demand globally as well. The other thing worth

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<v Speaker 3>noting is from a index composition perspective, because there is

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<v Speaker 3>a significant difference in terms of the index composition of

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<v Speaker 3>the companies listed in the Hong Kong market versus the

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<v Speaker 3>China onshore market. The best example is that a lot

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<v Speaker 3>of these well known Chinese internet companies are only listed

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<v Speaker 3>in Hong Kong, and some of them do have ADR listing,

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<v Speaker 3>whereas in the onshore market, the major large cap industries

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<v Speaker 3>tends to be overexposed to traditional industry like financials and

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<v Speaker 3>consumer staples, which may have exacerbated that kind of difference

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<v Speaker 3>in terms of price action that you're observing in Hong

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<v Speaker 3>Kong relative to the China onshore market.

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<v Speaker 2>I'm hoping you can give me a little bit of

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<v Speaker 2>insight into what's happening with the robotics industry in China

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<v Speaker 2>and whether or not it's a place to look at

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<v Speaker 2>closely when making the choice of putting capital to work.

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<v Speaker 3>You mentioned about robotics, and certainly we have seen in

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<v Speaker 3>industry trade shows and some of these promotional video in

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<v Speaker 3>the social media that the Chinese companies are making very

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<v Speaker 3>good progress. And in fact, at the so called Spring

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<v Speaker 3>Festival Gala, which is one of the most watched show

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<v Speaker 3>by the Chinese kind of consumer, one of the segment

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<v Speaker 3>actually feature a robot doing a tradition Chinese stands, which

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<v Speaker 3>actually gather a lot of attention. And going back to

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<v Speaker 3>your earlier point about President She's meeting with private entrepreneur.

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<v Speaker 3>One of the entrepreneurs actually is the CEO of that

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<v Speaker 3>particular robotic company that was featured at the Spring Festival Galas.

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<v Speaker 3>So certainly, from a policy making standpoint, there seems to

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<v Speaker 3>be a lot of policy support, I think when it

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<v Speaker 3>comes to investing, however, there's also this divide between private

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<v Speaker 3>market versus public market. A lot of these robotic companies

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<v Speaker 3>are still in the startup phase, so I think most

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<v Speaker 3>of the opportunity happens to be in the private space.

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<v Speaker 3>But we have indeed seen investors trying to ask the

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<v Speaker 3>question what are the suppliers? And I think that is

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<v Speaker 3>one area that for the listed market. People are also

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<v Speaker 3>focusing on at the moment, trying to understand that supply

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<v Speaker 3>chain dynamics, because there's a lot of understanding about the

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<v Speaker 3>ev supply chain. I think we're still at the stage

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<v Speaker 3>of understanding a lot of these robotics supply chain as well.

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<v Speaker 2>I think we can agree Jason that the one thing

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<v Speaker 2>that continues to hold back economic activity in China and

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<v Speaker 2>investment for that matter, is the property market. And we're

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<v Speaker 2>getting indications maybe that there's some type of nationalization when

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<v Speaker 2>it comes to China's VUNKA, and I'm wondering whether that

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<v Speaker 2>would send a signal that policymakers in Beijing are really

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<v Speaker 2>trying to do a lot more to bring stability not

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<v Speaker 2>only did the property market. Maybe it's a little bit

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<v Speaker 2>more than stability, it's something where it looks as though

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<v Speaker 2>a solid floor has been put under the market. Is

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<v Speaker 2>that too much to say?

