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Speaker 1: Let's get to the Tesla story next. As Brian mentioned

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Speaker 1: a new daily record in that story from Bloomberg's Denise Pellegrini.

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Speaker 2: The electric vehicle maker delivered a record four hundred and

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Speaker 2: sixty six one hundred forty cars worldwide in the second quarter,

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Speaker 2: and that is way more than the analyst estimate of

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Speaker 2: four hundred forty eight thousand in change. This is also

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Speaker 2: dramatically higher than a year ago. Deliveries are up eighty

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Speaker 2: three percent by that measure. The Model three and the

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Speaker 2: Model y together con for ninety six percent of Tesla's

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Speaker 2: global deliveries, and the delivery gains come amid persistent price

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Speaker 2: cuts by Tesla and inventory overhang. Though it is still

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Speaker 2: casting a bit of a shadow on things, Tesla is

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Speaker 2: still producing more cars than it's delivering. Tesla handed over

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Speaker 2: at least thirteen thousand fewer cars as a matter of fact,

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Speaker 2: than it produced in this latest quarter, Denise Pellegrine, Bloomberg,

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Speaker 2: Day Break Asia.

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Speaker 3: In the meantime, China's biggest TV maker byd sold more

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Speaker 3: than a quarter of a million vehicles in the month

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Speaker 3: of June alone. Bloombrigs Eric lamb As the story from

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Speaker 3: Hong Kong.

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Speaker 4: China's top ev makers generally saw a big return of demand.

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Speaker 4: In June. By D sold more than two hundred and

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Speaker 4: fifty three thousand units, dwarfing other manufacturers. That's up from

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Speaker 4: two hundred and thirty nine thousand in May. Lee Auto

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Speaker 4: sold more than thirty two thousand in June for the

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Speaker 4: first time ever. China last month extended a tax break

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Speaker 4: for consumers buying clean cars through twenty twenty seven. Overall,

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Speaker 4: the pace of deliveries for clean cars in China has

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Speaker 4: been slowing, but June's numbers will be seen as encouraging

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Speaker 4: for the industry in Hong Kong. I'm Eric Lamb Bloomberg

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Speaker 4: Daybreak Asia.

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Speaker 1: China is on a buying spree when it comes to

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Speaker 1: natural gas. Officials want importers to continue striking deals, even

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Speaker 1: though the energy crisis has eased a bit. Sources say

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Speaker 1: the government is hoping to boost its energy security through

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Speaker 1: the middle of the century. Now, China is on track

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Speaker 1: to be the world's top importer of liquefied natural gas

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Speaker 1: in twenty twenty three. Other importers, this would include India,

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Speaker 1: are also looking to sign more deals. The plan here

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Speaker 1: is to avoid future shortages and herb dependence on spot deliveries.

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Speaker 1: China is locking in contracts at a very rapid pace.

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Speaker 1: So far this year, thirty three percent of long term

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Speaker 1: LNG volumes have gone to China. Brian Well.

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Speaker 3: Australian house prices rose at a slower pace than expected

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Speaker 3: last month, leaving tomorrow's Reserve Bank of Australia meeting delicately

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Speaker 3: poised as it were, let's get more from Bloomberg's Paul Allen.

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Speaker 5: House price growth across Australia slowed in June to one

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Speaker 5: point two percent from the one point four percent recorded

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Speaker 5: to May. Prices in Sydney still climbed strongly, with supply

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Speaker 5: shortages among a range of factors driving prices and rents higher,

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Speaker 5: despite the Reserve Bank of Australia aggressively tightening rates over

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Speaker 5: the past year. The bank meets again on Tuesday in Australia,

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Speaker 5: with economists evenly split on the likely outcome. Thirteen see

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Speaker 5: another quarter point increase. Fourteen see the RBA staying on

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Speaker 5: hold at four point one percent. Traders pricing in a

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Speaker 5: sixty percent chance of a pause inflations running at six sand,

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Speaker 5: currently well outside the IBA's tigert range. The next set

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Speaker 5: of quarterly inflation numbers of juven Australia on July twenty six,

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Speaker 5: and this may encourage the IBA to stay on hold

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Speaker 5: and wait until August. Tuesday's meeting is going to be

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Speaker 5: a close call. Paul Allen Bloomberg Daybreak Asia.

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Speaker 3: So along with Doug Krisner, Rashad Salama will join us

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Speaker 3: in a few moments. So quite a few interesting stories.

