WEBVTT - Losses from China's iPhone Curbs; US-China Tensions Rise as G20 Begins

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<v Speaker 1>Good morning.

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<v Speaker 2>I'm Nathan Hager and I'm Karen Moscow. Here are the

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<v Speaker 2>stories we're following today.

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<v Speaker 1>We begin with Apple, still dealing with the fallout from

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<v Speaker 1>China's plans to expand its iPhone ban. The company's shares

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<v Speaker 1>have dropped more than six percent over the past two days,

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<v Speaker 1>wiping out one hundred and ninety billion dollars in value.

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<v Speaker 1>That came after reports China plans to go beyond banning

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<v Speaker 1>iPhones for government workers to include employees of state owned companies.

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<v Speaker 1>All this just days before Apple's latest product launch that's

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<v Speaker 1>coming up on Tuesday, as the iPhone maker looks to

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<v Speaker 1>reignite slowing smartphone sales. Alec Young is MAP Signals chief

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<v Speaker 1>investment strategist. He says there's a broader threat spooking investors.

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<v Speaker 3>There's no question that part of the negative inferences that

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<v Speaker 3>are swirling around right now is this idea that Apple

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<v Speaker 3>gets caught up in a nationalist rivalry between the US

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<v Speaker 3>and China. If iPhones, for example, were to become stigmatized

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<v Speaker 3>throughout Chinese society over the next few months to the

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<v Speaker 3>point that it depressed demand, those types of narratives inevitably

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<v Speaker 3>are popping into investors' minds right now.

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<v Speaker 1>Alec Young of mapp Signal says, so far the ban

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<v Speaker 1>only affects a little more than one percent of iPhone

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<v Speaker 1>units in China, and checking shares of Apple this morning,

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<v Speaker 1>they are little changed.

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<v Speaker 4>Man.

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<v Speaker 2>That's not the only smartphone news coming out of Asia

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<v Speaker 2>and Nathan. The US government has begun an official probe

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<v Speaker 2>into an advanced mate in China ship and Huawei's latest smartphone.

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<v Speaker 2>The Commerce Department says it's we're going to get more

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<v Speaker 2>information on a purported AS seven and nanimeter processor discovered

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<v Speaker 2>in the mid sixty pro The chip is made by

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<v Speaker 2>China's Semiconductor Manufacturing International Corporation, which, like Huawei, is blacklisted

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<v Speaker 2>in the US. The Biden administration is trying to limit

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<v Speaker 2>sales of advanced semiconductors to China, and this could prompt

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<v Speaker 2>the tightening or expanding of existing restrictions.

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<v Speaker 1>Well, Karen, US China relations do remain chilly. As President

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<v Speaker 1>Biden heads to the G twenty summit in India to meet.

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<v Speaker 5>With world leaders.

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<v Speaker 1>One of the leaders he won't meet with is Chinese

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<v Speaker 1>Vice Premier Lie Chiang, who is attending the G twenty

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<v Speaker 1>in place of China's president, she Jenping, she won't be there,

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<v Speaker 1>neither will Russian President Vladimir Putin. Instead, the Chinese president

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<v Speaker 1>is hosting the leaders of two heavily indebted nations next week,

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<v Speaker 1>the presidents of Zambia and Venezuela.

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<v Speaker 2>Well Nathan joining President Biden in New Delhi. Treasury Secretary

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<v Speaker 2>Jennet Yellen, she spoke ahead of the summit, saying she's

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<v Speaker 2>been surprised by the strength of global growth and Yellen

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<v Speaker 2>also discussed China's recent economic challenges.

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<v Speaker 6>So see China's growth as slowing over time. That said,

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<v Speaker 6>China has quite a bit of policy space to address

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<v Speaker 6>these challenges, so we're monitoring the situation. I don't see

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<v Speaker 6>it as having very significant direct impact on the United States.

