1
00:00:04,080 --> 00:00:07,120
Speaker 1: This is Bloomberg Day Break Asia for this Wednesday, May

2
00:00:07,160 --> 00:00:10,440
Speaker 1: thirty first in Hong Kong, Tuesday May thirtieth in New

3
00:00:10,520 --> 00:00:11,720
Speaker 1: York and coming up.

4
00:00:11,640 --> 00:00:15,440
Speaker 2: Today, The potential for AI's growth propels Nvidia to become

5
00:00:15,440 --> 00:00:17,440
Speaker 2: the first trillion dollar chip maker.

6
00:00:17,600 --> 00:00:20,120
Speaker 1: Goldman Sachs said to be planning another round of job

7
00:00:20,160 --> 00:00:22,479
Speaker 1: cuts as deal making drives up.

8
00:00:22,520 --> 00:00:25,960
Speaker 2: And China's economic rebound may have slowed again this month.

9
00:00:26,200 --> 00:00:28,440
Speaker 3: A lot of noise today on Capitol Hill about the

10
00:00:28,480 --> 00:00:32,560
Speaker 3: debt ceiling. Bell Pentagon says China conducted an unsafe fly

11
00:00:32,600 --> 00:00:35,320
Speaker 3: by over the South China Sea. China calls for an

12
00:00:35,320 --> 00:00:40,120
Speaker 3: accelerated rate of military capabilities. I'm at Baxter with Global News.

13
00:00:44,120 --> 00:00:47,319
Speaker 3: That's all straight ahead on Bloomberg day Break Asia. The

14
00:00:47,360 --> 00:00:50,000
Speaker 3: business news you need to start your day in just

15
00:00:50,120 --> 00:00:54,560
Speaker 3: one fifteen minute podcast available on Apple, Spotify, the Bloomberg

16
00:00:54,600 --> 00:00:57,320
Speaker 3: Business App, and everywhere you get your podcasts.

17
00:01:00,240 --> 00:01:02,640
Speaker 2: Good morning, I'm Richard Salanin.

18
00:01:02,520 --> 00:01:05,080
Speaker 1: And I'm Brian Curtis. Here are the stories we're following

19
00:01:05,080 --> 00:01:07,120
Speaker 1: today in videos.

20
00:01:07,160 --> 00:01:11,480
Speaker 2: Market valuation crossing the one trillion dollar threshold. Shares storings

21
00:01:11,520 --> 00:01:14,440
Speaker 2: of the company issued an AI fueled sales forecast of

22
00:01:14,520 --> 00:01:17,120
Speaker 2: eleven billion dollars in the second quarter that blew away

23
00:01:17,160 --> 00:01:19,720
Speaker 2: Wall Street estimates and helped to grow in videos value

24
00:01:19,720 --> 00:01:22,039
Speaker 2: by some one hundred and eighty four billion dollars in

25
00:01:22,080 --> 00:01:24,840
Speaker 2: a single day. Still continue to gain this week after

26
00:01:24,880 --> 00:01:28,040
Speaker 2: the company anounced several new AI related products. They touch

27
00:01:28,080 --> 00:01:32,280
Speaker 2: on everything from robotics to gaming, advertising, and networking. Bergs

28
00:01:32,480 --> 00:01:35,160
Speaker 2: in King tells us in videos trying to own the

29
00:01:35,160 --> 00:01:36,840
Speaker 2: AI industry.

30
00:01:36,560 --> 00:01:38,840
Speaker 4: If you look at it from the perspective of what

31
00:01:38,959 --> 00:01:40,880
Speaker 4: they are providing on what they are trying to do,

32
00:01:40,959 --> 00:01:43,880
Speaker 4: which is not just to sell to Google, to sell

33
00:01:43,959 --> 00:01:46,800
Speaker 4: to Amazon aw Ask, but to be like, hey, this

34
00:01:46,920 --> 00:01:50,000
Speaker 4: thing works, and it works bigger if we can bring

35
00:01:50,360 --> 00:01:54,000
Speaker 4: companies into the fold, companies that don't have all of

36
00:01:54,040 --> 00:01:57,400
Speaker 4: these data center them sells, and don't have all of

37
00:01:57,440 --> 00:02:00,720
Speaker 4: these genius computer scientists. So in videos addressing laws well.

38
00:02:00,840 --> 00:02:05,680
Speaker 2: Chip Baker, they're also hovering around some elite company alphabet, Amazon, Apple,

39
00:02:05,720 --> 00:02:07,960
Speaker 2: and Microsoft to the only American business to have a

40
00:02:08,000 --> 00:02:11,200
Speaker 2: trillion a dollar valuation. Few than ten companies globally have

41
00:02:11,280 --> 00:02:13,079
Speaker 2: actually managed to achieve this distinction.

42
00:02:13,440 --> 00:02:15,840
Speaker 1: And you know, ten Cent was one ritsch that got

43
00:02:15,960 --> 00:02:18,720
Speaker 1: very close to a trillion dollars before falling back, and

44
00:02:18,760 --> 00:02:22,359
Speaker 1: now it's less than half that. After we saw all

45
00:02:22,440 --> 00:02:26,680
Speaker 1: those Chinese companies tech companies slide well, Goldman Sachs is

46
00:02:26,720 --> 00:02:30,280
Speaker 1: considering another round of job cuts, with deal making remaining

47
00:02:30,400 --> 00:02:33,120
Speaker 1: in a slump. The story from Bloomberg's and Kates.

