1
00:00:02,400 --> 00:00:03,000
Speaker 1: Good morning.

2
00:00:03,120 --> 00:00:05,880
Speaker 2: I'm Brian Curtiz and I'm Doug Prisner. Here are the

3
00:00:05,920 --> 00:00:07,360
Speaker 2: stories we're following today.

4
00:00:07,800 --> 00:00:11,560
Speaker 1: US bank stocks fell after Moodies downgraded ten small and

5
00:00:11,600 --> 00:00:14,760
Speaker 1: medium sized American lenders, and it said that it might

6
00:00:14,800 --> 00:00:17,480
Speaker 1: do the same with a handful of major firms. But

7
00:00:17,640 --> 00:00:21,680
Speaker 1: he said that higher funding costs, potential regulatory capital weaknesses,

8
00:00:22,160 --> 00:00:26,040
Speaker 1: and rising risks tied to commercial real estate are all

9
00:00:26,120 --> 00:00:29,400
Speaker 1: strains that are prompting the review. Now we heard from

10
00:00:29,480 --> 00:00:32,960
Speaker 1: Richard Beauvet at odeon Capital. He said the move came

11
00:00:33,080 --> 00:00:34,080
Speaker 1: late for Moodies.

12
00:00:34,280 --> 00:00:36,920
Speaker 3: I think that when the second quarter earnings came out,

13
00:00:37,280 --> 00:00:40,159
Speaker 3: it was evident that the banking industry was suffering. And

14
00:00:40,200 --> 00:00:43,400
Speaker 3: the reason why it was suffering is because basically, as

15
00:00:43,520 --> 00:00:46,320
Speaker 3: interest rates go up, and this sounds stupid to say,

16
00:00:46,600 --> 00:00:49,760
Speaker 3: the value of financial assets go down. And if he

17
00:00:49,840 --> 00:00:51,559
Speaker 3: took a look at the balance sheet of each one

18
00:00:51,560 --> 00:00:54,520
Speaker 3: of these banks, the value of their financial assets were

19
00:00:54,520 --> 00:00:57,720
Speaker 3: going down very, very sharply. That meant that the industry

20
00:00:57,920 --> 00:00:58,520
Speaker 3: was in trouble.

21
00:01:00,000 --> 00:01:03,160
Speaker 1: Declined for firms that had their ratings cut, including M

22
00:01:03,240 --> 00:01:06,200
Speaker 1: and T Bank closing down one point four percent, and

23
00:01:06,280 --> 00:01:10,240
Speaker 1: also the KBW Regional Bank Index was down one point

24
00:01:10,280 --> 00:01:10,920
Speaker 1: four percent.

25
00:01:11,080 --> 00:01:14,080
Speaker 2: We got a surprise earnings report after the bell today

26
00:01:14,120 --> 00:01:17,440
Speaker 2: from the nation's number two ride hailing service. That story

27
00:01:17,440 --> 00:01:18,920
Speaker 2: from Bloomberg's tom Busby.

28
00:01:19,280 --> 00:01:22,240
Speaker 4: Everything seemed to align for Lift last quarter, which had

29
00:01:22,280 --> 00:01:24,840
Speaker 4: been struggling to bounce back from the pandemic lockdowns and

30
00:01:24,880 --> 00:01:28,160
Speaker 4: a shortage of drivers. But recent costcuding measure seemed to

31
00:01:28,200 --> 00:01:31,720
Speaker 4: have worked and lower fare prices drew back more writers

32
00:01:31,760 --> 00:01:34,679
Speaker 4: to the service that helped Lift beat Wall Street estimates

33
00:01:34,680 --> 00:01:37,440
Speaker 4: and even raise its outlook for the current quarter. Revenue

34
00:01:37,440 --> 00:01:40,200
Speaker 4: for the second quarter just over one billion dollars, where

35
00:01:40,280 --> 00:01:43,280
Speaker 4: earnings coming in at sixteen cents a share. Analysts were

36
00:01:43,319 --> 00:01:46,880
Speaker 4: expecting a loss of one cent per share. Shares of

37
00:01:46,920 --> 00:01:50,320
Speaker 4: Lyft soaring in after hours trading tom Busby Bloomberg day

38
00:01:50,320 --> 00:01:51,600
Speaker 4: Break Asia.

