WEBVTT - Fed Holds Rates, Tencent Doubles Buyback 0:00:02.480 --> 0:00:10.480 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:10.520 --> 0:00:13.720 Daybreak Asia podcast. I'm Doug Krisner. You can join Brian 0:00:13.800 --> 0:00:16.640 Curtis and myself for the stories, making news and moving 0:00:16.680 --> 0:00:19.560 markets in the APAC region. You can subscribe to the 0:00:19.600 --> 0:00:23.080 show anywhere you get your podcast and always on Bloomberg Radio, 0:00:23.320 --> 0:00:27.360 the Bloomberg Terminal, and the Bloomberg Business app well. 0:00:27.400 --> 0:00:30.800 The Federal Reserve held its benchmark FED Funds rate steady 0:00:30.960 --> 0:00:33.280 and a range between five and a quarter to five 0:00:33.320 --> 0:00:37.320 and a half percent. The decision was unanimous. Officials also 0:00:37.400 --> 0:00:40.560 maintained their outlook for three twenty five basis point cuts 0:00:40.560 --> 0:00:43.839 this year. After the decision, Chair J. Powell said that 0:00:43.880 --> 0:00:47.280 the Fed would require more evidence of a retreat in inflation. 0:00:48.200 --> 0:00:50.400 The Committee does not expect it will be appropriate to 0:00:50.440 --> 0:00:54.040 reduce the target range until it has gained greater confidence 0:00:54.360 --> 0:00:58.560 that inflation is moving sustainably down toward two percent. Of course, 0:00:58.600 --> 0:01:00.880 we're committed to both sides of our dual mandate, and 0:01:01.360 --> 0:01:04.639 an unexpected weakening in the labor market could also warrant 0:01:04.680 --> 0:01:05.720 a policy response. 0:01:07.280 --> 0:01:10.160 So that again is three rate cuts this year, but 0:01:10.280 --> 0:01:13.000 for twenty twenty five, the Fed is now forecasting just 0:01:13.120 --> 0:01:16.600 three rate cuts instead of the previous forecast of four. 0:01:17.280 --> 0:01:19.120 Joining us now to shed some light on all of 0:01:19.160 --> 0:01:22.640 this is Lydia Bassour, who's a senior economist at EY, 0:01:23.040 --> 0:01:25.480 to talk a little bit more in detail here on 0:01:25.520 --> 0:01:28.240 the FED. Lydia, I heard someone say the other day 0:01:28.600 --> 0:01:32.560 that j. Pwell has this uncanny ability to not create 0:01:32.600 --> 0:01:36.440 any news, and I think today was probably an example. 0:01:37.080 --> 0:01:40.240 It's steady as she goes sort of thing. But I 0:01:40.800 --> 0:01:42.880 think we can say that one of the points that 0:01:43.400 --> 0:01:46.679 Powell made effectively, I think was that, look, the FED 0:01:46.760 --> 0:01:50.440 did not overreact to the seven months of quick disinflation 0:01:50.600 --> 0:01:54.080 last year, and it's not overreacting now to the slightly 0:01:54.160 --> 0:01:58.080 hot two months January and February of hot inflation data 0:01:58.120 --> 0:02:01.240 this year. It so we the poke holes in that, 0:02:01.560 --> 0:02:01.880 is it? 0:02:03.920 --> 0:02:05.680 Yeah, So that's right. 0:02:05.760 --> 0:02:07.920 What we say today is I think a FED that 0:02:08.000 --> 0:02:12.040 really stayed the course and and really, you know, the 0:02:12.080 --> 0:02:16.120 FED narrative hasn't really changed. The FED is expecting inflation 0:02:16.240 --> 0:02:18.839 to continue to move lower, and it's still believing that 0:02:19.240 --> 0:02:22.040 you know, sometime this year they will be you know, 0:02:22.120 --> 0:02:24.880 in a position to start lowering interest rate. But as 0:02:24.880 --> 0:02:27.600 you said, they want to gain greater confidence that inflation 0:02:27.720 --> 0:02:30.880 is moving sustainable towards two percent, and that means we 0:02:31.000 --> 0:02:34.320 need more good inflation data in the coming months to 0:02:34.360 --> 0:02:37.200 start that is in process. In our view, we think 0:02:37.280 --> 0:02:39.799 that you know, they're likely to be in that position 0:02:40.240 --> 0:02:41.240 in June, in. 0:02:41.240 --> 0:02:42.040 The middle of the year. 0:02:42.080 --> 0:02:44.600 We think that by June they can start theseing process 0:02:45.000 --> 0:02:49.040 and we do expect to see you know, three rate cuts. 0:02:48.400 --> 0:02:49.200 Later this year. 0:02:50.080 --> 0:02:52.360 Is it possible that we're living in a world where 0:02:52.440 --> 0:02:56.800 the FED will tolerate inflation just above that two percent target? 