1
00:00:02,600 --> 00:00:06,000
Speaker 1: This is Bloomberg Daybreak Asia for this Thursday, April twenty

2
00:00:06,040 --> 00:00:09,479
Speaker 1: seventh in Hong Kong, Wednesday April twenty sixth in New

3
00:00:09,560 --> 00:00:10,840
Speaker 1: York and coming up today.

4
00:00:11,119 --> 00:00:14,360
Speaker 2: Shares in First Republic Bank plunge on word Advisors have

5
00:00:14,480 --> 00:00:17,439
Speaker 2: lined up potential buyers of new stock as part of

6
00:00:17,480 --> 00:00:18,279
Speaker 2: a rescue plan.

7
00:00:18,600 --> 00:00:22,040
Speaker 1: Shares in Meta Platforms jump after the company reports sales

8
00:00:22,079 --> 00:00:24,120
Speaker 1: that top analyst estimates.

9
00:00:23,880 --> 00:00:28,000
Speaker 2: And Microsoft sixty nine billion dollar takeover of Activision. Blizzard

10
00:00:28,320 --> 00:00:30,080
Speaker 2: is blocked by the UK government.

11
00:00:30,280 --> 00:00:34,280
Speaker 3: McCarthy's debt ceiling Bell Biden says any North Korea nuclear

12
00:00:34,320 --> 00:00:39,080
Speaker 3: attack will end Kim's regime. Disney sues DeSantis. I'm at

13
00:00:39,120 --> 00:00:40,280
Speaker 3: Baxter with Global News.

14
00:00:44,120 --> 00:00:47,800
Speaker 4: That's all straight ahead on Bloomberg Daybreak Asia, The business

15
00:00:47,840 --> 00:00:50,279
Speaker 4: news you need to start your day in just one

16
00:00:50,400 --> 00:00:55,320
Speaker 4: fifteen minute podcast available on Apple, Spotify, the Bloomberg Business App,

17
00:00:55,360 --> 00:00:57,320
Speaker 4: and everywhere you get your podcasts.

18
00:01:00,400 --> 00:01:03,040
Speaker 2: I'm Brian Curtis and I'm Doug Krisner. Here are the

19
00:01:03,040 --> 00:01:07,280
Speaker 2: stories we're following today. Will begin with Meta Platforms after

20
00:01:07,319 --> 00:01:10,600
Speaker 2: the bell, the company reported first quarter sales jumping to

21
00:01:10,720 --> 00:01:14,319
Speaker 2: twenty eight point six billion dollars. The street was looking

22
00:01:14,360 --> 00:01:17,560
Speaker 2: for something about a billion dollars less than that, so

23
00:01:17,680 --> 00:01:21,280
Speaker 2: this represents a return to growth after three straight quarters

24
00:01:21,280 --> 00:01:25,399
Speaker 2: of declines. Meta continued to add users. In the prior

25
00:01:25,520 --> 00:01:29,280
Speaker 2: quarter for Facebook, Instagram, and WhatsApp, more than three billion

26
00:01:29,319 --> 00:01:33,039
Speaker 2: people used it at least one of the products, I

27
00:01:33,040 --> 00:01:36,720
Speaker 2: should say daily. That's a new milestone. Some setbacks though.

28
00:01:37,480 --> 00:01:40,840
Speaker 2: Reality Labs, which is the Meta division focused on kind

29
00:01:40,880 --> 00:01:44,560
Speaker 2: of R and D revenue there down fifty one percent.

30
00:01:45,280 --> 00:01:48,360
Speaker 2: This is the division focused on building a virtual reality

31
00:01:48,440 --> 00:01:51,840
Speaker 2: tech for the metaverse. Bloomberg's man Deep Singh tells us

32
00:01:51,880 --> 00:01:55,040
Speaker 2: the company will continue to pour money into this area.

33
00:01:55,400 --> 00:01:58,440
Speaker 5: The foundational layer is AI. They are harnessing a lot

34
00:01:58,480 --> 00:02:00,920
Speaker 5: of that data. They are training their own equivalent of

35
00:02:01,000 --> 00:02:04,600
Speaker 5: large language models. We don't know how they'll be monetizing it.

36
00:02:04,600 --> 00:02:07,600
Speaker 5: It's not in the form of cloud infrastructure, which is

37
00:02:07,640 --> 00:02:10,520
Speaker 5: how Google and Microsoft are doing it. So we don't

38
00:02:10,560 --> 00:02:13,639
Speaker 5: know what that next application will be where they'll be

39
00:02:13,680 --> 00:02:17,080
Speaker 5: able to monetize it beyond the ad pricing, and you

40
00:02:17,080 --> 00:02:19,079
Speaker 5: know the ad business they already have, which is firing

41
00:02:19,120 --> 00:02:22,880
Speaker 5: on all cylenders. When it comes to the monetization they

42
00:02:22,880 --> 00:02:23,360
Speaker 5: have right.

43
00:02:23,280 --> 00:02:26,560
Speaker 2: Now, Bloomberg's Mandeep sing there Meta platforms up as much

44
00:02:26,560 --> 00:02:28,960
Speaker 2: as twelve percent in the late US session, and if

45
00:02:28,960 --> 00:02:31,880
Speaker 2: you go back from the first part of this year,

46
00:02:32,360 --> 00:02:36,320
Speaker 2: meta shares are up about seventy four percent. Let's take

47
00:02:36,320 --> 00:02:38,919
Speaker 2: a look at First Republic Bank. The stock was down

48
00:02:38,960 --> 00:02:41,519
Speaker 2: today quite a bit. This is after CNBC reported a

49
00:02:41,600 --> 00:02:44,600
Speaker 2: rescue plan is in the works for the struggling lender.

