WEBVTT - APAC Markets Posturing for US Election

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<v Speaker 1>Good morning, and welcome to the Bloomberg Daybreak Asia podcast.

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<v Speaker 1>I'm Doug Prisner. Here are the stories we're following today.

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<v Speaker 1>Joining us now is Mary Nicole or she is Bloomberg

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<v Speaker 1>and live strategist joining us from Singapore. It's always a

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<v Speaker 1>pleasure to speak with you. I know that you write

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<v Speaker 1>a lot for the blog, and I'm curious as to

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<v Speaker 1>what's top of mind for you today. What are you

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<v Speaker 1>kind of trying to feature here, what is the market

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<v Speaker 1>wrestling with and what are you discovering as you take

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<v Speaker 1>a closer look.

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<v Speaker 2>Yeah, there's a few headwinds really that's shaping how we're

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<v Speaker 2>looking at markets. So obviously there's the repricing of the

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<v Speaker 2>FED because we've seen an improvement in the US data.

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<v Speaker 2>But then there's also these other confluence of factors, including

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<v Speaker 2>the US elections, where people are on pause here in

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<v Speaker 2>Asia trying to figure out how does this affect Asian markets,

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<v Speaker 2>what are the implications of let's say, a higher fiscal

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<v Speaker 2>deficit or the occasions of potential tariffs. And then, of

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<v Speaker 2>course you still have the fundamental backdrop, so you still

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<v Speaker 2>have to focus on the labor market report, which is

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<v Speaker 2>coming next week. You have a busy earning season, So

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<v Speaker 2>there's a whole number of things stacking up that's not

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<v Speaker 2>giving Asian markets a chance to really breathe. And then,

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<v Speaker 2>of course you still have China that's hanging in the wings,

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<v Speaker 2>where we're still waiting for the NPC Standing Committee and

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<v Speaker 2>some of their decisions and how that will affect the

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<v Speaker 2>next phase of the implementation of the stimulus that they

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<v Speaker 2>had are originally planned.

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<v Speaker 1>So what are people saying about the stimulus that we

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<v Speaker 1>are aware of so far, the programs that have been announced,

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<v Speaker 1>and I know in many cases the actual program itself

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<v Speaker 1>has not been implemented. We're waiting for that. But do

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<v Speaker 1>people really, the people that you speak with, do they

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<v Speaker 1>believe that this is going to have a fundamental shift

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<v Speaker 1>in psychology where the investment community, where the retail community

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<v Speaker 1>is concerned, hubers are concerned. Is it going to move

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<v Speaker 1>the needle at all?

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<v Speaker 2>Yeah, it really comes down to what they're going to

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<v Speaker 2>do on the property market, right, especially on the retail side.

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<v Speaker 2>For the remember how involved the retail sector in China

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<v Speaker 2>is in their own equity markets, and they've lost a

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<v Speaker 2>lot of money on their property. So if they haven't

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<v Speaker 2>seen that recovery come through, or if they haven't seen

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<v Speaker 2>anything come through on the property market, that's still going

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<v Speaker 2>to weigh on sentiment. And then of course for foreign investors,

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<v Speaker 2>you're still thinking about, Okay, how are they managing the

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<v Speaker 2>property sector, how are they going to boost consumer demand?

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<v Speaker 2>And then on top of that, it's what's going to

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<v Speaker 2>happen between US China relations. So and then of course

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<v Speaker 2>you have this report that came out this morning about

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<v Speaker 2>China stimulus being insufficient from the IMF in terms of

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<v Speaker 2>improving and curbing you know, deflationary risks, and that's quite

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<v Speaker 2>and they're saying that what they've set out is not enough.

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<v Speaker 1>It's interesting. I can't tell you the number of conversations

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<v Speaker 1>that I've had on this topic where the question that

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<v Speaker 1>comes into my mind is can China basically fall into

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<v Speaker 1>the same trap that Japan fell into for three decades?