48
00:02:33,400 --> 00:02:35,520
Speaker 5: It would be the third time Goldman Sachs has announced

49
00:02:35,560 --> 00:02:38,320
Speaker 5: layoff plans in less than a year. According to Bloomberg,

50
00:02:38,360 --> 00:02:40,120
Speaker 5: the next set of pink slips will affect less than

51
00:02:40,120 --> 00:02:43,000
Speaker 5: two hundred and fifty and will include more senior employees.

52
00:02:43,320 --> 00:02:46,919
Speaker 5: Goldman Sacks eliminated several hundred positions last September, then cut

53
00:02:46,960 --> 00:02:48,959
Speaker 5: thirty two hundred jobs at the beginning of the year.

54
00:02:49,320 --> 00:02:53,239
Speaker 5: Rival Morgan Stanley is also reducing its workforce in Washington,

55
00:02:53,400 --> 00:02:55,160
Speaker 5: and Kates Bloomberg Day Break Asia.

56
00:02:55,280 --> 00:02:57,200
Speaker 2: All right, well, let's take a look now at what

57
00:02:57,280 --> 00:02:59,560
Speaker 2: the sec has been doing, because the Security is in

58
00:02:59,560 --> 00:03:03,840
Speaker 2: Exchange Mission is inquiring about how private equity companies did deposits,

59
00:03:03,840 --> 00:03:07,560
Speaker 2: including client funds, out of Silicon Valley Bank before it's collapse.

60
00:03:08,040 --> 00:03:09,800
Speaker 2: He's Bloomberg's Charlie Pennett.

61
00:03:09,960 --> 00:03:14,400
Speaker 6: Sources tell Bloomberg the Securities and Exchange Commissions examinations unit

62
00:03:14,760 --> 00:03:19,640
Speaker 6: has requested records of some investment firms, money transfers and

63
00:03:19,800 --> 00:03:24,200
Speaker 6: investor communications over the first three weeks of March, as

64
00:03:24,200 --> 00:03:29,040
Speaker 6: well as emails with SVB. They say some questions focused

65
00:03:29,080 --> 00:03:32,959
Speaker 6: on whether executives with personal accounts at the bank cashed

66
00:03:33,000 --> 00:03:37,120
Speaker 6: out before clients and where deposits went in New York

67
00:03:37,440 --> 00:03:39,760
Speaker 6: Charlie Pellett, Bloomberg Daybreak Asia.

68
00:03:40,360 --> 00:03:43,720
Speaker 1: Tesla's CEO Elon Musk, met with Chinese Foreign Minister Qin

69
00:03:43,800 --> 00:03:47,160
Speaker 1: Gang in Beijing on Tuesday. He said the interests of

70
00:03:47,240 --> 00:03:51,040
Speaker 1: China and the US are intertwined, according to a government statement.

71
00:03:51,240 --> 00:03:54,520
Speaker 1: The release also cited Musk as saying that Tesla opposes

72
00:03:54,600 --> 00:03:58,000
Speaker 1: decoupling from China and is willing to keep expanding in

73
00:03:58,040 --> 00:04:01,360
Speaker 1: the country. Let's get more here from bloomber Ed Ludlow.

74
00:04:01,240 --> 00:04:04,680
Speaker 7: It's a good opportunity in the first instance for Tesla's

75
00:04:04,720 --> 00:04:09,440
Speaker 7: take more market share of domestic sales relative to domestic

76
00:04:09,800 --> 00:04:12,200
Speaker 7: peers in the EV space. It produces a lot of

77
00:04:12,280 --> 00:04:16,720
Speaker 7: vehicles out of Shanghai, but doesn't sell proportionately as many

78
00:04:16,760 --> 00:04:19,719
Speaker 7: of those in that domestic market. But of course as well,

79
00:04:20,120 --> 00:04:23,479
Speaker 7: an expansion of Shanghai's undway has Bloomberg reported, according to sources,

80
00:04:23,480 --> 00:04:26,400
Speaker 7: and new generation Model three is nearing the trial phase

81
00:04:26,440 --> 00:04:29,640
Speaker 7: of production in that plant, so critical market for production,

82
00:04:29,720 --> 00:04:32,479
Speaker 7: but it's Dan Ives of Webwish notes a key opportunity

83
00:04:32,520 --> 00:04:34,119
Speaker 7: to expand domestic sales as well.

84
00:04:34,440 --> 00:04:38,320
Speaker 1: We hear Musk is also expected to visit Tesla's Shanghai factory,

85
00:04:38,640 --> 00:04:41,760
Speaker 1: and he'll potentially meet with Premier Lee Chung to discuss

86
00:04:41,880 --> 00:04:47,040
Speaker 1: automated driving technology. Tesla is seeking to introduce that in China.