50
00:02:45,000 --> 00:02:46,680
Speaker 2: We have more from Bloombergs and Cates.

51
00:02:46,960 --> 00:02:49,640
Speaker 6: Advisors will try to persuade big US banks who've already

52
00:02:49,639 --> 00:02:52,160
Speaker 6: built out. First Republic wants to purchase its bonds at

53
00:02:52,200 --> 00:02:54,720
Speaker 6: above market rates for a loss of a few billion dollars,

54
00:02:55,000 --> 00:02:58,600
Speaker 6: and they have already aligned up possible purchasers. Analystit Tdcounts

55
00:02:58,600 --> 00:03:01,200
Speaker 6: say that while regulators don't act based on stock price,

56
00:03:01,480 --> 00:03:03,880
Speaker 6: a steep decline could raise questions about the ability of

57
00:03:03,919 --> 00:03:06,240
Speaker 6: a bank to raise fresh capital, and they believe there

58
00:03:06,240 --> 00:03:08,760
Speaker 6: will have to be a broader restructuring of First Republic.

59
00:03:09,040 --> 00:03:12,160
Speaker 6: First Republic last month got thirty billion dollars in deposits

60
00:03:12,160 --> 00:03:16,400
Speaker 6: from bigger financial institutions in Washington and Kates Bloomberg day

61
00:03:16,400 --> 00:03:16,959
Speaker 6: Break Asia.

62
00:03:17,080 --> 00:03:20,240
Speaker 2: Now separately, we are told US bank regulators are weighing

63
00:03:20,280 --> 00:03:24,040
Speaker 2: the prospects of downgrading their private assessment of First Republic.

64
00:03:24,120 --> 00:03:27,640
Speaker 2: The move may limit the troubled firm's access to those

65
00:03:28,680 --> 00:03:32,560
Speaker 2: lending facilities at the Federal Reserve well. As I mentioned earlier, tomorrow,

66
00:03:32,560 --> 00:03:35,200
Speaker 2: we'll get the latest report card for the American economy.

67
00:03:35,280 --> 00:03:39,040
Speaker 2: GDP numbers for Q one out at eight thirty am

68
00:03:39,120 --> 00:03:42,240
Speaker 2: Wall Street time. We have a preview from Bloomberg's Michael McKee.

69
00:03:42,360 --> 00:03:44,680
Speaker 7: The GDP data are likely to present a picture of

70
00:03:44,720 --> 00:03:48,880
Speaker 7: a US economy that started the year strong before losing momentum.

71
00:03:48,960 --> 00:03:51,760
Speaker 7: The strength of the report is expected to be consumer spending,

72
00:03:51,840 --> 00:03:55,560
Speaker 7: particularly in January, although at least one bank suggests the

73
00:03:55,560 --> 00:04:00,560
Speaker 7: government's recent statistical adjustments to spending may cut growth concent considerably.

74
00:04:00,800 --> 00:04:03,520
Speaker 7: Inventory should be a drag, falling back after a big

75
00:04:03,520 --> 00:04:06,920
Speaker 7: bill at the end of twenty twenty two. Residential investment

76
00:04:06,920 --> 00:04:09,360
Speaker 7: will take a hit from the battered housing market and

77
00:04:09,480 --> 00:04:13,000
Speaker 7: durable goods. As they showed Wednesday, show business investment has

78
00:04:13,040 --> 00:04:15,640
Speaker 7: been tepid. Analysts and the Fed will have to decide

79
00:04:15,680 --> 00:04:19,359
Speaker 7: whether the slowdown is as expected given the Fed's rate increases,

80
00:04:19,560 --> 00:04:22,200
Speaker 7: or if it signals trouble ahead in the next few quarters.

81
00:04:22,560 --> 00:04:24,359
Speaker 7: Michael McKee, Bloomberg Daybreak Asia.

82
00:04:24,440 --> 00:04:27,240
Speaker 2: Well, it could be game over from Microsoft and its

83
00:04:27,279 --> 00:04:31,040
Speaker 2: hopes of buying Activision Blizzard. Let's get the story from

84
00:04:31,080 --> 00:04:33,040
Speaker 2: Bloomberg's to Nise Pellegrini.

85
00:04:32,880 --> 00:04:36,040
Speaker 8: The UK's antitrust watch dog is blocking the planned sixty

86
00:04:36,120 --> 00:04:39,720
Speaker 8: nine billion dollar takeover. The Competition and Markets Authority says

87
00:04:39,720 --> 00:04:43,880
Speaker 8: its concerns can't be resolved by any proposed remedies. In

88
00:04:43,920 --> 00:04:46,360
Speaker 8: the US, the Federal Trade Commission has already sued to

89
00:04:46,400 --> 00:04:49,160
Speaker 8: block the deal, and the European Commission is supposed to

90
00:04:49,240 --> 00:04:52,800
Speaker 8: rule by May twenty second. The Microsoft takeover of Activision

91
00:04:52,839 --> 00:04:55,400
Speaker 8: was being builled as the biggest ever deal pending in

92
00:04:55,440 --> 00:04:58,839
Speaker 8: the gaming industry. Microsoft and Activision both say they do

93
00:04:58,960 --> 00:05:02,760
Speaker 8: plan to appeal that decision. Denise Pellgrity, Bluebirg day Break

94
00:05:02,760 --> 00:05:03,560
Speaker 8: Asia maytime.