0:02:58.600 --> 0:03:02.280 Yeah, there is, you know, there are some there are 0:03:02.320 --> 0:03:05.959 some factors in the economy, in this post pandemic economy 0:03:05.960 --> 0:03:10.000 that are pointing to uh, you know, some inflation things 0:03:10.080 --> 0:03:13.320 somewhat you know, higher than than the inflation target. 0:03:13.960 --> 0:03:16.239 We've seen some structural changes in the economy. 0:03:16.280 --> 0:03:20.720 There are also you know, demographic changes, the energy transition 0:03:21.840 --> 0:03:24.760 to side a few and and the slow down in globalization, 0:03:25.560 --> 0:03:28.040 and and all of these factors do suggest that, you know, 0:03:28.080 --> 0:03:31.680 inflation could be hovering slightly above the two person target. 0:03:32.160 --> 0:03:34.760 Now the FED is still committed to bring inflation back 0:03:34.800 --> 0:03:38.400 to target. And and I think what was even you know, 0:03:38.640 --> 0:03:42.840 more important in in the new set of of economic 0:03:42.880 --> 0:03:45.600 projections on the dot plot. Is the fact that the 0:03:45.600 --> 0:03:48.440 FED is now I think, really embracing this idea that 0:03:48.600 --> 0:03:51.560 we can continue to see the tend economic growth with 0:03:51.720 --> 0:03:56.960 inflation coming back lower thanks to favorable supply side conditions 0:03:57.040 --> 0:04:01.320 which have normalized significantly, but also pick up in productivity growth. 0:04:02.080 --> 0:04:02.280 Yeah. 0:04:02.280 --> 0:04:04.600 I think we can argue that the FED can afford 0:04:04.640 --> 0:04:08.840 to be patient. Inflation now is well below the fed's 0:04:09.000 --> 0:04:12.200 benchmark rate. I mean by a long shot, it's somewhere 0:04:12.240 --> 0:04:15.440 around the high threes at the moment, and the benchmark 0:04:15.480 --> 0:04:18.800 rate is five and a half percent. Unemployment is near 0:04:18.920 --> 0:04:23.880 record lows, and inflation is below wage increases. So if 0:04:23.960 --> 0:04:25.880 you ask people, I mean, they're not jumping up and down. 0:04:25.880 --> 0:04:29.839 They're still complaining about inflation, but the math is working 0:04:30.120 --> 0:04:31.080 for them. 0:04:32.160 --> 0:04:32.360 Yeah. 0:04:32.839 --> 0:04:36.040 I think what was really important is the fact that, 0:04:36.120 --> 0:04:38.680 as you said, they're willing to look through the noise 0:04:39.040 --> 0:04:41.280 in the inflation data at the beginning of the year, 0:04:41.520 --> 0:04:45.839 and they did not overreact to the side surprising inflation. 0:04:46.279 --> 0:04:47.839 But if you take a step back and look at 0:04:47.880 --> 0:04:51.400 the broad inflation trend, we continue to think that we 0:04:51.560 --> 0:04:54.400 remain in a disinflationary environment, and I think that's what 0:04:54.560 --> 0:04:58.080 the FED is also looking at. We have seen a 0:04:58.160 --> 0:05:02.120 significant rebalancing in label market conditions and also slow down 0:05:02.160 --> 0:05:03.080 in wage growth. 0:05:03.920 --> 0:05:04.640 When we look at. 0:05:04.560 --> 0:05:08.880 Pricing power, companies have have certainly seen a decrease in 0:05:08.960 --> 0:05:13.080 their pricing power and and and you know, shrinking in 0:05:13.240 --> 0:05:15.640 in profit margins as well. And then when we look 0:05:15.680 --> 0:05:18.440 at some of the inflation drivers such as you know, 0:05:18.520 --> 0:05:22.400 shelter inflation, we're also expecting to see mode inflation there. 