WEBVTT - US Jobs Forecast, SEC Suing Musk, FTX Testimony Latest

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<v Speaker 1>Good morning.

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<v Speaker 2>I'm Brian Curtis and I'm Doug Krisner. Here are the

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<v Speaker 2>stories we're following today.

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<v Speaker 1>The job support tomorrow in the US may set the

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<v Speaker 1>tone for the Fed's policy meeting in November. We get

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<v Speaker 1>September employment data at eight thirty in the morning Wall

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<v Speaker 1>Street Time. Let's get a preview here from Bloomberg's Michael McKee.

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<v Speaker 1>It's not what the Fed does, or, to a lesser extent,

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<v Speaker 1>what it says. It's how the market reacts to the

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<v Speaker 1>September payrolls report that will matter. Bond deals have leaped

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<v Speaker 1>upwards in the past few weeks, tightening financial conditions and

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<v Speaker 1>raising recession worries. The Bloomberg economists consensus forecast calls for

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<v Speaker 1>slower job growth, but Wall Street's Whisper Numbers suggests traders

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<v Speaker 1>are positioned for a strong payrolls report. It may be

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<v Speaker 1>a classic case of good news being bad news for

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<v Speaker 1>the markets, and at FED trying to slow labor demand

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<v Speaker 1>to keep inflation in check. Michael McKee, Bloomberg News.

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<v Speaker 2>And that takes us to the latest Fed speak. Today

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<v Speaker 2>we heard from the head of the San Francisco Fed,

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<v Speaker 2>Mary Daily. She said the FED could hold steady. Here's

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<v Speaker 2>the caveat if the labor market and inflation both cool,

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<v Speaker 2>or if financial conditions remain tight. Here is Daily, speaking

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<v Speaker 2>earlier with Bloomberg.

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<v Speaker 3>The bond market has tightened quite considerably over about thirty

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<v Speaker 3>six basis points since we met in September. Well, that

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<v Speaker 3>is equivalent to about a ray hike, right, and so

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<v Speaker 3>then the need to do tightening additionally is not there?

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<v Speaker 2>Mary Daily?

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<v Speaker 4>There?

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<v Speaker 2>She is the head of the San Francisco FED. We

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<v Speaker 2>also heard today from the head of the Richmond FED,

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<v Speaker 2>Tom Barkin. He was saying surging treasury yields reflect strong

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<v Speaker 2>economic data as well as heavy supply from the US Treasury.

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<v Speaker 2>Barkin went on to say he sees a narrow path

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<v Speaker 2>to a soft landing, one that will avoid a recession.

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<v Speaker 1>Right well, US banks have raised their economic growth forecasts

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<v Speaker 1>for China. Let's get the story from Bloomberg.

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<v Speaker 5>Jen Kates, JP Morgan Chase strategists say recent data suggests

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<v Speaker 5>the economic slowdown in China since April has likely bottomed

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<v Speaker 5>and a turn around as underway, and that trend, coupled

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<v Speaker 5>with additional policy support, means China is on track to

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<v Speaker 5>meet the upgraded five percent target. For its gross domestic product.

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<v Speaker 5>City Group is also boosting its GDP projection for China

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<v Speaker 5>to five percent. Still, economists have pointed to concerns about

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<v Speaker 5>consumer confidence because of a week job market and the

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<v Speaker 5>financial troubles of property developers in Washington and Kates.

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<v Speaker 2>Bloomberg Radio Elon Musk is being pressed to testify before

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<v Speaker 2>the Securities and Exchange Commission about his stock sales ahead

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<v Speaker 2>of mister Musk's purchase of Twitter. Here's Bloomberg's Tom Giles.

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<v Speaker 6>The things that they're looking into. In particular, he tweeted

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<v Speaker 6>back in May of that year about how the deal

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<v Speaker 6>cannot move forward. This all came out in the middle

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<v Speaker 6>of last year. It was basically the things that he

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<v Speaker 6>said publicly about the deal. The sec is wondering whether

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<v Speaker 6>those things were on.

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<v Speaker 2>The up and up Bloomberg's Tom Giles. There now attorneys

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<v Speaker 2>from mister Musk are saying their client has testified numerous times,

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<v Speaker 2>and they added, quote enough is enough, Brian.

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<v Speaker 1>While we moved next to the fraud trial of FTX

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<v Speaker 1>founder Sam Bankman, freed co founder Gary Wong took the

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<v Speaker 1>stand today and provided some damning testimony to the court.