87
00:04:47,160 --> 00:04:50,920
Speaker 1: Tesla accounted for almost a quarter of Shanghai's total automotive

88
00:04:50,920 --> 00:04:54,599
Speaker 1: production value last year. And investor is like the story

89
00:04:54,600 --> 00:04:57,840
Speaker 1: of Musk in China, I suppose because Tesla traded up

90
00:04:57,880 --> 00:05:01,240
Speaker 1: four point one percent in the Leader session, Well, let's

91
00:05:01,440 --> 00:05:03,320
Speaker 1: have a look at China's economic rebound.

92
00:05:03,920 --> 00:05:08,360
Speaker 2: It's expected perhaps to have started a game, as it were,

93
00:05:08,800 --> 00:05:10,960
Speaker 2: this month in May, joining one has more.

94
00:05:10,839 --> 00:05:11,440
Speaker 5: From Hong Kong.

95
00:05:11,720 --> 00:05:14,520
Speaker 8: China's pmis this month are likely to show the factory

96
00:05:14,560 --> 00:05:18,400
Speaker 8: sector continuing to shrink back. In April, the official manufacturing

97
00:05:18,440 --> 00:05:22,360
Speaker 8: PMI fell steeply, and should contraction mixed to data since

98
00:05:22,400 --> 00:05:26,520
Speaker 8: then suggests little movement. In May, Economists surveyed expected the

99
00:05:26,560 --> 00:05:30,279
Speaker 8: official PMI to stay below fifty at forty nine point five,

100
00:05:30,640 --> 00:05:33,560
Speaker 8: and the non manufacturing index likely fell to fifty five

101
00:05:33,640 --> 00:05:37,360
Speaker 8: point two from fifty six point four. Robust spending during

102
00:05:37,400 --> 00:05:40,400
Speaker 8: the Labor Day holiday was probably not enough to offset

103
00:05:40,400 --> 00:05:43,760
Speaker 8: slower growth in other areas. Further signs of slowing will

104
00:05:43,800 --> 00:05:46,400
Speaker 8: likely add to the case for more stimulus in Hong

105
00:05:46,520 --> 00:05:48,400
Speaker 8: Kong Join Wan Bloomberg Day brig Asia.

106
00:05:49,040 --> 00:05:51,960
Speaker 1: So that's the approach that we're taking. That's balance between

107
00:05:51,960 --> 00:05:55,200
Speaker 1: Bloomberg economics view and also the survey that we do

108
00:05:55,279 --> 00:05:58,400
Speaker 1: of economists. However, yesterday, if you're listening to the program,

109
00:05:58,400 --> 00:06:01,680
Speaker 1: you probably heard us reporting that China beij book and

110
00:06:01,800 --> 00:06:06,159
Speaker 1: also Goldman Sachs citing some other indices PMI indices to

111
00:06:06,240 --> 00:06:08,600
Speaker 1: suggest that we may have seen a pick up in May.

112
00:06:08,680 --> 00:06:11,600
Speaker 1: So it really sets up as an interesting result today

113
00:06:11,600 --> 00:06:15,080
Speaker 1: when we get that Jamie Diamond will be sitting down

114
00:06:15,200 --> 00:06:18,080
Speaker 1: with Bloomberg at just about noontime ORS, so that's after

115
00:06:18,200 --> 00:06:20,240
Speaker 1: our show, but we will bring that interview to you

116
00:06:20,360 --> 00:06:23,600
Speaker 1: live at eleven fifty five. Steve Engel will be in

117
00:06:23,720 --> 00:06:26,679
Speaker 1: on that and this is part of JP Morgan Chase's

118
00:06:27,120 --> 00:06:30,600
Speaker 1: China Summit and as mentioned more on elon musk in

119
00:06:30,720 --> 00:06:33,400
Speaker 1: China coming up, and Japan saying that it will take

120
00:06:33,480 --> 00:06:36,839
Speaker 1: action if needed on the rapid weakening of the yen.

121
00:06:37,240 --> 00:06:39,720
Speaker 1: Right now, it's around the lowest levels that we've seen

122
00:06:40,120 --> 00:06:44,360
Speaker 1: since last November. We did get intervention last year. At

123
00:06:44,360 --> 00:06:47,279
Speaker 1: the moment, Dolly yen is at one thirty nine eighty

124
00:06:47,320 --> 00:06:51,200
Speaker 1: two in the top currency official Masato Kanda flexing his

125
00:06:51,320 --> 00:06:55,640
Speaker 1: muscles there about what the Japanese government might do. Now

126
00:06:55,680 --> 00:07:00,200
Speaker 1: it's time for global news. Japan has warned residents to

127
00:07:00,279 --> 00:07:03,600
Speaker 1: shelter from a North Korean missile threat. At Baxter has

128
00:07:03,640 --> 00:07:06,080
Speaker 1: that and other global news from the nine to sixty

129
00:07:06,120 --> 00:07:08,200
Speaker 1: newsroom in San Francisco.

130
00:07:07,880 --> 00:07:10,560
Speaker 3: Ed, Yeah, Brian, and this is developing as we speak.

