WEBVTT - Daybreak Asia: January 30th, 2023

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<v Speaker 1>This is Bloomberg Gay Break Asia for this Monday, January

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<v Speaker 1>in Hong Kong, Sunday January twenty nine in New York

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<v Speaker 1>and coming up this hour, Indian billionaire Guatamadanni tries to

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<v Speaker 1>calm investors with the rebuttaled to allegations of fraud. Chinese

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<v Speaker 1>equities are likely to enter a bullmarket today after a

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<v Speaker 1>week long break. China's Central Bank extends cheaper lending to

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<v Speaker 1>the green sector. A U S General warns the US

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<v Speaker 1>and China could soon be fighting a war. Get ready

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<v Speaker 1>for those dept ceiling talks. And mining giant Rio Tinto

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<v Speaker 1>loses a highly radioactive capsule. I'm Today's Pelegrady with Global News.

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<v Speaker 1>Novak Djokovic bakes history with yet another Australian Open title.

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<v Speaker 1>I'm Dan Schwartzmen. I'll have that storyboard coming up in

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<v Speaker 1>Bloomberg swoards. That's all straight Ahead on Bloomberg Daybreak Asia

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<v Speaker 1>on Bloomberg eleven three on New York, Bloomberg on Washington,

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<v Speaker 1>d C, bloom Burg one six one, Boston, Bloomberg nine six,

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<v Speaker 1>San Francisco, Sirius XM one nine Team, and around the

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<v Speaker 1>world on Bloomberg Radio Dot com and via the Bloomberg

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<v Speaker 1>business Side. Good morning, I'm the Prisoner and I'm Brian Curtis.

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<v Speaker 1>Here are the stories we're following today. Well, let's take

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<v Speaker 1>a look at these top stories, and Bloomberg's Michael McKee

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<v Speaker 1>has a preview on what to expect this week. It's

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<v Speaker 1>a big week for markets, although the news that may

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<v Speaker 1>have the biggest impact on markets won't come until Friday.

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<v Speaker 1>Wednesday's FED meeting will dominate the headlines early that although

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<v Speaker 1>a quarter percentage point increase in the nation's benchmark borrowing

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<v Speaker 1>rate is pretty much baked in, it would take a

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<v Speaker 1>surprise to really move markets. Friday is job's Day, however,

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<v Speaker 1>and that data will do a lot to inform how

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<v Speaker 1>investors think about the feds next move. So far, the

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<v Speaker 1>Central Bank has raised rates by four and a half

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<v Speaker 1>percent this year, but unemployment is unchanged. Does hiring slow

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<v Speaker 1>and job loss accelerate, and most important, to average hourly

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<v Speaker 1>wage gains slow? Those will be key data points for

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<v Speaker 1>Fed officials considering any additional policy change. Michael McKie Bloomberg

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<v Speaker 1>Daybreak Asia. Well, the Adonni group is trying to calm

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<v Speaker 1>jittery markets, and maybe a worried investors alike ahead of

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<v Speaker 1>that two and a half billion dollars share sale. In

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<v Speaker 1>the week ahead, we have more from Bloomberg's Sasanna Palmer

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<v Speaker 1>go to Madonni, India's richest man, published a four d

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<v Speaker 1>thirteen page rebuttle of allegations of fraud by short seller

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<v Speaker 1>Hindenburg Research. A Donnie calls the accusations by Hindenburg nothing

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<v Speaker 1>short of a calculated securities fraud under applicable law. Adanni

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<v Speaker 1>Group says it will exercise its rights to pursue remedies

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<v Speaker 1>to safeguard stakeholders. Hindenburgh had published a one hundred page

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<v Speaker 1>report on the eve of A Donnie's share sale opening,

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<v Speaker 1>alleging that it's two year investigation found quote brazen stock

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<v Speaker 1>manipulation and accounting fraud. It also called out A Donnie's

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<v Speaker 1>substantial debt. Susannah Palmer, Bloomberg Daybreak Asia. So a big

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<v Speaker 1>week this week, but a big a today. Chinese equities

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<v Speaker 1>coming back and likely to enter a bullmarket today when

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<v Speaker 1>the exchange is reopened after a week long break. Let's

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<v Speaker 1>get the story from Bloomberg's David and Glass here in

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<v Speaker 1>Hong Kong, the Seas I three hundred is tipped to

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<v Speaker 1>extend its nine rise from October. Travel in box office

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<v Speaker 1>data are sending a sign that the consumer is back. Hotels, restaurants,

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<v Speaker 1>and travel companies are all expected to shine China State

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<v Speaker 1>councils set on Saturday. The nation needs to accelerate consumption.