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Speaker 3: We should mention Pang Goong Shang, who has been named

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Speaker 3: the Communist Party chief of the PBOC, not specifically named

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Speaker 3: the PBOC governor yet, but that's the way that we're

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Speaker 3: moving here. The thinking is that he will be made

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Speaker 3: that and also the thinking, which again is a little

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Speaker 3: bit of an extrapolation Doug, is that this is more

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Speaker 3: of a continuity move than it is, Hey, let's do

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Speaker 3: something really fresh and really new now. That could ultimately happen,

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Speaker 3: But at least the signals that we're getting at the

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Speaker 3: moment is that this is more sort of steady as

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Speaker 3: she goes.

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Speaker 1: Thinking, Well, when it comes to the Central Bank here

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Speaker 1: in the US Brian midweek, we're going to get to

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Speaker 1: the minutes from the last FED meeting. This is kind

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Speaker 1: of walking us up to the employment report that we're

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Speaker 1: expecting in the US on Friday. The numbers here are

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Speaker 1: expected to show maybe moderate but still healthy job growth,

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Speaker 1: with an unemployment rate that's kind of holding at historically

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Speaker 1: low levels. Cooler wage gains, yeah, perhaps fewer job vacancies.

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Speaker 1: Where does this leave the FED? I think that's the

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Speaker 1: big question. And after that PCE data that we had

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Speaker 1: last Friday for the month of May, maybe in a

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Speaker 1: little bit more tightening. How much more is the big question?

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Speaker 3: Yeah, And the market seems to be going along its

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Speaker 3: merry way. You mentioned the big rally on Friday, with

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Speaker 3: the Nasdaq up one and a half percent the SMP

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Speaker 3: gaining one and a quarter percent. I really think one

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Speaker 3: of the big questions here at the moment is are

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Speaker 3: the gains already in? I think investors a little bit nervous.

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Speaker 3: I mean, nobody wants to be late to the party.

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Speaker 3: And I think the key might be whether or not

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Speaker 3: we're seeing the trothing of earnings. If earnings are in

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Speaker 3: the prom troughing, then the PE multiples will be able

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Speaker 3: to come down as earnings actually lift. And it seems

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Speaker 3: like the rally so far this year, DOUG has been

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Speaker 3: about multiple expansion and it might be tough for that

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Speaker 3: to continue, so they really do need to see the

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Speaker 3: earnings pick up.

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Speaker 1: I think we have to mention this enthusiasm that seems

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Speaker 1: relentless for anything related to artificial intelligence. That seemed to

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Speaker 1: be the case on Friday, with the Semis up about

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Speaker 1: one point six percent and Vidia shares higher by about

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Speaker 1: three six percent. Apple now with a market capitalization of

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Speaker 1: three trillion dollars, and since the beginning of the year,

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Speaker 1: nearly five trillion has been added to the value of

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Speaker 1: companies within the NASDAQ one hundred. So the story, too

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Speaker 1: continues to be one of information technology.

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Speaker 3: And the only sector that was We didn't actually have

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Speaker 3: many sectors that traded down. Let me just say this way,

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Speaker 3: almost every sector as far as the eye could see,

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Speaker 3: and the S and P five hundred was higher on Friday,

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Speaker 3: So it wasn't just information technology. You're right in pointing

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Speaker 3: that out. It was still the best performing sector, but

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Speaker 3: you had a number of other sectors up more than

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Speaker 3: one percent, and I think for a lot of people

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Speaker 3: that broadening out of the story would be pleasing. Now

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Speaker 3: it's time for global news, all right, let's get right

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Speaker 3: to Dan Schwartzman, looking at President Biden with an important

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Speaker 3: trip to Europe next week. Dan, what's the latest, Yeah, Brian.

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Speaker 6: The White House says that Biden's going to head to

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Speaker 6: Europe in a week to firm up ties with NATO allies.