131
00:07:10,800 --> 00:07:13,520
Speaker 3: Soul City as well has sent an alert to residence,

132
00:07:13,920 --> 00:07:16,400
Speaker 3: and South Korea is to hold a meeting to review

133
00:07:16,440 --> 00:07:20,480
Speaker 3: the national security status. Now, this appears to be the

134
00:07:20,520 --> 00:07:23,840
Speaker 3: satellite launch that the North has been talking about for

135
00:07:24,120 --> 00:07:27,880
Speaker 3: several weeks. For several days, maybe a week, South Korea's

136
00:07:27,880 --> 00:07:32,080
Speaker 3: military says it is a space launch vehicle. Now. The

137
00:07:32,120 --> 00:07:35,640
Speaker 3: North did notify Japan two days ago that it planned

138
00:07:35,680 --> 00:07:40,680
Speaker 3: the launch between May thirty first today and June eleventh.

139
00:07:40,760 --> 00:07:43,480
Speaker 3: Japan warned it would put its defenses on alert and

140
00:07:43,520 --> 00:07:47,480
Speaker 3: shoot down any projectile that threatens its territory. Tokyo did

141
00:07:47,520 --> 00:07:49,440
Speaker 3: say it expects the rocket to be fired over the

142
00:07:49,480 --> 00:07:53,320
Speaker 3: Southwest Island chain. It did so in twenty sixteen, so

143
00:07:53,760 --> 00:07:56,240
Speaker 3: as I say, looking for more information, it does appear

144
00:07:56,280 --> 00:08:00,239
Speaker 3: to be that satellite launch. A lot of public debate

145
00:08:00,360 --> 00:08:03,280
Speaker 3: today between congressional leaders regarding the Death Bill ceiling in

146
00:08:03,320 --> 00:08:05,960
Speaker 3: the US, A lot of debate, a lot of noise,

147
00:08:06,040 --> 00:08:08,720
Speaker 3: a lot of smoke. We'll find out as we head

148
00:08:08,800 --> 00:08:11,679
Speaker 3: for the House vote, which should come on the entire

149
00:08:11,800 --> 00:08:16,080
Speaker 3: bill probably Thursday. Now today, the right wing of the

150
00:08:16,120 --> 00:08:19,480
Speaker 3: Republican Party, the self called Freedom Caucus, has come out

151
00:08:19,600 --> 00:08:24,160
Speaker 3: very strongly. Republican Representative chep roy here Clark for.

152
00:08:24,200 --> 00:08:28,040
Speaker 9: Groove, scoring against it, the Heritage Foundation scoring against it,

153
00:08:28,120 --> 00:08:32,400
Speaker 9: Freedom Works scoring against it. Ron de Santis publicly opposed.

154
00:08:32,800 --> 00:08:35,840
Speaker 9: President Trump said he thought we should default rather than

155
00:08:35,840 --> 00:08:37,120
Speaker 9: pursue this kind of lunacy.

156
00:08:37,400 --> 00:08:40,200
Speaker 3: But Republican Tom Cole of the moderate section of the party, a.

157
00:08:40,280 --> 00:08:43,000
Speaker 10: True negotiation, you always get less than you want and

158
00:08:43,080 --> 00:08:44,320
Speaker 10: give up more than you'd like.

159
00:08:44,920 --> 00:08:45,520
Speaker 4: But with the.

160
00:08:45,440 --> 00:08:49,200
Speaker 10: Passage of the Fiscal Responsibility Act, will responsibly lift the

161
00:08:49,240 --> 00:08:52,440
Speaker 10: debt ceiling and avoid a default that would devastate the

162
00:08:52,480 --> 00:08:53,480
Speaker 10: American economy.

163
00:08:53,559 --> 00:08:55,640
Speaker 3: And that's what Speaker Kevin McCarthy is saying.

164
00:08:55,679 --> 00:08:58,000
Speaker 6: When the Freedom Caucus talks about once suspending back to

165
00:08:58,040 --> 00:09:01,240
Speaker 6: twenty twenty two, the non defense is back lower.

166
00:09:00,960 --> 00:09:04,040
Speaker 11: Than twenty twenty two. Veterans get more money and defense

167
00:09:04,080 --> 00:09:04,880
Speaker 11: gets more money.

168
00:09:05,000 --> 00:09:08,600
Speaker 3: Now, House Minority Leader Hakim Jeffreys, in an exclusive interview

169
00:09:08,640 --> 00:09:11,960
Speaker 3: on Bloomberg Radio and Television, says Republicans need to step

170
00:09:12,000 --> 00:09:13,400
Speaker 3: forward and pass this.

171
00:09:13,760 --> 00:09:16,920
Speaker 12: How many votes will the Republicans produce? This is an

172
00:09:16,960 --> 00:09:21,880
Speaker 12: agreement that at their insistence, they negotiated with the administration,

173
00:09:22,440 --> 00:09:25,520
Speaker 12: and it's our full and complete expectation that they are

174
00:09:25,559 --> 00:09:28,800
Speaker 12: going to produce at least one hundred and fifty votes.

175
00:09:29,200 --> 00:09:31,880
Speaker 12: We as Democrats, are going to make sure that we

176
00:09:32,000 --> 00:09:35,439
Speaker 12: do not default on our nation's debt. America should always

177
00:09:35,480 --> 00:09:36,200
Speaker 12: pay our bills.

178
00:09:36,440 --> 00:09:36,680
Speaker 6: Yeah.