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<v Speaker 1>Policymakers want consumers to be the new driving force of

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<v Speaker 1>the economy now. In the past, previous rallies were always

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<v Speaker 1>stopped short by COVID lockdowns, but that's out of the picture,

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<v Speaker 1>at least for now, and as a result, investors like

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<v Speaker 1>Morgan Stanley think there's a lot more room to run

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<v Speaker 1>in Hong Kong. David and Gless Bloomberg Day Break Asia.

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<v Speaker 1>China Central Bank will extend monetary policy tools for green

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<v Speaker 1>technologies and the logistics sector that story from Bloomberg's Annabel Jewelers.

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<v Speaker 1>The funding tools were for adopted in November twenty twenty

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<v Speaker 1>one and will remain in place until the end of

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<v Speaker 1>twenty four. Those banks lending to companies working to reduce

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<v Speaker 1>carbon emissions will have access to cheap funding. The p

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<v Speaker 1>BOC also said it will allow some local and foreign

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<v Speaker 1>financial institutions to join the project. The aim is to

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<v Speaker 1>deepen global cooperation and green finance. Meanwhile, the re lnding

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<v Speaker 1>project for the logistics sector will remain until the end

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<v Speaker 1>of June. Smaller logistics and storage companies will also be

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<v Speaker 1>added in Hong Kong. I'm Annabel Rulers Bloomberg Daybreak Asia Well.

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<v Speaker 1>Coming up at a few moments, we'll be chatting with

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<v Speaker 1>David Kotok, CEO and chairman of Cumberland Advisors, and Doug

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<v Speaker 1>one of the questions I'll put to him and this

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<v Speaker 1>is sort of interesting because we saw after Microsoft's earnings

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<v Speaker 1>that investors treated the company pretty lightly. It fared reasonably well,

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<v Speaker 1>and it seems that Bloomberg came out and codified how

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<v Speaker 1>this has been a reaction overall, that the market is

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<v Speaker 1>rewarding companies that beat expectations, but it's also limiting the

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<v Speaker 1>punishment doled out to those that fall short. And it

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<v Speaker 1>seems to be a message, which we mentioned at the time,

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<v Speaker 1>that a lot of the bad news is already baked in. Perhaps,

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<v Speaker 1>but consider the chip makers. There was a story on

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<v Speaker 1>the Bloomberg terminal about declining memory chip prices. Now I

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<v Speaker 1>know that a m D doesn't really play heavily in

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<v Speaker 1>that space that belongs more to let's say, to Micron

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<v Speaker 1>Technology or even South Korea's sk Heinex. Nonetheless, we're going

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<v Speaker 1>to hear from a m D this week along with

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<v Speaker 1>Qualcom and where the chip companies are concerned, Brian, I

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<v Speaker 1>think guidance is going to be critical. And isn't it

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<v Speaker 1>interesting that a m D S market cap now I

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<v Speaker 1>think has passed until which is really astonishing. I wanted

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<v Speaker 1>to make a very short comment on the Hindenburg A

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<v Speaker 1>Donni story that we talked about moments ago. Um, what

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<v Speaker 1>we wonder, you know, as our Shoeley Wren and others

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<v Speaker 1>pointed out, Hindenberg is pretty well respected on the street.

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<v Speaker 1>It was a firm that worked with Harry Markopolis, the

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<v Speaker 1>analyst that uncovered the Bernie made Off Ponzi scheme. And

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<v Speaker 1>you wonder whether or not this whole story is setting

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<v Speaker 1>back investing overall into all of em. Well, look at

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<v Speaker 1>what Bill Ackman had to say. I mean, he's doubling

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<v Speaker 1>down on his criticism right. He said, there's simply too

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<v Speaker 1>much liability or potential liability that the banks have right

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<v Speaker 1>now that are involved in this share sale, which may

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<v Speaker 1>happen this week. We don't know. Over the weekend. I

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<v Speaker 1>think it was on Saturday that Reuters was reporting that