39
00:01:51,720 --> 00:01:54,360
Speaker 1: Actually there was a quick change in after hours and

40
00:01:54,400 --> 00:01:58,000
Speaker 1: Lift shares and now down five point eight percent. Rivia

41
00:01:58,080 --> 00:02:00,920
Speaker 1: nudged up on its production guide guidance for the year

42
00:02:01,040 --> 00:02:04,440
Speaker 1: and narrowed its loss expectation. This comes after the company

43
00:02:04,520 --> 00:02:08,040
Speaker 1: narrowly missed its production target last year it grappled with

44
00:02:08,120 --> 00:02:12,480
Speaker 1: supply constraints and rising competition. Rivian cited an improved supply

45
00:02:12,600 --> 00:02:15,920
Speaker 1: chain outlook for its revised expectations, we get the story

46
00:02:15,960 --> 00:02:17,359
Speaker 1: from Bloomberg's Ed Ludlow.

47
00:02:17,720 --> 00:02:20,560
Speaker 5: They raised guidance modestly for the year by two thousand

48
00:02:20,720 --> 00:02:24,679
Speaker 5: units fifty two thousand evs across their two consumer vehicles

49
00:02:24,680 --> 00:02:27,080
Speaker 5: and the van that they build for Amazon. I reported

50
00:02:27,080 --> 00:02:30,160
Speaker 5: earlier in the year that Rivian executive had told staff

51
00:02:30,200 --> 00:02:33,520
Speaker 5: that actually their plan is to build sixty two thousand.

52
00:02:33,880 --> 00:02:36,520
Speaker 5: But what's interesting about this print is that they are

53
00:02:36,600 --> 00:02:38,880
Speaker 5: showing the benefits of scaling up.

54
00:02:39,240 --> 00:02:43,160
Speaker 1: And that's Ed Ludlow. Separately, Rivian reported second quarter earnings

55
00:02:43,200 --> 00:02:47,120
Speaker 1: that beat analyst expectations, and the shares currently are up

56
00:02:47,160 --> 00:02:48,360
Speaker 1: one point three percent.

57
00:02:48,480 --> 00:02:51,600
Speaker 2: In late trading, we Work said there is substantial doubt

58
00:02:51,800 --> 00:02:55,640
Speaker 2: about its ability to continue operating. The company cited sustained

59
00:02:55,680 --> 00:02:59,520
Speaker 2: losses along with canceled memberships for its office spaces. Now,

60
00:02:59,560 --> 00:03:01,640
Speaker 2: we Work is going to focus over the next year

61
00:03:01,760 --> 00:03:07,840
Speaker 2: on reducing rental cost, negotiating more favorable leases, and increasing revenue.

62
00:03:07,840 --> 00:03:09,680
Speaker 2: The company also wants to raise a little bit of

63
00:03:09,720 --> 00:03:13,200
Speaker 2: capital now. This warning comes just months after we Work

64
00:03:13,240 --> 00:03:16,120
Speaker 2: struck a deal with some of its biggest creditors and

65
00:03:16,280 --> 00:03:19,320
Speaker 2: soft Bank to reduce its debt load by around one

66
00:03:19,360 --> 00:03:22,560
Speaker 2: point five billion dollars. We Work shares are down in

67
00:03:22,639 --> 00:03:23,200
Speaker 2: late trading.

68
00:03:23,240 --> 00:03:27,720
Speaker 1: Brian Well, Chinese developer Country Gardens stock and bonds plunged

69
00:03:27,800 --> 00:03:31,399
Speaker 1: as noteholders said that they had not yet received coupon payments.

70
00:03:31,600 --> 00:03:33,960
Speaker 1: Bloomberg's Bonnieau has more from Hong Kong.

