WEBVTT - Yellen on De-escalation, China Data in Focus

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<v Speaker 1>Good morning. I'm Brian Curtis. Here are the stories we're

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<v Speaker 1>following today. US Treasury Secretary Janet Yellen saying that the

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<v Speaker 1>US should look for ways to further de escalate tensions

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<v Speaker 1>with China, but that it's too early to cut tariffs.

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<v Speaker 1>The story from Bloomberg's Joan Wong.

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<v Speaker 2>Yellen said the US is close to completing a four

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<v Speaker 2>year review of the tariffs and post on China. Given that,

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<v Speaker 2>she says it's premature to eliminate the tariffs. Yellen spoke

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<v Speaker 2>ahead of the G twenty meetings in India. The Treasury

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<v Speaker 2>Secretary acknowledged has that a move to lift tariffs would

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<v Speaker 2>stoke a.

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<v Speaker 3>Political reaction at home.

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<v Speaker 2>However, she said this could be an area where progress

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<v Speaker 2>can be made over time.

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<v Speaker 3>In Hong Kong. I'm Joan Wang, Bloomberg, Day Brigaesia Well.

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<v Speaker 1>White House National Security Advisor Jake Sullivan says that China

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<v Speaker 1>will only harm itself with restrictions on the export of

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<v Speaker 1>two chip related medals. Sullivan spoke on CBS's face the Nation.

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<v Speaker 4>I believe that it will only reinforce the determination of

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<v Speaker 4>many other countries in the world to de risk, to

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<v Speaker 4>find ways to reduce dependencies and increase the resilience of

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<v Speaker 4>their own supply chains, including for the kinds of critical

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<v Speaker 4>minerals that are at issue in this particular decision.

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<v Speaker 1>Jake Sullivan heard here on Bloomberg. China has said that

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<v Speaker 1>gallium and germanium will be subject to export controls meant

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<v Speaker 1>to protect Chinese national security, and those controls will begin

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<v Speaker 1>on August first. Well, China's economy is struggling to gain

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<v Speaker 1>some traction. We get the latest data later this morning

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<v Speaker 1>our time. Bloomberg's Bonniao has a preview from Hong.

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<v Speaker 5>Kong second quarter GDP probably grew seven point one percent

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<v Speaker 5>year on year, but only therve point eight percent from

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<v Speaker 5>the first quarter. The data may look better than the

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<v Speaker 5>reality because of the COVID lockdown last year in Shanghai,

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<v Speaker 5>industrial output and retail sales for June are expected to slow.

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<v Speaker 5>Retail sales growth in particular likely slid to three point

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<v Speaker 5>three percent from top point seven percent in May. Speculation

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<v Speaker 5>has grown that China will add more STIMA, but China

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<v Speaker 5>Central Bank is likely to hold US one year medium

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<v Speaker 5>term lending facility rate steady at two point sixty five

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<v Speaker 5>percent after a ten business point cuts last month in

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<v Speaker 5>Hong Kong. I'm Bonnie Al Bloomberg Daybreak Asia.

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<v Speaker 1>Well, it's a busy week for earnings after JP Morgan,

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<v Speaker 1>Wells Fargo, and City Group put investors in an upbeat

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<v Speaker 1>mood last week they beat on analysts expectations. Let's get

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<v Speaker 1>a preview of what's up next from Bloomberg's Charlie Pellett.

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<v Speaker 6>More financials will be reporting this week, including Goldman Sachs, Morgan, Stanley,

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<v Speaker 6>and Bank of America. The flood of earnings reports come

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<v Speaker 6>amid questions about whether earnings expectations justify the outlook for stocks.

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<v Speaker 6>Laura Cooper is senior investment strategist at black Rock International.

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<v Speaker 1>We really have seen that better than expected earnings backdrop

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<v Speaker 1>be a key tailwind for equity markets, and I struggled

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<v Speaker 1>to see that trend persisting in the second half of

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<v Speaker 1>the year.