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<v Speaker 1>And that's a real debate. Some people say no way,

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<v Speaker 1>China is a very different economy, but many people say yes,

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<v Speaker 1>the analog is sufficient and China is running the risk

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<v Speaker 1>of remaining in deflation for a substantial period of time.

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<v Speaker 2>Yeah, the similarities are really hard to ignore. At the

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<v Speaker 2>end of the day, between what Japan experienced in the

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<v Speaker 2>eighties and nineties versus what we're seeing with Japan today,

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<v Speaker 2>and a lot of it has to do with we

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<v Speaker 2>can't forget they had high debt, deflation and then of

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<v Speaker 2>course depressed consumer confidence. That's what Japan had during their time.

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<v Speaker 2>That's what we're seeing now with China. So it's hard

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<v Speaker 2>not to draw the similarities unless you see really aggressive

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<v Speaker 2>stimulus coming through from China, which really we haven't seen

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<v Speaker 2>yet to delay some of these concerns and to ignore

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<v Speaker 2>the potential Japanification of China.

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<v Speaker 1>Let's stay with Japan for a moment, because this yen

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<v Speaker 1>has been dramatically weakened in the last several days. I

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<v Speaker 1>think earlier today we traded on the week side of

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<v Speaker 1>one point fifty two against the dollar. I know we

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<v Speaker 1>have a BOJ meeting around the corner. I haven't heard

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<v Speaker 1>of anyone that's expecting a move from the Bank of Japan.

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<v Speaker 1>So we are looking for a period of time when

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<v Speaker 1>you got weakness in the end and maybe intervention on

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<v Speaker 1>the part of the Ministry of Finance. Is that what

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<v Speaker 1>we're looking at.

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<v Speaker 2>Yeah, for now, we're seeing a lot of verbal intervention

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<v Speaker 2>coming through right just a little bit of jaw boning

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<v Speaker 2>to talk down to ensure that the end doesn't go

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<v Speaker 2>two week but it's only it can only help for

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<v Speaker 2>such a period of time, right, it has its limits.

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<v Speaker 2>I think what the what the main thing is for Japan.

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<v Speaker 2>Obviously the key one of the biggest factors that's really

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<v Speaker 2>impacted the end has been the repricing of the fet

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<v Speaker 2>that's been first and foremost. The second impact has been

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<v Speaker 2>coming from the concerns about politics. If LDP doesn't have

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<v Speaker 2>a clear mandate, then you just leave a vacuum in

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<v Speaker 2>terms of what the BOJ is going to do in

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<v Speaker 2>terms of how are they going to move ahead with

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<v Speaker 2>policy if there's increased political volatility, and I think that's

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<v Speaker 2>also weighing on sentiment of the en and of course

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<v Speaker 2>you're seeing just higher volatility with the end.

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<v Speaker 1>But there's also an inflation story that's been happening in China,

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<v Speaker 1>and this is something that the BOJ has been waiting

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<v Speaker 1>for years to occur. It's happened. It's been happening now

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<v Speaker 1>for two years it seems like where inflation has been

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<v Speaker 1>above that two percent target. What do we know about

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<v Speaker 1>the inflation story in Japan right now? Particularly if you

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<v Speaker 1>look at a currency that's going to continue to allow

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<v Speaker 1>for the importation of inflation into the Japanese economy.

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<v Speaker 3>Yeah.

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<v Speaker 2>Actually, it's really interesting. If you chart let's say, Japan

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<v Speaker 2>CPI versus versus the yen, it's this perfect relationship, obviously

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<v Speaker 2>indicating that you know, the much of what has been

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<v Speaker 2>driving inflation has been the yen weakness. And then you've

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<v Speaker 2>had some of the numbers coming out today for October

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<v Speaker 2>CPI on for the Tokyo CPI numbers, they were still

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<v Speaker 2>above two percent, but they are creeping up in terms

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<v Speaker 2>of being higher than a little bit higher than expectations.