0:05:22.760 --> 0:05:24.520 So I do think that, you know, as we move 0:05:24.600 --> 0:05:27.440 throughout the year, you're going to continue to see that 0:05:27.600 --> 0:05:31.560 broad this inflation trend in you know, playing out. And 0:05:31.680 --> 0:05:33.919 I think that this is really going to be allowing 0:05:33.960 --> 0:05:38.719 the FED to start easing and to start the easing cycle. 0:05:39.160 --> 0:05:42.600 When we look at the macro environment, so often the 0:05:42.720 --> 0:05:46.040 calculations are based on cold, hard facts, and I'm wondering 0:05:46.080 --> 0:05:49.640 if there's an affect here that we can maybe you know, 0:05:49.760 --> 0:05:52.440 believe in, which is to say that maybe this FED 0:05:52.560 --> 0:05:55.480 is just is poised to cut, it would very much 0:05:55.760 --> 0:05:57.560 like to cut. Is that the feeling that you get 0:05:58.920 --> 0:05:59.279 there is. 0:05:59.360 --> 0:06:01.800 This feeling going out of this meeting that the FED 0:06:02.080 --> 0:06:04.840 wants to cut whenever it will be appropriate to do 0:06:04.960 --> 0:06:08.480 so and whenever it can do so. And I think, 0:06:08.680 --> 0:06:12.320 you know, just looking at the inflation prints, they're going 0:06:12.400 --> 0:06:14.480 to be looking at the inflation data very closely. 0:06:14.560 --> 0:06:16.520 We're going to get you know, more data points. 0:06:16.920 --> 0:06:18.760 But I think that you know, if we see that 0:06:19.480 --> 0:06:22.440 that's you know, that cool down in those inflation prints, 0:06:23.240 --> 0:06:25.840 the FED is going to be willing to start you know, 0:06:25.960 --> 0:06:29.360 that is in process. It's really about balancing the risk 0:06:29.520 --> 0:06:33.200 between keeping rates too high for too long and and 0:06:33.279 --> 0:06:35.840 I think the FED doesn't want to be, you know, 0:06:36.000 --> 0:06:39.880 imposing unnecessary pain to the economy. So they're really cognizant 0:06:39.920 --> 0:06:43.160 of the fact that you know that the labor market 0:06:43.240 --> 0:06:45.520 could often significantly and fetch your power. 0:06:45.920 --> 0:06:49.720 Did mention that as potentially triggering more rate cuts? 0:06:50.040 --> 0:06:53.000 Yeah, but he I thought, you know, as as an investor, 0:06:53.080 --> 0:06:56.400 as somebody who covers this, I thought he sounded pretty 0:06:56.760 --> 0:06:59.280 pretty much not all that concerned about the labor market, 0:06:59.320 --> 0:07:01.880 even though you know, he was given some examples about 0:07:01.920 --> 0:07:05.080 where we're seeing pockets of weakness and he was pretty 0:07:05.080 --> 0:07:06.640 comfortable with what's happening there. 0:07:07.800 --> 0:07:10.640 Yeah, the labor market has been you know, you continue 0:07:10.680 --> 0:07:13.720 to see solid job growth, We continue to see solid 0:07:13.800 --> 0:07:16.400 job growth, but at the same time, the supply side 0:07:16.440 --> 0:07:19.160 of the label market has been rebounding. We've seen the 0:07:19.240 --> 0:07:23.560 labor force participation rate, especially for primage workers, rebounding and 0:07:23.680 --> 0:07:25.360 reaching the highest level since. 0:07:25.120 --> 0:07:26.040 The early two thousand. 0:07:26.560 --> 0:07:29.880 So you've got that rebalancing with job openings coming down, 0:07:30.200 --> 0:07:34.000 liver them and coming down, and liver supply coming back up. 0:07:34.160 --> 0:07:37.040 And at the same time, the unemployment rate hasn't really 0:07:37.120 --> 0:07:39.840 moved up significantly. And that's why I think, you know, 0:07:39.920 --> 0:07:42.960 the FED right now is not that concern whether they're 0:07:43.360 --> 0:07:46.600 I think welcoming, is the fact that this rebalancing is 0:07:46.720 --> 0:07:49.360 leading to an easy in WAGH pressures and that's the 0:07:49.440 --> 0:07:52.360 type of dynamic that they want to see, if you know, 0:07:52.440 --> 0:07:55.120 to see more dis in patient, especially on the services 0:07:55.200 --> 0:07:56.080 side of the economy. 