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<v Speaker 6>This week, we'll also be hearing from Railroads, CSX, UAL, IBM,

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<v Speaker 6>Johnson and Johnson, Lockey, Martin, Netflix, and Tesla in New York.

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<v Speaker 6>Charlie Pellett Bloomberg PayBreak Asia.

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<v Speaker 1>Microsoft is promising to keep Call of Duty on Sony's PlayStation.

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<v Speaker 1>This comes as it gets closer and closer to clearing

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<v Speaker 1>all the hurdles to buy Activision Blizzard. The story from

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<v Speaker 1>Bloomberg's Denise Pellegreeney.

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<v Speaker 3>Microsoft's announcement seeks to address regulators' concerns that the nearly

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<v Speaker 3>sixty nine billion dollar Activision deal would make more games

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<v Speaker 3>exclusive to Microsoft's Xbox. The company already inked a tenure

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<v Speaker 3>deal for the game with Nintendo. This latest move with

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<v Speaker 3>Sony comes after an appeals court friday Tonight. The US

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<v Speaker 3>Federal Trade Commissions later suffered to delay the deal. Meantime,

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<v Speaker 3>UK regulators will be looking at the deal again tomorrow,

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<v Speaker 3>where Microsoft is apparently offering to sell the cloud based

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<v Speaker 3>market rights for its games. The company has to close

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<v Speaker 3>the deal by Tuesday or potentially pay Activision a three

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<v Speaker 3>billion dollar breakup fee. Denise Pellegrity, Bloomberg Day Break Asia.

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<v Speaker 1>Denise, thanks very much. Coming up in a little while,

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<v Speaker 1>we'll be chatting with James Abattem, managing director and chief

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<v Speaker 1>investment Officer at Center Asset Management. I'm Brian Curtis here

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<v Speaker 1>in Hong Kong. A couple of other items we'll be

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<v Speaker 1>looking at with the guests.

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<v Speaker 6>This morning.

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<v Speaker 1>We mentioned that China's growth may look pretty good in

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<v Speaker 1>the second quarter, but then because of the lockdown last year,

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<v Speaker 1>these numbers are sort of skewed. We'll take a closer

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<v Speaker 1>look at the stimulus part of this story. All economists

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<v Speaker 1>surveyed by Bloomberg predict the PBOC will keep its rate

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<v Speaker 1>on its one year policy loans unchanged today at two

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<v Speaker 1>point sixty five percent. What else can they do and

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<v Speaker 1>how much more of our reaching out to the private

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<v Speaker 1>sector can we expect? And again, looking at the dollar

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<v Speaker 1>weaker not only on hopes that the Fed will stop

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<v Speaker 1>hiking interest rates, but the dollar bears are looking even

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<v Speaker 1>past that onto when we might get some rate cuts

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<v Speaker 1>from the Fed. So that's another topic that we'll be

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<v Speaker 1>getting into. And again S and P five hundred firms

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<v Speaker 1>expected to post a nine percent drop in profits in

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<v Speaker 1>the second quarter, all during a time when markets quity

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<v Speaker 1>markets we're racing to the upside. Now it's time for

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<v Speaker 1>global news. China and Russia are going to hold joint

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<v Speaker 1>military exercises in the Japan See head backs to with

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<v Speaker 1>global news from the ninety sixty News from in San Francisco.

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<v Speaker 7>Ed Yeah Brian Russia saying it will send naval and

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<v Speaker 7>air forces for the annual drill. China's pla making the

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<v Speaker 7>announcement also plays into the ever deepening issue of China's

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<v Speaker 7>attitude toward the war in Ukraine. Meanwhile, US National Security

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<v Speaker 7>Advisor Jake Sullivan on CBS has heard here on Bloomberg

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<v Speaker 7>says China's help could be used regarding North Korea and

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<v Speaker 7>says China's in action is having the reverse effect to

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<v Speaker 7>what it wants.

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<v Speaker 4>Frankly, is in fact only creating circumstances in which the

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<v Speaker 4>United States are allies and partners have to step up

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<v Speaker 4>our activities and posture to respond.