95
00:05:03,640 --> 00:05:07,240
Speaker 2: The Biden administration is urging China to improve its protections

96
00:05:07,279 --> 00:05:10,880
Speaker 2: for intellectual property. The US has the pace of Beijing's

97
00:05:10,880 --> 00:05:14,880
Speaker 2: reform simply slowed last year. Now, Washington has been closely

98
00:05:14,960 --> 00:05:19,440
Speaker 2: monitoring China's progress in the implementation of commitments made in

99
00:05:19,520 --> 00:05:23,080
Speaker 2: the recent deal. The agreement was signed after a two

100
00:05:23,160 --> 00:05:26,400
Speaker 2: year tariff war launched under the Trump administration. In an

101
00:05:26,440 --> 00:05:29,720
Speaker 2: annual review, the Office of the US Trade rep says

102
00:05:29,839 --> 00:05:33,240
Speaker 2: China should provide a level playing field for IP protection

103
00:05:33,720 --> 00:05:37,600
Speaker 2: and enforcement. It went on to say concerns remain about

104
00:05:37,600 --> 00:05:41,840
Speaker 2: the implementation of China's measures, the USTR saying that China

105
00:05:41,880 --> 00:05:45,960
Speaker 2: should open its market to foreign investment and embrace market

106
00:05:46,000 --> 00:05:50,280
Speaker 2: oriented policies. This is Daybreak Asia. I'm joined now by

107
00:05:50,360 --> 00:05:53,200
Speaker 2: Brian Curtis, who's coming in from Hong Kong. Your thoughts

108
00:05:53,200 --> 00:05:55,040
Speaker 2: as we get set for trading in Asia today.

109
00:05:55,240 --> 00:05:57,400
Speaker 1: Well, you look at meta higher revenue at a time

110
00:05:57,400 --> 00:06:00,440
Speaker 1: when you're reducing costs, So that's very good recipe for gains,

111
00:06:00,480 --> 00:06:03,000
Speaker 1: and that's why we see such big gains after hours.

112
00:06:03,040 --> 00:06:04,479
Speaker 1: But I think it's really not a good sign for

113
00:06:04,520 --> 00:06:07,200
Speaker 1: the bulls dug to see the broader benchmarks not being

114
00:06:07,240 --> 00:06:10,560
Speaker 1: able to rally today after such strong earnings from companies

115
00:06:10,640 --> 00:06:15,479
Speaker 1: like Microsoft and alphabet and so it may bode for

116
00:06:15,760 --> 00:06:17,760
Speaker 1: a little bit more selling in the market. We don't know.

117
00:06:17,960 --> 00:06:20,520
Speaker 1: A lot depends on the data as well, but anyway,

118
00:06:20,560 --> 00:06:22,320
Speaker 1: if you're a bull, you're probably a little concerned.

119
00:06:22,360 --> 00:06:25,600
Speaker 2: And I noted earlier that THESC China Index was able

120
00:06:25,640 --> 00:06:28,840
Speaker 2: to snap a six day losing streak that may be significant.

121
00:06:29,279 --> 00:06:31,960
Speaker 2: The MSCI China Index up about that nine tenths of

122
00:06:32,000 --> 00:06:34,440
Speaker 2: one percent, and then stateside we had the Nasdaq Golden

123
00:06:34,520 --> 00:06:37,560
Speaker 2: Dragon China Index up about one percent. But I was

124
00:06:37,600 --> 00:06:42,160
Speaker 2: struck by this survey published on Wednesday, data shared exclusively

125
00:06:42,279 --> 00:06:45,000
Speaker 2: with Bloomberg. More than half of Chinese travelers say they

126
00:06:45,040 --> 00:06:48,080
Speaker 2: haven't plans to go abroad this year during the Golden

127
00:06:48,080 --> 00:06:48,760
Speaker 2: Week holiday.

128
00:06:49,080 --> 00:06:52,080
Speaker 1: Yeah, that'll be a big till, won't it. The Golden

129
00:06:52,120 --> 00:06:54,880
Speaker 1: Week holiday is one thing. And then also what we

130
00:06:55,000 --> 00:06:57,240
Speaker 1: might get from the Pollit Bureau, they're still expected to

131
00:06:57,279 --> 00:07:01,039
Speaker 1: meet this week to look at economic priority. Now, we

132
00:07:01,200 --> 00:07:04,080
Speaker 1: had interpreted that in one of our main stories at

133
00:07:04,120 --> 00:07:07,240
Speaker 1: Bloomberg that this could mean less stimulus coming. That's what

134
00:07:07,240 --> 00:07:12,000
Speaker 1: we're hearing from different economists around the region. But you know,

135
00:07:12,040 --> 00:07:17,239
Speaker 1: you're getting some really interesting cross currents here. Picta Asset

136
00:07:17,320 --> 00:07:21,320
Speaker 1: Management is calling for six point six percent growth for

137
00:07:21,360 --> 00:07:24,080
Speaker 1: the full year for the economy, and Goldman Sachs is

138
00:07:24,120 --> 00:07:27,679
Speaker 1: saying that strong earnings will lift China stocks. Ninety percent

139
00:07:27,760 --> 00:07:32,800
Speaker 1: of China firms giving positive first quarter guidance. Yet we've

140
00:07:32,840 --> 00:07:35,880
Speaker 1: had nearly half a trillion dollar sell off that you

141
00:07:35,960 --> 00:07:39,320
Speaker 1: mentioned at the beginning there in Chinese stocks, so albeit

142
00:07:39,440 --> 00:07:40,920
Speaker 1: with a little pause in the selling today.