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Speaker 6: Now he's going to hold talks with the UK Prime

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Speaker 6: Minister Rishi Sunak before he jets off to the seventy

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Speaker 6: fourth NATO summit in Vilnius, Lithuania. The President's going to

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Speaker 6: finish off the trip with a stop in Finland for

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Speaker 6: a gathering of Nordic leaders. The meetings come as tensions

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Speaker 6: have risen in Russia after the two day rebellion by

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Speaker 6: the Wagner Mercenary Group led by their leader of Genny Pregoshin,

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Speaker 6: who is now an ex all in Bella, Rus Israel's

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Speaker 6: going to buy twenty five more F thirty five fighter jets,

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Speaker 6: and a deal valued at three billion dollars. The jets,

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Speaker 6: made by Lockheed Martin will be fine enhanced by US

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Speaker 6: military aid to the country. Interest in the Stealth jet

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Speaker 6: has risen significantly after the Russian invasion of Ukraine, with

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Speaker 6: a Czech Republic Republic ordering as many as twenty four

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Speaker 6: of the jets, while South Korea has indicated a willingness

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Speaker 6: to purchase more as well. Israel will be expanding its

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Speaker 6: F thirty five fleet to three squadrons with the purchase,

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Speaker 6: with seventy five total planes. The Supreme Court will be

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Speaker 6: tackling some more controversial cases this fall. After ruling on

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Speaker 6: affirmative action, student loan relief, and businesses opposing same sex marriage,

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Speaker 6: the Court is scheduled to hear cases on whether people

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Speaker 6: who are subject to domestic violence restraining orders are allowed

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Speaker 6: to possess guns, as well as continued access to the

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Speaker 6: abortion pill. Mith for pristone and an ABC News poll,

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Speaker 6: fifty two percent respondents agreed with the Supreme Court ruling

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Speaker 6: to stop the use of racing college admissions, while thirty

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Speaker 6: two percent disapproved. Along racial lines, the majority of Whites

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Speaker 6: and Asians approved, while Latino and Hispanic Americans were evenly split,

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Speaker 6: with fifty two percent of Black Americans disapproving. Former Vice

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Speaker 6: President and current GOP presidential candidate Mike Pence. Appearing on

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Speaker 6: ABC's This Week What, Jonathan Carl says, it was the

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Speaker 6: right decision.

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Speaker 7: I think there was a time for affirmative action, john

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Speaker 7: where to open the doors of our colleges and universities

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Speaker 7: to minority students and particularly African Americans who may have

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Speaker 7: been denied access. But I think those days are over.

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Speaker 6: Meanwhile, forty five percent agreed with the Court's decision to

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Speaker 6: reject the Biden Administration's loan forgiveness plan, while forty percent

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Speaker 6: disapproved of the Court's decision. Days after the expiration their contract,

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Speaker 6: thousands of hotel workers in southern California are now officially

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Speaker 6: on strike. Major hotels such as the Ritz Carlton and JW.

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Speaker 6: Marriott in downtown Los Angeles were hit by the strike

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Speaker 6: during one of the busiest weekends for traveling the entire US.

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Speaker 6: The workers' union is seeking a Hospitality Workforce Housing fund

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Speaker 6: to combat rising living costs for its members. Some hotels,

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Speaker 6: such as the West In Bonaventure Hotel, which is the

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Speaker 6: largest by the way in Los Angeles, reached a deal

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Speaker 6: with workers the day before their contract expired, while other

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Speaker 6: hotels are looking to finalize agreements. Global News twenty four

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Speaker 6: hours a day para by more than twenty seven hundred

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Speaker 6: journalists and analysts in more than one hundred and twenty countries.

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Speaker 6: I'm Dan Schwartzman. This is Bloomberg.

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Speaker 3: I'm Brian Curtis along with Richard Salamat here in Hong Kong.

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Speaker 3: We said good morning in Asia two our guest Kumal

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Speaker 3: sree Kumar, president of Sri Kumar Global Strategies, and good

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Speaker 3: day to you, Sri, thanks very much for joining you.

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Speaker 3: Un So we know that the central banks are hawkish.

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Speaker 3: How close are we now to seeing the famous lagged

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Speaker 3: defective higher interest rates actually bite?

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Speaker 8: I think the lagged effect of interest rates have started

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Speaker 8: to bite, Brian. You saw that in March in the

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Speaker 8: regional banking crisis in the United States, And when Jerome

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Speaker 8: Powell was asked that question in Madrid when he spoke

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Speaker 8: at the Bank of Spain on Thursday, he would not

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Speaker 8: rule out another banking crisis. So clearly the Fed knows

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Speaker 8: that having increased interest rates substantially and exposed a lot

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Speaker 8: of regional banks which were paying very low interest rate

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Speaker 8: on the deposits, they now have one of two choices.