179
00:09:36,760 --> 00:09:39,800
Speaker 3: So, Jeffries tells Bloomberg that he will have the Democratic

180
00:09:39,840 --> 00:09:43,000
Speaker 3: votes needed. It will be up to moderate Republicans. So

181
00:09:43,040 --> 00:09:47,199
Speaker 3: where are we really regarding passage? Well Bloomberg Jack Fitzpatrick

182
00:09:47,280 --> 00:09:51,520
Speaker 3: says there's one representative considering calling for McCarthy's removal, but

183
00:09:51,559 --> 00:09:52,240
Speaker 3: other than that.

184
00:09:52,240 --> 00:09:54,800
Speaker 13: So we're finding more no votes on the bill, but

185
00:09:54,880 --> 00:09:56,880
Speaker 13: it still seems to have a pretty good path forward.

186
00:09:57,040 --> 00:10:00,360
Speaker 13: And McCarthy is dealing with some minimal push back to

187
00:10:00,480 --> 00:10:03,679
Speaker 13: his speakership. Again, he has a narrow majority in the House.

188
00:10:04,520 --> 00:10:06,640
Speaker 13: There is a bit of pushback, but a lot of

189
00:10:06,720 --> 00:10:09,400
Speaker 13: the Republicans who have complaints are focused on the bill

190
00:10:09,559 --> 00:10:11,000
Speaker 13: rather than McCarthy himself.

191
00:10:11,080 --> 00:10:14,239
Speaker 3: So again McCarthy says a bill will be brought forward tomorrow,

192
00:10:14,320 --> 00:10:17,680
Speaker 3: probably the vote on Thursday. US Pentagon says a Chinese

193
00:10:17,760 --> 00:10:21,720
Speaker 3: jet conducted unprofessional intercept last week. Statements says a jet

194
00:10:21,720 --> 00:10:24,880
Speaker 3: flew directly in front of a US reconnaissance aircraft over

195
00:10:24,920 --> 00:10:28,080
Speaker 3: the South China Sea. And China's President Shi Jimpeng has

196
00:10:28,120 --> 00:10:31,760
Speaker 3: told his military officials to accelerate efforts to modernize the

197
00:10:31,840 --> 00:10:36,200
Speaker 3: national security defenses because of complexity and toughness of security

198
00:10:36,200 --> 00:10:39,760
Speaker 3: issues facing the country, and he says it's notably increased

199
00:10:40,000 --> 00:10:42,840
Speaker 3: global news powered by more than twenty seven hundred journalist

200
00:10:42,920 --> 00:10:45,439
Speaker 3: and analysts in over one hundred and twenty countries. In

201
00:10:45,480 --> 00:10:48,679
Speaker 3: San Francisco, I'm at Baxter and this is Bloomberg.

202
00:10:49,280 --> 00:10:52,360
Speaker 1: I'm Brian Curtesy, in Hong Kong along with Rashad Salamat

203
00:10:52,520 --> 00:10:54,400
Speaker 1: and just getting a couple of quick lines here, one

204
00:10:54,440 --> 00:10:57,680
Speaker 1: from Kyoto that Japan doesn't see the missile from North

205
00:10:57,760 --> 00:11:02,400
Speaker 1: Korea as landing in its territory, and also from Yonhapp

206
00:11:02,440 --> 00:11:06,079
Speaker 1: talking about the South Korean side, saying that the projectile

207
00:11:06,360 --> 00:11:09,880
Speaker 1: would not be affecting the Soul area. Our guest is

208
00:11:09,960 --> 00:11:14,240
Speaker 1: Christina Hooper, chief Global market strategist at Invesco with us

209
00:11:14,559 --> 00:11:15,880
Speaker 1: so I love it. You've got the good, bad, and

210
00:11:15,920 --> 00:11:18,079
Speaker 1: the ugly. We can get to that in a few moments.

211
00:11:18,760 --> 00:11:21,680
Speaker 1: And also we want to take a closer look at

212
00:11:21,920 --> 00:11:25,559
Speaker 1: central banks and what they're doing. I thought the line

213
00:11:25,600 --> 00:11:28,880
Speaker 1: from Cliff Astness was kind of interesting, So let me

214
00:11:28,920 --> 00:11:32,360
Speaker 1: ask you about what he said. That stocks are kind

215
00:11:32,360 --> 00:11:35,840
Speaker 1: of in a scary place here if the US actually

216
00:11:36,000 --> 00:11:39,880
Speaker 1: enters recession. Do you concur with that view.

217
00:11:41,520 --> 00:11:45,560
Speaker 11: I don't concur very strongly with that view, and I'll

218
00:11:45,600 --> 00:11:50,560
Speaker 11: tell you why, because stocks tend to discount what's going

219
00:11:50,600 --> 00:11:54,720
Speaker 11: to happen the economy nine twelve months out. So I

220
00:11:54,760 --> 00:11:58,920
Speaker 11: think stocks have already discounted the economic downturn. And I

221
00:11:58,920 --> 00:12:01,560
Speaker 11: think what we're likely to see is that as we

222
00:12:01,600 --> 00:12:05,120
Speaker 11: move through the back half of this year, stocks will

223
00:12:05,160 --> 00:12:08,680
Speaker 11: start to discount an economic recovery. Does that mean we're

224
00:12:08,720 --> 00:12:12,120
Speaker 11: going to see turbulence in the near term, Yes, probably,

225
00:12:12,240 --> 00:12:14,000
Speaker 11: But I don't think we're going to see any kind

226
00:12:14,000 --> 00:12:16,760
Speaker 11: of dramatic drop in stocks. I think we saw the

227
00:12:16,800 --> 00:12:21,360
Speaker 11: bottom last October, and the future, if we hold on

228
00:12:21,480 --> 00:12:24,880
Speaker 11: long enough, to me, looks fairly positive for equities.