143
00:07:40,960 --> 00:07:43,760
Speaker 2: All right, let's get global news next. We have House

144
00:07:43,760 --> 00:07:48,200
Speaker 2: Speaker Kevin McCarthy getting his debt bill passed ed. Baxter

145
00:07:48,280 --> 00:07:50,880
Speaker 2: has the latest from the Bloomberg newsroom in San Francisco.

146
00:07:50,960 --> 00:07:53,640
Speaker 3: Eddie, Yeah, boy, the major victory for him, Doug, he

147
00:07:53,840 --> 00:07:57,640
Speaker 3: just snuck it through his party barely call list behind

148
00:07:57,720 --> 00:07:59,480
Speaker 3: him Bloomberg's Emily Wilkins.

149
00:07:59,480 --> 00:07:59,640
Speaker 1: Here.

150
00:08:00,160 --> 00:08:02,640
Speaker 9: They spend all day to day twisting arms, getting folks

151
00:08:02,680 --> 00:08:05,440
Speaker 9: on board. Certainly those handful of changes that they put

152
00:08:05,480 --> 00:08:07,960
Speaker 9: into place at two in the morning were helpful. They

153
00:08:07,960 --> 00:08:11,840
Speaker 9: addressed concerns that iwins had about corn and biofuels. They

154
00:08:11,840 --> 00:08:15,280
Speaker 9: addressed some some concerns that those across the conference had

155
00:08:15,360 --> 00:08:17,400
Speaker 9: on when work requirements would start.

156
00:08:17,840 --> 00:08:20,960
Speaker 3: Yeah. A Republican Congressman Josh Holly, though, repeated, it's all

157
00:08:21,000 --> 00:08:23,160
Speaker 3: about getting Joe Biden to the table. We all know

158
00:08:23,160 --> 00:08:24,680
Speaker 3: how this is going to be resolved in the end.

159
00:08:24,720 --> 00:08:27,560
Speaker 3: If it is resolved, and that is, the president is

160
00:08:27,600 --> 00:08:30,160
Speaker 3: going to have to He's going to have to negotiate.

161
00:08:30,360 --> 00:08:30,560
Speaker 10: Now.

162
00:08:30,760 --> 00:08:34,040
Speaker 3: President Biden has said today again he'd be glad to

163
00:08:34,040 --> 00:08:36,760
Speaker 3: sit down with McCarthy to discuss raising the debt ceiling.

164
00:08:37,240 --> 00:08:41,680
Speaker 3: If McCarthy took the fault off the table so it

165
00:08:41,800 --> 00:08:44,760
Speaker 3: is passed, it will have a tough time in the Senate.

166
00:08:45,000 --> 00:08:47,080
Speaker 3: Democrat Richard Blumenthal.

167
00:08:46,600 --> 00:08:51,040
Speaker 11: There may be a way to combine the two, but

168
00:08:51,200 --> 00:08:53,880
Speaker 11: right now, let's do the debt ceiling and have an

169
00:08:53,960 --> 00:08:58,120
Speaker 11: understanding that there can be discussions and conversations and even

170
00:08:58,160 --> 00:09:03,480
Speaker 11: negotiation about what the any limit should be going forward

171
00:09:03,520 --> 00:09:04,320
Speaker 11: in the next budget.

172
00:09:04,600 --> 00:09:06,480
Speaker 3: So let's see if it even gets brought up in

173
00:09:06,480 --> 00:09:08,920
Speaker 3: the Senate. That will be the next step. The meetings

174
00:09:08,920 --> 00:09:11,480
Speaker 3: between presidents of South Korea and the United States come

175
00:09:11,520 --> 00:09:15,079
Speaker 3: with a promise of increased deterrence against nuclear threats. President

176
00:09:15,160 --> 00:09:19,080
Speaker 3: Joe Biden today in a meeting with South Korean President

177
00:09:19,240 --> 00:09:23,400
Speaker 3: Eun Suk Yule, mentioned North Korea and Kim John undirectly.

178
00:09:23,679 --> 00:09:26,880
Speaker 12: A nuclear attack by North Korea against the United States

179
00:09:26,960 --> 00:09:31,640
Speaker 12: or its allies or partisans partners is unacceptable and will

180
00:09:31,679 --> 00:09:35,360
Speaker 12: result in the end of whatever regime we're to take such.