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<v Speaker 2>So if and people are feeling the pain on the ground,

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<v Speaker 2>so if they don't do something, you could see inflation

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<v Speaker 2>really getting out of control. And that puts a real

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<v Speaker 2>conundrum for the BOJ because if you, let's say, have

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<v Speaker 2>political potential political instability or weak government versus higher inflation,

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<v Speaker 2>how do you manage that balance?

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<v Speaker 1>So no change in BOJ policy next week, but this week?

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<v Speaker 4>No?

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<v Speaker 3>Okay?

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<v Speaker 1>So is it fair to say that we do get

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<v Speaker 1>maybe some action either in December or January? Is that

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<v Speaker 1>what the market is telling us?

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<v Speaker 2>Market's telling us a little bit later, Oh, they're still

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<v Speaker 2>not believing that they're looking for any sort of changes

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<v Speaker 2>from the boj So if we look at let's say,

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<v Speaker 2>what the market is pricing, they're not looking for really

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<v Speaker 2>any moves. Let's say, you know, another fifteen basis point

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<v Speaker 2>move until January for let's say, for looking for a

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<v Speaker 2>fifteen basis point move, Okay, until January. So there's still

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<v Speaker 2>some time where the market is. And even boj Uada said,

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<v Speaker 2>you know times on our side only recently, so there's

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<v Speaker 2>still something. But I think in terms of what if

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<v Speaker 2>the if the pressure from the currency and the currency

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<v Speaker 2>weakness becomes too much, they may be forced to act

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<v Speaker 2>sooner rather than later.

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<v Speaker 1>Yeah, it's been remarkable to see how quickly the end

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<v Speaker 1>got here to around one fifty two against the dollar. Mary,

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<v Speaker 1>thank you so much for being with us. It's always

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<v Speaker 1>a pleasure. Bloomberg's Mary Nicola m Live Strategists, joining us

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<v Speaker 1>from Singapore here on the Daybreak Asia podcast. Joining us

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<v Speaker 1>now is Gene Goldman. He is the chief investment officer

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<v Speaker 1>at Satara Financial Group. Joining us from Los Angeles. Gene,

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<v Speaker 1>thanks for making time to chat. Let's begin with the

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<v Speaker 1>FED because lately the market has been kind of debating

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<v Speaker 1>the degree to which the FED is going to potentially

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<v Speaker 1>scale back its pace of rate cuts. Where are you

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<v Speaker 1>in this debate right now?

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<v Speaker 4>When the FED came out with fifty basis points in September,

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<v Speaker 4>I was shocked. I mean I didn't think they should

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<v Speaker 4>do that. Think about this, you know, you know, the

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<v Speaker 4>employee picture was not as bad as the FED had believed.

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<v Speaker 4>You know, yes, the unemployment rate had picked up a bit,

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<v Speaker 4>but that was due to labor force participation. Jobs claims

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<v Speaker 4>are still pretty low. Payroll report looks pretty good, The

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<v Speaker 4>entire economy is not that bad. Retail sales, the Economic

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<v Speaker 4>Surprise Index GDP, I can rattle off tons and tons

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<v Speaker 4>of data that says that the economy is better than expected.

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<v Speaker 4>What worries me is that the FED is stimulating an

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<v Speaker 4>economy that does not need to be stimulated. And what

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<v Speaker 4>happened to the Feds focused on data dependency?

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<v Speaker 3>Right? Where'd that go? So? I do think the Fed

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<v Speaker 3>will need a lower.

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<v Speaker 4>Rates still because we're still pretty restrictive at two and

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<v Speaker 4>a quarter over over inflation.

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<v Speaker 3>But they've got to slow it down.

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<v Speaker 4>I suspect maybe a quarter in November and a quarter

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<v Speaker 4>in December, but that fifty in September was ridiculous.

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<v Speaker 1>So if the market has to recalibrate the idea that

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<v Speaker 1>the Fed is going to be accommodative, I mean to

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<v Speaker 1>say that maybe it was, as you said, overly aggressive

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<v Speaker 1>in estimating rate cuts. Is that a risk for the

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<v Speaker 1>equity space?