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<v Speaker 3>I think that's a great question, because it is true

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<v Speaker 3>that the AI development today will not resolve the property

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<v Speaker 3>situation in the near term, but it does play a

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<v Speaker 3>part of this overall confidence positive feedback loop. Because part

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<v Speaker 3>of the reason why the Chinese property market is struggling

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<v Speaker 3>is because in consumer as a whole lacking confidence not

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<v Speaker 3>just about their own job prospect, but perhaps to the

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<v Speaker 3>economic development as well. So if part of that confidence

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<v Speaker 3>can be raised thanks to the technological breakthrough, it certainly

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<v Speaker 3>helped kind of change the narrative. I think it's also

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<v Speaker 3>worth keeping in mind that the Chinese household in aggregate

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<v Speaker 3>has actually increased their savings over the years. In fact,

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<v Speaker 3>according to PBOC data as off end of last year,

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<v Speaker 3>the Chinese household as a group actually have one hundred

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<v Speaker 3>and fifty trillion women be worth of savings, and so

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<v Speaker 3>there's certainly some dry powder in the bank account, but

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<v Speaker 3>I think they just don't feeling confident enough to deploy

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<v Speaker 3>that capital into the property market. And so if indeed,

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<v Speaker 3>like you mentioned, there is some resolution of some of

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<v Speaker 3>the troubled property developer, it can certainly play the other

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<v Speaker 3>part of rebuilding that confidence. But our view is that

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<v Speaker 3>this process may take a little bit longer because there's

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<v Speaker 3>still a lot of excess infantry to be digest. But

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<v Speaker 3>if there's indeed a change in the feedback loop when

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<v Speaker 3>it comes to confidence and consumer kind of spending, I

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<v Speaker 3>think this will certainly allow the broader market kid to

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<v Speaker 3>think about the evaluation rerating even further because currently it's

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<v Speaker 3>very much concentrated on the technology sector.

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<v Speaker 2>I want to talk a little bit about trade because

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<v Speaker 2>on Tuesday we had President Trump saying that he is

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<v Speaker 2>planning tariffs on auto, semiconductor and pharmaceutical imports of around

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<v Speaker 2>twenty five percent. Maybe much of that is targeted toward

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<v Speaker 2>Mexico Canada. Certainly China has to be involved in a

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<v Speaker 2>portion of it. Now we know that the Trump administration

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<v Speaker 2>has already placed an additional ten percent tariff, a blanket

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<v Speaker 2>tariff on all Chinese goods. How do you understand the

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<v Speaker 2>risk right now of US tariffs holding back the export

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<v Speaker 2>economy in China.

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<v Speaker 3>That's a good question because if you look back at

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<v Speaker 3>the Chinese economic growth over the past few years, export

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<v Speaker 3>has played a very very important part. But at the

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<v Speaker 3>same time, China also has the benefit of going through

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<v Speaker 3>the trade war one point zero. So our observation is

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<v Speaker 3>that both policymakers and the corporate them seems to be

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<v Speaker 3>better prepared, at least initially. So when you saw the

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<v Speaker 3>ten percent tariff implementation. When we speak with our clients,

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<v Speaker 3>when we speak with our corporate I think they are

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<v Speaker 3>actually saying that they have some plan to deal with

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<v Speaker 3>that initial wave. So from our research perspective, we do

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<v Speaker 3>think that there will be a second round of teriff

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<v Speaker 3>high potentially in the second half of the year as well,

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<v Speaker 3>So there will be some incremental headwind, but at least

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<v Speaker 3>based on what we observe initially, the market, the corporates,

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<v Speaker 3>and the policy maker seems to be well prepared for

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<v Speaker 3>that initial wave. I think what could be a little

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<v Speaker 3>bit trickier for the rest of the region is that

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<v Speaker 3>markets like Japan, Corea, and Taiwan may not be fully

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<v Speaker 3>prepared for these type of terriffs. You mentioned about pharmaceutical

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<v Speaker 3>chips and all those Those are also very important industry

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<v Speaker 3>for those markets as well, and so we think there

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<v Speaker 3>could be some interesting divergence starting to develop across those

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<v Speaker 3>market depending on how prepared they are or how sensitive

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<v Speaker 3>they are to these and new rounds of terariff when

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<v Speaker 3>it comes to the broader Asian equity market.