181
00:09:35,160 --> 00:09:37,719
Speaker 3: An action, he says. The agreement signed today will have

182
00:09:37,920 --> 00:09:41,360
Speaker 3: nuclear weapons deployed on will not have nuclear weapons deployed

183
00:09:41,360 --> 00:09:44,120
Speaker 3: on the peninsula, but there will be visits to ports

184
00:09:44,120 --> 00:09:48,000
Speaker 3: by nuclear submarines, Biden saying nuclear attack is not the

185
00:09:48,040 --> 00:09:49,920
Speaker 3: only thing that this partnership will serve.

186
00:09:49,960 --> 00:09:54,040
Speaker 12: There's still a contest between autocracies and democracies, and we're

187
00:09:54,080 --> 00:09:57,080
Speaker 12: the meeting democracy in the world. And it's something I

188
00:09:57,120 --> 00:10:01,040
Speaker 12: know fair amount about, something I care about. I have

189
00:10:02,000 --> 00:10:04,520
Speaker 12: found a willingness and offl out of our allies and

190
00:10:04,640 --> 00:10:06,000
Speaker 12: trends to call it so.

191
00:10:06,280 --> 00:10:09,440
Speaker 3: At the briefing, President Ewn was asked whether the intelligence

192
00:10:09,559 --> 00:10:12,400
Speaker 3: leaks in the US threatened the relationship.

193
00:10:12,800 --> 00:10:20,319
Speaker 13: Hamlana with regard to that we are communicating between our

194
00:10:20,360 --> 00:10:24,680
Speaker 13: two countries and we are sharing necessary information. I believe

195
00:10:24,720 --> 00:10:29,040
Speaker 13: that investigation isn't your way in the United States, and.

196
00:10:28,920 --> 00:10:31,880
Speaker 3: To that point, Bloomberg Sam Kim, who's traveling with President Ewan,

197
00:10:31,920 --> 00:10:35,200
Speaker 3: says they kind of expected the intelligence gathering anyway.

198
00:10:35,400 --> 00:10:40,040
Speaker 14: There's American soldiers, about thirty thousand American soldiers station and

199
00:10:40,480 --> 00:10:42,720
Speaker 14: some of them are stationed right at the center of

200
00:10:42,760 --> 00:10:47,200
Speaker 14: the city. They still are, and there's a massive intelligence operations.

201
00:10:47,600 --> 00:10:49,559
Speaker 14: I'm not saying they're spying in South Korea, but they

202
00:10:49,640 --> 00:10:52,880
Speaker 14: need to do that in order to maintain the treaty

203
00:10:53,720 --> 00:10:54,800
Speaker 14: around the peninsula.

204
00:10:55,040 --> 00:10:57,600
Speaker 3: Sam says trust very important part of the relationship, and

205
00:10:57,679 --> 00:11:00,400
Speaker 3: both say that it is there. Well only it was

206
00:11:00,400 --> 00:11:02,920
Speaker 3: para by more than twenty seven hundred journalist and listen

207
00:11:02,960 --> 00:11:05,800
Speaker 3: over one hundred and twenty countries in San Francisco. I'm

208
00:11:05,800 --> 00:11:07,640
Speaker 3: at Baxter and this is Bloomberg.

209
00:11:07,800 --> 00:11:10,920
Speaker 1: I'm Brian Curtis in Hong Kong along with Rishard Salamad,

210
00:11:11,000 --> 00:11:14,440
Speaker 1: and our guest is Jin Bailu, who is portfolio manager

211
00:11:14,440 --> 00:11:17,520
Speaker 1: at Trabeca Investment Partner, is joining us from our studio

212
00:11:17,920 --> 00:11:21,439
Speaker 1: in Sydney. Jim Belu, Nice to have you on the program.

213
00:11:21,480 --> 00:11:25,280
Speaker 1: As usual, we mentioned it's an interesting environment where you

214
00:11:25,320 --> 00:11:27,480
Speaker 1: have such strong earnings from the tech companies and the

215
00:11:27,520 --> 00:11:31,840
Speaker 1: major benchmarks don't rally. However, if you pick the right companies,

216
00:11:32,280 --> 00:11:34,800
Speaker 1: you're singing all the way to the bank. If you

217
00:11:34,880 --> 00:11:37,160
Speaker 1: pick the right bank, that's the world we live in.

218
00:11:38,000 --> 00:11:40,200
Speaker 15: Well, absolutely, thank you so much for having me. Look,

219
00:11:40,240 --> 00:11:43,680
Speaker 15: this is a crazy world, and you know, I would

220
00:11:43,760 --> 00:11:46,840
Speaker 15: actually say this is really a market for active investors.

221
00:11:46,840 --> 00:11:49,880
Speaker 15: You pick the right company that will deliver you earning

222
00:11:50,000 --> 00:11:53,559
Speaker 15: and high expectations and growth, and that company is going

223
00:11:53,600 --> 00:11:56,040
Speaker 15: to deliver a lot of return. You know, this is

224
00:11:56,080 --> 00:11:58,600
Speaker 15: not the sort of market environment where you can just

225
00:11:58,640 --> 00:12:01,760
Speaker 15: buy benchmark and hopefully generate return. There's a lot of

226
00:12:01,840 --> 00:12:05,640
Speaker 15: uncertainties out there. There's lack of generally lack of investor

227
00:12:05,679 --> 00:12:09,880
Speaker 15: confidence in you know, just buying up all the sectors.