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<v Speaker 1>some of the bankers involved in this sale we're considering

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<v Speaker 1>either delays or maybe even price cuts. Yeah, now tit

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<v Speaker 1>for tat with with that story about Hindenburg and uh

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<v Speaker 1>Donnie's group. Well, the time now eight minutes past the hour,

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<v Speaker 1>it's time for global news. The U S General said

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<v Speaker 1>that the US and China could soon be at war,

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<v Speaker 1>and here come those dead ceiling talks. Let's get to

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<v Speaker 1>Denise Pellegrini in the Bloomberg newsroom. Denise, Yeah, Brian, we

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<v Speaker 1>could see some tit for tat on those dead ceiling talks,

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<v Speaker 1>but right now we are seeing some possible movement on

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<v Speaker 1>the debt limit. How Speaker Kevin McCarthy saying he's looking

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<v Speaker 1>forward to talking with President Biden about it on Wednesday.

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<v Speaker 1>I want to sit down together work out an agreement

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<v Speaker 1>that we can move forward to put us on a

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<v Speaker 1>path to balance at the same time, not put any

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<v Speaker 1>any of our debt in jeopardy at the same time.

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<v Speaker 1>And McCarthy also telling CBS Face the Nation he is

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<v Speaker 1>not asking for cuts to social Security or Medicare. He

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<v Speaker 1>does say though, Republicans do want to strengthen those programs,

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<v Speaker 1>so we'll see what happens there. Democrats and Republicans could

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<v Speaker 1>argue about the debt ceiling for months. Iran is warning

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<v Speaker 1>of escalating tension in the Persian Gulf. Says a drone

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<v Speaker 1>attack caused a heavy explosion at a Defense Ministry ammunition

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<v Speaker 1>depot in central Iran. No official word on who is

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<v Speaker 1>behind this attack. Correts though is blaming Israel. Former Defense

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<v Speaker 1>Secretary and former head of the CIA, Robert Gates says

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<v Speaker 1>support for Ukraine is holding up, but he does say

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<v Speaker 1>Vladimir Putin will not back down. If you had said

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<v Speaker 1>a year ago that Europe will go from more than

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<v Speaker 1>dependency on rush of oil and gas and they're now

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<v Speaker 1>less than a year later, zero to fifteen percent dependant,

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<v Speaker 1>that's extraordinary. Now he's speaking there an NBC's Meet the Press,

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<v Speaker 1>a US general says China and the US could be

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<v Speaker 1>at war within two years. General Mike Minihan the one

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<v Speaker 1>making this comment. He told his officers to prepare, according

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<v Speaker 1>to NBC for that, and he says he has a

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<v Speaker 1>gut feeling that the presidential elections in the US and

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<v Speaker 1>Taiwan in four will create what he calls an opportunity

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<v Speaker 1>for China to move in. He says by five, he

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<v Speaker 1>has a feeling they could be at war. China giving

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<v Speaker 1>visas to Japanese nationals wanting to visit again, that says,

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<v Speaker 1>it lifts more COVID restrictions. We'll see if China does

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<v Speaker 1>the same though with South Korea soon. One senator not

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<v Speaker 1>ruling out a federal investigation of the Memphis Police Department

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<v Speaker 1>after five of the department's officers were charged with murder

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<v Speaker 1>and connection to the beating death of Tyree Nichols. Illinois

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<v Speaker 1>Democrat Dick Durban. And Durban on ABC S this week

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<v Speaker 1>acknowledged the issue of police brutality wasn't isolated, but occurs

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<v Speaker 1>all over the country. U s attorney for the Western

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<v Speaker 1>District of Tennessee, does say that a civil rights investigation

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<v Speaker 1>into nichols death will occur, but not of the entire department.

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<v Speaker 1>And Rio Tinto says it has lost a highly radioactive

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<v Speaker 1>capsule in the Western Australian desert. This is the mining Giant,

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<v Speaker 1>It says. The package that this thing was in was

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<v Speaker 1>found broken apart at the radiation storage facility and empty.

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<v Speaker 1>Without this radioactive device exposure could cause radiation, sickness or burns.