229
00:12:25,240 --> 00:12:28,199
Speaker 2: You say that perhaps you know this has been priced in.

230
00:12:28,679 --> 00:12:31,520
Speaker 2: I mean, nastac's up twenty five percent nearly and we've

231
00:12:31,559 --> 00:12:35,080
Speaker 2: got an SMP five hundred and ten percent higher. Suit

232
00:12:35,320 --> 00:12:37,240
Speaker 2: you know, I beg to different that they are actually

233
00:12:37,280 --> 00:12:38,280
Speaker 2: pricing in a recession.

234
00:12:40,120 --> 00:12:43,960
Speaker 11: Well, you know, they're already starting to in my view,

235
00:12:44,800 --> 00:12:49,320
Speaker 11: they've already started to price in a better future. But

236
00:12:49,400 --> 00:12:52,000
Speaker 11: I think that what we're likely to see is a

237
00:12:52,120 --> 00:12:55,040
Speaker 11: risk off environment in the coming months. There's just way

238
00:12:55,080 --> 00:12:59,080
Speaker 11: too much uncertainty. But I do believe ultimately we'll get

239
00:12:59,080 --> 00:13:01,719
Speaker 11: to that point where there will be resolution of the

240
00:13:01,760 --> 00:13:05,120
Speaker 11: big issues that have created uncertainty, like of course, the

241
00:13:05,160 --> 00:13:08,560
Speaker 11: debt ceiling, like what exactly the Fed and other central

242
00:13:08,559 --> 00:13:11,880
Speaker 11: banks are going to do, And they will and markets

243
00:13:11,920 --> 00:13:15,960
Speaker 11: will start to anticipate that economic recovery. I think this downturn,

244
00:13:17,200 --> 00:13:19,120
Speaker 11: even if it's a recession, I think it's going to

245
00:13:19,120 --> 00:13:22,880
Speaker 11: be rather mild and brief, and so discounting should happen soon.

246
00:13:23,480 --> 00:13:26,000
Speaker 1: Well, it's such an interesting market because if you look

247
00:13:26,040 --> 00:13:28,760
Speaker 1: at it from one standpoint, Oh, it's so narrowly focused,

248
00:13:28,800 --> 00:13:31,320
Speaker 1: and it's only the AI related stocks and tech that's

249
00:13:31,520 --> 00:13:37,240
Speaker 1: you know, been really doing the gains. But you know,

250
00:13:37,280 --> 00:13:39,559
Speaker 1: you also have the on the losing side. The whole

251
00:13:39,600 --> 00:13:42,400
Speaker 1: banking sector has struggled a bit. And then if you

252
00:13:42,440 --> 00:13:45,880
Speaker 1: look at cyclicals and value stocks and the equal weight

253
00:13:45,960 --> 00:13:48,199
Speaker 1: index is essentially flat. So it's not like it has

254
00:13:48,559 --> 00:13:51,319
Speaker 1: been bad, it just hasn't been great.

255
00:13:52,000 --> 00:13:55,080
Speaker 11: No, And it's very true that this is a very

256
00:13:55,160 --> 00:14:00,160
Speaker 11: narrow market, but that is often the case in this

257
00:14:00,720 --> 00:14:05,960
Speaker 11: portion of the cycle when we are heading into a

258
00:14:06,040 --> 00:14:09,520
Speaker 11: downturn and there is defensive positioning. And this of course

259
00:14:09,760 --> 00:14:13,800
Speaker 11: has been exacerbated by this excitement over AI.

260
00:14:14,000 --> 00:14:16,320
Speaker 2: Which brings as nicely on to talk about the good,

261
00:14:16,360 --> 00:14:17,800
Speaker 2: the bad, and the ugly and what are they?

262
00:14:19,240 --> 00:14:21,680
Speaker 11: So the good is that it appears that finally the

263
00:14:21,680 --> 00:14:24,680
Speaker 11: White House and House Republicans have struck a deal on

264
00:14:24,760 --> 00:14:27,520
Speaker 11: the debt ceiling, that's old news at this point, but

265
00:14:27,600 --> 00:14:29,720
Speaker 11: I still think it's good. That was one of the

266
00:14:29,840 --> 00:14:34,280
Speaker 11: big sources of uncertainty hanging over markets in recent weeks. Now,

267
00:14:34,320 --> 00:14:36,760
Speaker 11: of course, it is not a done deal, so it

268
00:14:36,760 --> 00:14:39,720
Speaker 11: can always be scuttled, we can always have some hiccups

269
00:14:39,760 --> 00:14:41,560
Speaker 11: along the way. But that to me is good.