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<v Speaker 2>Treasury Secretary Jenet Yellen also pledged further financial assistance for

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<v Speaker 2>Ukraine and says the US we'll look to you strengthen

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<v Speaker 2>times with India. Yellen will join President Biden at a

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<v Speaker 2>meeting with Indian Prime Minister and Narendra Mody today.

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<v Speaker 1>Well, meanwhile, back at home, Karen, we're monitoring FED speak

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<v Speaker 1>for clues about the path of interest rates. In Florida yesterday,

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<v Speaker 1>Atlanta Fed President Rafael Bostik said, rate hikes need time

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<v Speaker 1>to work their way through the economy.

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<v Speaker 7>I'm grateful to say is that we've seen inflation come down.

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<v Speaker 7>I feel like we're in restrictive space now and now

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<v Speaker 7>we just need to let that restriction play out and

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<v Speaker 7>let it bring inflation, continue to bring inflation down to

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<v Speaker 7>get back into the range of our target.

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<v Speaker 1>In addition to Brafielbostik, we heard exclusively from New York

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<v Speaker 1>FED President John Williams, who discussed monetary policy with Bloomberg's

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<v Speaker 1>Michael McKee.

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<v Speaker 8>You know, things are moving in the right direction. We've

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<v Speaker 8>got policy in a good place, but we're going to

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<v Speaker 8>need to continue to be data dependent, watch the developments

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<v Speaker 8>and assess what we need to do.

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<v Speaker 1>And Fed officials to get a key piece of data

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<v Speaker 1>next week with the August Consumer Price Index on Wednesday.

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<v Speaker 1>Listen to our full conversation with New York Fed President

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<v Speaker 1>John Williams on the Bloomberg Talks podcasts wherever you get

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<v Speaker 1>your podcasts.

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<v Speaker 2>Well as the US deals with unprecedented temperatures this summer, Nathan,

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<v Speaker 2>we're following the heat crisis in the South. It's a

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<v Speaker 2>US declared to power emergency in Texas, and Bloomberg's d

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<v Speaker 2>Maxter has the story.

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<v Speaker 9>The declaration is an attempt to help keep power on

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<v Speaker 9>midst the brutal heat wave this week. It will allow

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<v Speaker 9>the grid operator to wave some air pollution limits so

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<v Speaker 9>generators can produce more power. The Energy Department says the

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<v Speaker 9>expected loadstress caused by the current extreme heat event threatens

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<v Speaker 9>to cause loss of power to homes and local businesses

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<v Speaker 9>in areas that might be affected by kurtailments, presenting a

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<v Speaker 9>risk to public health and safety. The declaration is in

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<v Speaker 9>effect until nine local time tonight. I'm at Baxter Bloomberg.

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<v Speaker 1>Radio, Okay, and thanks on Wall Street. Goldman Sachs maybe

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<v Speaker 1>planning to dismiss underperforming workers as soon as next month.

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<v Speaker 1>That's according to the Financial Times. It says it's part

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<v Speaker 1>of the bank's annual Staff Evalue EI. The sources say

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<v Speaker 1>reductions will be at the lower end of Goldman's usual

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<v Speaker 1>range of one to two five percent workforce cuts.

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<v Speaker 5>Well.

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<v Speaker 2>Speaking of Goldman and Nathan, the bank's CEO, David Solomon

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<v Speaker 2>is responding to recent negative news coverage of his leadership

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<v Speaker 2>style and management of the firm. In a conversation with CNBC,

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<v Speaker 2>the Goldman CEO said he does not recognize the caricature

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<v Speaker 2>that's been painted of him in the press. A handful

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<v Speaker 2>of Goldman partners have left the firm over the past months,

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<v Speaker 2>with at least five exiting in one week alone this summer.

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<v Speaker 2>Solomon called the volume of partner exits absolutely typical, and

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<v Speaker 2>time now for look at some of the other stories

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<v Speaker 2>making news around the world. For that, we're joined by

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<v Speaker 2>Bloomberg's Amy Morris say, good morning.

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<v Speaker 5>Good morning, Karen.