0:07:56.960 --> 0:07:59.000 Lyddy, and the time that we have left with you, 0:07:59.080 --> 0:08:00.880 i'd like to get your to on what happened this 0:08:00.960 --> 0:08:03.720 week with the Bank of Japan. What is your view 0:08:03.800 --> 0:08:05.800 here on what the bo J did and the way 0:08:05.840 --> 0:08:07.160 in which markets are responding. 0:08:08.920 --> 0:08:11.360 Yeah, I mean we saw that, we. 0:08:11.480 --> 0:08:14.440 Saw you know, the the bo J you know, exiting 0:08:15.320 --> 0:08:19.960 negative rates and and you know, removing moving away from 0:08:20.040 --> 0:08:23.600 that very accommodated accommodity extense, and I think, you know, 0:08:23.640 --> 0:08:26.240 if you look at the market reaction and and and 0:08:26.360 --> 0:08:29.840 the move, I think part of it is, you know 0:08:30.160 --> 0:08:32.440 the fact that this was maybe a bit more symbolic, 0:08:33.280 --> 0:08:36.840 you know then than really the signal that we are 0:08:36.960 --> 0:08:41.280 heading into a tightening cycle. I think economic conditions in 0:08:41.360 --> 0:08:45.520 Japan remain quite fragile, and the BOG really wants to 0:08:45.600 --> 0:08:48.520 see the anchor and inflation expectations. So they're not going 0:08:48.600 --> 0:08:52.120 to be embarking on on a you know, on a 0:08:52.920 --> 0:08:55.920 on an aggressive tightening cycle. I think they're they're going 0:08:55.960 --> 0:08:59.400 to be willing to kind of keep some accommodation and 0:08:59.720 --> 0:09:05.520 many hye policy you know, on financial condition essentially lose 0:09:06.280 --> 0:09:09.600 so that the economy can continue to recover. 0:09:10.960 --> 0:09:13.320 So on Monday, we were sort of musing this week, 0:09:13.400 --> 0:09:15.400 what would be the big event this week? Would it 0:09:15.480 --> 0:09:17.800 be the FED? Would it be the bo J or 0:09:18.000 --> 0:09:22.360 Nvidia's developer conference. From your standpoint as a senior economist, 0:09:22.440 --> 0:09:22.920 what was it? 0:09:24.760 --> 0:09:27.560 Yeah, it was, Uh, we've got we've got a bit 0:09:27.600 --> 0:09:32.360 of a I think, I mean, from from an economic standpoint, 0:09:32.440 --> 0:09:34.319 I think the bo J on the FED and what 0:09:34.440 --> 0:09:39.960 we've heard, you know, from the central banks is is important, 0:09:41.200 --> 0:09:43.960 and I think there was a lot of attention today 0:09:44.160 --> 0:09:47.120 on the dot plot and whether the FED could be 0:09:47.200 --> 0:09:49.679 signaling only two rate cuts instead of three. It was 0:09:49.760 --> 0:09:52.240 a close call, and we were one that away from 0:09:52.320 --> 0:09:55.360 getting fifty basis points a rat cut from that median 0:09:55.440 --> 0:09:59.040 dot plot. But overall, I think that, you know, it 0:09:59.280 --> 0:10:02.880 was encouraging to hear that the FEDI is tanged course, 0:10:02.960 --> 0:10:05.360 and that is it's still willing to get infistrates on 0:10:05.480 --> 0:10:07.720 looking through that noise in the effiicient data. 0:10:08.440 --> 0:10:08.640 Yeah. 0:10:08.880 --> 0:10:11.800 I remember asking almost every guest on the show yesterday, 0:10:12.400 --> 0:10:14.520 you know, it seems like the market is okay with 0:10:14.840 --> 0:10:18.320 what we've seen in inflation, a little pickup in January February. 0:10:18.360 --> 0:10:20.360 The key question for the FED will be is the 0:10:20.480 --> 0:10:22.760 Fed okay with it? And I think they answered that 0:10:22.960 --> 0:10:27.280 question today that at least for now, they're okay with it. Lydia, 0:10:27.360 --> 0:10:30.079 thank you for joining us. Lydia Bassour, a senior economist 0:10:30.120 --> 0:10:30.680 at EY. 0:10:31.280 --> 0:10:32.520 This is Bloomberg. 