228
00:12:10,679 --> 00:12:12,440
Speaker 15: You know, some of the risks are tail risks that

229
00:12:12,480 --> 00:12:14,920
Speaker 15: were previously thought were really just tail risk and now

230
00:12:15,000 --> 00:12:19,200
Speaker 15: just become a little bit more significant. And and that's

231
00:12:19,240 --> 00:12:22,120
Speaker 15: what sort of investors grappling with every single day.

232
00:12:23,040 --> 00:12:25,840
Speaker 10: Well, you say you've got to be active and nimble. Well,

233
00:12:26,640 --> 00:12:28,200
Speaker 10: I mean, surely you just put your money into a

234
00:12:28,200 --> 00:12:31,520
Speaker 10: money market fund and you're getting a decent return fixed

235
00:12:31,559 --> 00:12:34,760
Speaker 10: income wise, and you know that's one way of playing this,

236
00:12:34,840 --> 00:12:36,040
Speaker 10: I guess, and having the safety.

237
00:12:36,920 --> 00:12:40,080
Speaker 15: Yeah, look absolutely, but given them an equity market manager

238
00:12:40,200 --> 00:12:43,360
Speaker 15: that I certainly think the share market represents significant amount

239
00:12:43,360 --> 00:12:47,120
Speaker 15: of opportunity for the right investor being nimble and finding

240
00:12:47,280 --> 00:12:49,679
Speaker 15: you know, return opportunity. You know, we just talked to

241
00:12:49,800 --> 00:12:53,880
Speaker 15: some of those you know, great megacabs like Microsoft, like

242
00:12:53,960 --> 00:12:57,240
Speaker 15: the Google reporting phenomenal results and you know.

243
00:12:57,200 --> 00:12:59,559
Speaker 16: So far this year they've done very very well relative to.

244
00:13:00,240 --> 00:13:02,200
Speaker 15: You know the likes of banks and you know, the

245
00:13:02,240 --> 00:13:05,080
Speaker 15: cyclicals that's being sort of under pressure at the moment,

246
00:13:05,200 --> 00:13:08,120
Speaker 15: so it's really yeah, put your money to work, whether

247
00:13:08,160 --> 00:13:10,760
Speaker 15: it's fixed income. My view is that capital growth is

248
00:13:10,840 --> 00:13:14,400
Speaker 15: going to be quite significant and in the equity market,

249
00:13:14,480 --> 00:13:16,080
Speaker 15: so that's a good place for the money too.

250
00:13:17,000 --> 00:13:20,079
Speaker 1: You're pretty positive. I note that in your three conviction

251
00:13:20,240 --> 00:13:23,680
Speaker 1: calls you like US stocks to finish the year higher.

252
00:13:24,480 --> 00:13:28,240
Speaker 1: China reopening is gathering momentum. Perhaps you can talk about

253
00:13:28,280 --> 00:13:32,640
Speaker 1: that and that Australia will avoid recession. So given that

254
00:13:32,720 --> 00:13:36,800
Speaker 1: positive view, let's switch to China. Is the China reopening

255
00:13:37,200 --> 00:13:40,680
Speaker 1: part and parcel of that positive view for even US

256
00:13:40,760 --> 00:13:43,200
Speaker 1: stocks and Australia avoiding recession.

257
00:13:43,679 --> 00:13:45,199
Speaker 16: Look absolutely.

258
00:13:45,720 --> 00:13:47,760
Speaker 15: I think you know, for Australia, China is a very

259
00:13:47,800 --> 00:13:50,480
Speaker 15: important trading partner and a big part of our market

260
00:13:50,480 --> 00:13:52,600
Speaker 15: cap is very much linked to the fortune of China.

261
00:13:53,280 --> 00:13:57,400
Speaker 15: And you know, the will the reopening thematic is well

262
00:13:57,440 --> 00:14:00,440
Speaker 15: on the way, and I do think that the progress

263
00:14:00,440 --> 00:14:04,160
Speaker 15: has been very very promising. Now clearly there's you know,

264
00:14:04,240 --> 00:14:07,200
Speaker 15: star stop and then there's slowing data and consumption isn't

265
00:14:07,240 --> 00:14:10,200
Speaker 15: as good as fast as what everyone expecting. But don't

266
00:14:10,240 --> 00:14:13,760
Speaker 15: forget every other market when we went through reopening, like Australia,

267
00:14:13,880 --> 00:14:16,680
Speaker 15: like the US, we had many star stop and it

268
00:14:16,760 --> 00:14:18,800
Speaker 15: took years for US to really get back to that

269
00:14:18,800 --> 00:14:24,000
Speaker 15: one hundred percent you know, reopened activity. And you know,

270
00:14:24,080 --> 00:14:26,920
Speaker 15: I think China is achieving incredible progress and in the

271
00:14:26,920 --> 00:14:29,560
Speaker 15: next six month we will see some of those data

272
00:14:29,840 --> 00:14:31,720
Speaker 15: gathering momentum, you know, some.

273
00:14:31,600 --> 00:14:34,200
Speaker 1: Of the Yeah, that's that's I think that's consensus. But

274
00:14:34,240 --> 00:14:36,760
Speaker 1: why why is the stock market selling off so much?

275
00:14:37,760 --> 00:14:39,520
Speaker 1: You know, has been a really rough.