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<v Speaker 10>About two out of every three Democratic voters say they'd

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<v Speaker 10>rather see a different nominee than President Biden. This new

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<v Speaker 10>CNN poll says sixty seven percent of left leaning voters

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<v Speaker 10>would like the party to nominate someone else.

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<v Speaker 5>That's up from fifty four percent.

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<v Speaker 10>In March, FBI Director Christopher Ray sounded off on a

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<v Speaker 10>number of issues during an event called Spy Chat at

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<v Speaker 10>the International Spy Museum in Washington, DC. Ray spoke about

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<v Speaker 10>the future of the FBI's cyber defense capabilities.

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<v Speaker 4>If you look at our exposure as a country, something

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<v Speaker 4>like eighty percent of our critical infrastructures in the hands

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<v Speaker 4>of the private sector. It's our critical infrastructure the bad

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<v Speaker 4>guys are.

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<v Speaker 10>After FBI director Christopher Ray says tech companies should try

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<v Speaker 10>collaborating more with the federal government on security matters. The

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<v Speaker 10>dissent is growing louder to Senator Tommy Turberville's blockade of

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<v Speaker 10>military promotions over a Pentagon policy allowing travel for military

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<v Speaker 10>members seeking abortions or other reproductive healthcare. Bloomberg's Nancy Lyons

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<v Speaker 10>has the very latest.

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<v Speaker 11>Senator Tommy Tubberville is brushing off criticisms over his hold

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<v Speaker 11>on roughly three hundred military promotions.

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<v Speaker 5>They're already doing the job.

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<v Speaker 4>It's just they've got interim on their name.

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<v Speaker 5>There's no threat to readiness.

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<v Speaker 11>But retired Major General Old Panaro tells Bloomberg sound on Tubberville,

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<v Speaker 11>who once coached Auburn football, is playing into the hands

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<v Speaker 11>of the opponent.

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<v Speaker 3>If his first string quarterback was ready to play, he

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<v Speaker 3>would not put his four string quarterback in against Alabama.

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<v Speaker 2>Well, that's what we're doing right now Visa Beachina, North Korea, and.

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<v Speaker 11>Iran in Washington, Nancy Lyons Bloomberg Radio.

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<v Speaker 10>The new head of the CDC says COVID nineteen is

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<v Speaker 10>here to stay. Doctor Mandy Cohen recommends masking social distancing

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<v Speaker 10>into other measures and says a new booster will be

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<v Speaker 10>available as soon as next week. Now, a bill to

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<v Speaker 10>ban federal mask mandates is coming up short in the Senate.

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<v Speaker 5>Ohio Republican JD.

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<v Speaker 10>Vance argues that children can't go through another mask mandate.

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<v Speaker 12>We know that a generation of school children have suffered

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<v Speaker 12>significant speech and developmental disabilities because this country panicked instead

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<v Speaker 12>of using its brain and force toddlers and small children

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<v Speaker 12>to wear masks.

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<v Speaker 10>Vance attempted to pass that bill by unanimous consent, but

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<v Speaker 10>the move was blocked by Massachusetts Democrat Ed Markey. Global

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<v Speaker 10>News twenty four hours a day, powered by more than

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<v Speaker 10>twenty seven hundred journalists and analysts in more than one

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<v Speaker 10>hundred twenty countries.

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<v Speaker 2>I'm Amy Morris. This is Bloomberg Karen. All right, Amy,

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<v Speaker 2>thank you. It's time now for the Bloomberg Sports updates.

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<v Speaker 2>And here's John stash Hour, John Karen.

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<v Speaker 13>Opening night of the NFL, the Lions visiting the Chiefs,

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<v Speaker 13>whose fans celebrated last year's Super Bowl victory. Detroit finished

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<v Speaker 13>last season strong, had a ninety one yard touchdown drive,

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<v Speaker 13>took the lead in the first quarter.

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<v Speaker 5>Trailed at the half, the game turned in the third

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<v Speaker 5>quarter Mahomes out of the gun. He's got it. Wants

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<v Speaker 5>to throw Mahomes back throws it is equal. Please sick off.