0:10:39.360 --> 0:10:43.199 Orean Elizzit joins US CMC Market Sales Trader. So what 0:10:43.400 --> 0:10:45.600 this is as good as it gets. Come on. 0:10:47.840 --> 0:10:50.520 One and gentlemen, thanks for having me. Yeah, it was 0:10:50.600 --> 0:10:53.000 a bit of a how to say nothing burger overnight, 0:10:53.040 --> 0:10:55.200 and I think the market was expecting a little more. 0:10:55.280 --> 0:10:59.199 Even though there was a poppin equity markets, That dot 0:10:59.520 --> 0:11:03.480 revision was pretty much cast aside, I think, and really 0:11:03.559 --> 0:11:08.200 the main focus is on those macro macro indicators, so yeah, 0:11:08.480 --> 0:11:11.360 I look, they do still have somewhat of a balancing actor. 0:11:11.480 --> 0:11:14.439 Do commend the Fed in the way they've navigated, you know, 0:11:14.600 --> 0:11:18.720 around obviously you know, trying to increase you know, growth, 0:11:18.800 --> 0:11:21.959 but obviously maintain the market. And obviously the dollar remaining stronger, 0:11:22.480 --> 0:11:25.320 So pretty positive all round. I think we are higher 0:11:25.400 --> 0:11:29.199 for longer looking at some of those forecasted GDP and 0:11:29.240 --> 0:11:34.120 also inflation figures, so not too much to report. The 0:11:34.200 --> 0:11:38.079 dot plot remains fairly steady in terms of its projections. 0:11:39.120 --> 0:11:41.320 But yeah, it would be interesting to see a surprise 0:11:41.360 --> 0:11:42.400 and see how the markets reacting. 0:11:42.480 --> 0:11:45.880 Yeah, Powell's tone seemed kind of dubvish, and I'm wondering 0:11:45.960 --> 0:11:48.559 whether or not the market may be overlooking a risk. 0:11:48.880 --> 0:11:50.679 I know what the Fed is saying. Now, Yeah, we're 0:11:50.720 --> 0:11:53.520 expecting three rate cuts this year, but is it possible 0:11:53.559 --> 0:11:55.920 that we only get two twenty five basis point cuts? 0:11:57.640 --> 0:11:59.679 That was something that was I think right to the 0:11:59.760 --> 0:12:02.199 media was discussed, and I don't think it's completely out, 0:12:03.040 --> 0:12:06.760 you know, completely you know, not an issue. I think 0:12:07.040 --> 0:12:11.439 the inflation rate is still fairly manageable, so I can't 0:12:11.480 --> 0:12:14.520 really see it being pushed, you know, you know, sort 0:12:14.559 --> 0:12:16.560 of cut back at all if. 0:12:16.440 --> 0:12:17.439 We were to see too. 0:12:17.520 --> 0:12:20.320 I guess the question remains, do they accept do they 0:12:20.600 --> 0:12:24.160 look to accelerate in twenty twenty five? Should should inflation 0:12:24.360 --> 0:12:27.720 tail off as as sort of expected. No, it's probably 0:12:27.800 --> 0:12:29.880 my initial you know, sort of gut feeling, gentlemen. But 0:12:30.320 --> 0:12:32.079 you know, let's see, let's see how this thing plays out. 0:12:32.200 --> 0:12:35.199 Yeah, markets are so buoyant, you know, we continue to 0:12:35.440 --> 0:12:38.559 keep discounting. Well, we've got a soft landing and things 0:12:38.640 --> 0:12:39.520 are looking pretty good. 0:12:40.040 --> 0:12:40.199 You know. 0:12:40.280 --> 0:12:42.760 You think you'd think that you'd get an adjustment in 0:12:42.880 --> 0:12:46.559 that and then you'd need some really big news or 0:12:46.800 --> 0:12:49.840 you know, to generate these kinds of gains. I mean 0:12:49.920 --> 0:12:52.400 some of these some of these gains are pretty pretty 0:12:52.720 --> 0:12:56.679 astronomical now, and I wonder whether or not Oriental Liza 0:12:56.760 --> 0:12:58.720 thinks that perhaps we're getting overheated. 