71
00:03:34,280 --> 00:03:36,880
Speaker 6: The noteholders said they had not received payments as of

72
00:03:36,960 --> 00:03:40,440
Speaker 6: yesterday afternoon. Data showed the company owned ten point five

73
00:03:40,480 --> 00:03:42,840
Speaker 6: million dollars of interest on a dollar bond that matures

74
00:03:42,880 --> 00:03:45,600
Speaker 6: in twenty twenty six, and that are twelve million dollars

75
00:03:45,640 --> 00:03:48,560
Speaker 6: is due on a note maturing in twenty thirty. In

76
00:03:48,560 --> 00:03:51,880
Speaker 6: a statement, Country Garden set a deterioration in seals and

77
00:03:51,920 --> 00:03:55,880
Speaker 6: a refinancing environment has hurt us cash flow. Country Garden

78
00:03:55,920 --> 00:03:58,880
Speaker 6: is one of the few major Chinese developers yet to default,

79
00:03:59,000 --> 00:04:02,160
Speaker 6: and a failure to pay were pummel market confidence. The

80
00:04:02,200 --> 00:04:04,800
Speaker 6: builder is facing more than two billion dollars of bond

81
00:04:04,840 --> 00:04:07,560
Speaker 6: payments over the rest of this year in Hong Kong.

82
00:04:07,600 --> 00:04:10,200
Speaker 6: I'm Bonnie Al Bloomberg Daybreak Asia, A.

83
00:04:10,120 --> 00:04:13,000
Speaker 1: Couple of other stories will be looking at China says

84
00:04:13,000 --> 00:04:16,760
Speaker 1: it's Europe's own fault for the soaring trade deficit.

85
00:04:16,880 --> 00:04:18,159
Speaker 7: With Beijing.

86
00:04:18,560 --> 00:04:20,960
Speaker 1: China says that it wants to buy more high tech

87
00:04:21,040 --> 00:04:25,240
Speaker 1: goods but cannot. And also we had the weak China

88
00:04:25,320 --> 00:04:29,320
Speaker 1: export and import numbers yesterday, Doug. And it turns out

89
00:04:29,320 --> 00:04:32,040
Speaker 1: that the US is now buying more goods from Mexico

90
00:04:32,120 --> 00:04:35,400
Speaker 1: and Canada than from China. The US buying twenty five

91
00:04:35,440 --> 00:04:38,080
Speaker 1: percent less in the first half of this year than

92
00:04:38,160 --> 00:04:41,520
Speaker 1: last year in terms of the value of goods. And

93
00:04:41,600 --> 00:04:45,320
Speaker 1: added to that, Taiwan's trade surplus surging to a record high.

94
00:04:45,400 --> 00:04:47,240
Speaker 1: So a lot's happening on the trade front.

95
00:04:47,320 --> 00:04:49,440
Speaker 2: Yeah, we knew, Brian that the US was planning at

96
00:04:49,440 --> 00:04:52,440
Speaker 2: some point to restrict investment in China. Well, now we're

97
00:04:52,480 --> 00:04:56,120
Speaker 2: being told that the restrictions will likely apply only to

98
00:04:56,240 --> 00:04:59,080
Speaker 2: Chinese companies that get at least half of their revenue

99
00:04:59,080 --> 00:05:03,280
Speaker 2: from cutting A areas like quantum computing and artificial intelligence.

100
00:05:03,560 --> 00:05:05,320
Speaker 2: One source is a part of the story, which you

101
00:05:05,320 --> 00:05:08,760
Speaker 2: can find on the Bloomberg terminal incidentally said that this order,

102
00:05:08,839 --> 00:05:11,320
Speaker 2: expected to be announced in the coming days by the

103
00:05:11,320 --> 00:05:16,159
Speaker 2: Biden administration, is going to prohibit investment in AI for

104
00:05:16,360 --> 00:05:21,520
Speaker 2: military end users. Notification will be required for investments in

105
00:05:21,600 --> 00:05:22,880
Speaker 2: other AI activities.

106
00:05:23,200 --> 00:05:26,279
Speaker 1: Yeah, there's so much tension between the two. It's a

107
00:05:26,279 --> 00:05:28,960
Speaker 1: little more than this pull back on it, and the

108
00:05:28,960 --> 00:05:31,880
Speaker 1: headline in all the paper is today in Hong Kong

109
00:05:31,920 --> 00:05:35,160
Speaker 1: and likely in China as well, will be things like

110
00:05:35,240 --> 00:05:39,600
Speaker 1: de risking and re shoring, shipping away at China's trade picture,

111
00:05:39,760 --> 00:05:43,400
Speaker 1: chipping away at China's exports. So we'll be covering that

112
00:05:43,880 --> 00:05:47,039
Speaker 1: in greater detail all throughout the program. Now it's time

113
00:05:47,080 --> 00:05:52,320
Speaker 1: for Global News. Well, let's get right over to Ed Baxter.