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Speaker 8: They either have to continue to lose deposits or alternately

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Speaker 8: pay a much higher interest rate and take a hit

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Speaker 8: on earnings, and neither of which is going to be

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Speaker 8: good for the medium sized banking industry and that's what

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Speaker 8: I think he's concerned about, and rightly so, but there's

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Speaker 8: nothing he can do about it so late in the game.

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Speaker 9: Brian, Sure, I mean, yeah, sure, but that is also

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Speaker 9: something you know, which will mean that you'd have also

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Speaker 9: higher costs to take out loans, and therefore you know,

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Speaker 9: it does the fair's job for it in some ways.

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Speaker 8: Yes, it is going to be a much higher cost

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Speaker 8: of taking out the loan, and that means fewer people

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Speaker 8: are going to be able to qualify for a trishad.

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Speaker 8: And I think what we will find is, especially in

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Speaker 8: the commercial real estate sector, they're going to be starved

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Speaker 8: of loans and the situation is already dire. The property

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Speaker 8: owners are going to find that the rents are dropping,

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Speaker 8: tenants are leaving, and at the same time when their

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Speaker 8: interest rates are being set at a much higher pace.

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Speaker 8: So I think that's where I think the crisis is

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Speaker 8: going to come. We haven't seen the blast Act yet.

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Speaker 8: It is probably three to six months away from today, so.

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Speaker 3: I know that you tend to argue from the negative side.

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Speaker 3: I'm assuming that you think we're closer to seeing the

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Speaker 3: reality of a hard landing than a soft landing. But

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Speaker 3: I would like to get you to comment on some

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Speaker 3: of the recent data that has been better than expected,

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Speaker 3: talking about consumer sales growth itself, job job sort of

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Speaker 3: numbers generally, particularly in the unemployment claims not looking that

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Speaker 3: bad your thoughts.

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Speaker 8: You're absolutely correct. Yeah, there's been a lot of good

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Speaker 8: statistics which have come out on the employment front, consumers,

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Speaker 8: pending fund and last week we saw that in consumer

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Speaker 8: sentiment also being on the positive side. But what is

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Speaker 8: different for this situation, this part of the cycle than

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Speaker 8: compared with say two thousand and seven, two thousand and eight,

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Speaker 8: is that you have had an immense amount of stimulus,

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Speaker 8: both in the final months of the Trump administration and

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Speaker 8: the initial months of the Biden administration, and they are

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Speaker 8: still percolating through the system, and that in turn is

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Speaker 8: keeping the labor force participation rate low, the unemployment rate low,

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Speaker 8: because you're not considered unemployed unless you seek a job,

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Speaker 8: and you don't want to seek a job if you're

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Speaker 8: already very comfortable with your financial resources. So I think

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Speaker 8: those are what are delaying the recession. Brian. But if

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Speaker 8: you look at the treasury market, the treasury two we

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Speaker 8: two to ten year yield curve has been inverted since

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Speaker 8: last July. We are reaching peak inversion right now, yes,

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Speaker 8: especially on Friday, and that is saying to me that

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Speaker 8: recession is being delayed, but you're not being denied a recession.

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Speaker 8: So that's the difference. I think we need to be

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Speaker 8: aware of. The good news suggests to you that you're

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Speaker 8: not at a recession here yet, but the bond market

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Speaker 8: is saying that the recession is indeed coming.

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Speaker 9: Inflation is coming down ultimately three So you know, give

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Speaker 9: it a bit of time you.

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Speaker 8: Can, but how are you going to give it another

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Speaker 8: three to four years time for it to reach the

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Speaker 8: two percent target?

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Speaker 9: That's not well, should you have a two percent target?

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Speaker 8: On me?

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Speaker 9: Should you have a two percent target?

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Speaker 8: Well, if you do not, and yes, it's possible to

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Speaker 8: declare victory at four percent, which is roughly where the

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Speaker 8: Fed's favorite inflation target happens to be. But if you

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Speaker 8: do that, they that are going to be further distortions

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Speaker 8: in the economy and the FED is not going to

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Speaker 8: be able to keep its credit saying four percent is

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Speaker 8: the same as our roll two percent. The markets are

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Speaker 8: going to ask, why have you changed your view on that?

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Speaker 8: And that, Richard is I think the real problem of

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Speaker 8: credibility that the FED faces.

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Speaker 3: Well, let me ask you a lot of your question then,

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Speaker 3: which is kind of central to what Risch asked you about.