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<v Speaker 4>It is definitely a risk, and the bond market is

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<v Speaker 4>screaming it's a risk. Look at the ten year treasure yield,

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<v Speaker 4>for example, right before the Fed cut rates was at

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<v Speaker 4>three sixty two. Today I'm looking at my Bloomberg it's

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<v Speaker 4>at four to nineteen. That's a big surge in about

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<v Speaker 4>a month. That is a scary searche in just ten

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<v Speaker 4>year yields. And you see what happened. You know, mortgage rates,

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<v Speaker 4>as we all know, are tied to the ten year

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<v Speaker 4>treasure yield. Mortgage rates move higher, closer to seven percent,

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<v Speaker 4>slowed down mortgage applications. You add this with rising geopolitical risks,

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<v Speaker 4>election uncertainty. Third quarter earnings are okay, and then you

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<v Speaker 4>add on a little bit of you'll sprinkle in a

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<v Speaker 4>little evaluations and concentration. We have ourselves a setup for

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<v Speaker 4>a big volatile period coming up.

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<v Speaker 1>So what industry groups are most vulnerable right now in

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<v Speaker 1>your estimation.

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<v Speaker 4>Clearly the high valuation and the high concentration industry group.

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<v Speaker 4>So clearly technology communications services, the big ones, commune, consumer discretionary.

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<v Speaker 4>I think those areas are right for a pullback. I

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<v Speaker 4>think the areas, on the other hand, that look pretty attractive.

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<v Speaker 4>You really defensive growth areas like healthcare. Healthcare is one

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<v Speaker 4>of our favorite sectors. I think it's defensive growth does

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<v Speaker 4>well under a divided government, and neither Harris nor Trump

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<v Speaker 4>are proposing any major healthcare reform. Also value sectors. Small

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<v Speaker 4>cap looks pretty good. We see whenever the Fed cuts rates,

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<v Speaker 4>market breath tends to widen, and you see, for example,

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<v Speaker 4>equal weight SMP is outperforming market cap SMP over the

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<v Speaker 4>last few months. Great, great news. So we would look

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<v Speaker 4>at value small cap, defensive growth and a great area.

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<v Speaker 4>I think it's pretty attractive as financials. Yield curve steepening

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<v Speaker 4>looks pretty good for financials. Banks are going to make

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<v Speaker 4>more money in this type of environment.

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<v Speaker 1>Are you seeing opportunities offshore right now? Europe seems to

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<v Speaker 1>have the inflation story under control. Maybe some rate cuts

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<v Speaker 1>are in store, and that may be a way of

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<v Speaker 1>revitalizing growth on the continent, and we've been talking a

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<v Speaker 1>lot about the stimulus programs being unleashed by Beijing and

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<v Speaker 1>perhaps a growth spurt that may occur in China. I'm

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<v Speaker 1>curious as to whether or not you're exposed offshore right

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<v Speaker 1>now and to what extent.

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<v Speaker 4>Yeah, so we're neutral in both areas, both emerging markets

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<v Speaker 4>and international relative to our benchmarks. You know, both areas

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<v Speaker 4>are pretty good from a diversification standwent. You do want

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<v Speaker 4>some exposure. We're not ready yet to jump full both

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<v Speaker 4>feed in yet, just because we want to see see

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<v Speaker 4>a weaker dollar. A week your dollar will benefit both

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<v Speaker 4>investing in both areas. We don't see the weaker dollar yet.

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<v Speaker 4>The dollar has weaken a little bit, but we want

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<v Speaker 4>to see more boom and that weakness of the dollar

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<v Speaker 4>and to get that. Once we get that, that will

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<v Speaker 4>help us drive our investment outside.

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<v Speaker 3>In the US.