114
00:05:52,480 --> 00:05:55,400
Speaker 1: We are looking at China no longer the US's largest

115
00:05:55,400 --> 00:05:58,840
Speaker 1: importer of goods, which I just headlined there. Ed Baxter

116
00:05:58,880 --> 00:06:00,640
Speaker 1: has more from San Franceancisco a ed.

117
00:06:00,920 --> 00:06:03,480
Speaker 8: Yeah, let's detail it out, Brian, China now sells fewer

118
00:06:03,520 --> 00:06:06,760
Speaker 8: goods of the US and Mexico or Canada. Bloomberg Emerging

119
00:06:06,760 --> 00:06:10,200
Speaker 8: Markets correspondent Sherry On says the US imported about twenty

120
00:06:10,200 --> 00:06:13,200
Speaker 8: five percent year to year less from China the first

121
00:06:13,200 --> 00:06:14,640
Speaker 8: six months of the year.

122
00:06:14,720 --> 00:06:19,920
Speaker 7: According to analysts, perhaps a supply chain diversification is working

123
00:06:19,960 --> 00:06:24,159
Speaker 7: against China. I had an emergen markets analyst from Delta saying,

124
00:06:24,360 --> 00:06:26,960
Speaker 7: you know what, Mexico is a more interesting story because

125
00:06:27,000 --> 00:06:30,320
Speaker 7: the realignment of supply chains is already happening that way,

126
00:06:30,720 --> 00:06:34,240
Speaker 7: especially with those trade tensions, geopolitics being an issue and

127
00:06:34,360 --> 00:06:36,080
Speaker 7: the economic recovery slumping.

128
00:06:36,480 --> 00:06:38,880
Speaker 8: Now goods from Mexico in the same period we're up

129
00:06:38,920 --> 00:06:42,919
Speaker 8: five point four percent, so for the US trade partners

130
00:06:42,920 --> 00:06:47,560
Speaker 8: now Mexico, Canada, China, Germany and Japan. The former co

131
00:06:47,720 --> 00:06:51,560
Speaker 8: CEO of FDx, Ryan Salem, as the negotiations with prosecutors,

132
00:06:51,600 --> 00:06:56,159
Speaker 8: reportedly to plead guilty to criminal charges. Sources are saying

133
00:06:56,200 --> 00:06:58,599
Speaker 8: that the Republican mega donor may enter a plea as

134
00:06:58,640 --> 00:07:03,159
Speaker 8: soon as next month that may include campaign finance law violations.

135
00:07:03,600 --> 00:07:07,679
Speaker 8: Bloomberg's Ava Barry Morrison says this has been a long

136
00:07:07,800 --> 00:07:08,800
Speaker 8: time in coming.

137
00:07:09,000 --> 00:07:12,800
Speaker 9: Ryan Salem had a bit of an insight into the

138
00:07:13,280 --> 00:07:17,360
Speaker 9: political fun sorry political donation side of STX, so I

139
00:07:17,360 --> 00:07:19,600
Speaker 9: think it took them a long time to get information

140
00:07:19,640 --> 00:07:22,000
Speaker 9: about what he was involved in, cross checked out with

141
00:07:22,040 --> 00:07:22,920
Speaker 9: other people as well.

142
00:07:23,080 --> 00:07:26,760
Speaker 8: Aft Exit made donations to both Republicans and Democrats. At

143
00:07:26,760 --> 00:07:29,000
Speaker 8: this point, it is unclear whether he will enter into

144
00:07:29,000 --> 00:07:32,800
Speaker 8: cooperation deal to testify against co founder Sam Bankman freed.