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<v Speaker 7>To and Sullivan also says a US as firman saying

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<v Speaker 7>the recent Microsoft hack came from China.

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<v Speaker 4>Microsoft has said it was China. We see nothing so

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<v Speaker 4>far to dispute what Microsoft has said or to second

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<v Speaker 4>guests their claim that it was China.

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<v Speaker 7>Sullivan says a deep intrusion into the systems. And Republican

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<v Speaker 7>Canada for President Chris Christi on ABC has heard here

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<v Speaker 7>on Bloomberg says China is watching Russia and US actions

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<v Speaker 7>in Ukraine right now.

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<v Speaker 8>The Ukrainians are willing to fight this fight for themselves

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<v Speaker 8>if they have our support to be able to win it.

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<v Speaker 8>If the Chinese watch us back away from Ukraine, believe me,

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<v Speaker 8>the next move will be Taiwan.

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<v Speaker 7>Now politics, Christy says he is going to muscle up

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<v Speaker 7>on Donald Trump moving forward on issues like this. So

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<v Speaker 7>Trump last night at a rally.

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<v Speaker 1>Every time the radical left, Democrats, Marxist communists and fascists

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<v Speaker 1>indict me, I consider it to be a great badge

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<v Speaker 1>of honor and courage.

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<v Speaker 7>I'm doing it for you.

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<v Speaker 8>He's a liar and a coward. He's not getting indicted

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<v Speaker 8>for anyone other than because of his own conduct. There's

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<v Speaker 8>no other of the two hundred million Americans he spoke

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<v Speaker 8>about who illegally retained classified national secrets.

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<v Speaker 7>And then Christy also on CNN saying Trump will show

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<v Speaker 7>up at the debates. He believes his ego I.

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<v Speaker 8>Think will not permit him to have a big TV

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<v Speaker 8>show that he's not on. And I think he'd be

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<v Speaker 8>enormously frustrated sitting back in Bedminster and watching what I'm

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<v Speaker 8>going to do to him.

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<v Speaker 7>Yeah, Trump says he probably will not be at the

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<v Speaker 7>first debate. By the way, US Climate envoy has arrived

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<v Speaker 7>to Invaijang John Kerry to start up a dialogue on

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<v Speaker 7>global warming and climate change kind of to reset is

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<v Speaker 7>the word they're using. Meanwhile, weather is being very mean

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<v Speaker 7>to Mother Earth at least thirty five people and kill

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<v Speaker 7>the storms batter South Korea. Hong Kong Observatory has issued

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<v Speaker 7>a strong signal eight to now until noon. It's said

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<v Speaker 7>the way it's phasing it is before noon first of

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<v Speaker 7>the year, as the region gets pummeled by talem as

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<v Speaker 7>a storm. Heat is causing health alerts in sixteen cities

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<v Speaker 7>across southern Europe today and probably for the next couple

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<v Speaker 7>of days, and in New York. The potential of flo floods,

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<v Speaker 7>extreme weather around the globe global news power by more

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<v Speaker 7>than twenty seven hundred journalists and analysts and over one

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<v Speaker 7>hundred twenty countries. In San Francisco, I'm Ed Baxter, and

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<v Speaker 7>this is Bloomberg.

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<v Speaker 1>Let's get to our guests. James Abat, Managing Director and

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<v Speaker 1>Chief investment Officer at Center Asset Management. James Pleasure as usual,

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<v Speaker 1>thanks for joining us. So investors know that the FED

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<v Speaker 1>does not want to give the all clear just yet.

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<v Speaker 1>Markets have reacted, but it seems that we know that

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<v Speaker 1>the FED will continue to talk tough until they get

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<v Speaker 1>closer to that two percent deal, So is that discounted

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<v Speaker 1>in the market. Should we not expect some troubles ahead

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<v Speaker 1>when the FED does talk tough.

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<v Speaker 9>I think it's when you have to look at the

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<v Speaker 9>components of inflation. You know, goods prices are moving lower,

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<v Speaker 9>non durable goods as well as in dust or production goods,

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<v Speaker 9>you know, but services still remain in a very sticky uptrend.