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<v Speaker 1>TikTok by the Alliance five branch with it left side.

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<v Speaker 13>He's gone, baby, He's doing the house touchdown.

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<v Speaker 1>Detroit Lyons deflected the air, Branch ran under it.

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<v Speaker 5>And he took it all the way back.

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<v Speaker 13>Brion's radio had the call Bryan Branch are rookie playing

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<v Speaker 13>his first game. When David Montgomery scored midway through the

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<v Speaker 13>fourth quarter, Detroit top tenans A City in a upset

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<v Speaker 13>twenty one to twenty.

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<v Speaker 5>The Chiefs had won their last eight season openers.

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<v Speaker 13>Latest NFL player to get a mega contract Cincinnati quarterback

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<v Speaker 13>Joe Burrow on the eve of Week one. Five years, two,

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<v Speaker 13>one hundred and seventy five million, so fifty five million

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<v Speaker 13>a year with two hundred and nineteen million guaranteed. He's

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<v Speaker 13>an Ohio native and has resurrected the Bengals. Team US

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<v Speaker 13>opened Coco GoF into the women's singles finals.

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<v Speaker 5>She blew six match points but pulled.

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<v Speaker 13>Out a victory over Carolina and mohovera six y four

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<v Speaker 13>seven to five Coco seventeen and one. This summer on

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<v Speaker 13>hard courts, and in the finals shell Play Arena Sabalanca.

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<v Speaker 13>She lost the first set to Madison Keys at love,

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<v Speaker 13>but then won the second and third sets, both in tiebreakers.

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<v Speaker 5>John Stansh Edward Bloomberg.

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<v Speaker 4>Sports from coast to coast, from New York to San Francisco,

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<v Speaker 4>Boston to Washington, DC, nationwide on SIRISXAM, the Bloomberg Business

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<v Speaker 4>app in Bloomberg dot com. This is Bloomberg Day Break.

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<v Speaker 5>Good morning. I'm Nathan Hager.

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<v Speaker 1>What's good for the economy apparently is bad for the market.

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<v Speaker 1>Strong economic data spooked investors this week with speculation that

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<v Speaker 1>rates may need to stay higher for longer. Further softening

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<v Speaker 1>in the US economy leaves the path of rate hikes uncertain.

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<v Speaker 1>Between now and the next FED meeting, we'll get more

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<v Speaker 1>data as well as more Fed speak, and we're getting

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<v Speaker 1>some of that now.

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<v Speaker 5>In an exclusive.

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<v Speaker 1>Conversation between Bloomberg's Michael McKee and New York Fed President

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<v Speaker 1>John Williams, they spoke at a moderated discussion at the

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<v Speaker 1>Bloomberg Market Forum. Let's go to that conversation.

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<v Speaker 8>Here's how I see things now. You'll obviously always focused

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<v Speaker 8>on our dual mandate maximum employment and price stability. Inflation

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<v Speaker 8>is far too high. But that said, inflation is moving

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<v Speaker 8>in the right direction. We're seeing the imbalances in the

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<v Speaker 8>labor market which were really quite pronounced last year. They've

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<v Speaker 8>been closing job job open have been coming down, the

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<v Speaker 8>quit rates coming down, the hiring rate in the markets

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<v Speaker 8>coming down. So we're seeing movement in the right direction

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<v Speaker 8>of bringing supplying demand back into balance, seeing inflation come

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<v Speaker 8>back towards our two percent long run goal.

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<v Speaker 11>And we've done a lot.

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<v Speaker 8>I think everyone knows you know here in this room,

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<v Speaker 8>and we raise raised significantly over the last year and

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<v Speaker 8>a half or so, and we've gotten it to a

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<v Speaker 8>restrictive stand. So my answer to the question is, right now,

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<v Speaker 8>I think we've gotten MANTE policy in a very good

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<v Speaker 8>place in terms of we have a restrictive stance of policy.