145
00:07:33,920 --> 00:07:38,160
Speaker 8: July now officially the Earth's hottest month on record, taking

146
00:07:38,160 --> 00:07:41,640
Speaker 8: that record away from a year earlier July, the average

147
00:07:41,680 --> 00:07:45,920
Speaker 8: temperatures hit Paris cap of one point five celsius during

148
00:07:46,280 --> 00:07:49,320
Speaker 8: that was covered in the Accord. Now, the Arctic sea

149
00:07:49,440 --> 00:07:53,720
Speaker 8: ice dropped fifteen percent below average. It is the lowest

150
00:07:53,800 --> 00:07:58,600
Speaker 8: level since satellite observations began. The EU of Copernicus Climate

151
00:07:58,680 --> 00:08:02,000
Speaker 8: Change Service is warning of dire consequences if the trend

152
00:08:02,280 --> 00:08:05,640
Speaker 8: is not reversed. Ron Decantas has brought in a new

153
00:08:05,680 --> 00:08:09,840
Speaker 8: campaign manager in Bloomberg's Wendy Benjaminson says, James Uthmeyer has

154
00:08:09,880 --> 00:08:13,120
Speaker 8: served as chief of staff and dessentis Governor's office.

155
00:08:12,800 --> 00:08:17,080
Speaker 10: But has never run a presidential campaign before. And there

156
00:08:17,080 --> 00:08:19,400
Speaker 10: are lots of people in this town who have run

157
00:08:19,480 --> 00:08:23,720
Speaker 10: presidential campaigns. But he so keeps so closely to the

158
00:08:23,720 --> 00:08:27,360
Speaker 10: people he knows and trusts that he's putting inexperienced people

159
00:08:27,760 --> 00:08:28,400
Speaker 10: in charge.

160
00:08:28,680 --> 00:08:32,760
Speaker 8: Detractors say, insulating himself with cronies from Florida. This follows

161
00:08:32,800 --> 00:08:35,160
Speaker 8: a string of layoffs and strategy ships, same to the

162
00:08:35,160 --> 00:08:39,280
Speaker 8: addressing declining polling numbers. State leaders in Maryland are surveying

163
00:08:39,320 --> 00:08:42,760
Speaker 8: the damage from yesterday's major storm activity. A stretch of

164
00:08:42,840 --> 00:08:45,560
Speaker 8: highway had a row of utility poles lining it and

165
00:08:45,640 --> 00:08:48,440
Speaker 8: forty seven people trapped inside their cars because of it.

166
00:08:48,840 --> 00:08:51,760
Speaker 8: Governor Wes Moore says they were all rescued, but sections

167
00:08:51,760 --> 00:08:53,079
Speaker 8: of the state are thrashing.

168
00:08:53,200 --> 00:08:54,640
Speaker 11: This is going to take some time to fix.

169
00:08:55,480 --> 00:08:57,559
Speaker 6: The damage from last night is significant.

170
00:08:57,960 --> 00:09:00,480
Speaker 8: The authorities say most of the remaining customer with our

171
00:09:00,559 --> 00:09:04,719
Speaker 8: power will be restored by tomorrow night. Global newspower by

172
00:09:04,720 --> 00:09:07,280
Speaker 8: more than twenty seven hundred journalist and analysts in over

173
00:09:07,320 --> 00:09:10,480
Speaker 8: one hundred twenty countries in San Francisco. I'm Ed Baxter,

174
00:09:10,600 --> 00:09:12,280
Speaker 8: and this is Bloomberg.

175
00:09:12,880 --> 00:09:15,679
Speaker 1: This is Bloomberg Daybreak Asia. I'm Brian Curtis here in

176
00:09:15,720 --> 00:09:18,400
Speaker 1: Hong Kong along with Rashad so I'm not in London.

177
00:09:18,640 --> 00:09:21,600
Speaker 1: A flash here across the Bloomberg terminal. Amazon is in

178
00:09:21,720 --> 00:09:25,840
Speaker 1: talks to be an anchor investor in the arm IPO,

179
00:09:26,200 --> 00:09:28,520
Speaker 1: So that is the unit of SoftBank that's coming to

180
00:09:28,559 --> 00:09:31,800
Speaker 1: market we think quite soon. And that, of course, or

181
00:09:31,840 --> 00:09:35,040
Speaker 1: this story here from Reuters, So we'll get you details

182
00:09:35,200 --> 00:09:37,760
Speaker 1: on that as much as we can. Going forward. Let's

183
00:09:37,760 --> 00:09:41,240
Speaker 1: get to our guest, Sarah Ponzak, Vice President UBS Private

184
00:09:41,320 --> 00:09:45,600
Speaker 1: Wealth Management. Well, I mentioned that we did see we

185
00:09:45,640 --> 00:09:48,520
Speaker 1: did see some losses on Wall Street today but they