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Speaker 3: In terms of targets, it would seem that one of

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Speaker 3: the things we're learning throughout this process because we don't

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Speaker 3: see people out in the street, so one of the

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Speaker 3: things that we're learning is it's better to have a

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Speaker 3: job than perhaps you know, and endure slightly higher inflation

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Speaker 3: than the reverse. I mean, I know that goes against

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Speaker 3: you know, basic orthodoxy, but you know, you don't see

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Speaker 3: people really as angry about inflation as they do about

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Speaker 3: losing their job, and they're not losing the job at

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Speaker 3: the moment.

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Speaker 8: The question, it all depends on what kind of people

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Speaker 8: you ask that question of. If you're asking people in

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Speaker 8: low and middle income groups, they are big sufferers from

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Speaker 8: the high inflation rate. As you go higher up the

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Speaker 8: income scale, the high income people are able to protect

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Speaker 8: themselves from inflation because you can invest in the stock market,

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Speaker 8: you can get bonds which provide you inflation protection, and

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Speaker 8: you are better off. But in terms of the unemployment,

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Speaker 8: it is also affecting people on the lower income groups.

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Speaker 8: But now you're also find that the unemployment is rising

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Speaker 8: to the technology side. There are people who are being

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Speaker 8: laid off who used to be earning a very high

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Speaker 8: level of income. So I think it is a bit

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Speaker 8: too soon to say that inflation is not a problem,

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Speaker 8: because I think it is a problem at a lower

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Speaker 8: income level. Brian, and I think that's why the Biden

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Speaker 8: administration has been very careful. They talk about the advantages

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Speaker 8: the benefits they've got on the employment side, but they

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Speaker 8: don't push what they see taking place on the inflation front.

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Speaker 8: But that's going to become more important as the elections

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Speaker 8: come nearby.

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Speaker 3: Well sure, I mean they got to do a mandate,

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Speaker 3: so yeah.

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Speaker 8: Exactly, yeap.

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Speaker 9: So the dollar continues its march. What's the deal?

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Speaker 8: Well, look at what I'm glad you raised the issue

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Speaker 8: of the dollar.

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Speaker 2: Rish.

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Speaker 8: June fourteenth, when Powell had a press conference out of Washington,

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Speaker 8: d c. And he told people he's really going to

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Speaker 8: increase interest rates in the future, the dollar actually sank.

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Speaker 8: He did not believe him. But in the last couple

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Speaker 8: of days, after his speeches in Cintra, Portugal and then

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Speaker 8: Thursday in Spain, the dollar actually got again because it

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Speaker 8: realizes that once he was pushed by other central bank

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Speaker 8: heads to be hawkish. He has to do something July

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Speaker 8: twenty sixth, he has to increase interest rates and therefore

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Speaker 8: the dollar. I think the dollar reaction is a very

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Speaker 8: accurate reflection of what the market thinks. They did not

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Speaker 8: believe this hawkish rhetoric on June fourteenth. They think he

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Speaker 8: was forced to be more hawkish last week. But we'll

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Speaker 8: wait and see which who is the real Jerome Powell.

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Speaker 8: I really don't know whether he's a hawkish or a

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Speaker 8: dubbish chairman.

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Speaker 3: The Bloomberg Dollar spot Index is basically sideways for most

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Speaker 3: of this year, and it's actually down pretty sharply over

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Speaker 3: the last nine months or so, so I'm not sure

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Speaker 3: that there's a real strong story being told by the dollar.

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Speaker 3: I'll give you thirty seconds to counter that.

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Speaker 8: Yep, you're right. In the medium term, it has been

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Speaker 8: coming down, as you said, Brian, that is because the

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Speaker 8: other central banks have been more hawkish than the Fed

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Speaker 8: the point. But in the last month, I think the

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Speaker 8: way what we see is the dollar has also very

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Speaker 8: quickly reacted within two or three days to each development.

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Speaker 8: So I think I think both of them can coexist

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Speaker 8: without being mutually inconsistent.

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Speaker 3: We got to get you on for the whole houris

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Speaker 3: we'll see if we can engineer that. I mean, not

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Speaker 3: sure you'd give us the time, but we always enjoy it.

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Speaker 3: Thank you, Sree. That's Kamal Sri Kumar, president of Shri

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Speaker 3: Kumar Global Strategies, with us live on his Sunday, my Monday,

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Speaker 3: in fact mine and wishes. We're here on a Monday morning,

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Speaker 3: and this is Bloomberg