0:13:00.600 --> 0:13:03.160 Yeah, that is that is a major concern for me, 0:13:03.240 --> 0:13:06.160 and something I've spoken about previously on other discussions. I 0:13:06.200 --> 0:13:07.959 think we are getting a little bit toppy at the 0:13:08.000 --> 0:13:10.280 moment in terms of some of those markets. My my 0:13:10.720 --> 0:13:14.480 major concern, gents, is that we the lack of breadth 0:13:14.559 --> 0:13:18.000 of market is probably maybe more of a factor where 0:13:18.040 --> 0:13:21.640 you're so concentrated in the so called magnificent magnificent seven 0:13:21.720 --> 0:13:24.839 stocks that we if we do see any sort of 0:13:25.400 --> 0:13:27.840 set off, can the broader market sort of prop up 0:13:27.960 --> 0:13:32.679 or sustain that continued growth? Naturally, profit taking will take 0:13:32.720 --> 0:13:35.720 place within some of the institutions where those fun flows 0:13:36.360 --> 0:13:39.199 then go to with obviously bond yields you know, coming 0:13:39.240 --> 0:13:41.120 off a little bit, and those you know, risk free 0:13:41.200 --> 0:13:45.480 returns not as handsome how they have been in previously. 0:13:46.480 --> 0:13:49.080 But I do think we need, yes, maybe a somewhat 0:13:49.200 --> 0:13:52.160 slight correction in terms of price section. 0:13:52.559 --> 0:13:54.920 So if you were looking at opportunities right now, I 0:13:54.960 --> 0:13:57.599 mean not a trading opportunity, something that would have to 0:13:57.679 --> 0:14:00.760 be buy and hold. Let's say for the four seeable future, 0:14:00.800 --> 0:14:01.360 what would it be. 0:14:03.520 --> 0:14:05.839 Well, I'm leaving bitcoin out of this Genso it's the 0:14:05.880 --> 0:14:08.840 hot topic of the the time, but let's go away 0:14:08.840 --> 0:14:11.439 from the obvious. I am looking at the moment in 0:14:11.559 --> 0:14:14.880 terms of a couple of market conviction calls some smaller 0:14:14.960 --> 0:14:18.520 cap stocks, both in the UK and also in the US. 0:14:18.559 --> 0:14:21.760 I think that variance in terms of the sort of 0:14:21.840 --> 0:14:25.080 variance in terms of valuations between those big cap and 0:14:25.160 --> 0:14:27.960 small cap stocks. So looking at some stocks in the 0:14:28.040 --> 0:14:30.240 rustle and obviously some in the in the lower cap 0:14:30.320 --> 0:14:33.560 indexes in the UK of value. You need to be 0:14:33.640 --> 0:14:37.040 selective though in terms of the specific stocks that you 0:14:37.120 --> 0:14:40.080 are looking at, because some are priced I had to 0:14:40.160 --> 0:14:43.280 say for a reason at the lower end of the market. 0:14:43.480 --> 0:14:45.960 So in terms of you know, sector, I'll be looking 0:14:46.000 --> 0:14:47.840 at those smaller cap indexes for value. 0:14:49.520 --> 0:14:51.760 So let's talk a little bit about Japan because we 0:14:51.840 --> 0:14:54.520 had a major change there. I wouldn't describe what the 0:14:54.600 --> 0:14:57.040 FED did was a major change, but it did seem 0:14:57.160 --> 0:15:00.240 like an inflection point. Whether or not they were would 0:15:00.240 --> 0:15:03.320 be acknowledging that inflation was hot in the first part 0:15:03.360 --> 0:15:05.560 of the year and something needed to be done about it. 0:15:05.640 --> 0:15:08.800 That's not the decision they took. But in Japan we 0:15:08.920 --> 0:15:12.120 did see a well telegraphed move and then we got 0:15:12.200 --> 0:15:14.880 the move, and outside of the equity market it was 0:15:14.920 --> 0:15:15.640 a bit of a yawn. 0:15:17.720 --> 0:15:20.440 That seems to be the Eretrica across all markets in 0:15:20.560 --> 0:15:22.800 terms of macro announcements this week, where we were expecting 0:15:22.800 --> 0:15:26.760 a little bit more, you know from price action. Yeah, 0:15:27.120 --> 0:15:29.800 obviously naturally was very much priced in in terms of 0:15:29.880 --> 0:15:33.560 the two I guess major markets obviously being the Nike 0:15:34.280 --> 0:15:35.920 which has seen an all time high this morning, and 0:15:36.000 --> 0:15:38.080 obviously that dollar yam which has been a hot topic 0:15:38.160 --> 0:15:42.520 of discussion. Not not much sort of volatility in those 0:15:42.600 --> 0:15:45.800 two very much baked into the price. I do think 0:15:46.160 --> 0:15:48.880 it was a historical move by the Bank of Japan, 0:15:49.680 --> 0:15:54.200 but not so much impactful one. So in terms of 0:15:54.280 --> 0:15:59.080 them