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<v Speaker 1>Real Tinto is apologizing to the public for alarm this

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<v Speaker 1>is causing in the area. Global News twenty four hours

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<v Speaker 1>a day on errand on Bloomberg quick Take, powered by

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<v Speaker 1>more than journalists and analysts and more than a hundred

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<v Speaker 1>and twenty countries in the news. Remind Denise Pelygriny, this

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<v Speaker 1>is Bloomberg. This is Bloomberg, Gay Break Asia. I'm Brian

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<v Speaker 1>Curtis along with Shots Salama here in the studio with me,

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<v Speaker 1>and we are joined by David kotoxy io and chairman

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<v Speaker 1>of Cumberland Advisors. It makes some sense of what we

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<v Speaker 1>see in the markets. David, is this the week it's

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<v Speaker 1>such a big week? Is this the week that sort

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<v Speaker 1>of upsets the Apple card with the recent equity rallies.

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<v Speaker 1>We're gonna find that out. This is as you just

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<v Speaker 1>described and reported with Doug and Mike McKeith. This is

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<v Speaker 1>a huge week. Um expectations about the FED are pretty clear.

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<v Speaker 1>It looks like it's a quarter point. That's not where

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<v Speaker 1>the questions are. I'm I'm a little a little cautious

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<v Speaker 1>because of that attacked by drones in Iran, and to

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<v Speaker 1>me that is a new version. We have to see

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<v Speaker 1>if the oil price reacts. Um. I was looking at

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<v Speaker 1>it just now. It looks like there's a few pennies

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<v Speaker 1>firming up, no immediate reaction, but I don't see that

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<v Speaker 1>as a one off of vent and the markets have

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<v Speaker 1>no pricing of geo political risk or a Middle East

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<v Speaker 1>shock in them, So that could be a new item

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<v Speaker 1>in the list. Well, that could be something which up

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<v Speaker 1>to the stakes, absolutely, David. But you know, we got

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<v Speaker 1>on the other side one thing which could really uppend.

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<v Speaker 1>It would be a face saving piece if you like,

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<v Speaker 1>or a ceasefire in Ukraine. But I want to get

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<v Speaker 1>to the other part of the question that I wanted

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<v Speaker 1>to to to really ask you here, which is that

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<v Speaker 1>with basis points as a hike coming up if we

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<v Speaker 1>get but how much will the language have to change

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<v Speaker 1>in order to a support it and be to reassure

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<v Speaker 1>people and be ultimately you've got to also ask yourself.

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<v Speaker 1>Then they've got to be very careful what they say. Oh,

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<v Speaker 1>I agree, Rich, They have to be very careful. If

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<v Speaker 1>they indicate that the rate increases and the pressure on

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<v Speaker 1>inflation is over, the market will say they've accepted something

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<v Speaker 1>higher than two percent and do a that will be

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<v Speaker 1>a game changer. So my suspicion is, or expectation is

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<v Speaker 1>the language will remain firm. Now the rate of increases

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<v Speaker 1>is still an increasing trajectory of central bank policy, and

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<v Speaker 1>that's not just in the United States, that's going to

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<v Speaker 1>be everywhere. We mentioned that the stock market has been

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<v Speaker 1>kind of uh, you know, avoiding punishing companies that miss,

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<v Speaker 1>and we cited Microsoft as as one example. Bloomberg did

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<v Speaker 1>a study of this and said that companies that fell

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<v Speaker 1>short underperformed the broader market by just one point seven percent,

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<v Speaker 1>and that was the least negative reaction in the last

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<v Speaker 1>eight quarters of earnings. Does it tell you something? Does

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<v Speaker 1>it tell you that the market thinks that either times

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<v Speaker 1>are getting better, or companies are making the right adjustments,

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<v Speaker 1>or maybe that the bad news is already in Well, Brian,

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<v Speaker 1>I saw that, I saw the study. It was a

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<v Speaker 1>great study by Bloomberg, and I think you characterize it

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<v Speaker 1>in the in the positive sentiment, Well, the markets are

0:13:23.120 --> 0:13:30.320
<v Speaker 1>stock markets are saying no hard recession, inflation peaking, central

0:13:30.360 --> 0:13:36.440
<v Speaker 1>banking tightening policies are coming to a pause, and it's

0:13:36.440 --> 0:13:40.760
<v Speaker 1>a Goldilock scenario, maybe we'll get it. But in our shop,

0:13:40.880 --> 0:13:44.040
<v Speaker 1>in my portfolios and the portfolios that we manage, we