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<v Speaker 9>So I think the real key is that we're looking at,

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<v Speaker 9>you know, a shifting perhaps of investors' worries from inflation

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<v Speaker 9>to potentially one of growth. Because if the FED is

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<v Speaker 9>truly bent on trying to bring down inflation further and

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<v Speaker 9>really try to bring that services inflation level down, I

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<v Speaker 9>think investors will start to shift gears and start to

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<v Speaker 9>worry about whether or not we're going to be moving

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<v Speaker 9>lower on a growth perspective, because let's not forget you know,

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<v Speaker 9>if we look at the manufacturing indicies, we've been in

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<v Speaker 9>contraction since November of last year, and we look at

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<v Speaker 9>the new orders components, we're ten months of shrinking new orders,

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<v Speaker 9>which is a subcomponent of the PMI indica. So we've

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<v Speaker 9>got this dichotomy between services and manufacturing, and I think

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<v Speaker 9>the risk is that the FED actually overshoots, focusing solely

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<v Speaker 9>on services inflation, and they drive the inflation aren't even

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<v Speaker 9>the manufacturing component even further south.

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<v Speaker 1>So when we see yields come down, some investors might

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<v Speaker 1>feel good about that because they believe that yields are

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<v Speaker 1>heading down because inflation is coming down. But it's sending

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<v Speaker 1>the slightly a wrong signal. Really, it's it's further expectations

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<v Speaker 1>when the yields drop a lot, that there's trouble ahead

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<v Speaker 1>on the growth front.

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<v Speaker 9>That's what you're saying. Yeah, that's exactly right, because I mean,

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<v Speaker 9>right now, we haven't had I mean, the reason why

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<v Speaker 9>the markets haven't corrected to the same degree that they

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<v Speaker 9>did as people were expecting, you know, akin to what

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<v Speaker 9>happened in two thousand and two thousand and one or

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<v Speaker 9>even the global financial crisis, is that we haven't had

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<v Speaker 9>that double digit you know, earnings to client. What we've

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<v Speaker 9>had really is an environment where you know, profitability has

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<v Speaker 9>been contracted. But if you look at the components, you know,

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<v Speaker 9>margins have been you know, remained at relatively high levels.

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<v Speaker 9>You know, sales growth is positive, but it's continued to

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<v Speaker 9>slow down. Margins have been impacted by higher costs, and

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<v Speaker 9>act efficiency has been relatively flat. So we've had, you know,

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<v Speaker 9>only a slight decrease in earnings projections. Obviously, stock markets

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<v Speaker 9>declined last year on the inflation scare in the rise

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<v Speaker 9>and interest rates. The other thing that basically was a

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<v Speaker 9>missing component this time versus others is that we haven't

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<v Speaker 9>had a big risk aversion. You know, the events of

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<v Speaker 9>ft X or a Donnie or other things didn't have

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<v Speaker 9>the same kind of a polluting effect on people's risk

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<v Speaker 9>a version that let's say World com Enron or Lehman

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<v Speaker 9>Brothers or other kind of significant you know disruptions had

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<v Speaker 9>on investor psyche. We're back to basically where you know,

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<v Speaker 9>investors are embracing risk in a wholehearted fashion this.

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<v Speaker 1>Year, and the scare in March because of the banking

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<v Speaker 1>troubles exactly was not that significant.

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<v Speaker 9>Yeah, exactly, that's right. That's right.

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<v Speaker 1>So what about the slight churn that we've seen under

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<v Speaker 1>the hood in that you have seen a pretty good

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<v Speaker 1>bid in industrials. You've seen transport rally, there are a

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<v Speaker 1>number of sectors besides megacap tech that have done well

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<v Speaker 1>even when we're still concerned about growth. Do you think

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<v Speaker 1>that that, I mean, are there some idios crowd of

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<v Speaker 1>factors for that, reasons for that, or do you think

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<v Speaker 1>that that's investors telling you that the growth scare, while

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<v Speaker 1>a scare, it's not going to actually take us deeply

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<v Speaker 1>into recession.