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<v Speaker 4>I think China, China, you know, has a pretty good

0:12:10.240 --> 0:12:13.120
<v Speaker 4>surge in the markets really on monetary policy, but we

0:12:13.160 --> 0:12:15.200
<v Speaker 4>need to see more in fiscal policy. And you think

0:12:15.240 --> 0:12:17.720
<v Speaker 4>about China, China has this big overhang. You know, the

0:12:17.800 --> 0:12:21.000
<v Speaker 4>lingering one child policy is really hampered their consumer spending.

0:12:21.240 --> 0:12:23.199
<v Speaker 4>And China is trying to transform, as we know, from

0:12:23.240 --> 0:12:27.080
<v Speaker 4>a manufacturing to a consumer. They're trying monetary stimulus, but

0:12:27.120 --> 0:12:29.960
<v Speaker 4>fiscal stimulus is not there yet, so we're not ready

0:12:30.000 --> 0:12:32.880
<v Speaker 4>yet to jump in emerging markets really full of board.

0:12:32.920 --> 0:12:35.880
<v Speaker 1>Yet we're getting very close to the US presidential election.

0:12:36.000 --> 0:12:39.120
<v Speaker 1>How do you feel about this as a factor in

0:12:39.200 --> 0:12:41.480
<v Speaker 1>determining the direction of the market going forward.

0:12:43.160 --> 0:12:45.040
<v Speaker 3>That's a great question. First of all, you know the

0:12:45.080 --> 0:12:45.559
<v Speaker 3>old story.

0:12:45.559 --> 0:12:47.440
<v Speaker 4>Listen during an election year, if you like, the last

0:12:47.480 --> 0:12:50.160
<v Speaker 4>twenty election years, the stock market has been positive in

0:12:50.240 --> 0:12:52.520
<v Speaker 4>eighteen in the last twenty years. We don't see that

0:12:52.559 --> 0:12:54.640
<v Speaker 4>being a difference. We do think that the stock market

0:12:54.679 --> 0:12:58.160
<v Speaker 4>tends to ignore the election. But what that said, though, historically,

0:12:58.160 --> 0:13:00.800
<v Speaker 4>what you've seen is that usually the first two months

0:13:00.840 --> 0:13:03.199
<v Speaker 4>going into an election, you know, there's a lot of

0:13:03.240 --> 0:13:06.520
<v Speaker 4>volatility stocks on average, followed by about sixty basis points,

0:13:06.679 --> 0:13:10.960
<v Speaker 4>But the key period from election day to inauguration, on average,

0:13:11.000 --> 0:13:13.400
<v Speaker 4>stock market returns about one and a half percent. So

0:13:13.440 --> 0:13:15.959
<v Speaker 4>we do see some solace in the fact that whoever

0:13:16.000 --> 0:13:19.040
<v Speaker 4>wins the election is that at least we find out

0:13:19.080 --> 0:13:21.360
<v Speaker 4>who wins the election. That's actually pretty good news. And

0:13:21.360 --> 0:13:23.040
<v Speaker 4>you're seeing a lot of companies out there who have

0:13:23.080 --> 0:13:24.760
<v Speaker 4>come out and said, you know what, we are going

0:13:24.760 --> 0:13:27.800
<v Speaker 4>to delay projects, We're going to delay hiring, we're going

0:13:27.880 --> 0:13:30.400
<v Speaker 4>to delay whatever it is because we are unsure of

0:13:30.440 --> 0:13:32.720
<v Speaker 4>who's going to win. But the good news is that

0:13:32.800 --> 0:13:35.559
<v Speaker 4>whoever wins, we're likely going to see a dividing government.

0:13:35.600 --> 0:13:36.839
<v Speaker 4>So really, at the end of the day, I hate

0:13:36.840 --> 0:13:39.840
<v Speaker 4>to stay this, but nothing gets done. Markets, you're gonna

0:13:39.960 --> 0:13:42.360
<v Speaker 4>like that. So I think near term volatility. But the

0:13:42.480 --> 0:13:44.560
<v Speaker 4>end of the day, just like we've been saying, you know,

0:13:44.559 --> 0:13:46.800
<v Speaker 4>with the recent pullbacks, any pullback will be a buying

0:13:46.840 --> 0:13:50.680
<v Speaker 4>opportunity because again, nothing will get done and lots of

0:13:50.679 --> 0:13:52.880
<v Speaker 4>cash on the sideline waiting to get in at.