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<v Speaker 2>It's a very good point, Jason, Thank you so much

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<v Speaker 2>for lending your perspective. Jason Leu there head of APAC

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<v Speaker 2>Equity and Derivative Strategy at BNP Pariba, joining us from

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<v Speaker 2>Hong Kong here on the Daybreak Gaisia Podcast. Welcome back

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<v Speaker 2>to the Daybreak Gaisia Podcast. I'm Doug Prisner. So the

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<v Speaker 2>US equity market returned from the holiday and set a

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<v Speaker 2>record high. We had a rally among chip makers, also

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<v Speaker 2>a bit of optimism tied to the potential for the

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<v Speaker 2>end of war in Ukraine. We had the S and

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<v Speaker 2>P picking up just two tens at one percent. That

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<v Speaker 2>was enough for a record at sixty one twenty nine.

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<v Speaker 2>Joining me now for a closer look at the action

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<v Speaker 2>Jim Thorne. He is the chief market strategist at Wellington

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<v Speaker 2>ALTUS Private Wealth. Jim joins us from Toronto. Good of

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<v Speaker 2>you to make time to chat with us. What did

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<v Speaker 2>you make of today's price section.

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<v Speaker 1>I think we're just you know, climbing the walla worry

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<v Speaker 1>and it just seems to me that we're having this

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<v Speaker 1>rolling bull market where a section or a sector takes

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<v Speaker 1>a breather and another one comes to the forefront. Today

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<v Speaker 1>it was, you know, semiconductors. I think we're going to

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<v Speaker 1>get a nice bid going into the Navidia earnings call.

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<v Speaker 1>And you know now that all the fears of the

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<v Speaker 1>deep seek, you know, popping of the AI bubble is over.

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<v Speaker 1>You know, Semi's can run here. And I also think

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<v Speaker 1>at the same point in time, very interesting things happening

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<v Speaker 1>in the Ukraine. And you know, Doug, you know, I

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<v Speaker 1>think the cornerstone to President's Trump second term is going

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<v Speaker 1>to be peace and a piece dividend coming back. And

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<v Speaker 1>you know, Ukraine, We're going to get a deal there,

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<v Speaker 1>and I honestly think that we're going to get a

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<v Speaker 1>deal in China. And so I think, you know, investors

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<v Speaker 1>have to start looking at the fact that the cornerstone

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<v Speaker 1>to President's Trump economic policy is peace throughout the world.

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<v Speaker 2>Well, Jim, I'm wondering if you are as optimistic about

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<v Speaker 2>President Trump's trade policy today. Even he floated the idea

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<v Speaker 2>of twenty five percent tariffs on autos, pharmaceuticals, and semiconductors.

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<v Speaker 2>Maybe we'll get some clarity by the time that April

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<v Speaker 2>second has arrived. That's when he said he would possibly

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<v Speaker 2>make an announcement. You're speaking to me from Toronto. I

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<v Speaker 2>know that the Canadians are very upset about these proposed tariffs.

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<v Speaker 2>I mean, is this a net positive? Do you think

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<v Speaker 2>will it lead to some kind of constructive negotiations where

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<v Speaker 2>there will be a win win, Yeah? To the DOUG.

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<v Speaker 1>I'm a trained economists, I have a PhD. And I'm

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<v Speaker 1>also American living up here in Toronto, so okay, it's

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<v Speaker 1>kind of I have a very interesting view. First. First look,

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<v Speaker 1>the post World War two era is over right to

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<v Speaker 1>use an economic term, you know, the Raccardian trade theory

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<v Speaker 1>of comparative advantage no longer works if China, in India

0:12:54.440 --> 0:12:58.320
<v Speaker 1>and Europe are going to practice mercantilist trade policies, and

0:12:58.360 --> 0:13:02.760
<v Speaker 1>mister Trump is right to implement tariffs. Having said that, DOUG,

0:13:02.880 --> 0:13:07.880
<v Speaker 1>only fourteen percent of goods and services total, fourteen percent

0:13:07.920 --> 0:13:10.040
<v Speaker 1>of the total goods and services in the United States

0:13:10.040 --> 0:13:13.360
<v Speaker 1>are imported, So we're going to work through this. It's

0:13:13.400 --> 0:13:16.480
<v Speaker 1>going to be a shock, it's not going to be inflationary.