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<v Speaker 8>It is doing having the desired effects of bringing demand

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<v Speaker 8>and supply more into balance. We're seeing inflation move in

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<v Speaker 8>the right direction, but we'll have to watch the going forward.

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<v Speaker 8>We'll have to keep watching the data carefully analyzing all

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<v Speaker 8>of that and really asking ourselves the question, is this

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<v Speaker 8>sufficiently restrictive? Do we need to maybe raise rates again?

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<v Speaker 8>To make sure that we're keeping that steady progress terms

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<v Speaker 8>of getting imbalances, you know, shrinking balances in the labor

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<v Speaker 8>market and bring inflation back down. So right now, I think,

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<v Speaker 8>you know, things are moving in the right direction. We've

0:12:08.880 --> 0:12:10.800
<v Speaker 8>got policy in a good place, but we're going to

0:12:10.880 --> 0:12:14.560
<v Speaker 8>need to continue to be data dependent, watch the developments

0:12:14.559 --> 0:12:15.760
<v Speaker 8>and assess what we.

0:12:15.760 --> 0:12:16.120
<v Speaker 4>Need to do.

0:12:16.520 --> 0:12:18.160
<v Speaker 5>How do you know you're restrictive?

0:12:18.200 --> 0:12:19.680
<v Speaker 14>What metric do you use?

0:12:20.160 --> 0:12:21.440
<v Speaker 8>Let's see how long did it take to get to

0:12:21.440 --> 0:12:24.760
<v Speaker 8>our star? Okay, so the you know, I think there's

0:12:25.240 --> 0:12:27.600
<v Speaker 8>it's there's no right answer to that question. I think

0:12:27.679 --> 0:12:29.320
<v Speaker 8>you know. The way I think about it is really

0:12:29.360 --> 0:12:31.880
<v Speaker 8>in terms of real interest rates as a Fed funds

0:12:31.960 --> 0:12:35.400
<v Speaker 8>rate or more broadly, you know, uh, you know, treasury

0:12:35.480 --> 0:12:39.880
<v Speaker 8>yields relative to expected inflation. So you know, depending how

0:12:39.920 --> 0:12:42.000
<v Speaker 8>you measure it, you look at it, real rates are

0:12:42.280 --> 0:12:45.760
<v Speaker 8>you know, well above zero, you know, moving you know,

0:12:45.800 --> 0:12:48.240
<v Speaker 8>somewhere between one and two percent, and that seems to

0:12:48.240 --> 0:12:52.640
<v Speaker 8>be above typical estimates of the long run neutual real

0:12:52.679 --> 0:12:55.320
<v Speaker 8>interest rate. And I think the other way you see

0:12:55.320 --> 0:12:57.320
<v Speaker 8>it is a little bit of in what we're seeing

0:12:57.320 --> 0:13:00.199
<v Speaker 8>in the economy. Right so we are seeing demand and

0:13:00.480 --> 0:13:02.760
<v Speaker 8>in the labor market come down according to a lot

0:13:02.760 --> 0:13:06.240
<v Speaker 8>of different measures. We are seeing other kind of signs

0:13:06.400 --> 0:13:10.480
<v Speaker 8>that the economy is moving imbalance as an economy coming down.

0:13:10.640 --> 0:13:12.360
<v Speaker 8>So I think the two things. One is kind of

0:13:12.400 --> 0:13:15.320
<v Speaker 8>like where's our versus our star? That's one way to

0:13:15.360 --> 0:13:17.000
<v Speaker 8>think of it. But the other is what are we

0:13:17.040 --> 0:13:20.760
<v Speaker 8>seeing happening in the economy. Now there's a second test.