0:13:52.760 --> 0:13:53.560
<v Speaker 3>A better valuation.

0:13:53.679 --> 0:13:56.120
<v Speaker 1>Boy, I'm glad you mentioned that point because I was

0:13:56.120 --> 0:14:00.000
<v Speaker 1>reading an article on Bloomberg today. A stampede of cash

0:14:00.040 --> 0:14:02.079
<v Speaker 1>has been flowing at the US money market funds in

0:14:02.120 --> 0:14:05.000
<v Speaker 1>the last week. I think something a little over forty

0:14:05.040 --> 0:14:08.160
<v Speaker 1>billion dollars moving into money market funds. What will it

0:14:08.200 --> 0:14:11.480
<v Speaker 1>take for that money to come off the sidelines and

0:14:11.640 --> 0:14:14.160
<v Speaker 1>be put to work in either the equity market or

0:14:14.160 --> 0:14:15.040
<v Speaker 1>in the bond market.

0:14:15.840 --> 0:14:18.079
<v Speaker 4>Yeah, so we look at so there's six trillion of

0:14:18.120 --> 0:14:20.120
<v Speaker 4>money market assets on the sideline. But we also look

0:14:20.120 --> 0:14:23.440
<v Speaker 4>at money market assets and cash and savings and bank

0:14:23.440 --> 0:14:25.960
<v Speaker 4>accounts because we do think there's some high correlation there,

0:14:26.000 --> 0:14:28.640
<v Speaker 4>and that's twenty four trillion dollars what we think will

0:14:28.680 --> 0:14:32.200
<v Speaker 4>happen if we have a pullback, if we have better valuations,

0:14:32.280 --> 0:14:34.960
<v Speaker 4>just like we saw in the almost correction in July,

0:14:35.440 --> 0:14:37.200
<v Speaker 4>just like we saw in the correction in October of

0:14:37.280 --> 0:14:39.560
<v Speaker 4>last year, that money is waiting to come in for

0:14:39.600 --> 0:14:42.200
<v Speaker 4>a better valuation. We do expect some of the money

0:14:42.200 --> 0:14:44.920
<v Speaker 4>will move in as prices come back in line to

0:14:45.040 --> 0:14:47.880
<v Speaker 4>long term expectations. You know, right now we have high valuations.

0:14:47.920 --> 0:14:50.200
<v Speaker 4>The pe ratio on the SMP is what twenty two

0:14:50.280 --> 0:14:54.200
<v Speaker 4>times Ford earnings, high expectations, high concentration. All this is

0:14:54.280 --> 0:14:57.560
<v Speaker 4>kind of a mix for volatility and markets. Money is

0:14:57.600 --> 0:15:00.200
<v Speaker 4>weighing in the sideline to move in slowly. On the

0:15:00.200 --> 0:15:02.680
<v Speaker 4>fixed income side, you know, I think the good news

0:15:02.720 --> 0:15:06.240
<v Speaker 4>is that if you look at bond fund inflows this year,

0:15:06.280 --> 0:15:08.800
<v Speaker 4>there's only been one week that's been in an outflow,

0:15:09.120 --> 0:15:11.360
<v Speaker 4>so there's still a lot of demand for bonds. I

0:15:11.400 --> 0:15:13.360
<v Speaker 4>just think right now there's a lot of people waiting

0:15:13.360 --> 0:15:16.080
<v Speaker 4>on the sideline, worry about duration risk. So what we're

0:15:16.080 --> 0:15:18.960
<v Speaker 4>telling our clients today good news. You know, bonds offer

0:15:19.000 --> 0:15:22.120
<v Speaker 4>an attractive yield relative to inflation over inflation. But at

0:15:22.120 --> 0:15:25.400
<v Speaker 4>the same time, though, we do think yields will come

0:15:25.440 --> 0:15:27.800
<v Speaker 4>down eventually, especially as a FEDS are saying, you know,

0:15:27.960 --> 0:15:31.160
<v Speaker 4>raize cut rates. I think you look at less next year.