186
00:09:48,600 --> 00:09:51,360
Speaker 1: were not as bad so as to take away the

187
00:09:51,400 --> 00:09:53,800
Speaker 1: games we saw yesterday. And we also had the dip

188
00:09:53,840 --> 00:09:56,400
Speaker 1: buyers kind of entering the frame today. So I'm not

189
00:09:56,520 --> 00:09:59,200
Speaker 1: sure how to frame the action today, but it seems

190
00:09:59,240 --> 00:10:02,320
Speaker 1: a little more negative then perhaps the way I've just

191
00:10:02,360 --> 00:10:04,400
Speaker 1: put it, Sarah, your thoughts on the action today.

192
00:10:04,640 --> 00:10:06,800
Speaker 12: I think we have to put it in context of

193
00:10:06,920 --> 00:10:09,920
Speaker 12: the pretty unbelievable year that we've seen for stocks so far.

194
00:10:10,480 --> 00:10:12,880
Speaker 12: You know, through July, the for seven months of the year,

195
00:10:13,480 --> 00:10:16,040
Speaker 12: the S and P five hundred was up about twenty percent.

196
00:10:16,240 --> 00:10:18,480
Speaker 12: That was the best start to a year in the

197
00:10:18,520 --> 00:10:23,479
Speaker 12: first seven months since nineteen ninety seven, so pretty phenomenal.

198
00:10:23,640 --> 00:10:26,000
Speaker 12: And when you think about the shift that we saw

199
00:10:26,040 --> 00:10:28,760
Speaker 12: from last year through the beginning of the year through

200
00:10:28,760 --> 00:10:31,440
Speaker 12: the middle of twenty twenty three, it's really been this

201
00:10:31,600 --> 00:10:35,280
Speaker 12: change in perception of the assumption and the expectation that

202
00:10:35,320 --> 00:10:38,320
Speaker 12: we're going to fall into a recession to you know,

203
00:10:38,400 --> 00:10:41,200
Speaker 12: everyone kind of now believing and the consensus being that

204
00:10:41,240 --> 00:10:43,800
Speaker 12: we're going to have a soft landing. So when we

205
00:10:43,800 --> 00:10:45,800
Speaker 12: think about these past couple of months, you think about

206
00:10:45,800 --> 00:10:51,200
Speaker 12: that shift to you know, investors, economists throwing away that

207
00:10:51,280 --> 00:10:54,600
Speaker 12: recession call now believing in a soft landing. They're really

208
00:10:54,600 --> 00:10:58,120
Speaker 12: not being much negative news over the course of the summer,

209
00:10:58,520 --> 00:11:00,640
Speaker 12: to all of a sudden, a weekly last week in

210
00:11:00,720 --> 00:11:03,520
Speaker 12: which we get the Fitch downgrade of US sovereign debt

211
00:11:03,920 --> 00:11:05,520
Speaker 12: and then a day like today in which you have

212
00:11:05,600 --> 00:11:10,440
Speaker 12: the Moody's downgrade of regional banks. It's just negative news

213
00:11:10,440 --> 00:11:13,640
Speaker 12: in this stock market world in which there really hasn't

214
00:11:13,679 --> 00:11:16,920
Speaker 12: much been much negative news. So it's healthy to see,

215
00:11:16,920 --> 00:11:20,520
Speaker 12: you know, some volatility on the negative news. And if anything,

216
00:11:20,559 --> 00:11:23,040
Speaker 12: it seems complacency is more so a risk at this

217
00:11:23,080 --> 00:11:23,480
Speaker 12: point in.

218
00:11:23,440 --> 00:11:26,560
Speaker 11: Time, complacency in being the watchword, Sarah, given that we

219
00:11:26,600 --> 00:11:29,400
Speaker 11: saw the S and B banking index after those downgrades

220
00:11:29,400 --> 00:11:33,679
Speaker 11: from moody is sending the banking index absolutely to the

221
00:11:33,720 --> 00:11:36,720
Speaker 11: floor and then a recovery, a massive recovery to just

222
00:11:36,760 --> 00:11:39,280
Speaker 11: be just off the the gain line, as it were.