rising rates further to sort of tackle maybe in inflation, 0:15:59.320 --> 0:16:01.720 it is something that may be considered later in the year. 0:16:02.040 --> 0:16:04.960 I think some of the debt servicing that the boj 0:16:05.160 --> 0:16:07.160 needs to look at from their own balance sheet perspective 0:16:07.160 --> 0:16:11.280 will probably come into focus. And in terms of quantitative 0:16:11.360 --> 0:16:15.360 easy measures in terms of bond buybacks, which they mentioned 0:16:15.520 --> 0:16:17.840 they might still be interested in. Is going to take 0:16:17.880 --> 0:16:19.840 a long time for them to get back to normalization, 0:16:19.920 --> 0:16:20.920 which is a talk of the town. 0:16:21.120 --> 0:16:22.880 So if you had to take a position on the 0:16:22.920 --> 0:16:26.160 equity side in Japan right now, would it be in 0:16:26.240 --> 0:16:28.120 the banks or do you think that trade is pretty 0:16:28.160 --> 0:16:28.880 much played out. 0:16:30.720 --> 0:16:32.760 I think the banks. I think the price action reflected 0:16:32.800 --> 0:16:35.320 quite sort of aggressively where the banks dropped off obviously 0:16:35.360 --> 0:16:37.320 when they went to that higher interest rate. Those banks 0:16:37.320 --> 0:16:40.520 will be looking at, you know, some of their underwriting 0:16:40.760 --> 0:16:43.160 mechanics to see, you know, what sort of exposures that 0:16:43.240 --> 0:16:47.160 they do have to you know, outstanding debt. I think 0:16:47.240 --> 0:16:49.640 that we probably have to move away from the banks 0:16:49.680 --> 0:16:52.320 similar to similar to the US, take a look into 0:16:52.360 --> 0:16:55.200 some sort of the tech stocks within with it, within 0:16:55.280 --> 0:16:58.560 the NIKE. But yeah, banks might be a sort of 0:16:58.600 --> 0:17:01.800 treade with caution play at the moment given the rising 0:17:01.840 --> 0:17:02.800 interest rate environment. 0:17:04.000 --> 0:17:06.280 You said earlier that we had too much concentration in 0:17:06.359 --> 0:17:09.000 the Magnificent seven, although I think we have to set 0:17:09.000 --> 0:17:12.920 aside Tesla and Apple because Tesla's down something like thirty 0:17:12.960 --> 0:17:16.119 five percent year to date. But obviously, you know, we 0:17:16.240 --> 0:17:19.639 have seen huge gains in particularly those Fab five or 0:17:19.680 --> 0:17:22.080 whatever you want to call it. But then with the 0:17:22.200 --> 0:17:24.879 move by the Fed today, we did see regional banks 0:17:24.920 --> 0:17:27.320 advance more than three percent, and we saw the Russell 0:17:27.320 --> 0:17:30.760 two thousand of about two percent. Is this kind of 0:17:30.840 --> 0:17:35.760 a que now for a further broadening in the market, very. 0:17:35.720 --> 0:17:39.880 Much potentially I've been tracking quite quite I guess acutely 0:17:39.960 --> 0:17:44.120 the KRE ETF, which is a regional bank ETF, which 0:17:44.160 --> 0:17:49.000 came after obviously the calamity. It has rebounded quite you know, 0:17:49.160 --> 0:17:51.280 sort of handsomely. Back to my earlier point about those 0:17:51.400 --> 0:17:54.679 undervalued stocks, I think they will play a part. They 0:17:54.720 --> 0:17:58.680 will be sector specific in terms of that broadening or 0:17:58.800 --> 0:18:02.720 widening of the market effect. But value can be had 0:18:02.920 --> 0:18:06.680 in some of those, you know, I guess, sort of 0:18:06.800 --> 0:18:11.080 dump stocks where the wider foundation of those particular sectors 0:18:11.080 --> 0:18:11.760 are still strong. 0:18:11.920 --> 0:18:13.399 I'm not going to let you off the hook on 0:18:13.720 --> 0:18:16.760 the crypto stuff. Here, give me forty five seconds. Your 0:18:16.800 --> 0:18:21.240 position on bitcoin right now? A lot of volatility, Yeah. 0:18:21.119 --> 0:18:23.880 Exactly, Yeah, that's I think that's something that's very interesting. 