276
00:14:39,320 --> 00:14:43,160
Speaker 15: Month absolutely, so stock market is really grappling with you know,

277
00:14:43,200 --> 00:14:46,920
Speaker 15: I think the China reopening is definitely happening, but the

278
00:14:46,960 --> 00:14:49,360
Speaker 15: stock market is grappling with what's happening with the US

279
00:14:50,080 --> 00:14:52,760
Speaker 15: and Europe, some of the developed markets where things are

280
00:14:52,800 --> 00:14:55,880
Speaker 15: really slowing down very quickly. And the I think the

281
00:14:55,920 --> 00:14:59,880
Speaker 15: financial stress caused by some of those regional bank you know,

282
00:15:00,160 --> 00:15:04,080
Speaker 15: going under or having liquidity crisis is just really put

283
00:15:04,120 --> 00:15:08,000
Speaker 15: some heightened some of those risks that the investors sort

284
00:15:08,000 --> 00:15:10,480
Speaker 15: of you know, have been worried about for quite some time.

285
00:15:10,680 --> 00:15:13,040
Speaker 15: So I think this is what's happening. And right now,

286
00:15:13,440 --> 00:15:15,880
Speaker 15: you know, certainly seems like some of those regional banks

287
00:15:15,880 --> 00:15:19,960
Speaker 15: and the crisis liquidity crisis is contained to those markets.

288
00:15:20,320 --> 00:15:23,560
Speaker 16: But yes, you know, if it gets started spreading.

289
00:15:23,120 --> 00:15:26,200
Speaker 15: Into other markets, then they could put pressure or tighten

290
00:15:26,600 --> 00:15:29,560
Speaker 15: the financial condition. So don't forget we are in this,

291
00:15:30,080 --> 00:15:32,720
Speaker 15: you know, in this world where China is trying to

292
00:15:32,720 --> 00:15:35,720
Speaker 15: loosen the financial condition, trying to get it to going again,

293
00:15:35,920 --> 00:15:39,000
Speaker 15: whereas everywhere else was trying to contain or trying to

294
00:15:39,040 --> 00:15:41,880
Speaker 15: tighten the financial condition. So clearly I know where the

295
00:15:41,920 --> 00:15:45,000
Speaker 15: capital should go to generate return. But you know a

296
00:15:45,000 --> 00:15:47,000
Speaker 15: lot of global investors, you kind of if you have

297
00:15:47,040 --> 00:15:50,200
Speaker 15: to be invested, it's you know, it's a challenging period.

298
00:15:50,840 --> 00:15:52,600
Speaker 10: Well, obviously a lot of money has also gone into

299
00:15:53,440 --> 00:15:55,880
Speaker 10: fixed income as well, hasn't it. But I'm just looking

300
00:15:55,920 --> 00:15:58,000
Speaker 10: for a recording point of view, and what are the

301
00:15:59,040 --> 00:16:02,600
Speaker 10: I suppose the geographies you like in the sectors within

302
00:16:02,640 --> 00:16:04,280
Speaker 10: those geographies that you like, and the ones that you

303
00:16:04,400 --> 00:16:05,280
Speaker 10: absolutely do not.

304
00:16:06,880 --> 00:16:09,080
Speaker 15: Yeah, look absolutely, So you know our view is that,

305
00:16:09,640 --> 00:16:12,200
Speaker 15: you know, given this we talked to this uncertain world.

306
00:16:12,840 --> 00:16:14,920
Speaker 15: You know, we do think the quality growth leaders is

307
00:16:14,920 --> 00:16:18,000
Speaker 15: going to do well. Companies are actually not unprofitable. Growth

308
00:16:18,080 --> 00:16:20,960
Speaker 15: leaders is the quality that the company actually make, you know,

309
00:16:21,040 --> 00:16:24,680
Speaker 15: make significant returns and high roes and generate growth is

310
00:16:24,720 --> 00:16:27,680
Speaker 15: going to be the key return generator in this market.

311
00:16:28,360 --> 00:16:31,080
Speaker 15: You know, healthcare we talked to before is you know,

312
00:16:31,160 --> 00:16:33,920
Speaker 15: sits really well within that space where they have structural

313
00:16:33,920 --> 00:16:37,440
Speaker 15: growth driver and many of them have you know, is

314
00:16:37,480 --> 00:16:40,400
Speaker 15: going to have tailwind post in the post pandemic world.

315
00:16:41,200 --> 00:16:44,680
Speaker 15: And aside from that, we are seeing you know, sectors

316
00:16:44,720 --> 00:16:48,080
Speaker 15: where you know, they're being sold off because of you know,

317
00:16:48,160 --> 00:16:51,040
Speaker 15: uncertainties around the world, but they are linked to the

318
00:16:51,120 --> 00:16:54,240
Speaker 15: China reopening trade, you know, and we see those sectors

319
00:16:54,280 --> 00:16:58,520
Speaker 15: actually represent really good short term tactical opportunities, you know,

320
00:16:58,640 --> 00:17:02,400
Speaker 15: as we we we sail through this uncertain period.

321
00:17:02,560 --> 00:17:06,000
Speaker 1: Okay, you mentioned you mentioned the geopolitics is one reason

322
00:17:06,000 --> 00:17:10,200
Speaker 1: why stocks have been faltering in the China sphere. Now

323
00:17:10,200 --> 00:17:14,200
Speaker 1: you're saying that Australia will avoid recession, Australia is also

324
00:17:14,280 --> 00:17:16,840
Speaker 1: kind of wrapped up in a lot of the geopolitics

325
00:17:16,840 --> 00:17:20,840
Speaker 1: with China as well. What's the best play then for

326
00:17:20,920 --> 00:17:22,480
Speaker 1: your confidence in Australia.