0:13:17.080 --> 0:13:20.400
<v Speaker 1>Nobody should be surprised. But as I say up here

0:13:20.440 --> 0:13:23.920
<v Speaker 1>to my Canadian friends, I really don't think mister Trump

0:13:24.000 --> 0:13:27.920
<v Speaker 1>is talking about tariffs to protect Wisconsin cheese. I think

0:13:28.640 --> 0:13:31.040
<v Speaker 1>we really have to start thinking about this in the

0:13:31.160 --> 0:13:35.640
<v Speaker 1>geostrategic space where mister Trump wants to have security for

0:13:35.679 --> 0:13:38.920
<v Speaker 1>the United States and he does not want to have

0:13:39.000 --> 0:13:41.760
<v Speaker 1>business as usual. So I look at it as a

0:13:41.880 --> 0:13:44.920
<v Speaker 1>very positive My target for the S and P five

0:13:45.000 --> 0:13:48.200
<v Speaker 1>hundred this year is seven thousand. I think by the

0:13:48.280 --> 0:13:50.560
<v Speaker 1>end of President Trump's second term we could be up

0:13:50.559 --> 0:13:54.920
<v Speaker 1>to fourteen thousand. Mister Trump gets his piece, we have

0:13:55.000 --> 0:13:58.760
<v Speaker 1>a really good shot of getting the golden age that

0:13:58.840 --> 0:14:02.760
<v Speaker 1>mister Trump is talking. So I'm constructive and I take

0:14:02.800 --> 0:14:06.520
<v Speaker 1>the noise of the terriffs as just at a negotiation point.

0:14:06.600 --> 0:14:09.120
<v Speaker 2>Well, it's interesting that you don't feel as though even

0:14:09.200 --> 0:14:12.720
<v Speaker 2>the potential for teriffs would be inflationary right now. The

0:14:12.760 --> 0:14:15.960
<v Speaker 2>FED is still on hold when it comes to drawing

0:14:16.000 --> 0:14:18.920
<v Speaker 2>a conclusion on that front. We've heard from a number

0:14:18.920 --> 0:14:21.320
<v Speaker 2>of policy makers. The FED is clearly not in a

0:14:21.400 --> 0:14:23.800
<v Speaker 2>rush to cut interest rates. Do you think there is

0:14:23.840 --> 0:14:26.520
<v Speaker 2>a risk that we do on the rate front remain

0:14:26.840 --> 0:14:28.120
<v Speaker 2>higher for much longer?

0:14:28.640 --> 0:14:32.080
<v Speaker 1>I think the risk DUG is a hard landing in

0:14:32.200 --> 0:14:36.200
<v Speaker 1>twenty six and so if we use, if we DOGE

0:14:36.280 --> 0:14:40.240
<v Speaker 1>is going to be more successful than people think. We're

0:14:41.200 --> 0:14:45.480
<v Speaker 1>transitioning from an economy that is hooked on government spending

0:14:45.960 --> 0:14:48.920
<v Speaker 1>to an economy where the private sector takes the lead,

0:14:49.200 --> 0:14:52.640
<v Speaker 1>typically DUG. When that happens, we get an air pocket

0:14:52.680 --> 0:14:55.760
<v Speaker 1>for growth after World War One, after World War two,

0:14:56.680 --> 0:15:00.800
<v Speaker 1>So look up here in Canada, the lag for monetary

0:15:00.880 --> 0:15:05.560
<v Speaker 1>policies about two years, and this economy appears much more

0:15:05.600 --> 0:15:11.400
<v Speaker 1>interest rate sensitive. Back in the States, it's around three years.