223
00:11:39,760 --> 00:11:42,960
Speaker 11: Should people be worried. It does portend for of course,

224
00:11:43,320 --> 00:11:47,719
Speaker 11: more liquidity tightening and loans which would not be given out,

225
00:11:47,760 --> 00:11:49,760
Speaker 11: which are all going to do the Fed's job in

226
00:11:49,800 --> 00:11:51,760
Speaker 11: some ways or amplify what the Fed's doing.

227
00:11:52,120 --> 00:11:56,480
Speaker 12: Right, So it's interesting to see that whereas heading into

228
00:11:56,480 --> 00:12:00,319
Speaker 12: the year Originally, you know, the impetus for investment was

229
00:12:00,640 --> 00:12:03,720
Speaker 12: more so to fade gains, believing that they wouldn't be sustained.

230
00:12:04,040 --> 00:12:06,640
Speaker 12: And how quickly that has changed, you know, in the

231
00:12:06,640 --> 00:12:09,480
Speaker 12: face of fomo fear of missing out, to dip buying

232
00:12:09,840 --> 00:12:13,640
Speaker 12: whenever we do see some type of downdraft in the market,

233
00:12:13,960 --> 00:12:16,679
Speaker 12: because you know, some people now believe that we are

234
00:12:16,720 --> 00:12:19,319
Speaker 12: going to see you know, further gains and if they

235
00:12:19,360 --> 00:12:21,120
Speaker 12: sold and went to cast at the beginning of the year,

236
00:12:21,400 --> 00:12:23,880
Speaker 12: it's a difficult position to be and you feel as

237
00:12:23,880 --> 00:12:26,360
Speaker 12: that you need to get in at some point in time.

238
00:12:26,440 --> 00:12:29,240
Speaker 12: So we do see this impetus of dip buying now.

239
00:12:29,480 --> 00:12:32,720
Speaker 12: But when we think about, you know, the larger ramifications

240
00:12:32,760 --> 00:12:34,520
Speaker 12: of the downgrades that we did see from Moodies on

241
00:12:34,559 --> 00:12:38,560
Speaker 12: some of those regional banks, this is not entirely new news.

242
00:12:39,200 --> 00:12:43,280
Speaker 12: You know, we have been listening to and thinking about

243
00:12:43,360 --> 00:12:46,600
Speaker 12: what is going on in the banking system for months

244
00:12:46,640 --> 00:12:49,320
Speaker 12: now after what we saw with you know, a couple

245
00:12:49,400 --> 00:12:54,200
Speaker 12: regional bank failures, and again this sheds more light and

246
00:12:54,280 --> 00:12:58,040
Speaker 12: it does bring focus back to the fact that you know,

247
00:12:58,160 --> 00:13:00,920
Speaker 12: the fallout that we saw with a few regional banks.

248
00:13:01,200 --> 00:13:04,240
Speaker 12: It's very possible. It's not over. There could be more

249
00:13:04,280 --> 00:13:08,280
Speaker 12: dominoes to fall, and we need to take you know,

250
00:13:08,520 --> 00:13:10,760
Speaker 12: we need to take stock of that when we think

251
00:13:10,800 --> 00:13:15,600
Speaker 12: about the overall US banking system. But really, all in all,

252
00:13:15,760 --> 00:13:17,680
Speaker 12: this isn't necessarily new news.

253
00:13:18,360 --> 00:13:23,520
Speaker 1: Yeah, in terms of well, I imagine you know you

254
00:13:23,600 --> 00:13:26,760
Speaker 1: have some contact with high net worth individuals. I'm curious

255
00:13:26,800 --> 00:13:29,840
Speaker 1: whether or not they're talking more about diversification now rather

256
00:13:29,880 --> 00:13:32,560
Speaker 1: than riding the gains that we saw in the first part.

257
00:13:32,559 --> 00:13:35,360
Speaker 1: And if so, what are they diversifying into they.

258
00:13:35,280 --> 00:13:39,000
Speaker 12: Are I actually had a conversation with a high networth

259
00:13:39,040 --> 00:13:43,400
Speaker 12: client individual today who was asking, Okay, you know, should

260
00:13:43,440 --> 00:13:46,880
Speaker 12: we be diversifying out of some of these high flying,

261
00:13:47,080 --> 00:13:51,160
Speaker 12: big tech names that have really driven the gains this year?