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<v Speaker 1>We get more here from Bloomberg's Ava Benny Morrison.

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<v Speaker 7>He walked into the court. He didn't make eye contact

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<v Speaker 7>with Sam. He sat in the witness box and we're

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<v Speaker 7>speaking very quickly and could tell he was a little

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<v Speaker 7>bit nervous, sort of reciting everything that happened at FTX

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<v Speaker 7>in front of a court room full of people. He

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<v Speaker 7>said that, yes, he committed a financial crime with Bateman Freed,

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<v Speaker 7>he altered the code that allowed Alameda to borrow billions

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<v Speaker 7>of dollars from FTX.

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<v Speaker 1>That's Bloomberg's Ava, Benni Morrison. We also heard from another

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<v Speaker 1>of bankman Freed's MIT classmates, Adam Rdidia. He testified that

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<v Speaker 1>Bankman Freed privately expressed concern about a potential eight billion

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<v Speaker 1>dollars shortfall at FTX. Bank Man Freed's lawyers, who are

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<v Speaker 1>arguing that he made some mistake but had no ill intent,

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<v Speaker 1>will continue to try and undermine some of those weaknesses

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<v Speaker 1>put forward in court. Well, let's take a closer look

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<v Speaker 1>at the backdrop here at markets because we're heading into

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<v Speaker 1>the weekend, last final or the final day of the

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<v Speaker 1>trading week here in Ash. I would say Doug that

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<v Speaker 1>we've got more fed speak out there, which you mentioned

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<v Speaker 1>talking about market rates doing some of the Fed's job.

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<v Speaker 1>We have seen rates down and now we have oil

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<v Speaker 1>down quite significantly. XL down ten percent in a week.

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<v Speaker 1>That's sort of like giving the peace sign markets.

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<v Speaker 2>Yeah, so far this week WTI and I'm talking four

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<v Speaker 2>trading days here, WTI is down more than a nine percent.

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<v Speaker 2>To your point, Brian, and we were talking a short

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<v Speaker 2>while ago about the fact that WTI today and New

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<v Speaker 2>York trading broke below that fifty day moving average for

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<v Speaker 2>the first time since July. So the big question is

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<v Speaker 2>whether or not this downward path for oil will be sustained.

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<v Speaker 2>But you're right too to point out the fact that

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<v Speaker 2>the FED ed was kind of alluding to the fact

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<v Speaker 2>that the market has done some heavy lifting for the Fed.

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<v Speaker 2>Mary Daily Today, the head of the San Francisco FED,

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<v Speaker 2>we talked about this story a short while ago. She

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<v Speaker 2>was saying that the recent push higher in bond yields

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<v Speaker 2>has been equivalent to about one rate hike from the FED.

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<v Speaker 2>So I'm going to assume that's about twenty five basis points.

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<v Speaker 2>And we got some fresh data today from the Investment

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<v Speaker 2>company Institute. Money Market funds now at a fresh record

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<v Speaker 2>high We're seeing a lot of money move in, about

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<v Speaker 2>sixty four point one billion into US money market funds

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<v Speaker 2>in the week ended yesterday given the spike in market rates.

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<v Speaker 1>Yeah, and we mentioned that the jobs report will set

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<v Speaker 1>the tone. I think also the CPI next week will

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<v Speaker 1>be very important, so to be a little bit of

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<v Speaker 1>a one to two punch, A couple of other stories

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<v Speaker 1>will get to China's aggression pushing other countries closer to

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<v Speaker 1>the United States. That's from the Pentagon's Number two Kathleen Nick's,

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<v Speaker 1>a story that ED will be taking a look at.

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<v Speaker 1>And also this is sort of interesting. Even China's closest

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<v Speaker 1>supporters in Taiwan are turning Wherry. This is an interesting

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<v Speaker 1>piece on the terminal about gin Men, a very small island.

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<v Speaker 1>It's just a mile and a half off the coast

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<v Speaker 1>of China, which is part of Taiwan. And then as

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<v Speaker 1>we mentioned as well, JP Morgan and City raising their

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<v Speaker 1>growth estimates on China. So a lot coming forward here

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<v Speaker 1>on Bloomberg Daybreak Asia. Now it's time for Global news.

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<v Speaker 1>US President Joe Biden saying that the southern border wall

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<v Speaker 1>will be built. Head Baxter with that story and the

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<v Speaker 1>news in San Francisco.