0:13:20.920 --> 0:13:23.760
<v Speaker 8>There's kind of the are we restrictive? And the second

0:13:23.840 --> 0:13:27.079
<v Speaker 8>is are we are we sufficiently restrictive to really make

0:13:27.120 --> 0:13:30.880
<v Speaker 8>sure that we're bringing inflation sustainably down to two percent

0:13:30.960 --> 0:13:33.160
<v Speaker 8>and getting the job done? So, you know, I have

0:13:33.200 --> 0:13:36.640
<v Speaker 8>to I think it's pretty clear we're restrictive. Still an

0:13:36.640 --> 0:13:38.960
<v Speaker 8>open question as we go forward, and have we got

0:13:39.520 --> 0:13:40.800
<v Speaker 8>sufficiently restrictive to.

0:13:40.760 --> 0:13:43.480
<v Speaker 14>Achieve that we'll get to our star when we get

0:13:43.480 --> 0:13:46.160
<v Speaker 14>to a Tom called it the ecobabble part of our

0:13:46.800 --> 0:13:51.800
<v Speaker 14>conversation here. But first, you have raise rates eleven times,

0:13:51.840 --> 0:13:55.280
<v Speaker 14>you've gone up to five and a half percent top range,

0:13:55.720 --> 0:14:01.280
<v Speaker 14>but unemployment remains extraordinarily low, and we are seeing signs

0:14:01.280 --> 0:14:05.360
<v Speaker 14>of the economy accelerating. Now, so do you really think

0:14:05.400 --> 0:14:07.000
<v Speaker 14>you're sufficiently restrictive?

0:14:07.240 --> 0:14:09.880
<v Speaker 8>Well, you know, I think, first of all, in the

0:14:10.000 --> 0:14:14.120
<v Speaker 8>unemployment rate has been relatively steady over the last year

0:14:14.200 --> 0:14:16.520
<v Speaker 8>or so. It's it's fluctuating between three point four and

0:14:16.600 --> 0:14:19.080
<v Speaker 8>three point eight percent where it is today, and I

0:14:19.120 --> 0:14:22.560
<v Speaker 8>think it's a signing that well, clearly we're not moving,

0:14:22.920 --> 0:14:26.280
<v Speaker 8>you know, significantly to more imbalanced and unemployment even lower.

0:14:27.120 --> 0:14:30.160
<v Speaker 8>Normally have we seen the clear signs of unemployment moving

0:14:30.240 --> 0:14:33.000
<v Speaker 8>you know, significantly up. But I do think it's a

0:14:33.120 --> 0:14:36.760
<v Speaker 8>unique time, right because if you look at the unemployment rate,

0:14:36.800 --> 0:14:39.560
<v Speaker 8>it seems to kind of get to a minimum value

0:14:39.560 --> 0:14:41.800
<v Speaker 8>of around three point four percent, kind of get there,

0:14:41.880 --> 0:14:44.640
<v Speaker 8>but then these other indicators have been shifting. So I

0:14:44.680 --> 0:14:47.240
<v Speaker 8>think what we've seen in the labor market is demand

0:14:47.240 --> 0:14:49.760
<v Speaker 8>exceed supply. It's not showing up as much in the

0:14:49.840 --> 0:14:52.560
<v Speaker 8>unemployment rate continuing to go down, but just showing up

0:14:52.560 --> 0:14:54.680
<v Speaker 8>in these other things like job vacancy, is quit race,

0:14:54.720 --> 0:14:57.560
<v Speaker 8>things like that. So to me, the things I'm focused

0:14:57.600 --> 0:15:00.360
<v Speaker 8>on is really are we seeing the demand and caters

0:15:00.360 --> 0:15:04.200
<v Speaker 8>supply and becares move together. I would expect the unemployment

0:15:04.280 --> 0:15:08.960
<v Speaker 8>rate to edge up over the next year somewhat, but again,

0:15:09.480 --> 0:15:11.560
<v Speaker 8>you know, I see positive signs in the sense that

0:15:11.840 --> 0:15:14.160
<v Speaker 8>the indicators of demand and supplier moving the right direction.

0:15:14.200 --> 0:15:16.480
<v Speaker 8>The unemployment rate hasn't moved moved as much.

0:15:18.240 --> 0:15:21.160
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