0:15:11.640 --> 0:15:14.360
<v Speaker 1>So what I find so frustrating, Doug, is, you know,

0:15:14.440 --> 0:15:18.120
<v Speaker 1>we're talking about they should be normalizing to two seventy five,

0:15:18.640 --> 0:15:21.920
<v Speaker 1>and yet what do we hear continually is that if

0:15:21.920 --> 0:15:26.080
<v Speaker 1>the FED cuts rates now today, that is going to

0:15:26.120 --> 0:15:30.560
<v Speaker 1>affect inflation today. It's not if it's three years, Doug,

0:15:30.800 --> 0:15:34.240
<v Speaker 1>We're talking late twenty seven and into twenty eight, which

0:15:34.280 --> 0:15:37.960
<v Speaker 1>I think the Fed is on the wrong side of history. Again,

0:15:38.160 --> 0:15:40.880
<v Speaker 1>they should be normalizing. And what we talk to our

0:15:40.880 --> 0:15:43.600
<v Speaker 1>clients at Wellington is the fact that we've got to

0:15:43.640 --> 0:15:47.200
<v Speaker 1>expect a growth scare coming into twenty six and into

0:15:47.240 --> 0:15:47.960
<v Speaker 1>twenty seven.

0:15:48.120 --> 0:15:51.360
<v Speaker 2>So we talked about the possibility that inflation will prove

0:15:51.440 --> 0:15:53.960
<v Speaker 2>sticky here in the US. But what about where you

0:15:54.000 --> 0:15:57.720
<v Speaker 2>are in Canada consumer prices reaccelerating for the first time

0:15:57.720 --> 0:16:00.160
<v Speaker 2>in three months. Does that concern you in the slow.

0:16:01.280 --> 0:16:06.200
<v Speaker 1>No, Because, as an old economics professor, interest rate hikes

0:16:06.240 --> 0:16:10.560
<v Speaker 1>in particular points of the cycle are inflationary. So if

0:16:10.600 --> 0:16:14.880
<v Speaker 1>you take out mortgage interest costs up here that's the

0:16:14.920 --> 0:16:18.680
<v Speaker 1>Bank of can Or rate hikes. Over nine months, inflation

0:16:18.880 --> 0:16:23.240
<v Speaker 1>is negative one point three percent, and over six months

0:16:23.280 --> 0:16:27.720
<v Speaker 1>it's it's negative three percent. We're following China into deflation.

0:16:28.280 --> 0:16:30.200
<v Speaker 1>And if you look at the United States, you do

0:16:30.280 --> 0:16:33.920
<v Speaker 1>the same thing. Take out shelter right and you're you're

0:16:33.960 --> 0:16:38.600
<v Speaker 1>below target. And so you know there are unique times

0:16:38.680 --> 0:16:42.520
<v Speaker 1>in the cycle where right hikes are inflationary and when

0:16:42.760 --> 0:16:48.800
<v Speaker 1>inflation is driven by shelter costs, which it is, and

0:16:48.840 --> 0:16:50.840
<v Speaker 1>you go, I think the thirty year I mean, when

0:16:50.880 --> 0:16:53.040
<v Speaker 1>I was living in DC for fifteen years, I had

0:16:53.080 --> 0:16:56.320
<v Speaker 1>a one to seventy five mortgage. Right A mortgage right

0:16:56.320 --> 0:16:58.680
<v Speaker 1>now I think I checked today is seven percent a

0:16:58.840 --> 0:17:02.720
<v Speaker 1>jumbo is. I think seven point thirty's that's going to

0:17:02.800 --> 0:17:05.879
<v Speaker 1>create inflation in the housing market in the FED. The

0:17:06.000 --> 0:17:10.160
<v Speaker 1>countertuite of move that the FED should be doing right now,

0:17:10.240 --> 0:17:13.159
<v Speaker 1>which is frustrating is the fact that they should be

0:17:13.240 --> 0:17:17.480
<v Speaker 1>cutting rates to bring inflation down, bring the cost of

0:17:17.560 --> 0:17:20.040
<v Speaker 1>housing down, inflation will fall.

0:17:20.440 --> 0:17:23.119
<v Speaker 2>I was looking at a survey today from Bank of America.