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<v Speaker 8>Ed, Yeah, that's right, Brian, not all of it, but

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<v Speaker 8>more of it at a way at President Homeland National

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<v Speaker 8>Security meet end today, saying he is cornered borderwall.

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<v Speaker 9>When money was appropriated for the border wall. I tried

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<v Speaker 9>to get them reappropriated to redirect that money. They did,

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<v Speaker 9>they wouldn't And in the meantime, there's nothing under the

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<v Speaker 9>law other than they have to use the money for

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<v Speaker 9>what was appropriated.

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<v Speaker 8>And Bloomberg's Ryan Tige Beckworth says, all some environmental concern

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<v Speaker 8>will be waved. This was not expected.

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<v Speaker 10>It's definitely not something that you would expect because he

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<v Speaker 10>had explicitly promised, and I quote him directly quote not

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<v Speaker 10>one foot border wall would be constructed if he were.

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<v Speaker 8>Elected, Ryan says. The President says he had to use

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<v Speaker 8>the money for that purpose. Ask whether the President asked

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<v Speaker 8>whether he would he thought it would stop migration, he

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<v Speaker 8>said flatly. No high level meeting on migration US today

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<v Speaker 8>between Homeland Security, Department of Justice, State Department, and Mexican authorities.

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<v Speaker 8>Homeland Secretary Alejandro Majorcas.

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<v Speaker 4>Today's high level security dialogue is the first to include

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<v Speaker 4>migration as part of its agenda. An essential component of

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<v Speaker 4>our National and Regional Security.

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<v Speaker 8>Meeting in Mexico City. Russian President of Vladimir Putin saying

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<v Speaker 8>pieces of grenade were found in the bodies of Wagner

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<v Speaker 8>founder Yevgeny Progosian and other Mercenary leaders who died in

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<v Speaker 8>the plane crash. Putin handed progotion had been a drug user.

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<v Speaker 8>Putin says no evidence of external impact on the aircraft.

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<v Speaker 8>He says, unfortunately they didn't test for alcohol or narcotics

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<v Speaker 8>in the blood of those who died. And Putin also

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<v Speaker 8>said today that Russia may revoke the ban on nuclear

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<v Speaker 8>weapons tests, complaining about US failure to ratify a treaty

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<v Speaker 8>that imposed the ban. The wrangling for House Speaker is

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<v Speaker 8>on both Jim Jordan and Steve Scalise looking for support.

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<v Speaker 8>Congress is out of session until Tuesday, will caucus then

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<v Speaker 8>and some added spice. Bloomberg's Laura Davison's Balance on Balance

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<v Speaker 8>of Power Today with Joe Matthew and Amrie Hordern reports

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<v Speaker 8>Donald Trump says he will be there.

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<v Speaker 11>You know, obviously Trump is famous for making a decision

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<v Speaker 11>and then un making that decision, or you know, calling

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<v Speaker 11>an audible at the last moment. But if House Republicans

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<v Speaker 11>change their rules, and there's several House Republicans calling it

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<v Speaker 11>that he could be speaker, which would really throw a

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<v Speaker 11>whole wrench not only to House politics, but twenty twenty.

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<v Speaker 8>Fours seeing of the speaker's roster with the gavel, he'd

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<v Speaker 8>loved that. Joe almost backtor Reality the TV most pointed

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<v Speaker 8>attack yet on the case against Donald Trump for subversion

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<v Speaker 8>surrounding trump efforts to interfere with the twenty twenty election.

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<v Speaker 8>Trump attorneys have asked the judge dismissed the case as

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<v Speaker 8>a whole. They argue he's immune from prosecution for actions

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<v Speaker 8>they say we're taken as his official role as president,

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<v Speaker 8>and US Pentagon says China's growing assertiveness in Asia's pushing

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<v Speaker 8>other countries to strike new partnerships with the US. Deputy

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<v Speaker 8>Defense Secretary Kathleen Hicks points new agreements with the Philippines,

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<v Speaker 8>enhanced cooperation with Japan and South Korea. Also points to

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<v Speaker 8>the aucas alliance with the UK and Australia. Global News

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<v Speaker 8>powered by more than twenty seven hundred journalists and analysts

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<v Speaker 8>in over one hundred twenty countries. In San Francisco, I'm

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<v Speaker 8>ed Baxter, and this is Bloomberg.