262
00:13:51,559 --> 00:13:57,800
Speaker 12: And our response was yes, especially if you have more

263
00:13:57,920 --> 00:14:00,600
Speaker 12: exposure to some of these names that have just led

264
00:14:00,640 --> 00:14:03,880
Speaker 12: the way this year been even the index, then yes

265
00:14:03,880 --> 00:14:06,080
Speaker 12: it could. It could take sense to take some chips

266
00:14:06,080 --> 00:14:09,200
Speaker 12: off the table and diversify those gains a bit. So

267
00:14:09,240 --> 00:14:12,760
Speaker 12: what we've been saying, ubs' chief investment office has really

268
00:14:13,080 --> 00:14:15,520
Speaker 12: been pounding the table on two key themes, one of

269
00:14:15,559 --> 00:14:18,440
Speaker 12: them being you know, if you missed out on the

270
00:14:18,480 --> 00:14:22,440
Speaker 12: gains this year, or if you are not diversified, if

271
00:14:22,440 --> 00:14:24,720
Speaker 12: you have a significant amount of capital tied up in

272
00:14:24,840 --> 00:14:27,280
Speaker 12: just a few big tech names, maybe it does make

273
00:14:27,280 --> 00:14:30,240
Speaker 12: sense to now look to the laggards, look to value,

274
00:14:30,320 --> 00:14:32,800
Speaker 12: look to more defensive areas of the market. Maybe look

275
00:14:32,880 --> 00:14:34,760
Speaker 12: to an equal weight version of the S and P

276
00:14:34,880 --> 00:14:37,680
Speaker 12: five hundred and we have seen this broadening out over

277
00:14:37,720 --> 00:14:39,920
Speaker 12: the past month or so. You know, you look at

278
00:14:40,000 --> 00:14:43,240
Speaker 12: value stocks, you look at small caps. It has happened.

279
00:14:43,480 --> 00:14:45,680
Speaker 1: It definitely has happened, Sharon. We have noted it on

280
00:14:45,680 --> 00:14:48,520
Speaker 1: this program quite a lot. To RSP is one ETF

281
00:14:48,520 --> 00:14:51,360
Speaker 1: that one can look at for the equal weight. We

282
00:14:51,560 --> 00:14:55,120
Speaker 1: enjoyed the conversation, Sharah. Thank you. Sarah Ponzak, Vice President

283
00:14:55,240 --> 00:15:00,400
Speaker 1: UBS Private Wealth Management. This is Bloomberg Daybreak Asia morning

284
00:15:00,440 --> 00:15:03,080
Speaker 1: brief on the stories making news from Hong Kong to

285
00:15:03,200 --> 00:15:04,600
Speaker 1: Singapore and Wall Street.

286
00:15:04,640 --> 00:15:07,800
Speaker 2: Look for us on your podcast feed every day on Apple,

287
00:15:08,000 --> 00:15:10,880
Speaker 2: Spotify and anywhere else you get your podcasts.

288
00:15:10,880 --> 00:15:13,480
Speaker 1: You can also listen live each day on Bloomberg eleven

289
00:15:13,520 --> 00:15:15,880
Speaker 1: three to zero in New York, Bloomberg ninety nine to

290
00:15:15,920 --> 00:15:19,120
Speaker 1: one in Washington, Bloomberg one oh sixty one in Boston,

291
00:15:19,440 --> 00:15:21,880
Speaker 1: and Bloomberg nine sixty in San Francisco.

292
00:15:21,960 --> 00:15:24,800
Speaker 2: Our flagship New York station, is also available on your

293
00:15:24,840 --> 00:15:29,920
Speaker 2: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.

294
00:15:29,760 --> 00:15:32,920
Speaker 1: Plus listen coast to coast on the Bloomberg Business app,

295
00:15:33,240 --> 00:15:37,440
Speaker 1: Sirius XM Channel one nineteen, the iHeartRadio app, and on

296
00:15:37,480 --> 00:15:40,560
Speaker 1: Bloomberg dot Com. I'm Brian Curtis.

297
00:15:40,480 --> 00:15:42,920
Speaker 2: And I'm Doug Prisner. Join us again tomorrow for all

298
00:15:42,920 --> 00:15:45,440
Speaker 2: the news you need to start your day right here

299
00:15:45,520 --> 00:15:48,960
Speaker 2: on Bloomberg day Break Asia