0:18:24.000 --> 0:18:25.520 And you know what is it? 0:18:25.720 --> 0:18:28.720 Is it down to mechanics of bitcoin? Is it big talented? 0:18:28.720 --> 0:18:30.720 The upcoming harving is that going to play a part? 0:18:31.240 --> 0:18:33.760 Is it overbought? I guess is potentially one other question 0:18:33.920 --> 0:18:36.280 as well. I think that fun flow into the ETF 0:18:36.320 --> 0:18:40.240 space from an institutional standpoint, is naturally driven, you know, 0:18:40.520 --> 0:18:44.200 the price sort of higher. I think proper taking in 0:18:44.440 --> 0:18:47.040 some of the equity markets and fun flow into bitcoin 0:18:47.160 --> 0:18:48.639 is also helping it getting propped up. 0:18:49.480 --> 0:18:52.320 Where is the downside coming from? That's probably a very 0:18:52.320 --> 0:18:53.240 good question, gentlemen. 0:18:54.240 --> 0:18:56.520 Yeah, that's a little bit one which probably needs a 0:18:56.560 --> 0:19:00.600 little bit more investigating. You know, people, people you know 0:19:00.800 --> 0:19:02.800 are probably looking to get in and get out and 0:19:02.840 --> 0:19:06.280 take advantage having had their fingers but in the previous 0:19:06.320 --> 0:19:08.760 sort of up cycle. So I think there's still a 0:19:08.840 --> 0:19:10.160 website to be had in bitcoin. 0:19:10.840 --> 0:19:13.640 Yeah, Doug Oreano is saying that he thinks some money 0:19:13.680 --> 0:19:15.840 will flow out of equities and end to crypto, and 0:19:16.080 --> 0:19:18.119 kind of what we've seen of late is both of 0:19:18.200 --> 0:19:21.360 them rallying at the same time. So only time will tell. 0:19:21.480 --> 0:19:24.240 Interesting to watch, Oreana, thanks very much for joining us. 0:19:24.320 --> 0:19:28.640 Oreana Liza CMC markets sales trader with us live here 0:19:29.040 --> 0:19:30.360 eighteen minutes past the hour. 0:19:30.680 --> 0:19:32.200 This is Bloomberg. 0:19:38.200 --> 0:19:40.720 Well ten Cent Holdings is planning to double its stock 0:19:40.760 --> 0:19:44.600 buyback program to nearly thirteen billion dollars and joining us 0:19:44.640 --> 0:19:47.680 in our studios here in Hong Kong is the esteemed 0:19:47.840 --> 0:19:51.399 Vlad Savov, Bloomberg Tech editor. So let me see if 0:19:51.400 --> 0:19:53.240 I got this right. We had a miss on sales, 0:19:53.480 --> 0:19:56.960 but that was kind of offset by the buyback and 0:19:57.760 --> 0:20:01.200 raising the dividend, and we also had slightly better numbers. 0:20:01.240 --> 0:20:04.080 We had a beat on operating profit and net income, 0:20:04.720 --> 0:20:07.920 but somehow the miss on sales seems to be the 0:20:07.960 --> 0:20:10.600 biggest story. I mean, the stock is up, but that's 0:20:10.600 --> 0:20:13.600 probably because of the buyback. But there's something wrong here, Flad, 0:20:13.920 --> 0:20:14.360 Is that right? 0:20:15.000 --> 0:20:15.160 Yeah? 0:20:15.200 --> 0:20:15.680 Absolutely? 0:20:15.680 --> 0:20:17.760 I Mean when you think about ten Cent, it's such 0:20:17.800 --> 0:20:20.400 a vast company, but ultimately its core business is still 0:20:20.520 --> 0:20:24.320 domestic games within China, and that's been such a disrupted 0:20:24.400 --> 0:20:27.840 sector and that's what Tencent is reflecting with its latest 0:20:27.880 --> 0:20:31.680 quarter earnings. It is the lifeblood of the company still, 0:20:31.840 --> 0:20:33.639 much like the iPhone is for Apple. 0:20:34.240 --> 0:20:36.399 You can when I've watched. 0:20:36.200 --> 0:20:38.800 Tencent with its quarti earnings, I mean it was delivering 0:20:38.880 --> 0:20:40.920 double digit growth over the past three quarters. 0:20:41.320 --> 0:20:42.960 Is you're one of the best operationally. 0:20:43.800 --> 0:20:45.480 But if you want to find votes, it is the 0:20:45.520 --> 0:20:49.000 fact that it hasn't internationalized it its games business quite 0:20:49.000 --> 0:20:52.359 as much as others and investors might have hoped, and 0:20:52.640 --> 0:20:56.840