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<v Speaker 8>Yeah.

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<v Speaker 9>I think all those things are correct in the sense

0:12:25.240 --> 0:12:28.000
<v Speaker 9>that you know, clearly what we've had is a return

0:12:28.160 --> 0:12:33.160
<v Speaker 9>to the secular growth stocks, the fang names as we

0:12:33.320 --> 0:12:36.280
<v Speaker 9>like to call them, basically this year, as investors have

0:12:36.320 --> 0:12:39.000
<v Speaker 9>re embraced them as leadership in the market, and simply

0:12:39.040 --> 0:12:42.520
<v Speaker 9>because of their size in terms of market capitalization, they've

0:12:42.559 --> 0:12:45.199
<v Speaker 9>had a pronounced impact on what the S and P

0:12:45.320 --> 0:12:47.720
<v Speaker 9>for one hundred returns have done. That being said, as

0:12:47.760 --> 0:12:49.880
<v Speaker 9>you're right, we pointed out you've seen, you know, a

0:12:49.880 --> 0:12:54.760
<v Speaker 9>lot of strength in some of the cruise stocks, Royal Caribbean, Carnival,

0:12:55.720 --> 0:12:59.559
<v Speaker 9>the airlines and others, because what we've saw was essentially

0:12:59.679 --> 0:13:02.920
<v Speaker 9>a you know, great operating leverage and the real key

0:13:02.960 --> 0:13:04.920
<v Speaker 9>and this is this is what might hold the market

0:13:04.960 --> 0:13:09.800
<v Speaker 9>back but give opportunity at the idiosyncratic level, is that

0:13:10.120 --> 0:13:12.800
<v Speaker 9>you know, when you're able to basically, you know, bring

0:13:12.840 --> 0:13:17.199
<v Speaker 9>the trifecta of you know, improving fundamentals from bottom up perspective,

0:13:17.240 --> 0:13:19.640
<v Speaker 9>where you get a return of sales growth, you get

0:13:19.640 --> 0:13:23.160
<v Speaker 9>that great profit margin expansion. And then because these companies

0:13:23.240 --> 0:13:26.560
<v Speaker 9>have cut back so much post COVID and during you know,

0:13:26.600 --> 0:13:29.480
<v Speaker 9>really stimulated by COVID in terms of their own asset

0:13:29.520 --> 0:13:32.400
<v Speaker 9>base as they were shutting down so much capacity, they're

0:13:32.400 --> 0:13:35.839
<v Speaker 9>getting these huge gains in terms of act efficiency. And

0:13:35.880 --> 0:13:39.040
<v Speaker 9>that's really the operating leverage that's contributed to these stocks

0:13:39.080 --> 0:13:41.120
<v Speaker 9>doing exceptionally well thus far this year.

0:13:42.040 --> 0:13:44.760
<v Speaker 1>Well, how much risk are you willing to take on then?

0:13:45.160 --> 0:13:46.360
<v Speaker 1>And how would you express it?

0:13:47.720 --> 0:13:50.839
<v Speaker 9>Well? Right now, I mean this we've been given I

0:13:50.840 --> 0:13:53.600
<v Speaker 9>think a gift. You know. One of the components that

0:13:53.640 --> 0:13:57.040
<v Speaker 9>we use within our American Select equity strategy is to

0:13:57.120 --> 0:14:01.520
<v Speaker 9>tactically hedge the portfolio with protective put options when we

0:14:01.559 --> 0:14:05.400
<v Speaker 9>feel that we can in a cost efficient manner, you know,

0:14:05.559 --> 0:14:08.760
<v Speaker 9>hedge the underlying risk or the systemic risk that's embedded

0:14:08.800 --> 0:14:12.360
<v Speaker 9>within the portfolio. So, with the Vicks down to around fourteen,

0:14:13.200 --> 0:14:16.280
<v Speaker 9>we took the opportunity last week to basically put a

0:14:16.320 --> 0:14:20.080
<v Speaker 9>full protective hedge on the portfolio to protect us against

0:14:20.080 --> 0:14:23.200
<v Speaker 9>a significant kind of tail risk, you know, draw down

0:14:23.240 --> 0:14:25.240
<v Speaker 9>from now until the end of the year, and we

0:14:25.240 --> 0:14:28.040
<v Speaker 9>could do so in ess since fifty basis points of

0:14:28.080 --> 0:14:31.240
<v Speaker 9>the portfolio because volatility is so depressed at this point

0:14:31.280 --> 0:14:35.359
<v Speaker 9>in time. We're heading into a seasonally rising period of volatility.