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<v Speaker 1>This is Bloomberg Daybreak Asia. I'm Brian Curtis in Hong

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<v Speaker 1>Kong alongside Rashad so On, and our guest is Ryan Belonger,

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<v Speaker 1>is managing principal and founder of Claro Advisors. Ryan, thanks

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<v Speaker 1>very much for joining us. So we mentioned that we

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<v Speaker 1>had fairly big drop in bond yields from one point

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<v Speaker 1>to the next on the ten year, as much as

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<v Speaker 1>seventeen basis points so and also roughly a ten percent

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<v Speaker 1>drop in oil prices. Is that enough to put soft

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<v Speaker 1>landing back into the conversation?

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<v Speaker 12>You know, I don't think it is. I mean, I

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<v Speaker 12>think it's a nice reprieve. People can breathe a sigh

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<v Speaker 12>of relief for a little bit here. But we've just

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<v Speaker 12>got a lot of data coming out soon that I

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<v Speaker 12>think it's going to just continue to reflect weakness in

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<v Speaker 12>the economy, and you know, in particular the payroll data

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<v Speaker 12>that we kind of got a.

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<v Speaker 13>Sneak peek at with the ADP report.

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<v Speaker 12>I just think it's going to be difficult to get

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<v Speaker 12>the soft lending done.

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<v Speaker 13>I do think we should give the Fed, you know,

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<v Speaker 13>a lot of credit.

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<v Speaker 12>So far they've got they've gotten it to a pretty

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<v Speaker 12>good spot. I just think it's probably more likely than

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<v Speaker 12>not that they they overtightened, and you know that's better

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<v Speaker 12>than the alternative.

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<v Speaker 14>Right, And don't they need to overtighten. Don't they need

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<v Speaker 14>to put the economy into recession and ode for them

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<v Speaker 14>medicine to work.

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<v Speaker 13>Yeah, I totally agree.

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<v Speaker 12>And I think comes that you know of probably a

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<v Speaker 12>decent recession, nothing severe, but you know, recessions are just part.

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<v Speaker 13>Of the economic cycle, and I think that'll play itself out.

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<v Speaker 12>But you're starting to see, you know, a fair amount

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<v Speaker 12>of cracks in the system. Most of the leading economic

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<v Speaker 12>indicators have turned negative for a substantial period of months,

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<v Speaker 12>and I just think the one of the you know,

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<v Speaker 12>things that happens with rising interest rates is a lot

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<v Speaker 12>of refinancing costs where coming to home to roost. I mean,

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<v Speaker 12>next year, the commercial real estate market alone has almost

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<v Speaker 12>one trillion of assets that need to be refinanced.

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<v Speaker 14>Yeah, yeah, sorry, I just want it's just good care

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<v Speaker 14>on the same thing about recession, et cetera, et cetera,

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<v Speaker 14>because you know, it's a horrible thing to say, but

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<v Speaker 14>does American need a recession given that you know, they've

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<v Speaker 14>the Central Bank not just of course the fad, but

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<v Speaker 14>that has essentially been masking the economic and business cycle

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<v Speaker 14>with their actions and monetary policy to stop of course

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<v Speaker 14>what had the worst of the GFC, and also ever

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<v Speaker 14>since then with the free money aspect, that maybe the

0:12:12.000 --> 0:12:14.240
<v Speaker 14>economy needs some kind of a cleansing effect.

0:12:16.440 --> 0:12:18.320
<v Speaker 13>You know, I'm a big proponent of that.

0:12:18.400 --> 0:12:21.120
<v Speaker 12>I mean, I think if nothing else, it'll get the

0:12:22.160 --> 0:12:26.920
<v Speaker 12>decision makers in Washington to get on a better fiscal path,

0:12:26.960 --> 0:12:29.360
<v Speaker 12>which I think is you know, something that really needed

0:12:29.400 --> 0:12:31.680
<v Speaker 12>to be talked about more and I think will be

0:12:32.559 --> 0:12:34.040
<v Speaker 12>as especially as we get.

0:12:34.320 --> 0:12:36.160
<v Speaker 13>Into a recession. It's just, you know, we have a

0:12:36.200 --> 0:12:36.480
<v Speaker 13>we have.

0:12:36.440 --> 0:12:39.880
<v Speaker 12>A spending problem, and we're spending a considerable amount of

0:12:39.880 --> 0:12:44.800
<v Speaker 12>our GDP on entitlements and an interest costs. I mean,

0:12:44.800 --> 0:12:47.640
<v Speaker 12>we're going to spend probably close to the ten eleven

0:12:47.679 --> 0:12:53.440
<v Speaker 12>percent of our federal revenues on interest payments alone, and

0:12:53.559 --> 0:12:55.840
<v Speaker 12>other TRIPA A Ready companies spend one percent.