0:15:31.200 --> 0:15:34.200
<v Speaker 4>You're two years the you know, the ending rate for

0:15:34.240 --> 0:15:36.000
<v Speaker 4>the FED is a two point nine to three percent,

0:15:36.040 --> 0:15:38.600
<v Speaker 4>maybe a little bit higher. But regardless, long term rates

0:15:38.600 --> 0:15:40.080
<v Speaker 4>are coming down. But we'll see what happens.

0:15:40.160 --> 0:15:42.800
<v Speaker 1>Yeah, there's still a debate over where the terminal rate is.

0:15:42.840 --> 0:15:43.800
<v Speaker 1>Do you have a sense of that.

0:15:45.040 --> 0:15:46.520
<v Speaker 4>If you look at the let's say the FED, let's

0:15:46.520 --> 0:15:48.880
<v Speaker 4>believe the FED, the fest is two point nine to three.

0:15:49.320 --> 0:15:50.640
<v Speaker 4>I do think it's going to be a little bit

0:15:50.720 --> 0:15:53.680
<v Speaker 4>higher than that because let's just say that we have

0:15:53.800 --> 0:15:55.000
<v Speaker 4>more government spending.

0:15:55.080 --> 0:15:57.040
<v Speaker 3>Let's say that. You know, you look at for example, the.

0:15:58.600 --> 0:16:01.640
<v Speaker 4>Government the end of this fiscal year, you know, we're

0:16:01.640 --> 0:16:04.920
<v Speaker 4>at at one point eight trillion dollars, third highest deficit

0:16:05.000 --> 0:16:07.800
<v Speaker 4>on record over twenty twenty and twenty twenty one, third

0:16:07.880 --> 0:16:11.240
<v Speaker 4>highest year. Nine hundred and fifty of that billion dollars

0:16:11.320 --> 0:16:14.440
<v Speaker 4>of that was for treasury payments. We do see a

0:16:14.520 --> 0:16:17.040
<v Speaker 4>lot of treasury payments coming in. We do see a

0:16:17.040 --> 0:16:19.680
<v Speaker 4>lot of debt a love yield coming into the market.

0:16:19.880 --> 0:16:21.400
<v Speaker 4>But again it comes a point when you're thinking it

0:16:21.520 --> 0:16:24.720
<v Speaker 4>yield over over inflation. So there's some pretty attractive areas.

0:16:24.840 --> 0:16:27.160
<v Speaker 4>So what we've been telling our clients is it's okay

0:16:27.200 --> 0:16:29.560
<v Speaker 4>to be you know, strong and durational, you know interest

0:16:29.600 --> 0:16:31.640
<v Speaker 4>rate sensitivity, but it comes to point you need to

0:16:31.720 --> 0:16:34.320
<v Speaker 4>ratchet that down a little bit, especially if the yield

0:16:34.360 --> 0:16:37.120
<v Speaker 4>curve steepens and there some attractive opportunities on the shorter

0:16:37.200 --> 0:16:37.920
<v Speaker 4>end of the yell curve.

0:16:38.160 --> 0:16:40.040
<v Speaker 1>Gene will leave it there. Thanks so much for taking

0:16:40.080 --> 0:16:43.760
<v Speaker 1>time to be on the Daybreak Asia podcast. Jeane Goldman,

0:16:44.080 --> 0:16:47.640
<v Speaker 1>chief investment Officer at Satara Financial Group, joining us from

0:16:47.720 --> 0:16:53.560
<v Speaker 1>Los Angeles. This is Bloomberg day Break Asia, your morning

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