0:13:44.120 --> 0:13:47.760
<v Speaker 1>still have a cash reserve and we are still wary

0:13:48.080 --> 0:13:51.560
<v Speaker 1>of geopolitical risk. So we are very much overweighted the

0:13:51.640 --> 0:13:55.720
<v Speaker 1>defense sector and aerospace sector. We don't think you have

0:13:55.960 --> 0:14:01.160
<v Speaker 1>just at the nine everything works out wonderfully outcome after

0:14:01.320 --> 0:14:04.480
<v Speaker 1>this shock. Now we'll be right or wrong. We'll know

0:14:04.640 --> 0:14:07.680
<v Speaker 1>that probably six months or a year from now, like

0:14:07.800 --> 0:14:12.559
<v Speaker 1>most things actually ultimately David. But so there is a

0:14:12.559 --> 0:14:18.640
<v Speaker 1>almost a sense of people being sanguine about geopolitics. And

0:14:18.679 --> 0:14:20.920
<v Speaker 1>that's something which is crept in probably the last couple

0:14:20.920 --> 0:14:24.040
<v Speaker 1>of decades because anything before uses really have a market

0:14:24.080 --> 0:14:28.160
<v Speaker 1>impact when it came to geo political changes, etcetera, etcetera.

0:14:28.200 --> 0:14:34.000
<v Speaker 1>Why do you think that happened? Well, low interest rates

0:14:34.160 --> 0:14:39.680
<v Speaker 1>for a persistent period of time created asset inflations, asset

0:14:39.800 --> 0:14:46.000
<v Speaker 1>price increases. Everyone thought how smart they were because whatever

0:14:46.040 --> 0:14:52.240
<v Speaker 1>they touched improved. Meanwhile, the world didn't become less dangerous,

0:14:52.280 --> 0:14:57.640
<v Speaker 1>it became more dangerous. And um, we have we go

0:14:57.720 --> 0:15:02.240
<v Speaker 1>through cycles reach and this is one of them. I'm

0:15:02.280 --> 0:15:05.440
<v Speaker 1>you know, if you're if you study history, and I've

0:15:05.720 --> 0:15:09.040
<v Speaker 1>done that for a while and continue to do so

0:15:10.480 --> 0:15:13.800
<v Speaker 1>when you get to sanguine and things are too easy

0:15:13.960 --> 0:15:17.280
<v Speaker 1>in the scenario is two goldilocks, then you got to

0:15:17.280 --> 0:15:20.160
<v Speaker 1>hold back. Yeah, you said you did, and you said

0:15:20.200 --> 0:15:22.000
<v Speaker 1>you've got a lot of cash on the on the

0:15:22.040 --> 0:15:25.480
<v Speaker 1>balance sheet. Would you deploy that to China? Now, I'm

0:15:25.640 --> 0:15:28.440
<v Speaker 1>I'm trying to quickly get to this because it's such

0:15:28.440 --> 0:15:31.119
<v Speaker 1>a big story for us today in Asia. The China reopened.

0:15:31.200 --> 0:15:34.000
<v Speaker 1>Uh does it look like this rally has more room

0:15:34.040 --> 0:15:38.040
<v Speaker 1>to run? It sure looks like it. Yes, deploying into

0:15:38.160 --> 0:15:42.640
<v Speaker 1>China is something we are doing and have done and

0:15:42.800 --> 0:15:46.920
<v Speaker 1>continue to be optimistic about China reopening. And I think

0:15:46.920 --> 0:15:50.080
<v Speaker 1>there's a bunch of others. I don't see the trade

0:15:50.240 --> 0:15:56.440
<v Speaker 1>as too crowded yet. Because China suffered, Asian markets suffered,

0:15:56.960 --> 0:16:01.320
<v Speaker 1>So it's not just China. How about Korea? Have about Vietnam?

0:16:01.360 --> 0:16:06.080
<v Speaker 1>In a frontier market or an emerging market, a resurgence

0:16:06.120 --> 0:16:10.560
<v Speaker 1>in Asian market could have real legs for an extended run. Now,

0:16:13.680 --> 0:16:16.520
<v Speaker 1>this is Bloomberg Daybreak Asia, your morning brief on the

0:16:16.600 --> 0:16:20.240
<v Speaker 1>stories making news from Hong Kong to Singapore and Wall Street.

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