0:12:56.160 --> 0:12:58.600
<v Speaker 13>So we got we got to figure that out.

0:12:59.320 --> 0:13:02.559
<v Speaker 1>Let me raise an interesting scenario though. You get a recession,

0:13:02.720 --> 0:13:05.080
<v Speaker 1>in other words, you get two quarters of negative growth,

0:13:05.480 --> 0:13:07.720
<v Speaker 1>but you don't really lose that many jobs. You know,

0:13:07.880 --> 0:13:11.000
<v Speaker 1>usually you do. But if we don't this time, and

0:13:11.520 --> 0:13:14.440
<v Speaker 1>that might be the case because we see that companies

0:13:14.480 --> 0:13:18.120
<v Speaker 1>are reluctant to lay people off. Does that make it okay?

0:13:18.160 --> 0:13:20.920
<v Speaker 1>Does that sort of bring back the soft scenario?

0:13:21.040 --> 0:13:24.800
<v Speaker 13>Thinking it could? I mean, anything's possible.

0:13:25.040 --> 0:13:30.439
<v Speaker 12>I just think, you know, typically recessions are a little

0:13:30.440 --> 0:13:32.640
<v Speaker 12>bit more severe than just that.

0:13:32.760 --> 0:13:34.120
<v Speaker 13>I mean, I think we've only had.

0:13:36.960 --> 0:13:40.400
<v Speaker 12>Two or three soft landings, you know, in the last

0:13:40.480 --> 0:13:42.880
<v Speaker 12>seventy years, and none of those involved the scenario that

0:13:42.880 --> 0:13:45.640
<v Speaker 12>we have now. So I'm just thinking, you know, it's

0:13:45.679 --> 0:13:48.520
<v Speaker 12>more likely than not, but it is possible, and I

0:13:48.559 --> 0:13:50.760
<v Speaker 12>do think the Fed's done a really good job so far.

0:13:51.160 --> 0:13:53.400
<v Speaker 12>There's a lot coming down the road that people should

0:13:53.440 --> 0:13:56.280
<v Speaker 12>be focused on as it released to their portfolios.

0:13:56.480 --> 0:13:58.600
<v Speaker 1>So if you bring the hard landing into the picture,

0:13:58.880 --> 0:14:02.000
<v Speaker 1>since you've already had a pullback in stocks, what does

0:14:02.040 --> 0:14:04.559
<v Speaker 1>a hard landing mean for the stock market.

0:14:05.559 --> 0:14:07.720
<v Speaker 12>Well, you know, I think we've had a you know,

0:14:07.960 --> 0:14:10.800
<v Speaker 12>the last six weeks or so have been a pullback.

0:14:10.880 --> 0:14:12.720
<v Speaker 12>But if you zoom out a little bit more than that,

0:14:12.760 --> 0:14:18.000
<v Speaker 12>you've got equities still trading at above historical market pe.

0:14:18.320 --> 0:14:21.560
<v Speaker 12>So there's still kind of expensive historically. I mean, if

0:14:21.600 --> 0:14:23.320
<v Speaker 12>you go back to look at the two thousand and

0:14:23.320 --> 0:14:28.000
<v Speaker 12>eight recession, we traded at ten twelve multiple on earnings.

0:14:28.200 --> 0:14:30.960
<v Speaker 12>We're still at you know, eighteen seventeen eighteen on the

0:14:31.000 --> 0:14:33.200
<v Speaker 12>S and P. So I think there's a meaningful pullback

0:14:33.240 --> 0:14:36.120
<v Speaker 12>that could happen in certain sectors. I mean, if you

0:14:36.160 --> 0:14:38.880
<v Speaker 12>look at the medians, stock and the S and P

0:14:39.000 --> 0:14:42.120
<v Speaker 12>this year, it's flat. You know, most companies are flattered down.

0:14:42.160 --> 0:14:44.920
<v Speaker 12>It's just it's a handful of companies, as we've all

0:14:44.920 --> 0:14:47.720
<v Speaker 12>been telling people and reading about, that have been driving

0:14:47.720 --> 0:14:50.640
<v Speaker 12>this performance. So I think that will you know, those

0:14:50.680 --> 0:14:54.040
<v Speaker 12>games will come back, and I think people just have

0:14:54.080 --> 0:14:56.000
<v Speaker 12>to adjust their portfolios accordingly.

0:14:57.200 --> 0:15:00.520
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