0:17:23.480 --> 0:17:27.639
<v Speaker 2>It found that global stocks have become the most popular

0:17:27.760 --> 0:17:32.280
<v Speaker 2>asset class among investors and BAA strategist Michael Hartnett was

0:17:32.320 --> 0:17:36.160
<v Speaker 2>saying that investors are long stalks, short everything else. If

0:17:36.200 --> 0:17:39.359
<v Speaker 2>that is true, are you a little concerned that maybe

0:17:39.359 --> 0:17:40.960
<v Speaker 2>the boat is somewhat lopsided.

0:17:41.400 --> 0:17:45.320
<v Speaker 1>No, I think you've got the demographics of the of

0:17:45.400 --> 0:17:50.800
<v Speaker 1>the millennials, in the younger generation just entering into family

0:17:50.880 --> 0:17:54.920
<v Speaker 1>formation and saving years. So we're in a secular bull market.

0:17:55.440 --> 0:17:59.800
<v Speaker 1>So no, I don't see that. And I think, you know,

0:18:00.240 --> 0:18:03.159
<v Speaker 1>when you look at action in Ali Baba and the

0:18:03.200 --> 0:18:06.560
<v Speaker 1>action in the Chinese market or in the hand saying,

0:18:07.119 --> 0:18:09.720
<v Speaker 1>or you look at action in the you know, the

0:18:09.760 --> 0:18:13.680
<v Speaker 1>Europe and the EUROSOC fifty, you're getting good action. And

0:18:14.480 --> 0:18:17.320
<v Speaker 1>what I just keep saying to clients is, you know,

0:18:17.400 --> 0:18:19.920
<v Speaker 1>first off, I think the United States is the place

0:18:19.960 --> 0:18:23.280
<v Speaker 1>to invest. I think technology is the place to be.

0:18:23.920 --> 0:18:26.359
<v Speaker 1>I think mister Trump is going to usher in four

0:18:26.440 --> 0:18:31.040
<v Speaker 1>years of really solid economic growth and it's really about

0:18:31.080 --> 0:18:33.560
<v Speaker 1>not owning cash, right. And so I had a big

0:18:33.640 --> 0:18:37.159
<v Speaker 1>discussion today about Ali Baba, and you know, she is

0:18:37.200 --> 0:18:39.720
<v Speaker 1>doing this big pivot, and I don't think we should

0:18:39.760 --> 0:18:43.240
<v Speaker 1>be could be surprised that that China and mister Trump

0:18:44.040 --> 0:18:46.880
<v Speaker 1>come up with an early deal. China has to cut

0:18:46.880 --> 0:18:49.400
<v Speaker 1>a deal, and so do you know, do you want

0:18:49.440 --> 0:18:51.480
<v Speaker 1>to buy the k web right or do you want

0:18:51.520 --> 0:18:54.520
<v Speaker 1>to buy Ali Baba? And typically for acid allocators in

0:18:54.560 --> 0:18:58.400
<v Speaker 1>North America, you know your exposure to you know, China

0:18:58.560 --> 0:19:01.440
<v Speaker 1>or to emerging markets out of the end. Maybe it's

0:19:01.480 --> 0:19:05.080
<v Speaker 1>five percent, maybe it's ten percent. So I'm advocating to

0:19:05.200 --> 0:19:08.480
<v Speaker 1>do that. But I still think to the preponderance or

0:19:08.480 --> 0:19:12.280
<v Speaker 1>the significant portion of your portfolio should be focused on

0:19:12.840 --> 0:19:15.760
<v Speaker 1>secular growth names in the United States because that's the

0:19:15.800 --> 0:19:17.040
<v Speaker 1>place where all the action is.

0:19:17.200 --> 0:19:19.359
<v Speaker 2>But Jim, I'm wondering if there is one thing that

0:19:19.480 --> 0:19:22.399
<v Speaker 2>concerns you to the extent that it would kind of

0:19:22.480 --> 0:19:25.560
<v Speaker 2>reverse your optimism. Is there one thing that you're worried

0:19:25.600 --> 0:19:29.000
<v Speaker 2>about and you're looking at very closely, Where if the

0:19:29.040 --> 0:19:32.760
<v Speaker 2>needle on that whatever it happens to me, moves, you're

0:19:32.840 --> 0:19:34.119
<v Speaker 2>going to change your strategy.