0:14:35.800 --> 0:14:39.480
<v Speaker 9>So you know, potentially as the market shifts from inflation

0:14:39.560 --> 0:14:42.560
<v Speaker 9>worries to growth concerns like we talked about. Plus you

0:14:42.600 --> 0:14:45.800
<v Speaker 9>know all the achieve political risks that are evident almost

0:14:45.800 --> 0:14:49.080
<v Speaker 9>every day, whether it's in Ukraine or China or what

0:14:49.160 --> 0:14:51.120
<v Speaker 9>have you. You know, this is a great opportunity for

0:14:51.160 --> 0:14:56.200
<v Speaker 9>investors to you know, inexpensively put some hedges and protect

0:14:56.200 --> 0:14:57.960
<v Speaker 9>their underlying portfolios.

0:14:58.320 --> 0:15:00.960
<v Speaker 1>I want to get to China. But maybe one more

0:15:01.040 --> 0:15:05.320
<v Speaker 1>question on the US and on you know, inflation versus

0:15:06.040 --> 0:15:06.960
<v Speaker 1>a growth slowdown.

0:15:07.200 --> 0:15:08.400
<v Speaker 9>What's the key to watch?

0:15:08.600 --> 0:15:10.840
<v Speaker 1>I mean, will it be jobs? Will you get it

0:15:10.840 --> 0:15:12.479
<v Speaker 1>from the data or the earnings?

0:15:13.600 --> 0:15:15.280
<v Speaker 9>I think it's going to come from a bottom up

0:15:15.320 --> 0:15:19.720
<v Speaker 9>because historically you're going to see job losses well inside

0:15:21.120 --> 0:15:24.240
<v Speaker 9>a recession itself. And again I think you know, when

0:15:24.240 --> 0:15:26.600
<v Speaker 9>you're looking at the environment that we're in today and

0:15:26.640 --> 0:15:29.479
<v Speaker 9>we talked about in the past, is that the inability

0:15:29.520 --> 0:15:33.480
<v Speaker 9>to reconcile the top down indicators to the bottom up research.

0:15:33.640 --> 0:15:36.760
<v Speaker 9>You know, whether it's you know, ism numbers, it's a

0:15:36.840 --> 0:15:39.920
<v Speaker 9>yield curve, all of which are basically saying that we

0:15:39.920 --> 0:15:42.440
<v Speaker 9>should be in a very deeper session right now. You know,

0:15:42.480 --> 0:15:44.480
<v Speaker 9>none of that is really evident when you're looking at

0:15:44.520 --> 0:15:47.520
<v Speaker 9>companies from a bottom up perspective because of the distortions

0:15:47.520 --> 0:15:49.480
<v Speaker 9>that came about from COVID. So I think you're going

0:15:49.520 --> 0:15:51.800
<v Speaker 9>to have to look at companies and sectors kind of

0:15:51.840 --> 0:15:54.640
<v Speaker 9>on a one off basis as this rolling recession kind

0:15:54.640 --> 0:15:57.080
<v Speaker 9>of makes its way through the overall economy.

0:15:57.600 --> 0:15:59.640
<v Speaker 1>Now, with China, we have seen a little bit of

0:15:59.640 --> 0:16:03.160
<v Speaker 1>a pick up up in markets, largely because of late

0:16:03.200 --> 0:16:05.840
<v Speaker 1>policy makers have changed their tune a little. They seem

0:16:05.840 --> 0:16:09.600
<v Speaker 1>a little friendlier to the private sector. The stimulus hasn't

0:16:09.600 --> 0:16:12.400
<v Speaker 1>really done it. Neither the fiscal nor the monetary stimulus

0:16:12.400 --> 0:16:15.720
<v Speaker 1>has been all that strong. It's been cautious and piecemeal.