270
00:14:42,080 --> 00:14:42,320
Speaker 10: Okay.

271
00:14:42,360 --> 00:14:47,480
Speaker 11: The bad Well, investors can then turn their attention more

272
00:14:47,520 --> 00:14:50,360
Speaker 11: fully on central banks, and it's clear that central banks

273
00:14:50,760 --> 00:14:56,960
Speaker 11: are very anxious about inflation becoming entrenched. Inflation has certainly

274
00:14:57,440 --> 00:15:00,400
Speaker 11: proven to be a bit stickier than we'd like to see,

275
00:15:00,520 --> 00:15:02,720
Speaker 11: and of course we have to worry that they are

276
00:15:02,760 --> 00:15:05,560
Speaker 11: going to be more aggressive than they need be because

277
00:15:05,600 --> 00:15:06,440
Speaker 11: they're spooked.

278
00:15:06,600 --> 00:15:09,000
Speaker 1: Okay, And the ugly, the ugly.

279
00:15:09,160 --> 00:15:12,680
Speaker 11: The disinflationary process is very imperfect, and we have to

280
00:15:12,720 --> 00:15:15,440
Speaker 11: recognize that we're going to see spikes along the way.

281
00:15:15,440 --> 00:15:18,520
Speaker 11: We're going to see disappointing data points. It doesn't mean

282
00:15:18,560 --> 00:15:22,200
Speaker 11: that we're not part of the disinflationary We're not going

283
00:15:22,240 --> 00:15:24,920
Speaker 11: through a disinflationary process, but it can be ugly.

284
00:15:25,400 --> 00:15:29,000
Speaker 1: So Christina, you know, I was watching surveillance last night

285
00:15:29,000 --> 00:15:30,760
Speaker 1: before going to bed, and you know, they had a

286
00:15:30,760 --> 00:15:34,880
Speaker 1: section where they're talking about the US exceptionalism and that

287
00:15:35,000 --> 00:15:38,880
Speaker 1: perhaps this is just an example of how they created

288
00:15:38,920 --> 00:15:42,800
Speaker 1: this driving force of AI in a sense that powering

289
00:15:42,840 --> 00:15:48,200
Speaker 1: the market. Unemployment is not going up, the economy is

290
00:15:48,480 --> 00:15:50,800
Speaker 1: faring pretty well, and it's just an example of the world.

291
00:15:50,840 --> 00:15:52,600
Speaker 1: The rest of the world can be doing what is doing,

292
00:15:52,880 --> 00:15:55,240
Speaker 1: but the US is doing just fine. That seems like

293
00:15:55,280 --> 00:15:56,520
Speaker 1: you're kind of in that camp.

294
00:15:57,440 --> 00:15:59,800
Speaker 11: Well, I think there's certainly some truth to that, but

295
00:16:00,040 --> 00:16:04,280
Speaker 11: I wouldn't buy into it entirely. Let's face it, the

296
00:16:04,360 --> 00:16:08,040
Speaker 11: US has gotten lucky in a lot of respects, but

297
00:16:08,360 --> 00:16:12,360
Speaker 11: one of those key sources of strength for the US

298
00:16:12,680 --> 00:16:17,520
Speaker 11: is also something that other Western developed economies are experiencing.

299
00:16:18,360 --> 00:16:21,440
Speaker 11: Perhaps not at the same level, but we have a

300
00:16:21,560 --> 00:16:25,880
Speaker 11: very low unemployment rate. Now that has proven to be

301
00:16:26,000 --> 00:16:30,440
Speaker 11: problematic when it comes to services x housing inflation, but

302
00:16:30,560 --> 00:16:33,960
Speaker 11: it also should be part of, you know, one of

303
00:16:34,000 --> 00:16:38,080
Speaker 11: the key reasons why the US will will weather this

304
00:16:38,160 --> 00:16:42,720
Speaker 11: economic downturn and likely get out with few scars.

305
00:16:43,920 --> 00:16:46,680
Speaker 2: Well, Christian, I mean the good, the Batter, and the

306
00:16:46,720 --> 00:16:49,440
Speaker 2: Ugly was part of the Dollars trilogy. It was the

307
00:16:49,520 --> 00:16:51,400
Speaker 2: last one after a fist full of dollars and a

308
00:16:51,440 --> 00:16:53,640
Speaker 2: few dollars more, where can I get those dollars?

309
00:16:58,280 --> 00:17:01,280
Speaker 11: Well, you know this is is you know, we have

310
00:17:01,360 --> 00:17:04,359
Speaker 11: to recognize that I hate to say the term this

311
00:17:04,440 --> 00:17:07,160
Speaker 11: time is different, but this is a unique environment because

312
00:17:07,200 --> 00:17:10,520
Speaker 11: we are in a post pandemic world and so we

313
00:17:10,640 --> 00:17:14,800
Speaker 11: had an artificial driving up of inflation to a very

314
00:17:14,840 --> 00:17:19,280
Speaker 11: dramatic level. We also have some really structural issues with

315
00:17:19,320 --> 00:17:23,280
Speaker 11: the labor market, with housing that are conspiring to keep

316
00:17:23,320 --> 00:17:28,879
Speaker 11: in some components of inflation stickier. But this is an

317
00:17:29,040 --> 00:17:32,520
Speaker 11: environment in which I think we are going to be

318
00:17:32,600 --> 00:17:35,760
Speaker 11: able to have a bumpy landing. It will not be

319
00:17:35,800 --> 00:17:37,800
Speaker 11: a hard landing, it will not be a soft landing.