327
00:17:23,520 --> 00:17:25,040
Speaker 16: Look Australia economy.

328
00:17:25,600 --> 00:17:28,399
Speaker 15: We if you look at some of the data in

329
00:17:28,480 --> 00:17:32,760
Speaker 15: terms of inflation the like it wasn't it didn't rise

330
00:17:32,880 --> 00:17:35,879
Speaker 15: as sharply as every other markets like the China and

331
00:17:36,280 --> 00:17:39,320
Speaker 15: other countries. You know, it's partly because our you know

332
00:17:39,400 --> 00:17:44,040
Speaker 15: lockdown and disruption to reopening was longer than other markets,

333
00:17:44,600 --> 00:17:46,920
Speaker 15: so in the way, we sort of avoided that peak

334
00:17:47,000 --> 00:17:48,680
Speaker 15: of you know, inflationary pressure.

335
00:17:48,880 --> 00:17:50,760
Speaker 16: Now, our inflation is high, our.

336
00:17:50,640 --> 00:17:53,320
Speaker 15: Interest rate is still yet to be at the you know,

337
00:17:53,440 --> 00:17:57,200
Speaker 15: the reasonable level, but it certainly seems like the interest

338
00:17:57,240 --> 00:18:03,359
Speaker 15: rate increases is slowing down Australia and the inflation read

339
00:18:03,560 --> 00:18:05,879
Speaker 15: it seems to be sort of topping out. And that

340
00:18:06,040 --> 00:18:08,800
Speaker 15: is you know, encouraging because we may not have to

341
00:18:08,800 --> 00:18:11,080
Speaker 15: get to the interest rate that is achieved by other

342
00:18:11,160 --> 00:18:14,959
Speaker 15: markets like the US. So you know, so that together thinks, okay,

343
00:18:15,160 --> 00:18:18,160
Speaker 15: housing is not falling as bad as what people are expecting,

344
00:18:18,400 --> 00:18:21,040
Speaker 15: so that creates a bit of a little bit more confidence.

345
00:18:21,080 --> 00:18:21,359
Speaker 16: Clip.

346
00:18:21,760 --> 00:18:23,760
Speaker 10: I just want to just get one very quick one.

347
00:18:23,760 --> 00:18:26,640
Speaker 10: And if suddenly we get to this announcement, let's say

348
00:18:26,880 --> 00:18:30,880
Speaker 10: the Fed went twenty five basis points and okay, we're done.

349
00:18:31,359 --> 00:18:33,560
Speaker 10: They just say that, why would the market react to you?

350
00:18:33,640 --> 00:18:36,719
Speaker 15: Of you, market will be very pleased, but twenty five

351
00:18:36,760 --> 00:18:39,600
Speaker 15: basis point is being priced in, so market would like that.

352
00:18:39,640 --> 00:18:41,720
Speaker 15: And then in the next six month we should begin

353
00:18:41,800 --> 00:18:44,000
Speaker 15: to see a very strong equity market on basis of

354
00:18:44,000 --> 00:18:45,720
Speaker 15: the certainty of the interest rate directions.

355
00:18:47,520 --> 00:18:50,359
Speaker 1: This is Bloomberg Daybreak Asia, your morning brief on the

356
00:18:50,480 --> 00:18:53,480
Speaker 1: story is making news from Hong Kong to Singapore and

357
00:18:53,560 --> 00:18:54,119
Speaker 1: Wall Street.

358
00:18:54,520 --> 00:18:58,560
Speaker 2: Look for us on your podcast feed every day, on Apple, Spotify,

359
00:18:58,800 --> 00:19:00,840
Speaker 2: and anywhere else you get your podcast.

360
00:19:01,160 --> 00:19:03,800
Speaker 1: You can also listen live each day on Bloomberg eleven

361
00:19:03,880 --> 00:19:06,240
Speaker 1: three to zero in New York, Bloomberg ninety nine to

362
00:19:06,240 --> 00:19:09,480
Speaker 1: one in Washington, Bloomberg one oh sixty one in Boston,

363
00:19:09,760 --> 00:19:12,320
Speaker 1: and Bloomberg nine sixty in San Francisco.

364
00:19:12,560 --> 00:19:15,480
Speaker 2: Our flagship New York station is also available on your

365
00:19:15,560 --> 00:19:20,600
Speaker 2: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty plus.

366
00:19:20,680 --> 00:19:24,040
Speaker 1: Listen coast to coast on the Bloomberg Business app, Sirius

367
00:19:24,200 --> 00:19:28,440
Speaker 1: XM Channel one nineteen, the iHeartRadio app, and on Bloomberg

368
00:19:28,520 --> 00:19:30,960
Speaker 1: dot Com. I'm Brian Curtis.

369
00:19:30,920 --> 00:19:33,359
Speaker 2: And I'm Doug Chrisner. Join us again tomorrow for all

370
00:19:33,400 --> 00:19:35,880
Speaker 2: the news you need to start your day right here

371
00:19:35,960 --> 00:19:38,040
Speaker 2: on Bloomberg Daybreak Asia.