0:16:16.040 --> 0:16:17.920
<v Speaker 1>What are you expecting out of China, say, over the

0:16:17.920 --> 0:16:18.880
<v Speaker 1>next quarter or two.

0:16:19.600 --> 0:16:23.680
<v Speaker 9>Well, I think if the stimulus stays focused on investment

0:16:24.240 --> 0:16:29.240
<v Speaker 9>and capacity of manufacturing and exports, it's not going to

0:16:29.280 --> 0:16:33.360
<v Speaker 9>really have much efficacy. You know, my expectation, you're started

0:16:33.400 --> 0:16:36.800
<v Speaker 9>to see some rumors about this is that if China

0:16:36.840 --> 0:16:39.160
<v Speaker 9>is able to shift the focus of its stimulus from

0:16:39.200 --> 0:16:42.520
<v Speaker 9>investment to consumption, you know, part of that could be

0:16:42.920 --> 0:16:47.280
<v Speaker 9>loosening you know, urban residency curves that they have. You know,

0:16:47.320 --> 0:16:50.680
<v Speaker 9>there's a very detailed system with residence permits in China

0:16:51.040 --> 0:16:54.400
<v Speaker 9>that you know impacts workers as they move through from

0:16:54.480 --> 0:16:57.000
<v Speaker 9>the countryside into the cities and so forth. I think

0:16:57.040 --> 0:17:00.480
<v Speaker 9>the real key is to take you know, big significant

0:17:00.520 --> 0:17:03.160
<v Speaker 9>actions that are going to be able to move the

0:17:03.760 --> 0:17:07.080
<v Speaker 9>stimulus away from the export driven model, which because of

0:17:07.119 --> 0:17:10.000
<v Speaker 9>all the tariffs and other restrictions that are going about,

0:17:10.560 --> 0:17:12.760
<v Speaker 9>I think aren't going to have that same kind of impact.

0:17:12.840 --> 0:17:15.760
<v Speaker 9>What they have to do is really drive it towards consumption.

0:17:15.960 --> 0:17:18.160
<v Speaker 9>And there's several ways you can do that, and residency

0:17:18.920 --> 0:17:20.520
<v Speaker 9>permits is probably one way to start.

0:17:21.440 --> 0:17:25.000
<v Speaker 1>Okay, just in forty seconds or so, your best option

0:17:25.200 --> 0:17:26.119
<v Speaker 1>in Asia at.

0:17:26.000 --> 0:17:29.760
<v Speaker 9>The moment, well, I think you know, right now, if

0:17:29.800 --> 0:17:32.720
<v Speaker 9>you're looking at Asia, you're starting to see some of

0:17:32.720 --> 0:17:36.600
<v Speaker 9>the frontier markets do very very well, whether it's Vietnam

0:17:36.800 --> 0:17:39.639
<v Speaker 9>or other areas. You know, traditionally one of the things

0:17:39.640 --> 0:17:43.199
<v Speaker 9>that looks very strong when you see dollar weakness is

0:17:43.240 --> 0:17:47.199
<v Speaker 9>that emerging markets outperform you know, develop markets, and one

0:17:47.200 --> 0:17:49.120
<v Speaker 9>of the things that we've started to see is a breakout.

0:17:49.520 --> 0:17:52.760
<v Speaker 9>Well not a technician, but it's hard to ignore, you know,

0:17:52.800 --> 0:17:54.720
<v Speaker 9>the breakout that you're seeing in some of the emerging

0:17:55.000 --> 0:17:58.720
<v Speaker 9>in frontier markets, Vietnam being one of them as a

0:17:58.920 --> 0:18:01.000
<v Speaker 9>place to go in terms of speculative assets.

0:18:03.920 --> 0:18:06.760
<v Speaker 1>This is Bloomberg Daybreak Asia, your morning brief on the

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