320
00:17:38,200 --> 00:17:41,200
Speaker 11: It will be a bumpy landing. And then, of course

321
00:17:41,240 --> 00:17:45,040
Speaker 11: I think the US is poised to recover and certainly

322
00:17:45,160 --> 00:17:50,840
Speaker 11: has has some real, really helpful factors in its favor,

323
00:17:51,119 --> 00:17:55,919
Speaker 11: including the fact that most US consumers who own homes

324
00:17:56,280 --> 00:17:58,400
Speaker 11: have fixed rate, long term mortgages.

325
00:17:58,800 --> 00:18:01,720
Speaker 1: That is a central point. I didn't want to get

326
00:18:01,720 --> 00:18:04,720
Speaker 1: into that when it's talking about the discussion on surveillance

327
00:18:04,800 --> 00:18:06,840
Speaker 1: last night, but one of the guests was saying, you

328
00:18:06,960 --> 00:18:10,639
Speaker 1: can't underestimate how important it is for consumers to have

329
00:18:11,000 --> 00:18:14,399
Speaker 1: thirty year fixed mortgages when in the UK and throughout

330
00:18:14,440 --> 00:18:17,800
Speaker 1: other places Europe and certainly over here we have variable

331
00:18:17,840 --> 00:18:20,960
Speaker 1: rate mortgages and it can be tough. Final question, because

332
00:18:21,000 --> 00:18:24,000
Speaker 1: we can't ignore China. It's a difficult question for Jamie

333
00:18:24,040 --> 00:18:27,399
Speaker 1: Diamond and Elon Musk to talk about decoupling versus de risking.

334
00:18:27,520 --> 00:18:28,239
Speaker 1: How do you see it?

335
00:18:29,560 --> 00:18:33,040
Speaker 11: Well, I think that certainly we'll go through patchy spots

336
00:18:33,400 --> 00:18:38,240
Speaker 11: in relationships, but I do believe that this remains a

337
00:18:38,240 --> 00:18:42,919
Speaker 11: global economy. We've taken a few steps back, but I

338
00:18:42,960 --> 00:18:45,320
Speaker 11: think that China is very much a part of this

339
00:18:45,400 --> 00:18:49,480
Speaker 11: global economy and there will be a way to make

340
00:18:49,520 --> 00:18:52,920
Speaker 11: it work. I also think there's a real attractiveness. The

341
00:18:53,640 --> 00:18:57,440
Speaker 11: growing middle class in China cannot be ignored. It's such

342
00:18:57,480 --> 00:19:02,720
Speaker 11: a powerful economy that you companies and quite frankly, companies

343
00:19:02,760 --> 00:19:05,560
Speaker 11: all over the world will continue to clamor to do

344
00:19:05,640 --> 00:19:06,560
Speaker 11: business in China.

345
00:19:07,880 --> 00:19:10,680
Speaker 1: This is Bloomberg Daybreak Asia, your morning brief on the

346
00:19:10,800 --> 00:19:14,479
Speaker 1: stories making news from Hong Kong to Singapore and Wall Street.

347
00:19:14,640 --> 00:19:18,320
Speaker 2: Look for us on your podcast feed every day on Apples, Spotify,

348
00:19:18,359 --> 00:19:20,320
Speaker 2: and anywhere else you get your podcast.

349
00:19:20,880 --> 00:19:23,520
Speaker 1: You can also listen live each day on Bloomberg eleven

350
00:19:23,560 --> 00:19:25,920
Speaker 1: three to zero in New York, Bloomberg ninety nine to

351
00:19:25,960 --> 00:19:29,160
Speaker 1: one in Washington, Bloomberg one oh sixty one in Boston,

352
00:19:29,480 --> 00:19:32,000
Speaker 1: and Bloomberg nine sixty in San Francisco.

353
00:19:32,240 --> 00:19:34,920
Speaker 2: Our flagship New York station is available on your Amazon

354
00:19:34,960 --> 00:19:39,840
Speaker 2: Alexa devices. Just say Alexa Play Bloomberg eleven thirty plus.

355
00:19:39,960 --> 00:19:43,360
Speaker 1: Listen coast to coast on the Bloomberg Business app, Sirius

356
00:19:43,480 --> 00:19:47,680
Speaker 1: XM Channel one nineteen, the iHeartRadio app, and on Bloomberg

357
00:19:47,760 --> 00:19:50,200
Speaker 1: dot Com. I'm Brian Curtis.

358
00:19:49,920 --> 00:19:52,200
Speaker 2: And I'm Rashard, So I'm to join us again tomorrow.

359
00:19:52,400 --> 00:19:55,080
Speaker 2: All the news you need to start your day right

360
00:19:55,119 --> 00:20:03,200
Speaker 2: here on Bloomberg day Break Asia