0:19:34.720 --> 0:19:37.040
<v Speaker 1>Well, it's never saying never, right, I mean, you've got

0:19:37.040 --> 0:19:40.800
<v Speaker 1>to check your biases at the door and continually, you know,

0:19:41.920 --> 0:19:45.520
<v Speaker 1>change your thesis if something major happens. I mean, I

0:19:45.560 --> 0:19:48.480
<v Speaker 1>think in the United States, it's fine, right, I think

0:19:48.680 --> 0:19:51.640
<v Speaker 1>you've got the set. You know, you've got to dynamite cabinet.

0:19:52.359 --> 0:19:57.479
<v Speaker 1>I mean, it's you're talking Howard Ludnik just got voted in.

0:19:57.600 --> 0:20:02.760
<v Speaker 1>You've got percent I mean, Treasury secretary is a superstar, right,

0:20:02.800 --> 0:20:06.320
<v Speaker 1>You've got Elon Musk doing doge and you're finding waste

0:20:06.400 --> 0:20:10.320
<v Speaker 1>I mean, Doug. My non consensus view coming into this

0:20:10.440 --> 0:20:14.280
<v Speaker 1>year is that they would find more waste and cut

0:20:14.320 --> 0:20:17.960
<v Speaker 1>the deficit quicker right, which is a complete and total

0:20:18.000 --> 0:20:20.840
<v Speaker 1>non consensus call. So I'm happy with the United States

0:20:21.040 --> 0:20:23.760
<v Speaker 1>up here north of the border. I'm worried about the

0:20:23.840 --> 0:20:27.960
<v Speaker 1>liberals getting in. And I really think that those countries

0:20:28.040 --> 0:20:32.720
<v Speaker 1>that don't understand that we are in this generation historic

0:20:32.840 --> 0:20:38.160
<v Speaker 1>pivot away from progressive left policies too much more towards

0:20:38.160 --> 0:20:41.520
<v Speaker 1>the center, and I would say towards economic policies coming

0:20:41.560 --> 0:20:45.199
<v Speaker 1>out of the University of Chicago and Milton Friedman, you know,

0:20:45.240 --> 0:20:51.000
<v Speaker 1>a libertarian small government, big private sector for those countries

0:20:51.080 --> 0:20:53.920
<v Speaker 1>that do not understand that they're going to be left behind.

0:20:54.280 --> 0:20:56.320
<v Speaker 2>Jim, we'll leave it there. Thank you for joining us.

0:20:56.359 --> 0:20:58.840
<v Speaker 2>Jim Thorn there. He is the chief market strategist at

0:20:58.920 --> 0:21:02.439
<v Speaker 2>Wellington Alta's Private Wealth. Joining us from Toronto here on

0:21:02.480 --> 0:21:07.960
<v Speaker 2>the Daybreak Asia podcast. Thanks for listening to today's episode

0:21:08.000 --> 0:21:12.000
<v Speaker 2>of the Bloomberg Daybreak Asia Edition podcast. Each weekday, we

0:21:12.080 --> 0:21:15.960
<v Speaker 2>look at the story shaping markets, finance, and geopolitics in

0:21:16.000 --> 0:21:19.159
<v Speaker 2>the Asia Pacific. You can find us on Apple, Spotify,

0:21:19.320 --> 0:21:22.800
<v Speaker 2>the Bloomberg Podcast YouTube channel, or anywhere else you listen.

0:21:23.200 --> 0:21:26.120
<v Speaker 2>Join us again tomorrow for insight on the market moves

0:21:26.160 --> 0:21:30.680
<v Speaker 2>from Hong Kong to Singapore and Australia. I'm Doug Chrisner,

0:21:30.880 --> 0:21:32.280
<v Speaker 2>and this is Bloomberg